“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.