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Kemper (KMPR) Divests Reserve National, Focuses on Key Areas
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Kemper Corporation (KMPR - Free Report) divested Reserve National Insurance Company and its subsidiaries to Medical Mutual of Ohio for $88 million in cash. The divesture will allow this Zacks Rank #3 (Hold) insurer to intensify its focus on its core capabilities. The transaction was announced on Aug 1, 2022.
Based in Oklahoma City, Reserve National sells accident and health insurance products in both the individual and group markets. The unit wrote more than $170 million premiums in 2021. Headquartered in Cleveland, Medical Mutual is one of Ohio’s oldest and largest health insurance companies. The company provides health, life, disability, dental, vision and indemnity plans to its customers. Thus, the addition of Reserve National to Medical Mutual’s portfolio will help the acquirer expand its presence and strengthen its product portfolio.
Kemper stays focused on building its P&C and life insurance businesses that provide sustainable, competitive advantages. In tandem with its business focus and enhanced operating model, the insurer has initiated a strategic review of Kemper Personal Insurance, which is the preferred home and auto business.
Kemper has also laid out strategic initiatives to strengthen competitive advantages and accelerate growth. The insurer stated this includes programs to enhance and optimize expenses within LAE, enterprise expense and real estate. While KMPR estimates more than $150 million annualized expense savings, it also expects to incur $150 million to $200 million over the next three years to achieve the expense savings.
Shares of this multi-line insurer have lost 5.1% year to date against the industry's increase of 0.1%. A compelling product portfolio, lower investment expenses, strong segmental performance and ample liquidity should help the stock bounce back.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average being 36.34%. In the past year, MGIC Investment has lost 10.5%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 12.1% and 0.4% north, respectively, in the past 30 days.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 30 days. In the past year, the insurer has lost 12.5%.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 8.2%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 4.4% and 3.8% north, respectively, in the past 30 days.
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Kemper (KMPR) Divests Reserve National, Focuses on Key Areas
Kemper Corporation (KMPR - Free Report) divested Reserve National Insurance Company and its subsidiaries to Medical Mutual of Ohio for $88 million in cash. The divesture will allow this Zacks Rank #3 (Hold) insurer to intensify its focus on its core capabilities. The transaction was announced on Aug 1, 2022.
Based in Oklahoma City, Reserve National sells accident and health insurance products in both the individual and group markets. The unit wrote more than $170 million premiums in 2021. Headquartered in Cleveland, Medical Mutual is one of Ohio’s oldest and largest health insurance companies. The company provides health, life, disability, dental, vision and indemnity plans to its customers. Thus, the addition of Reserve National to Medical Mutual’s portfolio will help the acquirer expand its presence and strengthen its product portfolio.
Kemper stays focused on building its P&C and life insurance businesses that provide sustainable, competitive advantages. In tandem with its business focus and enhanced operating model, the insurer has initiated a strategic review of Kemper Personal Insurance, which is the preferred home and auto business.
Kemper has also laid out strategic initiatives to strengthen competitive advantages and accelerate growth. The insurer stated this includes programs to enhance and optimize expenses within LAE, enterprise expense and real estate. While KMPR estimates more than $150 million annualized expense savings, it also expects to incur $150 million to $200 million over the next three years to achieve the expense savings.
Shares of this multi-line insurer have lost 5.1% year to date against the industry's increase of 0.1%. A compelling product portfolio, lower investment expenses, strong segmental performance and ample liquidity should help the stock bounce back.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are MGIC Investment Corporation (MTG - Free Report) , Radian Group Inc. (RDN - Free Report) and Allianz SE (ALIZY - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average being 36.34%. In the past year, MGIC Investment has lost 10.5%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 12.1% and 0.4% north, respectively, in the past 30 days.
Radian Group’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.10%.
The Zacks Consensus Estimate for RDN’s 2022 earnings has moved 12.7% north in the past 30 days. In the past year, the insurer has lost 12.5%.
Allianz’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 12.96%. In the past year, the insurer has lost 8.2%.
The Zacks Consensus Estimate for ALIZY’s 2022 and 2023 earnings has moved 4.4% and 3.8% north, respectively, in the past 30 days.