Kemper Corporation reported a net loss of $8.0 million, or $(0.13) per share, for the fourth quarter of 2025 versus net income of $97.4 million, or $1.51 per diluted share, in the fourth quarter of 2024.

Kemper Corporation (NYSE: KMPR) reported a net loss of $8.0 million, or $(0.13) per share, for the fourth quarter of 2025, compared to net income of $97.4 million, or $1.51 per diluted share, for the fourth quarter of 2024.

Adjusted Consolidated Net Operating Income1 was $14.6 million, or $0.25 per share, for the fourth quarter of 2025, compared to Adjusted Consolidated Net Operating Income1 of $115.1 million, or $1.78 per diluted share, for the fourth quarter of 2024.

Summary of quarterly performance:

Adjusted Consolidated Net Operating Income1 of $14.6 million or $0.25 per share

Specialty P&C operating results pressured by bodily injury severity; actions underway to improve profitability

Life business generated solid results driven by expense management

Trailing 12-month operating cash flow of ~$585 million remained near all-time high

Generated 5.1% ROE and 7.8% Adjusted ROE1 for FY'25; BVPS increased 4.6% YoY

Parent liquidity remains strong at over $1.0 billion

"We are focused on taking deliberate actions to address the specific factors affecting our recent performance," said C. Thomas Evans, Jr., Interim CEO. "We're strengthening execution across pricing, claims and expenses while working with renewed focus to diversify our portfolio geographically. These actions are intended to improve consistency, reduce volatility, and position Kemper for long-term value creation."

Revenues

Total revenues for the fourth quarter of 2025 decreased $55.4 million to $1,131.4 million compared to the fourth quarter of 2024. The decline was primarily due to a $35.0 million Florida Statutory Profit Limit Refund in the Specialty Property & Casualty Insurance segment, lower Specialty Personal Automobile volumes, and a $16.3 million reduction in earned premium from Non-Core Operations due to lower volumes resulting from the exit and run-off of the Preferred Insurance business.

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 $2.6 million in the fourth quarter of 2025, compared to adjusted net operating income of $101.2 million in the fourth quarter of 2024. This decrease was due primarily to an increase in our Specialty Personal Automobile Underlying Combined Ratio1. Specialty Personal Automobile's Underlying Combined Ratio1 was 110.0 percent, compared to 91.4 percent in the fourth quarter of 2024. The increase was primarily driven by higher claim severity, a $35.0 million Florida Statutory Profit Limit Refund, and elevated frequency, partially offset by higher average earned premiums per exposure resulting from rate increases.

The Life Insurance segment reported adjusted net operating income of $20.1 million for the fourth quarter of 2025, compared to adjusted net operating income of $23.5 million in the fourth quarter of 2024, primarily driven by unfavorable mortality experience from life insurance products, partially offset by lower Insurance Expenses.

Capital

Total Kemper Corporation Shareholders' Equity as of December 31, 2025 was $2,681.4 million, a decrease of $107.0 million, or 4 percent, since year-end 2024 primarily driven by common stock repurchases and dividend payments, partially offset by comprehensive income for the year. Kemper and its direct non-insurance subsidiaries ended the year with cash and investments of $145.4 million, and $600.0 million of available borrowing capacity under the revolving credit agreement.

On November 5, 2025, Kemper announced that its Board of Directors declared a quarterly dividend of $0.32 per share, or $18.9 million. The dividend was paid on December 3, 2025, to its shareholders of record as of November 17, 2025.

Kemper ended the year with a book value per share of $45.71, an increase of 5 percent from $43.68 at the end of 2024. Adjusted book value per share1 was $28.06 at the end of 2025, compared to $29.04 at the end of 2024.

Use of Non-GAAP Financial Measures

Adjusted Consolidated Net Operating Income1 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, Pension Settlement and Other Charges;

(vi) Goodwill Impairment Charges;

(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 Income1 for the three months and year ended December 31, 2025 or 2024.

Kemper believes that Adjusted Consolidated Net Operating Income1 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 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 acquisitions and business decisions which are unrelated to the insurance underwriting process. 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, Pension Settlement 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; (ii) settlement of pension plan obligations which are business decisions made by Kemper, the timing of which is unrelated to the underwriting process; and (iii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Goodwill Impairment Charges 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 Generally Accepted Accounting Principles ("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.

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