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

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Kemper Corporation (KMPR - Free Report) 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-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 - Free Report) , RLI Corp. (RLI - Free Report) and The Travelers Companies, Inc. (TRV - Free Report) beat the respective Zacks Consensus Estimate.

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