KMPR

Kemper’s second quarter was marked by a notable contraction in sales, with revenue falling short of analysts’ expectations and the market reacting negatively. Management attributed the decline mainly to underperformance in personal auto, particularly in California, and highlighted a substantial non-cash goodwill impairment in the specialty auto segment. CEO Stephen McAnena acknowledged, “We have to be candid about where performance must improve. The clearest example of this is personal auto, where we are not delivering target returns.” Expense discipline and sequential improvements in underlying operating performance offset some of the headline challenges, but management emphasized that restoring profitability remains the company’s top priority. Is now the time to buy KMPR? Find out in our full research report (it’s free). Revenue: $1.12 billion vs analyst estimates of $1.17 billion (9.1% year-on-year decline, 4.9% miss) Adjusted EPS: $0.45 vs analyst estimates of $0.34 (32.4% beat) Operating Margin: -41.8%, down from 7.1% in the same quarter last year Market Capitalization: $1.54 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Gregory Peters (Raymond James) asked about specific changes to pricing and underwriting, especially in California, and CEO Stephen McAnena responded that aligning claims with underwriting and pricing teams has accelerated progress, with aggressive rate filings and expense actions already underway. Gregory Peters (Raymond James) followed up on the goodwill impairment, seeking clarity on future risks, and CFO Bradley Camden explained that continued share price declines or operational setbacks could trigger further impairments, but current goodwill levels are considered appropriate. Jon Paul Newsome (Piper Sandler) questioned the rationale behind writing down surplus notes and whether this signals a shift away from prior reciprocal strategies. McAnena said the reciprocal structure is under review, with decisions pending a more thorough evaluation. Jon Paul Newsome (Piper Sandler) also probed the link between rate actions and policy growth in California, with McAnena reiterating that future growth will only occur once profitability is restored and that current efforts are conditional, not time-bound. Andrew Kligerman (Unknown Firm) pressed for details on the competitive landscape in California and the timing for policy growth resumption, and McAnena emphasized that profitability, not a specific timeline, will determine when growth can restart. In upcoming quarters, the StockStory team will monitor (1) progress on rate filings and approvals in California and other major markets, (2) the trajectory of reserve development and loss trends in commercial auto, and (3) further evidence of expense reductions from restructuring initiatives. Additionally, we will watch for updates on strategic decisions regarding the reciprocal exchange and the impact of leadership realignment on execution. Kemper currently trades at $27, down from $29.27 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:00 a.m. ET Vice President of Corporate Development and Investor Relations - Michael Marinaccio President and Chief Executive Officer - Stephen McAnena Executive Vice President and Chief Financial Officer - Bradley Camden Executive Vice President and President of Kemper Life - Chris Flint Executive Vice President and Chief Investment Officer - John Boschelli Operator: Good morning, ladies and gentlemen, and welcome to Kemper's Second Quarter 2026 Earnings Conference Call. My name is Samantha, and I will be your coordinator today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. I would now like to introduce your host for today's conference call, Michael Marinaccio, Kemper's Vice President of Corporate Development and Investor Relations. Mr. Marinaccio, you may begin. Michael Marinaccio: Thank you. Good morning, everyone, and welcome to the conference discussion of our second quarter 2026 results. This morning you'll hear from Stephen McAnena, Kemper's President and CEO, and Bradley Camden, Kemper's Executive Vice President and Chief Financial Officer. We'll make a few opening remarks to provide context around our second quarter results, followed by a Q&A session. During the interactive portion of our call, our presenters will be joined by Chris Flint, Kemper's Executive Vice President and President of Kemper Life, and John Boschelli, Kemper's Executive Vice President and Chief Investment Officer. After the markets closed yesterday, we issued our earnings release, filed our Form 10-Q with the SEC, and published our earnings presentation and financial supplement. You can find these documents in the investor section of our website, kemper.com. Our discussion today may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the company's outlook on its future results of operation and financial condition. Our actual future results in financial condition may differ materially from these statements. For information on additional risks that may impact these forward-looking statements, please refer to our 2025 Form 10-K and our second quarter earnings release. This morning's discussion also includes non-GAAP financial measures we believe are meaningful to investors. In our financial supplement, earnings presentation, and earnings release, we've defined and reconciled all non-GAAP financial measures to GAAP, where required in accordance with SEC rules. You can find each of these documents in the investor section of our website, kemper.com. All comparative references will be to the corresponding 2025 period unless otherwise stated. I'll now turn the call over to Steve. Stephen McAnena: Well, thanks, Michael, and good morning, everyone, and thank you for joining us. Since joining Kemper 2 months ago, I've spent time with employees, agents, business partners, and members of the investment community. Those conversations, combined with the work I've done to better understand the business, have energized me about Kemper's future. I see a company with meaningful strengths, including the stability of life, the momentum within commercial auto, real potential for personal auto, and a talented team committed to improving results. Together, these strengths position us to deliver long-term shareholder value. At the same time, we have to be candid about where performance must improve. The clearest example of this is personal auto, where we are not delivering target returns, driven in large part by our concentration in California. We're addressing this, but the benefits of our actions will take time to flow to our results. These realities have shaped how I think about the business and the priorities that will drive success. Stepping back, there are 3 messages I want you to take away from this discussion. First, restoring profitability is our most important priority. I want to be very clear on this point. We do not view profitability and growth as competing objectives. Profitability is a prerequisite for growth. And as such, growth will be earned, not chased. In commercial auto, that means despite strong top and bottom line performance, to take a more disciplined stance given successive quarters of prior year adverse development. We're making intentional adjustments moving forward to ensure growth is profitable and sustainable. Second, Kemper has the foundational elements necessary for long-term growth. Our focus is on improving performance and delivering more consistent results. Unlocking that value requires clearer accountability and more consistent execution. And that brings me to my third takeaway for stakeholders. We've realigned the P&C organization to improve accountability and execution. Underwriting, pricing, product, and claims are now under 1 P&C leader, Eric Kappler. We believe this structure will create sharper accountability, faster decision-making, and ultimately better execution. Eric's deep experience in non-standard auto makes him well-suited to lead this work. We look forward to introducing him at our next earnings call. I also want to officially welcome Tony DeSantis to our Board of Directors. Tony brings over 40 years of experience in our industry, including 10 in non-standard auto. He's already been a great addition to the board and I look forward to his counsel and contributions. Taken together, these 3 points define our path forward. Restore profitability, unlock the value in our business, strengthen leadership and accountability to deliver more consistent results. Against that backdrop, this quarter shows encouraging progress while also highlighting the work still ahead. For the quarter, underlying results improved sequentially while reported GAAP results were adversely impacted by a goodwill impairment. Brad will cover the numbers in detail, but first I wanted to share my perspective on each of our businesses. Within personal auto, rate and non-rate actions improved our combined ratio while also reducing our concentration in California. This is great progress, but as I said, meaningful work remains. Commercial auto continues to generate strong underlying results. But the business is not without challenges. The prior year reserve strengthening reinforces the importance of maintaining discipline as the business grows. While we continue to see attractive opportunities ahead, we'll be placing greater emphasis on profitability by taking more rate and tightening our underwriting, even if that results in less growth in the near term. And finally, life continues to provide stable earnings, consistent cash flow, and valuable diversification. Building on that foundation, we continue to advance our distribution and lapse management initiatives in support of profitable new business growth. In summary, our path is clear. Restoring profitability is our top priority, and achieving that goal will earn us the right to grow. My confidence in our path forward is grounded in both the actions underway and the strength of our people. I feel incredibly fortunate to work alongside this management team and our talented employees across the country. Grateful for their commitment, and I'm looking forward to working with them and building a stronger Kemper. Thank you and with that I will turn the call over to Brad. Bradley Camden: Thank you, and good morning, everyone. Steve discussed the progress we're making to restore profitability, the actions underway to improve execution, and the underlying strengths of the businesses. I will provide additional perspective on our financial results, our capital position, and the operating trends we're seeing across the enterprise. Let me begin with our financial results. This quarter reflected sequential improvement in underlying operating performance, although our reported GAAP results were significantly impacted by 2 items that I'll discuss in more detail shortly. Net loss was $464.8 million or $7.90 per share, while adjusted consolidated net operating income was $26.3 million or $0.45 per share. Underlying operating results improved sequentially driven by P&C underwriting performance, expense discipline, and stable earnings from Life business. Net investment income totaled $105 million and trailing 12-month cash flow was $434 million, reflecting the consistent cash generating ability of our businesses. Before discussing the quarter in more detail, let me provide additional context on the items that affected our reported results. The primary driver of our reported net loss was a $460 million non-cash goodwill impairment in our specialty auto segment. Recent operational challenges and a subsequent decline in our share price triggered a quantitative goodwill impairment evaluation under GAAP. The resulting impairment reflects an estimate of fair value based in part on our second quarter share price. Let me emphasize that this does not affect the ongoing operations or cash generating ability of the businesses. While significant from a GAAP perspective, the impairment has no impact on our statutory capital, holding company liquidity, or compliance with our debt and revolving credit covenants. We also recognized a $16.6 million after-tax allowance for credit losses related to the surplus notes issued by Kemper Reciprocal Exchange. Based on our assessment of the expected recoverability of those notes under GAAP, we recorded an allowance during the quarter. Similar to the goodwill impairment, this charge does not affect our insurance subsidiary statutory capital or holding company liquidity. With that context, let me turn to our balance sheet and capital position. Our balance sheet remains a source of strength. Insurance subsidiaries are well capitalized and we ended the quarter with $766 million of holding company liquidity. While our debt to capital ratio increased to 28.3%, that change was primarily driven by the goodwill impairment and does not reflect a deterioration in liquidity or statutory capital. Our investment portfolio performed well, generating $105 million of net investment income during the quarter. It continues to provide a stable and predictable source of earnings. I'll now turn to the operating performances of our businesses. I'll begin with our specialty auto segment, which includes both our personal and commercial auto businesses. Underlying results improved sequentially with the normalized underlying combined ratio improving 0.8 points from 102.8% to 102.0%. Within personal auto, the normalized underlying combined ratio improved 1.3 points from 106.5% to 105.2%. The improvement reflected stronger underwriting performance and continued expense discipline. As part of our profit restoration strategy, California's share of the personal auto portfolio declined by 2.5 percentage points during the quarter. Driven by a 10% sequential decline in policies in force, along with continued growth in other markets. Turning to commercial auto, the business delivered strong underlying performance with an underlying combined ratio of 93.7% while PIF increased 9.2% year-over-year. Reported results, however, were impacted by $17.7 million of prior year reserve development. As Steve mentioned, the prior year reserve strengthening reinforces the importance of maintaining discipline as the business grows. Accordingly, we are taking additional rate actions and adjusting our underwriting standards. While these actions will temper growth in the near term, we believe they are prudent and position us to build on our underlying momentum and deliver stronger, more consistent profitability over time. And finally, our life business delivered another solid quarter, generating $18 million of net operating income, supported by growth in earned premiums, favorable mortality and lapse experience, and higher net investment income. Earned premiums increased to $103 million, while average premium per policy increased to 5.4% from the prior year period. Reflecting the benefits of our pricing, underwriting, and distribution initiatives. Importantly, life continues to provide stable earnings, consistent cash generation, and valuable diversification for Kemper. Before I conclude, I'd like to provide an update on our restructuring program. Since announcing the initiative last October, we've identified more than $80 million of cumulative annualized run rate savings, an increase of $20 million since last quarter. While we continue to identify additional opportunities to improve our cost structure, the actions we've taken are contributing to improved financial performance, including lower expense and LAE ratios. Overall, the quarter demonstrated progress toward restoring profitability. While our GAAP reported results were significantly impacted by 2 items discussed earlier, underlying operating trends improved. As Steve emphasized and I'll reiterate, restoring profitability is our top priority. This quarter reinforces that our actions are gaining traction while preserving the financial strength needed to execute our strategy and create long-term value for our shareholders. With that, Operator, we'd be happy to take questions. Operator: [Operator Instructions] Your first question comes from the line of Gregory Peters with Raymond James. Gregory, your line is open. Please go ahead. Charles Peters: I think the great place to start is, Steve, as you're moving through the organization realigning the executives. At the end of the day, it's the pricing and the underwriting that's going to drive the improvement. So maybe you can provide us some additional detail on how you're changing the pricing and the underwriting backbone of the company to give better results. And particularly interested in California where, you know, obviously you're shrinking and it's a difficult market to get rate increases through. Stephen McAnena: Hey Greg, thanks for the question. If I can kind of play it back, I think your question was kind of organizational in nature and I'll kind of pull back and say, for me, the big aspect of the organizational change was aligning claims with the rest of the business. If I'm being candid, I feel like the things we're doing on the underwriting and pricing side prior to my joining, were pretty effective. I think there are a couple of areas we can certainly speed up and maybe get a little more aggressive, but I'd say from my perspective, pretty effective. And so if I kind of pull back to sort of go through the levers we're pulling with sort of no emphasis on just California, we are taking rates up the team. If you go back and look, the team swung pretty hard early on after the minimum limit change. And we followed it up with another filing recently. So I'd say the speed and urgency there was where we needed it to be. And we were pretty aggressive. I'd say second, as part of that, sort of slowed down new business anywhere where we thought the calendar year impact was going to be adverse. And so again, the team swung pretty hard on that and we're seeing pretty good results. I think Brad commented in his remarks that California share came down. I think the last thing I'd comment on is expenses and that's not just an underwriting or pricing issue or pricing team issue rather it's an enterprise-wide effort and initiative. And so as Brad said, I think we made a fair amount of progress there. So if I pull back, the primary aspect of the change was around aligning claims with the rest of the organization. And I feel like we're making progress on the levers that are at our disposal. Teams are moving quickly and most importantly we're seeing some of the results, some of the actions bear fruit in our results, and so we feel pretty good about that. Brad, I'll turn it to you and see if you wanted to add or amend anything I just said. Bradley Camden: I'll just add to Steve's comments, Greg, and good morning to you. As Steve mentioned, we have made some significant progress. We got rate effective in California in a quarter, probably averaged between 2 of our programs about 5.5% beginning to earn in. We filed another 6.9%. And we continued to take non-rate actions, which you can see through the reduction in PIF growth quarter-over-quarter. We like what we're seeing. We're seeing some modest sequential improvement and we expect over time for that to improve over the coming quarters. So, I'll leave it there. Turn it back to the operator. Charles Peters: Well, I have a follow-up question, if that's okay. Bradley Camden: Of course. Charles Peters: I just wanted to touch on the goodwill charge. Just if you can walk us through the mechanics of that, because I know you still have some goodwill on the balance sheet, just trying to understand how you came at the number and where the stock price is, is that going to result in continuing quantitative analysis every quarter on goodwill? Just give us an update there, please. Thank you. Bradley Camden: Yes, sure. Thanks for the question, Greg. You know, our goodwill impairment was triggered by the sustained decline in our stock price over the past year. You know, Kemper's down about roughly 50% year-over-year, roughly 30% year-to-date. And that required a quantitative goodwill impairment assessment evaluation. When you evaluate goodwill, you use multiple different methods. One is, you know, this kind of cash flow method and one's a market value approach which uses, you know, Kemper's public market valuations. And when you look at where our tangible book value is relative to book value, and you look at the valuation of the fair value of our specialty auto segment, given the valuation and some of the control premiums, you know, we could no longer support the book value that was on our books. And so we had to bring down that evaluation. As I mentioned earlier, we had a $460 million goodwill impairment that brings our specialty auto segment goodwill down to about $570 million. When you think about as we go forward, you know, another sustained decline in our share price would require us to do another quantitative goodwill impairment. But that's not the only trigger. It also depends upon our operating results. And as we mentioned earlier, our operating results are improving and we expect further improvement. Well, there's multiple things to look at. But you are correct, and we did mention this in our filings, that a sustained decline in our share price as well as continued or challenged operating results could result in additional impairment. But as we see it, as we see it right now, we're comfortable with the position. We're comfortable with the goodwill on our books. And I'll also mention there was no adjustment to the life segment this quarter. Operator: Your next question comes from the line of Paul Newsome with Piper Sandler. Paul, your line is open. Please go ahead. Jon Paul Newsome: I wanted to touch on the $16.6 million write-off related to the surplus notes and the reciprocal. I'm guessing, and please tell me if I'm wrong, that you're essentially writing down the surplus note that was issued to the reciprocal, and I would guess that's because it's not expected to be profitable. But the major question is, assuming that I'm right, is, does this mean that the prior management's thinking about moving everything into reciprocal is not the current strategy. What's your thought on that? Stephen McAnena: Hey Paul, this is Steve. Thanks for the question. So I'll start and then hand it over to Brad to cover some of the technical details. If you kind of pull back, I've been here since the beginning of June. My focus has been on getting my arms around the team, organization and restoring profitability. The reciprocal is definitely on the agenda of things to sort of explore, study and decide upon. But it's only been 60 days. We're going to focus on that in addition to a couple of other things throughout the remainder of the year. What I would ask is as it relates to sort of decisions on the reciprocal give me a little bit of time to get my arms around the business and that particular issue and we'll be in touch and communicate any decisions around that at the appropriate time. Brad, I'll hand it to you and you can perhaps cover some of the technical issues. Bradley Camden: Yes, thanks, Steven, and good morning, Paul. You know, similar to, you know, the goodwill impairment, when you think about the reciprocal exchange, Kemper issued or purchased $36 million of surplus note from the exchange. We look at the performance of that exchange, which has not been making money, and you look at, you forecast that out over the next, you know, 3 to 5 years, the exchange could no longer support the valuation of those surplus notes. As a result, we wrote them down. We took a $21.1 million, or $21 million pre-tax charge. There's roughly $15 million of surplus notes left. We'll evaluate those as we go forward based on the cash flows of that legal entity. And as Steve mentioned, we'll provide additional details around the reciprocal strategy and the exchange here in the near future. Jon Paul Newsome: That's great. Maybe a little bit of a follow-up to Greg's question. If you're just looking at California and the needed rate increases, is there a way for us to think about linking the sort of rate increases that you're working your way through in stages to get to profitability with the PIF growth? And I guess I'm thinking is, you know, should we be thinking that PIF growth should be under pressure really until the technical rate gets to its ultimate level, which I assume is that obviously you're not seeing the full technical rate increase needed. So should we think about this sort of as a multi-stage period where eventually maybe another rate increase out or two, you get to that period, or do you think that PIF will not necessarily track what you're doing from a rate perspective? Stephen McAnena: Hey, Paul, this is Steve again. Thanks for the question. So, let me try to, there's a lot to unpack in what you asked and brought up, so let me try to do it. We'll tag team with Brad and do our best to try to address your question so. Let's start with sort of the diagnosis. Diagnosis as we sit here today, is we need double-digit rate in California. So you can look at the numbers, we're not profitable. And you see that with other competitors as well. We've taken one rate change. We have another filing pending and we feel good about that. We feel good about the impact that rate is going to have on retention, retention appears to be holding. So we feel pretty good. But like I said at the beginning, this is about restoring profitability and putting that first and foremost. We want to make sure we have a thriving business on the other side, but it is profit first. I'd say the second thing is we are taking some non-rate action so we have slowed down new business, new business generates economic value for the enterprise. However, in the near term, on a calendar year basis, as you're well aware, that can have an adverse impact on the combined ratio. So we are slowing that down. And then we are taking some non-rate actions, including but not limited to expenses. I'd say from my perspective, when we think about PIF growth, both in the aggregate and within California. It's not time bound, it's conditional. And the condition is that we need to have profitability or at least clear line of sight towards profitability. We're not there yet. We're definitely marching towards it. We feel confident in the actions and the levers we're pulling, but once we see that, we will begin to thoughtfully and meaningfully start to grow our PIF. Brad, if you want to add or amend anything I said, feel free. Bradley Camden: I think you got it covered, and Paul if I ask, if you got a follow-up to Steve's answer. Jon Paul Newsome: No, I'm good. Although I will say it's a positive thing. I got some wonderful positive feedback on your new hires. Stephen McAnena: Thank you for that. Hello, Andrew. Andrew Kligerman: Can you hear me? Michael Marinaccio: Yes. Sorry. We can hear you now. Andrew Kligerman: Okay. Great. I want to follow up on the question that Paul was just asking. So if I understand California correctly, you got 6.9%, you filed for another 6.9%, but then I think I heard you say that you need double-digit rate and you've taken some non-rate actions already. So, you know, one, do you get that? Is California going to provide that rate? I guess maybe you can share the competitive landscape in California right now such that, you know, what are your competitors doing? And ultimately what I want to get to is when do you think you'll get to a point where you could turn around PIF? Kemper was a company that had, I think you had something well over 2 million in PIF prior to COVID. And now you're sitting at 928,000 personal auto policies. So I guess, you know, to make it shorter, you know, what's it going to take to get to, what's the competitive landscape allowing for you to kind of pivot to growth and the part two of it is, yes, well, that's it. What's going to allow you to pivot to growth? Stephen McAnena: Hey Andrew, this is Steve and thanks for the question. Brad and I will do our best to try to address the points that you raised. So let me pull back. I said, we need somewhere in the double-digit range to, to restore profitability. We have 6.9% pending. You asked a question around, hey, when is that going to get approved? We filed in accordance with CDI regulation. We have an effective date later this year. I can tell you the data supports the change. If you're asking me to guarantee that the CDI will approve it, I don't think anyone can guarantee CDI will approve, but we feel pretty confident that we can support it. The second piece of data that I'd sort of lean into is, we're not alone. So when you look at competitor filings, you do see a pretty substantial rate increases, particularly on the liability side. I'd say the third thing is leading into the double-digit rate need would be the filing and also some of the expense actions and initiatives we have under place. And so from our perspective, we feel like we're on track with our filing. We feel like we are on track and continuing to pursue expense opportunities. I'll go back to something I said earlier. I've been here 60 days. I frankly think it would be irresponsible for me to say, here's the exact date upon which we're going to start growing PIF. From my perspective, I think what we want to see is clear signs of profitability in the book or a very clear line of sight towards profitability. As we continue to navigate going forward, we will certainly communicate our plans and we do have an expectation that we will be able to grow PIF, but we have to grow it profitably. And so once we get the filings approved, continue to make progress on our expense initiatives, we'll be talking about how and when we're going to be growing our PIF in California. Brad, if you wanted to add anything to that, feel free. Bradley Camden: I'll just have a few comments. You know, we did see some nice improvement quarter-over-quarter, particularly in California. The rate actions we took late in '25 were effective in the second quarter, 1 in April, 1 in June. As Steve mentioned, we filed for another 6.9%. I'd also highlight that the non-rate actions, which are, you know, constraining the PIF growth, are, you know, are helping improve the loss ratio and the combined ratio. My expectation is that those will continue to help improve the margins. And third, as Steve mentioned, the expenses are also, significantly helping as well. When you think about, you know Steve's comments, we're doing everything we can to get rate and improve margins, but that will also be dependent upon the frequency severity trends in the marketplace. And I leave you with this, Andrew. Typically when you go from first quarter to second quarter, you have seasonality and our combined ratio typically goes up. This quarter, it went down a little bit in California. And that is a positive sign and that gives me confidence that the non-rate actions that we're implementing are having the intended effect. Andrew Kligerman: That was very helpful. And maybe shifting over to commercial auto, I'm a little perplexed because you had an underlying combined of 93.7%, but I think I heard that you're going to file for more rate to kind of fix the book. But if the underlying is okay, then I'm not sure why you would be, you know, needing dramatic rate. And just the second part of that and tied to that is, you know, this will be, I think the fifth consecutive quarter of adverse development in commercial auto. So why do you think you might or might not have your arms around your reserving in commercial auto after this last adverse development? Stephen McAnena: Well, thanks for the question again, Andrew. So let me sort of pull back and tell you how we've been thinking about commercial auto. And I think it's important to sort of look at this under the lens of overall performance. And you have our results, you know what our combined ratio is in the aggregate across all businesses. And to some degree that does sort of influence strategy, thinking, et cetera. When we and I look at commercial auto I see a couple of things and I want to make sure I want to edit one of the words that you used. I see pretty strong PIF growth, high single digits. I see a strong underlying combined ratio, low 90s. And like you, we see prior year development over successive quarters. I think that gives us sort of an opportunity to pull back and say, what are the options for us going forward? Option 1, and I'll just simplify it, there are a ton, but Option 1 is continue to go down our current path, continue growing at the current rate, continue taking rates up at our current level. And frankly, if you looked at that, that's a reasonable path, given some of the numbers you have. I think against the backdrop of overall performance and what we've seen with prior year development, and Brad will talk about his perspective on that. That sort of leads us to Option 2. What I didn't say is we're going to take meaningfully more rate, what I said was we're going to take more rate. And I think the consequence of that is going to be to slow down and we'll tighten our underwriting as well. Consequence of that will be likely to slow down our PIF growth. We'll still have positive PIF growth. I think this is sort of a more measured approach to sort of manage commercial auto, particularly given the backdrop of overall performance. And with that, I'll hand it to Brad. Brad, if you wanted to comment on reserves, that'd be great. Bradley Camden: Thanks, Steve. Andrew, you're correct. We've had successive quarters of adverse prior development. When you look at the total reserves for the commercial where we're at roughly $1 billion of reserves. 90% of those reserves are related to bodily injury, the bodily injury coverage. And that's been a challenging coverage to get correct. We've talked about this in the past, 45% of our books is in California, California is a highly litigious state, and you're seeing a lot of activity there, and you're seeing the cost to defend those claims continue to increase. As a result of that environment, we find ourselves needing to continue to increase our reserves. When we think about do we have a handle on this, we think we do. But that's not indicative of the last couple quarters from our reserve strengthening. We like the trends that we're seeing. Things are getting better across the entire book with some favorable development and other coverages, but BI, particularly in California, continues to be the predominant issue and we'll continue to monitor it and address it as needed. Operator: There are no further questions at this time. I will now turn the call back to Michael Marinaccio for closing remarks. Michael Marinaccio: Once again, I just want to thank you all for joining us today. We appreciate your questions and continued support, and we look forward to talking to you again next quarter. Have a great day. Operator: Thank you for attending today's call. You may now disconnect. Before you buy stock in Kemper, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kemper wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Kemper (KMPR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Kemper Corporation? Here are five stocks we like better. Kemper reported a $464.8 million GAAP net loss, or $7.90 per share, primarily due to a $460 million non-cash goodwill impairment in its specialty auto segment. Adjusted net operating income was $26.3 million, or $0.45 per share. CEO Steve McAnena emphasized that profitability will come before growth. Personal auto performance improved, but California remains challenged; Kemper is reducing exposure, pursuing additional rate increases and limiting new business until returns improve. Commercial auto growth will become more disciplined amid adverse prior-year reserve development, while Kemper reported $18 million in life-business operating income and more than $80 million in annualized cost savings. 5 Top-Rated Dividend Stocks With Double-Digit Upside Kemper (NYSE:KMPR) reported a second-quarter net loss of $464.8 million, or $7.90 per share, as a $460 million non-cash goodwill impairment in its specialty auto segment weighed on GAAP results. Adjusted consolidated net operating income was $26.3 million, or $0.45 per share, as the insurer cited sequential improvement in underlying operating performance. President and Chief Executive Officer Steve McAnena, who joined the company two months ago, said restoring profitability is Kemper’s primary priority, with growth to be pursued only where it can be achieved profitably. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling “Profitability is a prerequisite for growth, and as such, growth will be earned, not chased,” McAnena said. The company said its underlying operating performance improved through property and casualty underwriting results, expense discipline and stable earnings from its life insurance business. Net investment income totaled $105 million during the quarter, while trailing 12-month cash flow was $434 million. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Chief Financial Officer Brad Camden said the goodwill impairment was triggered by recent operational challenges and a subsequent decline in Kemper’s share price, requiring a quantitative assessment under GAAP. The charge was based in part on the company’s second-quarter share price and reduced goodwill in the Specialty Property & Casualty segment to about $570 million. Camden said the impairment does not affect the company’s ongoing operations, cash-generating ability, statutory capital, holding-company liquidity or compliance with debt and revolving credit covenants. → No Hangover: Revisiting Microsoft One Week After Earnings Kemper also recorded a $16.6 million after-tax allowance for credit losses associated with surplus notes issued by Kemper Reciprocal Exchange. Camden said during the question-and-answer session that the company took a $21 million pre-tax charge on $36 million of surplus notes after concluding that projected cash flows at the exchange could not support their prior valuation. Roughly $15 million of surplus notes remain and will be evaluated based on the legal entity’s future cash flows. McAnena said the company is reviewing its strategy for the reciprocal exchange and expects to provide further details at a later time. Kemper ended the quarter with $766 million of holding-company liquidity. Its debt-to-capital ratio rose to 28.3%, which Camden attributed primarily to the goodwill impairment rather than a change in liquidity or statutory capital. Kemper’s specialty auto segment, which includes personal and commercial auto operations, reported a normalized underlying combined ratio of 102%, improving 0.8 percentage points sequentially. In personal auto, the normalized underlying combined ratio improved 1.3 points sequentially to 105.2%, reflecting stronger underwriting performance and expense discipline. However, McAnena said the business remains below target return levels, largely because of Kemper’s exposure to California. The company reduced California’s share of its personal auto portfolio by 2.5 percentage points during the quarter. Policies in force in California declined 10% sequentially, while Kemper continued to grow in other markets. Management said it implemented rate increases averaging about 5.5% across two California programs that began taking effect during the second quarter and has filed for an additional 6.9% increase. McAnena said Kemper needs rate increases in the double-digit range to restore profitability in the state, alongside non-rate measures and cost reductions. The company has slowed new-business writings in areas where management expects new policies could hurt calendar-year results. McAnena said Kemper will not provide a timetable for returning to policy growth in California, instead tying growth plans to profitability or a clear path toward it. Camden said the personal auto combined ratio in California declined from the first quarter to the second quarter despite normal seasonal pressure, which he described as an encouraging sign that the company’s rate and non-rate actions are having the intended effect. Commercial auto posted an underlying combined ratio of 93.7%, while policies in force increased 9.2% from a year earlier. Reported results were affected by $17.7 million of prior-year reserve development. McAnena said Kemper will take additional rate and tighten underwriting standards in commercial auto, even if those actions reduce near-term growth. The company has seen adverse prior-year development in successive quarters, prompting management to adopt what McAnena described as a more measured approach. Camden said commercial auto has roughly $1 billion in reserves, with about 90% related to bodily injury coverage. He said California represents about 45% of the commercial auto book and remains a particular challenge because of litigation activity and higher claim-defense costs. Management said it believes it has a handle on reserving trends but will continue to monitor bodily injury claims, especially in California. Kemper’s life business generated $18 million in net operating income, supported by earned-premium growth, favorable mortality and lapse experience, and higher investment income. Earned premiums increased to $103 million, while average premium per policy rose 5.4% from the prior-year period. The company said its restructuring program has identified more than $80 million in cumulative annualized run-rate savings since it was announced in October, up $20 million from the prior quarter. Camden said the cost actions have contributed to lower expense and loss-adjustment-expense ratios. McAnena also said Kemper has realigned its property and casualty organization, placing underwriting, pricing, product and claims under one leader, Eric Kappler. The company expects the change to improve accountability, speed decision-making and strengthen execution. Kemper Corporation (NYSE:KMPR) is a diversified insurance holding company headquartered in Chicago, Illinois. Formed through the rebranding of Unitrin in 2010, Kemper has established a nationwide presence by offering a broad array of property and casualty insurance products. The company distributes its products through independent agents, brokers and direct-to-consumer channels, serving both individual policyholders and commercial clients. The personal insurance segment provides coverage for automobiles, homeowners, renters and umbrella lines, while the commercial business focuses on liability, workers' compensation and specialty property solutions tailored to small and mid-sized enterprises. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kemper Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management established a 'profitability first' mandate, explicitly stating that growth must be earned through target returns rather than chased at the expense of margins. Personal auto performance remains below target due to high concentration in California, prompting aggressive non-rate actions and a 2.5 percentage point reduction in the state's portfolio share. The P&C organization was realigned to place underwriting, pricing, product, and claims under a single leader to improve execution speed and accountability. Commercial auto continues to deliver strong underlying results with a 93.7% combined ratio, though management is shifting to a more disciplined stance to address recurring reserve development. The Life segment serves as a foundational stabilizer, providing consistent cash flow and diversification through improved distribution and lapse management. Operational improvements are being driven by an enterprise-wide expense discipline initiative, which has already identified significant run-rate savings. Management views the current results as a transition period where restoring technical profitability is the prerequisite for future scale. Future PIF growth is conditional on achieving clear lines of sight toward profitability, with no specific timeline set for pivoting back to aggressive acquisition. Guidance for personal auto assumes the approval of a pending 6.9% rate filing in California and the continued realization of double-digit rate needs. Commercial auto growth is expected to temper in the near term as the company prioritizes rate adequacy and tighter underwriting standards over volume. The restructuring program is projected to reach more than $80 million in cumulative annualized run-rate savings, up from previous estimates. Management plans to evaluate the long-term strategy for the Kemper Reciprocal Exchange over the remainder of the year following recent valuation adjustments. A $460 million non-cash goodwill impairment was recorded in the specialty auto segment, triggered by a sustained decline in share price and recent operational challenges. A $16.6 million after-tax allowance for credit losses was recognized for surplus notes related to the Kemper Reciprocal Exchange due to expected recoverability assessments. Successive quarters of prior year adverse development in commercial auto, totaling $17.7 million this quarter, highlight ongoing volatility in California bodily injury claims. Management noted that while the goodwill impairment impacts GAAP results, it does not affect statutory capital, liquidity, or debt covenant compliance. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is aligning claims more closely with pricing and underwriting to accelerate decision-making and response times to market trends. The company has implemented a 5.5% rate increase in California and has another 6.9% filing pending to address a total double-digit rate need. Non-rate actions, including slowing new business and reducing expenses, are being used as primary levers while waiting for rate approvals to earn in. The impairment was triggered by the stock price being down approximately 50% year-over-year, making the book value of the specialty auto segment unsustainable under GAAP. Management clarified that while specialty auto goodwill was reduced to $570 million, no adjustment was required for the Life segment. Future impairments remain a risk if there is a further sustained decline in share price or if operating results fail to improve as expected. The $21 million pre-tax charge reflects that the exchange's current performance cannot support the full valuation of the $36 million in surplus notes. CEO Stephen McAnena requested more time (beyond his first 60 days) to fully evaluate whether the reciprocal remains the core long-term strategy. There are approximately $15 million in surplus notes remaining on the books, which will be evaluated based on future entity cash flows. Management is choosing a 'measured approach' to slow PIF growth in commercial auto to ensure the business does not outpace its reserving accuracy. The primary pressure point is bodily injury coverage, which represents 90% of the segment's $1 billion in reserves; California is a particular challenge as it represents 45% of the book and remains highly litigious. The shift toward more rate and tighter underwriting is intended to break the cycle of successive quarters of adverse prior year development.

This article first appeared on GuruFocus. Net Loss: Reported a net loss of $464.8 million, or $7.90 per share, for the second quarter of 2026. Adjusted Consolidated Net Operating Income: Totaled $26.3 million, or $0.45 per share. Net Investment Income: Reached $105 million for the quarter. Trailing 12-Month Cash Flow: Amounted to $434 million. Goodwill Impairment: Recorded a $460 million non-cash goodwill impairment in the specialty auto segment. Allowance for Credit Losses: Recognized a $16.6 million after-tax allowance related to surplus notes issued by Kemper Reciprocal Exchange. Holding Company Liquidity: Ended the quarter with $766 million. Debt to Capital Ratio: Increased to 28.3%, primarily driven by the goodwill impairment. Specialty Auto Underlying Combined Ratio: Improved 0.8 points sequentially to 102.0% on a normalized basis. Personal Auto Underlying Combined Ratio: Improved 1.3 points sequentially to 105.2% on a normalized basis. California Portfolio Share: Declined by 2.5 percentage points during the quarter, with a 10% sequential decline in policies in force. Commercial Auto Underlying Combined Ratio: Reported a strong 93.7%. Commercial Auto Policies in Force: Increased 9.2% year-over-year. Commercial Auto Prior Year Reserve Development: Impacted by $17.7 million of adverse development. Life Net Operating Income: Generated $18 million for the quarter. Life Earned Premiums: Increased to $103 million. Life Average Premium per Policy: Increased 5.4% from the prior year period. Restructuring Savings: Identified more than $80 million of cumulative annualized run rate savings, up $20 million from the prior quarter. Warning! GuruFocus has detected 4 Warning Sign with KMPR. Is KMPR fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Underlying results improved sequentially, with the normalized underlying combined ratio improving 0.8 points to 102.0%. Personal auto combined ratio improved 1.3 points to 105.2%, driven by rate and non-rate actions. Commercial auto delivered strong underlying performance with a combined ratio of 93.7% and 9.2% year-over-year PIF growth. Life business generated stable earnings of $18 million, supported by growth in earned premiums and favorable mortality and lapse experience. Restructuring program identified over $80 million in cumulative annualized run-rate savings, up $20 million from last quarter. Reported GAAP results were significantly impacted by a $460 million non-cash goodwill impairment in the specialty auto segment. Personal auto remains unprofitable, requiring double-digit rate increases in California, with only a 6.9% filing pending. Commercial auto experienced $17.7 million of prior-year reserve development, marking successive quarters of adverse development. California concentration remains high, with a 10% sequential decline in policies in force as part of the profit restoration strategy. A $16.6 million after-tax allowance for credit losses was recorded related to surplus notes issued by Kemper Reciprocal Exchange. Q: Can you provide additional detail on how you're changing the pricing and underwriting backbone of the company, particularly in California where you're shrinking and it's a difficult market to get rate increases?A: Steve McAnena (President and CEO) stated that the primary aspect of the organizational change was aligning claims with the rest of the business, noting that underwriting and pricing actions prior to his arrival were "pretty effective." He highlighted that the team has been aggressive with rate increases in California, including a recent filing, and has slowed new business where calendar-year impact would be adverse. Brad Camden (CFO) added that rate effective in the quarter averaged about 5.5% between two programs, with another 6.9% filed, and that non-rate actions are visible through the reduction in PIF growth. Q: Can you walk us through the mechanics of the $460 million goodwill impairment charge and whether the stock price will result in continuing quantitative analysis every quarter?A: Brad Camden (CFO) explained that the impairment was triggered by a sustained decline in the stock price (down roughly 50% year-over-year and 30% year-to-date), requiring a quantitative assessment. The evaluation used discounted cash flow and market value approaches, which could no longer support the book value of the Specialty Auto segment. The impairment brings Specialty Auto goodwill down to about $570 million. He noted that another sustained decline in share price or continued challenged operating results could result in additional impairment, but the company is currently comfortable with the position. Q: Regarding the $16 million write-off related to the surplus notes issued by Kemper Reciprocal Exchange, does this mean the prior management's thinking about moving everything into the reciprocal is not the current strategy?A: Steve McAnena (President and CEO) said the reciprocal is "definitely on the agenda" to explore and study, but he has only been in the role for 60 days and needs time to get his arms around the business before making decisions. Brad Camden (CFO) provided technical details, explaining that Kemper purchased $36 million of surplus notes from the exchange, and based on the exchange's performance and forecasts over the next three to five years, it could no longer support the valuation, resulting in a $21.1 million pre-tax charge. Roughly $15 million of surplus notes remain and will be evaluated based on future cash flows. Q: Is there a way to link the rate increases in California to PIF growth, and should we think about this as a multi-stage period where PIF growth remains under pressure until the technical rate gets to its ultimate level?A: Steve McAnena (President and CEO) stated that the diagnosis is a need for "double-digit rate" in California to restore profitability. He emphasized that PIF growth is "not time-bound, it's conditional" on achieving profitability or having a clear line of sight toward it. The company is slowing new business because it can adversely impact the calendar-year combined ratio, and will only begin to grow "thoughtfully and meaningfully" once profitability is achieved. Q: You got 6.9% rate and filed for another 6.9% in California, but you said you need double-digit rate. Do you get that, and what's the competitive landscape allowing you to pivot to growth?A: Steve McAnena (President and CEO) said the company needs somewhere in the double-digit range to restore profitability, with 6.9% pending and an effective date later this year. He noted that competitor filings show substantial rate increases, particularly on the liability side, and that expense actions will help close the gap. He declined to give an exact date for resuming PIF growth, stating it would be "irresponsible" after only 60 days, but confirmed the expectation to grow PIF profitably. Brad Camden (CFO) added that non-rate actions constraining PIF growth are helping improve the loss ratio and combined ratio, and noted that California's combined ratio went down slightly from Q1 to Q2 despite typical seasonality, which is a positive sign. Q: Commercial auto had an underlying combined ratio of 93.7%, but you're filing for more rate. Why would you need dramatic rate if the underlying is okay, and why do you think you might not have your arms around reserving after this fifth consecutive quarter of adverse development?A: Steve McAnena (President and CEO) clarified that he didn't say the company would take "meaningfully more rate" but rather "more rate" and tighten underwriting, which will likely slow PIF growth while still remaining positive. He framed this as a measured approach given the backdrop of overall performance. Brad Camden (CFO) addressed the reserving issue, noting that about 90% of the roughly $1 billion in commercial auto reserves relate to bodily injury coverage, which has been challenging to get correct. He cited California's highly litigious environment (45% of the book) and increasing defense costs as drivers of continued reserve strengthening, but expressed confidence that the company has a handle on the trends. Q: Can you provide context on the $16.6 million after-tax allowance for credit losses related to the surplus notes and its impact on capital?A: Brad Camden (CFO) explained that the allowance was recorded based on an assessment of expected recoverability of the surplus notes under GAAP. He emphasized that, similar to the goodwill impairment, this charge does not affect insurance subsidiary statutory capital or holding company liquidity. The company ended the quarter with $766 million of holding company liquidity, and the debt-to-capital ratio increase to 28.3% was primarily driven by the goodwill impairment, not a deterioration in liquidity or statutory capital. Q: What is the status of the restructuring program and its contribution to financial performance?A: Brad Camden (CFO) reported that since announcing the restructuring initiative last October, the company has identified more than $80 million of cumulative annualized run rate savings, an increase of $20 million since last quarter. He noted that the actions taken are contributing to improved financial performance, including lower expense and LAE, and that the company continues to identify additional opportunities to improve its cost structure. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

For the quarter ended June 2026, Kemper (KMPR) reported revenue of $1.12 billion, down 8.9% over the same period last year. EPS came in at $0.45, compared to $1.30 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.23 billion, representing a surprise of -9.5%. The company delivered an EPS surprise of +40.63%, with the consensus EPS estimate being $0.32. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Kemper performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Specialty Property & Casualty Insurance - Commercial Automobile Insurance - Total Incurred Loss and LAE Ratio: 83.6% versus 77.7% estimated by two analysts on average. Specialty Property & Casualty Insurance - Combined Ratio: 104% versus the two-analyst average estimate of 105.1%. Specialty Property & Casualty Insurance - Total Incurred Loss and LAE Ratio: 83.4% versus 83.3% estimated by two analysts on average. Specialty Property & Casualty Insurance - Insurance Expense Ratio: 20.6% versus the two-analyst average estimate of 21.8%. Revenues- Life Insurance- Earned Premiums: $102.7 million compared to the $101.77 million average estimate based on three analysts. The reported number represents a change of +2.2% year over year. Revenues- Specialty Property & Casualty Insurance- Earned Premiums: $896.6 million versus the three-analyst average estimate of $1.01 billion. The reported number represents a year-over-year change of -11.3%. Revenues- Earned Premiums: $1.01 billion versus the three-analyst average estimate of $1.13 billion. The reported number represents a year-over-year change of -10.5%. Revenues- Net Investment Income: $105.4 million versus the three-analyst average estimate of $106.57 million. The reported number represents a year-over-year change of +9.9%. Revenues- Specialty Property & Casualty Insurance- Earned Premiums- Personal Automobile: $647.4 million versus $797.59 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -18% change. Revenues- Specialty Property & Casualty Insurance- Earned Premiums- Commercial Automobile: $249.2 million compared to the $256.52 million average estimate based on two analysts. The reported number represents a change of +12.5% year over year. Revenues- Life Insurance- Total: $152.4 million versus the two-analyst average estimate of $151.45 million. The reported number represents a year-over-year change of +4.7%. Revenues- Specialty Property & Casualty Insurance- Total: $951.6 million compared to the $1.11 billion average estimate based on two analysts. The reported number represents a change of -10.5% year over year. View all Key Company Metrics for Kemper here>>> Shares of Kemper have returned -0.3% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #5 (Strong Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kemper Corporation (KMPR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Kemper (KMPR) came out with quarterly earnings of $0.45 per share, beating the Zacks Consensus Estimate of $0.32 per share. This compares to earnings of $1.3 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +40.63%. A quarter ago, it was expected that this insurance holding company would post earnings of $0.81 per share when it actually produced earnings of $0.21, delivering a surprise of -74.07%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Kemper, which belongs to the Zacks Insurance - Multi line industry, posted revenues of $1.12 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 9.5%. This compares to year-ago revenues of $1.23 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Kemper shares have lost about 27.5% since the beginning of the year versus the S&P 500's gain of 13%. While Kemper has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Kemper was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.55 on $1.22 billion in revenues for the coming quarter and $1.94 on $4.91 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Multi line is currently in the bottom 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Assured Guaranty (AGO), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This insurance holding company is expected to post quarterly earnings of $1.66 per share in its upcoming report, which represents a year-over-year change of +64.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Assured Guaranty's revenues are expected to be $191.8 million, down 3.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kemper Corporation (KMPR) : Free Stock Analysis Report Assured Guaranty Ltd. (AGO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CHICAGO, August 05, 2026--(BUSINESS WIRE)--Kemper Corporation (NYSE: KMPR) reported second quarter 2026 results, which included a non-cash goodwill impairment of $460 million. This has no impact on the cash-generating ability of our businesses, statutory capital, holding company liquidity, or compliance with our debt and revolving credit covenants. Including this charge, Kemper reported a net loss of $464.8 million, or $(7.90) per share, for the second quarter of 2026, compared to net income of $72.6 million, or $1.12 per diluted share, for the second quarter of 2025. Adjusted Consolidated Net Operating Income1 was $26.3 million, or $0.45 per share, for the second quarter of 2026, compared to Adjusted Consolidated Net Operating Income1 of $84.1 million, or $1.30 per diluted share, for the second quarter of 2025. Summary of quarterly performance: Underlying operating performance improved sequentially; reported results included a non-cash goodwill impairment and valuation allowance Delivered Adjusted Consolidated Net Operating Income¹ of $26.3 million, or $0.45 per share Personal Auto profitability improved, reflecting underwriting actions and continued expense discipline Commercial Auto maintained strong underlying performance; reported profitability was impacted by prior-year reserve development Life business continued to generate stable operating earnings Strengthened leadership and organizational alignment to improve accountability and execution "This quarter reflects improving underlying operating performance and the actions we’re taking to restore profitability," said President and CEO Stephen J. McAnena. "While there is more work ahead, we have a clear understanding of where performance must improve and are taking decisive actions to strengthen execution, sharpen accountability, and improve returns across our business. I am confident these actions will position Kemper to deliver stronger, more consistent results and create long-term value for shareholders." Revenues Total revenues for the second quarter of 2026 decreased $132.9 million to $1,092.7 million compared to the second quarter of 2025. The decline was primarily due to lower Specialty Personal Automobile volumes and higher impairment losses, partially offset by higher Specialty Commercial Automobile volumes and net investment income. Segment Results Unless otherwise noted, (i) the segment results discussed below are presented on an after-tax basis, (ii) prior-year development includes both catastrophe and non-catastrophe losses and LAE, (iii) catastrophe losses and LAE exclude the impact of prior-year development, (iv) loss ratio includes loss and LAE, and (v) all comparisons are made to the prior year quarter unless otherwise stated. The Specialty Property and Casualty Insurance segment reported adjusted net operating income of $15.8 million in the second quarter of 2026, compared to adjusted net operating income of $79.0 million in the second quarter of 2025. This decrease was due primarily to an increase in our Specialty Personal Automobile Underlying loss and LAE ratio1. Specialty Personal Automobile’s Underlying loss and LAE ratio1 was 83.8 percent, compared to 72.5 percent in the second quarter of 2025. The increase was primarily driven by higher claim severity and frequency in California. The Life Insurance segment reported adjusted net operating income of $18.3 million for the second quarter of 2026, compared to adjusted net operating income of $12.6 million in the second quarter of 2025. The improvement was primarily driven by higher Net Investment Income and Earned Premiums. Capital Total Kemper Corporation Shareholders’ Equity as of June 30, 2026 was $2,192.8 million, a decrease of $488.6 million, or 18 percent, since year-end 2025 primarily driven by net loss for the period. Kemper and its direct non-insurance subsidiaries ended the quarter with cash and investments of $130.0 million, and $350.0 million of available borrowing capacity under the revolving credit agreement. On May 6, 2026, Kemper announced that its Board of Directors declared a quarterly dividend of $0.32 per share, or $19.3 million. The dividend was paid on June 2, 2026, to its shareholders of record as of May 18, 2026. Kemper ended the quarter with a book value per share of $37.22, a decrease of 19 percent from $45.71 at the end of 2025. Adjusted book value per share1 was $27.55 at the end of the quarter, compared to $28.06 at the end of 2025. Unaudited Condensed Consolidated Statements of (Loss) Income for the three and six months ended June 30, 2026 and 2025 are presented below. Unaudited business segment revenues for the three and six months ended June 30, 2026 and 2025 are presented below. Unaudited selected financial information for the Specialty Property & Casualty Insurance segment follows. Unaudited selected financial information for the Life Insurance segment follows. Use of Non-GAAP Financial Measures Adjusted Consolidated Net Operating Income is an after-tax, non-GAAP financial measure and is computed by excluding from Net (Loss) Income attributable to Kemper Corporation the after-tax impact of: (i) Change in Fair Value of Equity and Convertible Securities; (ii) Net Realized Investment Gains (Losses); (iii) Impairment Losses; (iv) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs; (v) Debt Extinguishment and Other Charges; (vi) Goodwill Impairment; (vii) Non-Core Operations; and (viii) Significant non-recurring or infrequent items that may not be indicative of ongoing operations Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is Net (Loss) Income attributable to Kemper Corporation. There were no applicable significant non-recurring items that Kemper excluded from the calculation of Adjusted Consolidated Net Operating Income for the three and six months ended June 30, 2026 or 2025. Kemper believes that Adjusted Consolidated Net Operating Income provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. Change in Fair Value of Equity and Convertible Securities, Net Realized Investment Gains (Losses) and Impairment Losses related to investments included in Kemper’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of Kemper’s investments, the timing of which is unrelated to the insurance underwriting process. Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs may vary significantly between periods and are generally driven by the timing of business decisions which are unrelated to the insurance underwriting process. In the second quarter of 2026, the Company completed the sale of Newins and recorded a gain in connection with the transaction. In the third quarter of 2025, a restructuring program was launched to achieve operational and organizational efficiencies. The Company will continue to evaluate additional efficiency opportunities through 2027. Debt Extinguishment and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by Kemper’s financing and refinancing decisions and capital needs, as well as external economic developments such as debt market conditions, the timing of which is unrelated to the insurance underwriting process; and (ii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Goodwill Impairments are excluded because they are infrequent and non-recurring charges. Non-Core Operations includes the results of our Preferred Insurance business which we expect to fully exit. These results are excluded because they are irrelevant to our ongoing operations and do not qualify for Discontinued Operations under GAAP. Significant non-recurring items are excluded because, by their nature, they are not indicative of Kemper’s business or economic trends. The preceding non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures, as they do not fully recognize the profitability of Kemper’s businesses. A reconciliation of Net (Loss) Income attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income for the three and six months ended June 30, 2026 and 2025 is presented below. Diluted Adjusted Net Operating Income per Unrestricted Share is a non-GAAP financial measure computed by dividing Adjusted Net Operating Income by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Net (Loss) Income per Unrestricted Share. A reconciliation of Diluted Net (Loss) Income per Unrestricted Share to Diluted Adjusted Net Operating Income per Unrestricted Share for the three and six months ended June 30, 2026 and 2025 is presented below. Return on Adjusted Shareholders' Equity is a calculation that uses a non-GAAP financial measure. It is calculated by dividing the period’s annualized Net (Loss) Income attributable to Kemper Corporation, excluding the annualization of the after-tax goodwill impairment and the credit loss allowance recognized on the Reciprocal Exchange surplus notes, by the average shareholders’ equity excluding net unrealized gains and losses on fixed maturities, the change in discount rate on future life policyholder benefits and goodwill. Return on Shareholders’ Equity is the most directly comparable GAAP measure. We use this non-GAAP measure to identify and analyze the change in performance attributable to management efforts between periods. Kemper believes this non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are not influenced by management. Kemper believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. A reconciliation of Return on Shareholders’ Equity to Return on Adjusted Shareholders’ Equity is presented below: Underlying Combined Ratio is a non-GAAP financial measure. It is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding Total Incurred Losses and LAE Ratio, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio. Kemper believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in Kemper’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause Kemper’s loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on incurred losses and LAE and the Combined Ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of Kemper’s insurance products in the current period. Kemper believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing Kemper’s underwriting performance. Adjusted Book Value Per Share is a calculation that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains and losses on fixed income securities, the change in discount rate on future life policyholder benefits and goodwill by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. Kemper uses the trends in book value per share excluding the after-tax impact of net unrealized gains and losses on fixed income securities, the change in discount rate on future life policyholder benefits and goodwill in conjunction with book value per share to identify and analyze the change in net worth excluding goodwill attributable to management efforts between periods. Kemper believes the non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are not influenced by management. Kemper believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. A reconciliation of Book Value Per Share to Adjusted Book Value Per Share is presented below: Conference Call Kemper will host its conference call to discuss second quarter 2026 results on Thursday, August 6, at 8:00 a.m. Eastern (7:00 a.m. Central). The conference call will be accessible via the internet and by telephone at 833.461.5787, Conference ID 170600198. To listen via webcast, register online at the investor section of kemper.com at least 15 minutes prior to the webcast to download and install any necessary software. A replay of the call will be available online at the investor section of kemper.com. More detailed financial information can be found in Kemper’s Investor Financial Supplement and Earnings Call Presentation for the second quarter of 2026, which is available at the investor section of kemper.com. About Kemper The Kemper family of companies is one of the nation’s leading specialized insurers. With approximately $12 billion in assets, Kemper is improving the world of insurance by providing affordable and easy-to-use personalized solutions to individuals, families and businesses through its Kemper Auto and Kemper Life brands. Kemper serves over 4.4 million policies, is represented by approximately 24,100 agents and brokers, and has approximately 7,000 associates dedicated to meeting the ever-changing needs of its customers. Learn more about Kemper at kemper.com. Caution Regarding Forward-Looking Statements This press release 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; changes in interest rate environment; supply chain disruption; product demand and pricing; effects of legislative, governmental and regulatory actions; heightened competition; litigation outcomes and trends; investment risks; cybersecurity risks or incidents; 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. 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 press release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805043499/en/ Contacts Investors: Michael Marinaccio312.661.4930 or [email protected] Media: Barbara Ciesemier312.661.4521 or [email protected]