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TheStreet Open House

Kemper Corporation Reports Fourth Quarter And Full Year 2012 Results

“During the fourth quarter, we concluded our strategic review of the Direct business and placed our direct-to-consumer operations in run-off. Going forward, we expect this business to be cash flow and earnings positive during the run-off period and expect to free up the majority of capital backing the run-off business in the next two to three years,” concluded Southwell.

Highlights

  • Kemper Home Service Companies continued its planned dwelling run-off; policies in force are down 20 percent from approximately 51,000 policies at the beginning of the year. As a result of these actions, the business expects to save $2 million annually in catastrophe reinsurance expenses going forward.
  • Reserve National reported stable quarterly accident and health earned premiums of $34 million, which included a 19 percent increase in earned premiums on its expanded supplemental product offerings, offsetting a 19 percent anticipated decrease in its hospitalization products.
  • Kemper Preferred's year-over-year fourth quarter average written premium on homeowners policies increased 10 percent.
  • The investment portfolio continued to produce solid returns for both the quarter and year. The pre-tax annualized book yield for 2012 was 5.5 percent.
  • Kemper returned $118 million of capital to shareholders in 2012 through share repurchases and dividends.

Capital

During 2012, Kemper repurchased over 2.0 million shares of common stock at a cost of $60.7 million and paid dividends of $56.9 million.

Kemper ended the year with a book value per share of $36.98, and a book value per share excluding unrealized gains on fixed maturities of $30.62, up from $35.13 and $29.70, respectively, at the end of 2011.

At the end of the 2012, the holding company held cash and investments of $190.2 million, and its $325 million revolving line of credit was undrawn.

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