Kemper Corporation has reported a net loss of $146.3 million for the third quarter of 2023, compared to a net loss of $74.8 million for the third quarter of 2022.
Net loss for Q3’23 included a $55.5 million after-tax non-cash charge related to the termination of Kemper’s remaining pension plan obligations, which was previously included within accumulated other comprehensive income (AOCI) and $22.9 million of after-tax net realised losses on investments, the company noted.
Total revenues for Q3 of 2023 decreased $162.1 million, or 11.9%, to $1,199.4 million, compared to Q3’22, mostly driven by $109.1 million of lower Specialty P&C earned premiums from a decrease in new business resulting from targeted actions to improve profitability, partially offset by higher average earned premium per exposure from rate increases.
The decrease in total revenues was also driven by $40.0 million of lower Life earned premiums mostly due to the disposition of Kemper Health that was completed in December 2022, and a $23.1 million decrease in total revenues from Non-Core Operations, the company said.
The Adjusted Consolidated Net Operating Loss for the quarter was $27.9 million, adds Kemper, compared to the Adjusted Consolidated Net Operating Loss of $27.0 million for Q3 of 2022.
Additionally, the Specialty Property and Casualty Insurance segment reported net operating loss of $33.2 million for the third quarter of 2023, compared to net operating loss of $28.7 million in the third quarter of 2022. Results decreased due primarily to adverse prior year loss and LAE development, partially offset by an improvement in the Underlying Combined Ratio, says Kemper.
The segment’s Underlying Combined Ratio was 100.5 percent, compared to 106.8 percent in the third quarter of 2022, primarily driven by higher average earned premiums per exposure resulting from rate increases and lower underlying claim frequency.
The Life Insurance segment reported net operating income of $14.7 million for the third quarter of 2023, compared to a net operating income of $14.0 million in the third quarter of 2022.
“We continue to make strong progress toward profitability against an ongoing, dynamic operating environment,” said Joseph P. Lacher, Jr., President, CEO and Chairman.
“We are encouraged by the incremental improvements in our underlying performance. The implementation of 30 points of California specialty auto rate, along with the cumulative benefits from our other actions, are providing a tailwind for the fourth quarter and full year 2024.”
“In addition, this quarter we advanced our strategic initiatives, which are on track to produce or exceed the intended operational and financial targets.”
Total Shareholders’ Equity at the end of the quarter was $2,361.3 million, a decrease of $309.3 million, or 12%, since year-end 2022 primarily driven by the net loss for the year.
Kemper and its direct non-insurance subsidiaries ended the quarter with cash and investments of $153.9 million, and $376.0 million of available borrowing capacity under the revolving credit agreement.
On August 2, 2023, the company announced that its Board of Directors declared a quarterly dividend of $0.31 per share, or $20.2 million. The dividend was paid on August 28, 2023 to its shareholders of record as of August 14, 2023.
