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Kemper (KMPR) Reports Q2 Loss, Sees Higher Revenues Y/Y

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Zacks Equity Research
·3 min read
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Kemper Corporation KMPR reported second-quarter 2021 adjusted loss of $1.54 per share. The bottom line came against the Zacks Consensus Estimate of earnings of $1.11. The company reported adjusted earnings of $1.20 in the year-ago quarter.

Kemper witnessed steep expenses in the quarter.

Kemper Corporation Price, Consensus and EPS Surprise

Kemper Corporation Price, Consensus and EPS Surprise
Kemper Corporation Price, Consensus and EPS Surprise

Kemper Corporation price-consensus-eps-surprise-chart | Kemper Corporation Quote

Behind the Headlines

Kemper's total operating revenues of $1.5 billion were up 25.9% year over year on the back of higher Specialty P&C earned premiums and a decline in the change in fair value of equity and convertible securities.

The top line beat the Zacks Consensus Estimate by 7.8%.

Total expenses increased 49.1% year over year to $1.5 billion due to steep policyholders’ benefits, and incurred losses and loss adjustment expenses along with insurance costs.

Net investment income came in at $113.9 million in the quarter under review, up 68% year over year, primarily owing to a lower rate of return from alternative investments and higher levels of investments in fixed income securities.

Segment Details

Specialty Property & Casualty Insurance's revenues increased 35.3% from the prior-year quarter’s level to $1 billion. Its total earned premiums surged 33.1% from the prior-year quarter’s reading on the back of Specialty Automobile and Commercial automobile. Net investment income surged 152.7% year over year to $42.7 million. Combined ratio expanded 1820 basis points (bps) year over year to 107.3%.

Preferred Property & Casualty Insurance's revenues increased 7.6% from the prior-year quarter’s tally to $180.7 million. The segment’s total earned premiums dipped 0.2% from the prior-year quarter’s level to $163.2 million due to poor performance of homeowners. Net investment income soared 353.5% year over year to $19.5 million. Combined ratio expanded 1870 bps year over year to 103.1%.

Life & Health Insurance's revenues inched up 3.5% from the prior-year quarter’s level to $214.7 million. The segment’s total earned premiums increased 0.9% from the prior-year quarter’s figure to $162.7 million on the back of life business. Net investment income rose 18.3% year over year to $52.4 million.

Financial Update (as of Jun 30, 2021)

Kemper had cash of $105.1 million, down 49% from the level as of Dec 31, 2020.

Total shareholders' equity was $4.3 billion, down 5.6% from the level as of Dec 31, 2020.

Book value per share was $67.67 per share, down 3% from $69.74 as of Dec 31, 2020.

Share Repurchase and Dividend Update

During the second quarter of 2021, Kemper paid out dividends worth $20.4 million.

On May 5, 2021, its board of directors declared a quarterly dividend of 31 cents per share.

The company also bought back shares worth $112 million.

Zacks Rank

Currently, Kemper carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom line results of The Progressive Corporation PGR, RLI Corp. RLI and The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate.


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