Fourth Quarter 2021 Earnings

January 31, 2022

Earnings Call Presentation - 4Q 2021

Preliminary Matters

Cautionary Statements Regarding Forward-Looking Information

This presentation may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Such statements involve known and unknown risks, uncertainties, and other factors, including but not limited to:

  • changes in the frequency and severity of insurance claims;
  • claim development and the process of estimating claim reserves;
  • the impacts of inflation;
  • product demand and pricing;
  • effects of governmental and regulatory actions;
  • litigation outcomes;
  • investment risks;
  • cybersecurity risks;
  • impact of catastrophes; and
  • other risks and uncertainties detailed in Kemper's Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission ("SEC").

The COVID-19 outbreak and subsequent global pandemic ("Pandemic") is an extraordinary catastrophe that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on Kemper's operating and financial results.

Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this presentation, including any such statements related to the Pandemic.

Non-GAAP Financial Measures

This presentation contains non-GAAP financial measures that the company believes are meaningful to investors. Non-GAAP financial measures have been reconciled to the most comparable GAAP financial measure.

Earnings Call Presentation - 4Q 2021

2

Create Long-Term Shareholder Value

Leverage competitive advantages to grow returns and BVPS1 over time

Diversified sources

Sustainable competitive

of earnings;

Grow returns

Strong capital/liquidity

advantages and build

and book value per

positions;

core capabilities

share over time

Disciplined approach

to capital management

Strategic focus:

Consumer-related businesses with opportunities that:

  • Target specialty markets
  • Have limited, weak or unfocused competition
  • Require unique expertise (underwriting, claim, distribution, analytics and other)

Deliver low double-digit ROE2 over time

¹ Book value per share

Earnings Call Presentation - 4Q 2021

3

2 Return on equity

Fourth Quarter 2021 Highlights

Pandemic headwinds continued to impact margins

Shareholder

Value Creation

4th Quarter Overview

Environmental pressures challenged 4Q21 financial results

  • Net loss of $106 million ($1.66) per share, as reported, or $101 million ($1.59) per share, as adjusted3
  • Adjusted consolidated net operating loss1 of $131 million ($2.05) per share, as reported, or $126 million ($1.98) per share, as adjusted3
  • (3)% ROAE2, (5)% ROAE2 excluding net unrealized gains on fixed maturities and goodwill1
  • Generated $351 million of operating cash flow for the year
  • Dividends paid of $0.31

Taking actions to return to target profitability

  • Inflation trends related to supply chain issues and labor shortages continued to drive loss costs, exceeding the benefits of rate and underwriting actions
  • Specialty P&C rate actions: Filed for 8% rate increase on ~57% of book, includes California
  • Preferred P&C rate actions: Filed for 12% rate increase on ~23% of book, ongoing repositioning of book to improve profitability

Capital

Management

and Financial

Strength

Strong capital and liquidity enables us to navigate environmental challenges

  • Holding company remains a source of strength for subsidiaries, with more than $900 million of liquidity
  • Debt-to-capitalratio of 21.9% remains within target range
  • Upsized and renewed multi-year occurrence and annual aggregate programs

¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 20-29

2 Return on average shareholders' equity (5-point average)Earnings Call Presentation - 4Q 20214 3 As adjusted for acquisition; see reconciliation on Pages 26-29

Fourth Quarter Financial Highlights

Environmental headwinds impacted profitability and TBVPS growth

As Reported

As Adjusted1

Quarter Ended

Quarter Ended

Dec 31,

Dec 31,

Dec 31,

Dec 31,

(Dollars in millions, except per share amounts)

2021

2020

2021

2020

Net Income (Loss)

$(106)

$98

$(101)

$118

Net Income (Loss) - Per Diluted Share

$(1.66)

$1.46

$(1.59)

$1.77

Adjusted Consolidated Net Operating Income (Loss)1

$(131)

$106

$(126)

$119

Adj. Consolidated Net Op. Income (Loss) - Per Diluted Share1

$(2.05)

$1.59

$(1.98)

$1.78

Catastrophe Losses

$13

$6

Tangible Book Value Per Common Share excluding unrealized gains1

$34.44

$41.65

AAC goodwill diluted

Return on Avg. Tangible Common Equity1

(4.9)%

16.3%

TBVPS by $3.11

Dividend Paid to Shareholders Per Share

$0.31

$0.30

Specialty PIF growth

17.9%

2.5%

4.5%

2.2%

Focus is on restoring profitability and positioning businesses for growth in 2023

¹ As adjusted for acquisition; see reconciliation on Pages 26-29

Earnings Call Presentation - 4Q 2021

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Kemper Corporation published this content on 31 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2022 21:24:33 UTC.