10q10k10q10k.net

What changed in KEMPER Corp's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of KEMPER Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+278 added−277 removedSource: 10-K (2026-02-11) vs 10-K (2025-02-07)

Top changes in KEMPER Corp's 2025 10-K

278 paragraphs added · 277 removed · 233 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+11 added−16 removed78 unchanged
Biggest changeCompliance and Ethics A culture grounded in compliance and ethical behavior is essential for protecting the Company from actions that could negatively impact our reputation and business results. These values are also critical to the sound operation of our business and contribute to a positive work environment for our employees.
Biggest changeAs of December 31, 2025, we had approximately 7,400 employees, consisting of 7,300 full-time and 100 part-time employees, located across the country. We consider our relationships with our employees to be positive. Compliance and Ethics A culture grounded in compliance and ethical behavior is essential to protecting the Company, supporting sound business operations, and fostering a positive work environment.
Further, because the level of insured losses that 6 could occur in any one year cannot be accurately predicted, these losses contribute to material year-to-year fluctuations in the results of operations and financial position of these companies. Specific types of catastrophic events are more likely to occur at certain times within the year than others.
Further, because the level of insured losses that could occur in any one year cannot be accurately predicted, these losses contribute to material year-to-year fluctuations in the 6 results of operations and financial position of these companies. Specific types of catastrophic events are more likely to occur at certain times within the year than others.
These requirements may include the advance filing of specific information with the state insurance regulators, a public hearing on the matter, and the review and approval of the change of control by such 12 regulators. The Company has insurance subsidiaries domiciled or deemed commercially domiciled in Alabama, California, Florida, Illinois, Indiana, Louisiana, Missouri, New York, Ohio, Oregon, Texas and Wisconsin.
These requirements may include the advance filing of specific information with the state insurance regulators, a public hearing on the matter, and the review and approval of the change of control by such regulators. The Company has insurance subsidiaries domiciled or deemed commercially domiciled in Alabama, California, Florida, Illinois, Indiana, Louisiana, Missouri, New York, Ohio, Oregon, Texas and Wisconsin.
Dividends As a holding company with no significant business operations of its own, Kemper relies on dividends from its insurance subsidiaries to meet its obligations. Certain dividends and distributions by an insurance subsidiary are subject to prior approval by the insurance regulator in which it is domiciled or commercially domiciled.
Dividends As a holding company with no significant business operations of its own, Kemper relies on dividends from its insurance subsidiaries to meet its obligations. Certain dividends and distributions by an insurance subsidiary are subject to prior approval by the insurance regulator in the state in which it is domiciled or commercially domiciled.
Kemper’s property and casualty insurance companies purchase their reinsurance only from reinsurers rated “A-” or better by A. M. Best Co., Inc. (“A.M. Best”), at the time of purchase. A.M. Best is an organization that specializes in rating insurance and reinsurance companies.
Kemper’s property and casualty 7 insurance companies purchase their reinsurance only from reinsurers rated “A-” or better by A. M. Best Co., Inc. (“A.M. Best”), at the time of purchase. A.M. Best is an organization that specializes in rating insurance and reinsurance companies.
See Item 1A., “Risk Factors,” under the caption “ The insurance industry is highly competitive, making it difficult to grow profitability and within expectations of investors. ” Life Insurance Business General The Company’s life & health insurance business operations are conducted primarily through the Life Insurance segment.
See Item 1A., “Risk Factors,” under the caption “ The insurance industry is highly competitive, making it difficult to grow profitability within the expectations of investors. ” Life Insurance Business General The Company’s life & health insurance business operations are conducted primarily through the Life Insurance segment.
Accordingly, the process of estimating and establishing the Company’s Life Insurance Reserves is inherently uncertain. See MD&A, “Critical Accounting Estimates,” 9 under the caption “Life Insurance Reserves” for more details on the Company’s reserving process and the factors considered by the Company’s actuaries in estimating the Company’s Life Insurance Reserves.
Accordingly, the process of estimating and establishing the Company’s Life Insurance Reserves is inherently uncertain. See MD&A, “Critical Accounting Estimates,” under the caption “Life Insurance Reserves” for more details on the Company’s reserving process and the factors considered by the Company’s actuaries in estimating the Company’s Life Insurance Reserves.
State departments of insurance and certain federal agencies adopted implementing regulations as required by federal law. In addition, SEC rules require disclosure regarding cybersecurity oversight and incidents. State Laws and Regulations In recent years, state insurance regulators have focused increasing attention on cybersecurity.
State departments 11 of insurance and certain federal agencies adopted implementing regulations as required by federal law. In addition, SEC rules require disclosure regarding cybersecurity oversight and incidents. State Laws and Regulations In recent years, state insurance regulators have focused increasing attention on cybersecurity.
Therefore, acquisitions subject to the 10% threshold generally would require the prior approval of insurance regulators in each state in which the Company’s insurance subsidiaries are domiciled or deemed commercially domiciled, including those in Alabama, while acquisitions subject to the 5% threshold generally would require the prior approval of only Alabama regulators.
Therefore, acquisitions subject to the 10% threshold generally would require the prior approval of insurance regulators in each state in which the Company’s insurance subsidiaries are domiciled or deemed commercially domiciled, including those in Alabama, while acquisitions subject to the 5% threshold generally would require the prior approval of only 12 Alabama regulators.
The Life Insurance segment is a party to the Florida Hurricane Catastrophe Fund (“FHCF”) and the Property & Casualty catastrophe excess of loss reinsurance contract. Lapse Ratio The lapse ratio is a measure of a life insurer’s loss of in-force policies.
The Life Insurance segment is a party to the Florida Hurricane Catastrophe Fund (“FHCF”) and the Property & Casualty catastrophe excess of loss reinsurance contract. 9 Lapse Ratio The lapse ratio is a measure of a life insurer’s loss of in-force policies.
In addition, the quality, nature, 10 amount and concentration of the various types of investments held by Kemper and its subsidiaries affect the amount of asset risk calculated by regulators and rating agencies in determining required capital.
In addition, the quality, nature, amount and concentration of the various types of investments held by Kemper and its subsidiaries affect the amount of asset risk calculated by regulators and rating agencies in determining required capital.
See Note 6, “Property and Casualty Insurance Reserves,” to the Consolidated Financial Statements for a tabular reconciliation of the three most recent annual periods setting forth the Company’s Property and Casualty Insurance Reserves as of the beginning of each year, incurred losses and LAE for insured events of the current year, changes in incurred losses and LAE for insured events of prior years, payments of losses and LAE for insured events of the current year, payments of losses and LAE for insured events of prior years and the Company’s Property and Casualty Insurance Reserves at the end of the year and additional information regarding the nature of adjustments to incurred losses and LAE for insured events of prior years.
See Note 5, “Property and Casualty Insurance Reserves,” to the Consolidated Financial Statements for a tabular reconciliation of the three most recent annual periods setting forth the Company’s Property and Casualty Insurance Reserves as of the beginning of each year, incurred losses and LAE for insured events of the current year, changes in incurred losses and LAE for insured events of prior years, payments of losses and LAE for insured events of the current year, payments of losses and LAE for insured events of prior years and the Company’s Property and Casualty Insurance Reserves at the end of the year and additional information regarding the nature of adjustments to incurred losses and LAE for insured events of prior years.
ISO-classified catastrophes are assigned a unique serial number recognized throughout the insurance industry. The discussions throughout this 2024 Annual Report utilize ISO’s definition of catastrophes. The process of estimating and establishing reserves for catastrophe losses is inherently uncertain and the actual ultimate cost of a claim, net of reinsurance recoveries, may vary materially from the estimated amount reserved.
ISO-classified catastrophes are assigned a unique serial number recognized throughout the insurance industry. The discussions throughout this 2025 Annual Report utilize ISO’s definition of catastrophes. The process of estimating and establishing reserves for catastrophe losses is inherently uncertain and the actual ultimate cost of a claim, net of reinsurance recoveries, may vary materially from the estimated amount reserved.
Such regulation pertains to a variety of matters, including, but not limited to, policy forms, rate setting, licensing to transact business, market conduct, trade practices, underwriting standards, claims handling practices, transactions with affiliates, payment of dividends, nature and amount of investments, solvency, reserve adequacy, statutory accounting methods, risk management and corporate governance.
Such regulation pertains to a variety of matters, including, but not limited to, policy forms, rate setting, licensing to transact business, market conduct, trade practices, underwriting standards, profitability regulations, claims handling practices, transactions with affiliates, payment of dividends, nature and amount of investments, solvency, reserve adequacy, statutory accounting methods, risk management and corporate governance.
They also generally require insurance companies within an insurance holding company system to register with the insurance department of each state where they are domiciled and to file certain reports with those insurance departments describing capital structure, ownership, financial condition, certain intercompany transactions, an enterprise risk report and general business operations.
They also generally require insurance companies within an insurance holding company system to register with the insurance department of each state where they are domiciled or commercially domiciled and to file certain reports with those insurance departments describing capital structure, ownership, financial condition, certain intercompany transactions, an enterprise risk report and general business operations.
See Item 1A., “Risk Factors,” under the caption “ Catastrophe losses could materially and adversely affect the Company’s results of operations, liquidity and/or financial condition ” for a discussion of catastrophe risk. See Note 26, “Catastrophe Reinsurance,” to the Consolidated Financial Statements for a discussion of the factors that influence the process of estimating and establishing reserves for catastrophes.
See Item 1A., “Risk Factors,” under the caption “ Catastrophe losses could materially and adversely affect the Company’s results of operations, liquidity and/or financial condition ” for a discussion of catastrophe risk. See Note 25, “Catastrophe Reinsurance,” to the Consolidated Financial Statements for a discussion of the factors that influence the process of estimating and establishing reserves for catastrophes.
At December 31, 2024, the total amount of capital held by each of Kemper’s domestic insurance subsidiaries exceeded the minimum levels required under applicable RBC requirements, and the total amount of capital held by Kemper Bermuda Ltd. exceeded the minimum levels required by the Bermuda Monetary Authority’s Enhanced Capital Requirement.
At December 31, 2025, the total amount of capital held by each of Kemper’s domestic insurance subsidiaries exceeded the minimum levels required under applicable RBC requirements, and the total amount of capital held by Kemper Bermuda Ltd. exceeded the minimum levels required by the Bermuda Monetary Authority’s Enhanced Capital Requirement.
With approximately $12.6 billion in assets, Kemper is improving the world of insurance by providing affordable and easy-to-use personalized solutions to individuals, families and businesses through its Kemper Auto and Kemper Life brands.
With approximately $12.5 billion in assets, Kemper is improving the world of insurance by providing affordable and easy-to-use personalized solutions to individuals, families and businesses through its Kemper Auto and Kemper Life brands.
The 2025 catastrophe reinsurance program covering the property and casualty insurance companies is provided by an annual excess of loss reinsurance contract. Annual Excess of Loss Reinsurance Contract The 2025 Annual Excess of Loss Contract provides coverage for the annual period of January 1, 2025 through December 31, 2025.
The 2026 catastrophe reinsurance program covering the property and casualty insurance companies is provided by an annual excess of loss reinsurance contract. Annual Excess of Loss Reinsurance Contract The 2026 Annual Excess of Loss Contract provides coverage for the annual period of January 1, 2026 through December 31, 2026.
Kemper’s property and casualty insurance companies wrote less than 1% of the industry’s 2023 premium volume. The property and casualty insurance industry is highly competitive, particularly with respect to personal automobile insurance.
Kemper’s property and casualty insurance companies wrote less than 1% of the industry’s 2024 premium volume. The property and casualty insurance industry is highly competitive, particularly with respect to personal automobile insurance.
The Company’s Life Insurance segment ranked in the top 30% of life and health insurance company groups, as measured by net admitted assets, net premiums written and capital and surplus.
The Company’s Life Insurance segment ranked in the top 31% of life and health insurance company groups, as measured by net admitted assets, net premiums written and capital and surplus.
The Company derives a significant portion of its earned premiums in two such states, California and Florida. See MD&A under the caption “Specialty Property & Casualty Insurance”. Competition Based on the most recent annual data published by A.M. Best, as of the end of 2023, there were 1,104 property and casualty insurance groups in the United States.
The Company derives a significant portion of its earned premiums in two such states, California and Florida. See MD&A under the caption “Specialty Property & Casualty Insurance”. Competition Based on the most recent annual data published by A.M. Best, as of the end of 2024, there were 1,108 property and casualty insurance groups in the United States.
The second layer provides 95% coverage on the losses on individual catastrophes of $65 million in excess of $110 million. Reinstatement of Excess of Loss Reinsurance Contract In the event that the Company’s incurred catastrophe losses and LAE covered by its catastrophe reinsurance program exceed the retention for a particular layer, the program allows for reinstatement of such coverage.
The second layer provides 95% coverage on the losses on individual catastrophes of $60 million in excess of $100 million. Reinstatement of Excess of Loss Reinsurance Contract In the event that the Company’s incurred catastrophe losses and LAE covered by its catastrophe reinsurance program exceed the retention for a particular layer, the program allows for reinstatement of such coverage.
For further discussion of the reinsurance programs, see Note 26, “Catastrophe Reinsurance,” and Note 27, “Other Reinsurance,” to the Consolidated Financial Statements.
For further discussion of the reinsurance programs, see Note 25, “Catastrophe Reinsurance,” and Note 26, “Other Reinsurance,” to the Consolidated Financial Statements.
As a result, the Life Insurance segment premiums have a higher expense load than the life insurance industry average. Competition Based on the most recent data published by A.M. Best, as of the end of 2023, there were 384 life and health insurance company groups in the United States.
As a result, the Life Insurance segment premiums have a higher expense load than the life insurance industry average. Competition Based on the most recent data published by A.M. Best, as of the end of 2024, there were 378 life and health insurance company groups in the United States.
Individual life insurance is offered primarily on a non-participating, guaranteed-cost basis. Face amounts of these policies are lower than those of policies typically sold to higher income customers by other companies in the life insurance industry. Premiums average approximately $29 per policy per month with an average face value of $6,413.
Individual life insurance is offered primarily on a non-participating, guaranteed-cost basis. Face amounts of these policies are lower than those of policies typically sold to higher income customers by other 8 companies in the life insurance industry. Premiums average approximately $30 per policy per month with an average policy face value of $6,513.
Kemper’s property and casualty group was among the top 6% of property and casualty insurance groups in the United States as measured by net admitted assets, net written premiums, and capital and surplus in 2023. Among all personal lines automobile insurance writers, Kemper’s property and casualty group was the 15th largest writer as measured by net written premiums in 2023.
Kemper’s property and casualty group was among the top 6% of property and casualty insurance groups in the United States as measured by net admitted assets, net written premiums, and capital and surplus in 2024. Among all personal lines automobile insurance writers, Kemper’s property and casualty group was the 16th largest writer as measured by net written premiums in 2024.
Kemper serves over 4.7 million policies, is represented by more than 22,200 agents and brokers, and has approximately 7,400 associates dedicated to meeting the ever-changing needs of its customers. The Company is engaged, through its subsidiaries, in the property and casualty insurance and life insurance businesses.
Kemper serves over 4.5 million policies, is represented by more than 24,100 agents and brokers, and has approximately 7,400 associates dedicated to meeting the ever-changing needs of its customers. The Company is engaged, through its subsidiaries, in the property and casualty insurance and life insurance businesses.
The Life Insurance segment’s lapse ratio for individual life insurance was 5%, 5%, and 6% in 2024, 2023 and 2022, respectively. The customer base served by the Life Insurance segment tends to have a higher incidence of lapse than other demographic segments of the population.
The Life Insurance segment’s lapse ratio for individual life insurance was 5% in 2025, 2024, and 2023. The customer base served by the Life Insurance segment tends to have a higher incidence of lapse than other demographic segments of the population.
Kemper’s subsidiaries employ approximately 7,400 associates supporting their operations, of which approximately 2,500 are employed in the Specialty Property & Casualty Insurance Segment, approximately 2,900 are employed in the Life Insurance segment and the remainder are employed in various corporate and other functions.
Kemper’s subsidiaries employ approximately 7,400 associates supporting their operations, of which approximately 2,550 are employed in the Specialty Property & Casualty Insurance Segment, approximately 2,800 are employed in the Life Insurance segment and the remainder are employed in various corporate and other functions.
Specialty Property & Casualty Insurance The Specialty Property & Casualty Insurance segment, based in Chicago, Illinois, conducts business in 16 states under the Kemper Auto brand. As shown in the following table, three states provided 90% of the segment’s premium revenues in 2024.
Specialty Property & Casualty Insurance The Specialty Property & Casualty Insurance segment, based in Chicago, Illinois, conducts business in 22 states under the Kemper Auto brand. As shown in the following table, three states provided 90% of the segment’s premium revenues in 2025.
In addition, the Life Insurance segment’s career agents also sell contents coverage for personal property to its customers against loss resulting from fire, lightning and other causes.
In addition, the Life Insurance segment’s career agents also sell contents coverage for personal property to its customers against loss resulting from fire, lightning and other causes as well as personal general liability coverage.
State Percentage of Total Premiums California 58 % Florida 19 % Texas 13 % The Specialty Property & Casualty Insurance segment provides personal automobile insurance to consumers who have had difficulty obtaining standard or preferred risk insurance, usually because of their driving records, claims experience or premium payment history.
State Percentage of Total Premiums California 63 % Florida 16 % Texas 11 % The Specialty Property & Casualty Insurance segment provides personal automobile insurance to consumers who have had difficulty obtaining standard or preferred risk insurance, usually because of their driving records, claims experience or premium payment history.
In the third quarter of 2023 the Company established Kemper Reciprocal (the “Reciprocal Exchange” or “Exchange”), an Illinois-domiciled reciprocal insurance exchange. The Exchange principally writes specialty automobile policies sold to subscribers of the Exchange. Net written premiums and net earned premiums reported through the Exchange were $27.6 million and $17.0 million, respectively, for the year ended December 31, 2024.
In the third quarter of 2023 the Company established Kemper Reciprocal (the “Reciprocal Exchange” or “Exchange”), an Illinois-domiciled reciprocal insurance exchange. The Exchange principally writes specialty automobile policies sold to subscribers of the Exchange. Net written premiums reported through the Exchange were $50.3 million, $27.6 million, and $0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
See Note 6, “Property and Casualty Insurance Reserves,” to the Consolidated Financial Statements for information about incurred and paid claims development for the 2020 to 2023 accident years as of December 31, 2024, net of reinsurance and indemnification, as well as cumulative claim frequency and the total of incurred but not reported (“IBNR”) liabilities, including expected development on reported claims included within the net incurred losses and allocated LAE amounts as of December 31, 2024.
See Note 5, “ Property and Casualty Insurance Reserves ,” to the Consolidated Financial Statements for information about incurred and paid claims development for the 2021 to 2024 accident years as of December 31, 2025, net of reinsurance and indemnification, as well as cumulative claim frequency and the total of incurred but not reported (“IBNR”) liabilities, including expected development on reported claims included within the net incurred losses and allocated LAE amounts as of December 31, 2025.
Rankings by net admitted assets, net premiums written and capital and surplus were: Ordinal Percentile Measurement Rank Rank Net Admitted Assets 102 73 % Net Written Premiums 115 70 Capital and Surplus 116 70 Kemper’s life and health insurance subsidiaries generally compete by using appropriate pricing, offering products to selected markets or geographies, controlling expenses, maintaining adequate ratings from A.M.
Rankings by net admitted assets, net premiums written and capital and surplus were: Ordinal Percentile Measurement Rank Rank Net Admitted Assets 101 73 % Net Written Premiums 113 70 Capital and Surplus 118 69 Kemper’s life and health insurance subsidiaries generally compete by using appropriate pricing, offering products to selected markets or geographies, controlling expenses, maintaining adequate ratings from A.M.
These career agents also distribute and/or service contents coverage for personal property providing coverage against loss resulting from fire, lightning, and other causes. As shown in the following table, five states provided 67% of the premium revenues in this segment in 2024.
These career agents also distribute and/or service contents coverage for personal property providing coverage against loss resulting from fire, lightning, and other causes as well as personal general liability coverage. As shown in the following table, five states provided 63% of the premium revenues in this segment in 2025.
Collectively, these segments provide specialty automobile, fire/contents, and other types of property and casualty insurance to individuals and commercial automobile insurance, and general liability as an endorsement to commercial automobile, to businesses. 4 Net Written Premiums for the Property and Casualty Business were as follows: DOLLARS IN MILLIONS 2024 2023 2022 Business Segments: Specialty Property & Casualty Insurance Segment: Specialty Personal Automobile Insurance $ 2,887.7 $ 2,677.5 $ 3,305.1 Commercial Automobile Insurance 797.7 627.9 629.3 Life Insurance Segment: Fire/Contents Protection 43.3 45.3 50.0 Total Segment Net Written Premiums 3,728.7 3,350.7 3,984.4 Non-Core Operations 108.3 435.5 527.1 Total Property and Casualty Net Written Premiums $ 3,837.0 $ 3,786.2 $ 4,511.5 Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property.
Collectively, these segments provide specialty automobile, fire/contents, and other types of property and casualty insurance to individuals and commercial automobile insurance, and general liability as an endorsement to commercial automobile, to businesses. 4 Net Written Premiums for the Property and Casualty Business were as follows: DOLLARS IN MILLIONS 2025 2024 2023 Business Segments: Specialty Property & Casualty Insurance Segment: Specialty Personal Automobile Insurance $ 2,934.1 $ 2,887.7 $ 2,677.5 Commercial Automobile Insurance 978.7 797.7 627.9 Life Insurance Segment: Fire/Contents Protection 41.0 43.3 45.3 Total Segment Net Written Premiums 3,953.8 3,728.7 3,350.7 Non-Core Operations 59.4 108.3 435.5 Total Property and Casualty Net Written Premiums $ 4,013.2 $ 3,837.0 $ 3,786.2 Property insurance indemnifies an insured with an interest in physical property for loss of, or damage to, such property.
The segment’s insurance products accounted for 85%, 80% and 78% of the Company’s consolidated insurance premiums in 2024, 2023 and 2022, respectively. The segment’s insurance products are marketed through approximately 15,750 independent agents and brokers as well as a smaller portion sold direct to consumer and through captive agents.
The segment’s insurance products accounted for 89%, 85% and 80% of the Company’s consolidated insurance premiums in 2025, 2024 and 2023, respectively. The segment’s insurance products are marketed through approximately 17,800 independent agents and brokers as well as a smaller portion sold direct to consumer and through captive agents.
The 2025 Annual Excess of Loss Contract provides coverage in two layers for losses on individual catastrophes of $125 million in excess of $50 million. The 2025 Annual Excess of Loss Contract provides 95% coverage on the first layer of losses on individual catastrophes of $60 million in excess of $50 million.
The 2026 Annual Excess of Loss Contract provides coverage in two layers for losses on individual catastrophes of $110 million in excess of $50 million. The 2026 Annual Excess of Loss Contract provides 95% coverage on the first layer of losses on individual catastrophes of $50 million in excess of $50 million.
Property and Casualty Insurance Reserves at December 31, 2024 and 2023 were: DOLLARS IN MILLIONS 2024 2023 Business Segments: Specialty Property & Casualty Insurance: Personal Automobile Insurance 1 $ 1,626.0 $ 1,711.9 Commercial Automobile Insurance 721.9 596.8 Life Insurance: Fire/Contents Protection 2.7 2.9 Total Segment Property and Casualty Insurance Reserves 2,350.6 2,311.6 Non-Core Operations 261.7 356.4 Unallocated Reserves 9.0 12.5 Total Property and Casualty Insurance Reserves 1 $ 2,621.3 $ 2,680.5 1 Includes $9.4 million attributable to Kemper Reciprocal as of December 31, 2024, which is reported as a consolidated variable interest entity.
Property and Casualty Insurance Reserves at December 31, 2025 and 2024 were: DOLLARS IN MILLIONS 2025 2024 Business Segments: Specialty Property & Casualty Insurance: Personal Automobile Insurance 1 $ 1,826.8 $ 1,626.0 Commercial Automobile Insurance 942.6 721.9 Life Insurance: Fire/Contents Protection 1.9 2.7 Total Segment Property and Casualty Insurance Reserves 2,771.3 2,350.6 Non-Core Operations 161.9 261.7 Unallocated Reserves 7.0 9.0 Total Property and Casualty Insurance Reserves 1 $ 2,940.2 $ 2,621.3 1 Includes $29.4 million and $9.4 million attributable to Kemper Reciprocal as of December 31, 2025 and 2024, respectively, which is reported as a consolidated variable interest entity.
These include, but are not limited to: • Health insurance including medical, dental, vision and prescription drug coverage • Life and disability insurance • Tax-advantaged Flexible Spending Accounts for health care and dependent care • Health Savings Accounts for the High-Deductible Health Plan, including a company match 14 • 401(k) retirement savings program, including a company match and 100% vesting upon hire • Employee Stock Purchase Program (ESPP) • Employee Assistance & Work/Life Program (EAP) • Tuition reimbursement • Adoption assistance • Employee discount programs • Voluntary benefit programs • Leave and time off programs • Flexible work arrangements based on function and role • Wellness resources, including diabetes, hypertension, weight management and pregnancy support • Commuter benefits • Benefits navigation How We Work At Kemper, we embrace a thoughtful hybrid work model designed to enhance both flexibility and connection within our workforce.
These include, but are not limited to: • Health insurance including medical, dental, vision and prescription drug coverage • Life and disability insurance • Tax-advantaged Flexible Spending Accounts for health care and dependent care • Health Savings Accounts for the High-Deductible Health Plan, including a company match • 401(k) retirement savings program, including a company match and 100% vesting upon hire • Employee Stock Purchase Program (ESPP) • Employee Assistance & Work/Life Program (EAP) • Tuition reimbursement • Adoption assistance • Employee discount programs • Voluntary benefit programs • Paid parental leave • Short- and long-term disability leave, military leave, and leave pursuant to the Family and Medical Leave Act of 1993 (FMLA) 14 • Flexible work arrangements based on function and role • Wellness resources, including diabetes, hypertension, weight management and pregnancy support • Commuter benefits How We Work At Kemper, we embrace a hybrid work model that enhances flexibility and strengthens connection across our workforce.
The outcome of these actions is uncertain; however, these actions may result in an increase in the level of capital and liquidity required by insurance holding companies. Human Capital Management Company Culture Kemper proudly serves growing niche and underserved markets through appropriate and affordable insurance and financial solutions.
The outcome of these actions is uncertain; however, these actions may result in an increase in the level of capital and liquidity required by insurance holding companies. Human Capital Management Commitment to a Strong, Inclusive, and Performance-Driven Culture Kemper proudly serves niche and underserved markets with appropriate and affordable insurance and financial solutions.
Rankings by net admitted assets, net premiums written and capital and surplus were: Ordinal Percentile Measurement Rank Rank Net Admitted Assets 56 95 % Net Written Premiums 36 97 Capital and Surplus 67 94 In 2023, the U.S. property and casualty insurance industry’s estimated net premiums written were $863.6 billion, of which nearly 82% were accounted for by the top 50 groups of property and casualty insurance companies.
Rankings by net admitted assets, net premiums written and capital and surplus were: Ordinal Percentile Measurement Rank Rank Net Admitted Assets 60 95 % Net Written Premiums 37 97 Capital and Surplus 70 94 In 2024, the U.S. property and casualty insurance industry’s estimated net premiums written were $937.8 billion, of which nearly 82% were accounted for by the top 50 groups of property and casualty insurance companies.
See the discussions of the Company’s investments under the headings “Investment Results,” “Investment Quality and Concentrations,” “Investments in Limited Liability Companies and Limited Partnerships,” “Liquidity and Capital Resources” and “Critical Accounting Estimates,” in the MD&A, “Quantitative and Qualitative Disclosures about Market Risk,” in Item 7A and Note 11, “Investments,” Note 12, “Income from Investments,” Note 13, “Derivatives,” and Note 14, “Fair Value Measurements,” to the Consolidated Financial Statements.
See the discussions of the Company’s investments under the headings “Investment Results,” “Investment Quality and Concentrations,” “Investments in Limited Liability Companies and Limited Partnerships,” “Liquidity and Capital Resources” and “Critical Accounting Estimates,” in the MD&A, “Quantitative and Qualitative Disclosures about Market Risk,” in Item 7A and Note 10, “Investments,” Note 11, “Income from Investments,” Note 12, “Derivatives,” and Note 13, “Fair Value Measurements,” to the Consolidated Financial Statements. 10 Regulation Overview of State Regulation Kemper’s insurance subsidiaries are subject to extensive regulation, primarily, but not exclusively, at the state level.
State Percentage of Total Premiums Texas 29 % Louisiana 15 Alabama 10 Florida 7 Georgia 6 Life Insurance Reserves The Company’s Life Insurance Reserves are reported using the Company’s estimate of its liability for future policyholder benefits.
State Percentage of Total Premiums Texas 25 % Louisiana 16 Mississippi 8 Alabama 8 Florida 6 Life Insurance Reserves The Company’s Life Insurance Reserves are reported using the Company’s estimate of its liability for future policyholder benefits.
In most states, the involuntary pool participation of Kemper’s insurance subsidiaries is determined in proportion to their voluntary writings of related lines of business in such states. 11 Privacy and Cybersecurity Regulation and Oversight The Company is subject to numerous federal and state laws and state insurance regulations that impose significant requirements and standards for protecting personal and confidential information of insurance company policyholders, employees, and other individuals.
Privacy and Cybersecurity Regulation and Oversight The Company is subject to numerous federal and state laws and state insurance regulations that impose significant requirements and standards for protecting personal and confidential information of insurance company policyholders, employees, and other individuals.
Life Insurance Reserves by business segment at December 31, 2024 and 2023 were: DOLLARS IN MILLIONS 2024 2023 Business Segments: Life Insurance: Life Insurance $ 3,195.1 $ 3,417.7 Accident & Health Insurance 4.6 4.7 Total Life Insurance Reserves $ 3,199.7 $ 3,422.4 Significant assumption inputs to the calculation of the liability for future policyholder benefits include mortality, lapses, and discount rates (both accretion and current).
Insurance Reserves for the Company’s life & health insurance business operations were $3,287.5 million and $3,199.7 million at December 31, 2025 and 2024, respectively. Significant assumption inputs to the calculation of the liability for future policyholder benefits include mortality, lapses, and discount rates (both accretion and current).
The Life Insurance segment distributes its products through a network of employee, or “career” agents. These career agents are paid commissions for their services.
The Life Insurance segment distributes its products through a network of employee, or “career” agents. These career agents are paid commissions for their services. Earned premiums from the Life Insurance segment accounted for 9%, 8%, and 7% of the Company’s insurance premiums earned in 2025, 2024 and 2023, respectively. The Life Insurance segment, primarily based in St.
Kemper’s insurance subsidiaries are also required to participate in various involuntary pools or assigned risk pools, principally involving windstorms and high risk drivers.
Kemper’s insurance subsidiaries are also required to participate in various involuntary pools or assigned risk pools, principally involving windstorms and high risk drivers. In most states, the involuntary pool participation of Kemper’s insurance subsidiaries is determined in proportion to their voluntary writings of related lines of business in such states.
The Exchange is operated by a management company owned by Kemper that acts as the attorney-in-fact (“AIF”). The AIF receives a management fee for the services provided to the Reciprocal Exchange. The management fee revenues are based upon all premiums written or assumed by the Exchange. The AIF determines the management fee rate to be paid by the Exchange.
The management fee revenues are based upon all premiums written or assumed by the Exchange. The AIF determines the management fee rate to be paid by the Exchange.
However, certain perils, such as biological, chemical, nuclear pollution or contamination, are excluded from the reinsurance coverage for non-certified events. 7 Under the various reinsurance arrangements, Kemper’s property and casualty insurance companies are indemnified by reinsurers for certain losses incurred under insurance policies issued by the reinsurers.
The companies have reinsurance coverage to address these exposures, when material. Under the various reinsurance arrangements, Kemper’s property and casualty insurance companies are indemnified by reinsurers for certain losses incurred under insurance policies issued by the reinsurers.
We measure engagement through an employee survey, giving all team members the opportunity to provide feedback on key drivers of work satisfaction, including career growth and development, company leadership, compensation and benefits, recognition, collaboration, communication, resources, culture, and ethics.
We support strong engagement through a range of programs and initiatives that recognize employees who consistently contribute to the Company’s culture and performance. Kemper periodically measures employee engagement through surveys that provide team members the opportunity to share feedback on key aspects of the work experience, including career development, leadership, compensation and benefits, recognition, collaboration, communication, resources, culture, and ethics.
This model prioritizes purposeful time in the office, where in-person collaboration, team meetings, and training sessions are maximized to foster engagement, innovation and relationship-building. We believe that intentional in-office interactions are essential to maintaining a strong sense of community and achieving our collective goals.
The model emphasizes purposeful time in the office, where in-person collaboration, team meetings, and training foster engagement, innovation, and relationship-building. These intentional interactions foster a strong sense of community, and our blend of remote and in-office work provides employees the flexibility to balance work and life while staying connected to one another. 15
Employee Development Kemper’s long-term success is closely tied to the development and engagement of our employees. Kemper offers valuable opportunities for personal and professional growth at every career stage, from early career programs like internships and rotational development programs to manager and leadership development.
We offer opportunities for personal and professional growth at every career stage, from internships and rotational development programs to manager and leadership training.
Individual growth and development is supported through various initiatives, including the Own Your Career program, which provides employees with the resources and tools needed to continue advancing toward career success.
Role-based learning supports employees in building the skills needed to excel in their current positions and prepare for future opportunities, Individual growth is further supported through initiatives such as the Own Your Career program, which provides employees with skill-building tools, development resources, and structured guidance to help them advance in their careers.
Removed
The companies have reinsurance coverage to address certain exposures to potential future terrorist attacks. The reinsurance coverage for certified events, as designated by the federal government, is from the Terrorist Risk Insurance Act. The coverage for non-certified events is available in the catastrophe reinsurance program for property and casualty insurance companies.
Added
Net earned premiums reported through the Exchange were $49.5 million, $17.0 million, and $0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Exchange is operated by a management company owned by Kemper that acts as the attorney-in-fact (“AIF”). The AIF receives a management fee for the services provided to the Reciprocal Exchange.
Removed
Earned premiums from the life insurance segment accounted for 8% of the Company’s consolidated insurance premiums earned in 2024 and 7% of the Company’s insurance premium earned in 2023 and 2022. 8 The Life Insurance segment, primarily based in St.
Added
Our culture reflects the belief that our people are essential to fulfilling our purpose, and we strive to create an environment where collaboration, shared accountability, and diverse perspectives drive success. Kemper empowers employees at every level to collaborate, contribute their expertise, and drive performance in a dynamic and inclusive workplace.
Removed
Regulation Overview of State Regulation Kemper’s insurance subsidiaries are subject to extensive regulation, primarily, but not exclusively, at the state level.
Added
Our workforce is strengthened by diverse backgrounds, experiences, and ideas, and we are committed to ensuring all employees feel valued, supported, and positioned for growth. This focus on inclusivity and collaboration enables us to attract and retain a high-performing workforce and continually enhance the way we serve our customers and communities.
Removed
Kemper’s Strategic Intent centers on empowering every team member to Act Like an Owner to deliver on our promises to our stakeholders. This concept highlights one of the most important elements of fulfilling our purpose—our employees—and infuses our ownership culture into everything we do.
Added
Kemper provides tools and resources to promote an inclusive and respectful workplace and maintains multiple channels for reporting fraud, theft, violence, and misconduct. Our compliance reporting protocol supports integrity and ethical conduct by enabling timely corrective action when issues arise.
Removed
Our culture empowers employees at every level to take authority and accountability for their roles, driving high performance. We foster this through a dynamic, diverse, and innovative team of individuals who act like owners, continually driven by intellectual curiosity, analytic superiority, and a commitment to being world class operators.
Added
Employees are encouraged to raise concerns through their manager, any member of management, the Kemper Corporate Responsibility Hotline, the Corporate Compliance and Ethics Officer, or Human Resources. 13 Employee Development Kemper’s long-term success is closely tied to the development and engagement of our employees.
Removed
Commitment to a Strong, Performance-Driven and Inclusive Culture Our strength comes from a dynamic workforce where different perspectives, experiences and talents drive our success. Kemper is committed to fostering an environment where all employees feel valued, empowered and positioned for growth.
Added
Kemper maintains a structured succession planning process to support leadership continuity and long-term organizational stability. Each year, the Company conducts a comprehensive review of succession plans for the executive leadership team and their direct reports. This process assesses leadership capabilities, identifies key talent, and evaluates readiness for expanded responsibilities or future leadership roles.
Removed
This 13 commitment enables us to attract and retain the strongest possible high-performance workforce from the broadest sources of talent. • Workplace: Cultivate an “Act Like an Owner” culture where all employees feel they have a voice, a sense of purpose, and contribute to shared success. • Workforce: Foster an environment where every individual has the opportunity to grow, develop and make meaningful contributions. • Marketplace: Expand our reach and impact through strategic partnerships and community engagement that reflect the diverse needs of the customers we serve.
Added
The Board of Directors, through its relevant committees, oversees this process and receives regular updates on succession planning and leadership development initiatives. Engagement and Employee Voice Employee engagement is essential to sustaining Kemper’s culture and driving our success.
Removed
Kemper provides a variety of tools and resources to ensure these values create an inclusive and welcoming environment for every member of the Kemper community. Kemper maintains an open communication environment with multiple channels for reporting fraud, theft, violence, and misconduct.
Added
Business, functional and Human Resources leaders review the results to assess employee sentiment, support cultural priorities, and take action on identified opportunities to enhance the workplace. Our leadership team further supports connection and transparency by hosting regular in-person and virtual town halls.
Removed
Our compliance reporting protocol strengthens our efforts to foster integrity and ethical behavior, while enabling corrective actions to address any identified issues. In addition, Kemper encourages employees to reach out to their direct manager, another manager, the Kemper Corporate Responsibility Hotline, the Kemper Corporate Compliance and Ethics Officer, or Human Resources with any compliance or ethical concerns.
Added
These meetings provide updates on priorities and initiatives, celebrate achievements, and offer a forum for questions and open dialogue. Kemper employees contributed 3,223 volunteer hours during the year through various community initiatives. These efforts support our commitment to engaging with and serving the diverse communities in which our customers live and work. In 2025, Kemper was recognized by U.S.
Removed
Kemper’s commitment to Own Your Career aligns with our Act Like an Owner culture, offering opportunities for skill building, talent development, and connection with peers and managers to support employees on their path forward. Engagement with Company Culture Employee engagement is essential to driving the Company’s culture and success.
Added
News & World Report as one of the Best Companies to Work For in Finance/Insurance and in the Midwest. Total Rewards Kemper’s total rewards reflect our investment in recognizing and rewarding employee contributions through competitive compensation and benefits, including base salary and short- and long-term incentives.
Removed
Kemper fosters elevated engagement through various initiatives and programs, recognizing employees who consistently go above and beyond in contributing to the Company’s success.
Added
Our market-competitive programs help attract and retain talent, support employee well-being, and reinforce a positive employee experience. We offer a broad range of benefits that promote the physical, emotional, financial, and social health of our workforce.
Removed
This feedback is reviewed by our business, functional and Human Resources leadership teams to assess employees’ emotional commitment to the most critical engagement factors, refine our culture, and address opportunities to enhance the work experience. Total Rewards Total rewards represent the investments Kemper makes to recognize and reward employees for their contributions.
Removed
This includes both benefits and compensation (base salary, short- and long-term incentives). Kemper is committed to offering a robust and market-competitive total rewards package that helps us attract and retain the talent necessary to grow our company and achieve our goals.

… 3 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

21 edited+3 added−2 removed126 unchanged
Biggest changeSome of these proceedings may involve matters particular to Kemper or one or more of its subsidiaries, while others may pertain to industry business practices. Some lawsuits may seek class action status that, if granted, could expose the Company to potentially significant liability by virtue of the size of the putative classes.
Biggest changeKemper and its subsidiaries are from time to time involved in lawsuits, regulatory inquiries and other legal proceedings arising out of the ordinary course of their businesses. Some of these proceedings may involve matters particular to Kemper or one or more of its subsidiaries, while others may pertain to industry business practices.
A failure of such third-party providers or their software or systems to perform effectively, maintain information security, or provide uninterrupted service and access to those systems, could materially adversely affect Kemper’s business.
A failure of such third-party providers or their software or systems to perform effectively, maintain information security, or provide uninterrupted service and access to those systems, could materially and adversely affect Kemper’s business.
We are subject to extensive cybersecurity and privacy regulation through policies and requirements imposed by state and federal authorities. These policies and regulations are complex, difficult to implement and sometimes contradictory. A finding that the Company has breached these regulations could result in litigation, fines, and expenses that materially adversely impact financial condition or results of operations.
We are subject to extensive cybersecurity and privacy regulation through policies and requirements imposed by state and federal authorities. These policies and regulations are complex, difficult to implement and sometimes contradictory. A finding that the Company has breached these regulations could result in litigation, fines, and expenses that materially and adversely impact financial condition or results of operations.
A downgrade in Kemper’s credit rating by Standard & Poor’s (“S&P”), Moody’s Investors Services (“Moody’s”) or Fitch Ratings (“Fitch”) may reduce Kemper’s ability to cost-effectively access the capital markets or may increase the cost to refinance existing debt. The insurance industry is highly competitive, making it difficult to grow profitability and within expectations of investors.
A downgrade in Kemper’s credit rating by Standard & Poor’s (“S&P”), Moody’s Investors Services (“Moody’s”) or Fitch Ratings (“Fitch”) may reduce Kemper’s ability to cost-effectively access the capital markets or may increase the cost to refinance existing debt. The insurance industry is highly competitive, making it difficult to grow profitability within the expectations of investors.
The Company holds a significant amount of assets without readily available, active, quoted market prices or for which fair value cannot be measured from actively quoted prices. These assets are generally deemed to require a higher degree of judgment in measuring fair value.
The Company holds a significant amount of assets without readily available, active, quoted market prices or for which fair value cannot be measured from actively quoted prices. These assets are generally deemed to require a higher degree of 23 judgment in measuring fair value.
Readers are advised to consider all of these factors along with the other information included in this 2024 Annual Report, including the factors set forth under the caption “Caution Regarding Forward-Looking Statements”, and to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.
Readers are advised to consider all of these factors along with the other information included in this 2025 Annual Report, including the factors set forth under the caption “Caution Regarding Forward-Looking Statements”, and to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.
The Company has been and will continue to be exposed to damages, regulatory penalties and other liabilities, reputational risk and significant increases in compliance and litigation costs as a result of these occurrences, which could have a material adverse impact on our financial condition and results of operations.
The Company has been and may continue to be exposed to damages, regulatory penalties and other liabilities, reputational risk and significant increases in compliance and litigation costs as a result of these occurrences, which could have a material adverse impact on our financial condition and results of operations.
The extent of the Company’s losses from a catastrophe is a function of both the total amount of its insured exposure in the geographic area affected by the event and the severity of the event. In recent periods, the Company has experienced significant catastrophe losses relating to tropical storm activity as well as rain and hail events.
The extent of the Company’s losses from a catastrophe is a function of both the total amount of its insured exposure in the geographic area affected by the event and the severity of the event. In recent periods, the Company has experienced catastrophe losses primarily relating to tropical storm activity as well as rain and hail events.
For information about the Company’s pending legal proceedings, see Note 29, “Commitments and Contingencies,” to the Consolidated Financial Statements. Changes in the availability of insurance coverage or in the ability of insurers to meet their obligations could result in the Company being exposed to significant losses.
For information about the Company’s pending legal proceedings, see Note 28, “Commitments and Contingencies,” to the Consolidated Financial Statements. Changes in the availability of insurance coverage or in the ability of insurers to meet their obligations could result in the Company being exposed to significant losses.
These failures could result in significant loss of business, increased costs, fines and other adverse consequences. If Kemper is unable to send or accept electronic payments, our business and financial results could be adversely affecte d. The Company relies increasingly on electronic payments from policyholders, including, but not limited to, payment by credit and debit cards.
These failures could result in significant loss of business, increased costs, fines and other adverse consequences. If Kemper is unable to send or accept electronic payments, our business and financial results could be adversely affected. The Company relies increasingly on electronic payments from policyholders, including, but not limited to, payment by credit and debit cards.
Competitive success is based on many factors, including, but not limited to, the following: • Competitiveness of prices charged for insurance policies; • Sophistication of pricing segmentation; • Design and introduction of insurance products to meet emerging consumer trends; • Ability to attract and retain experienced industry talent; • Selection and retention of agents and other business partners; • Compensation paid to agents; • Underwriting discipline; • Selectiveness of sales markets; • Effectiveness of marketing materials and name recognition; • Product and technological innovation; • Effectiveness of online servicing platforms; • Ability to settle claims timely, efficiently, and without incurring extra-contractual liability; 18 • Ability to detect and prevent fraudulent insurance claims; • Effectiveness of deployment and use of information technology across all aspects of operations; • Ability to control operating expenses; • Financial strength ratings; and • Quality of services provided to, and ease of doing business with, independent agents, brokers, or policyholders.
Competitive success is based on many factors, including, but not limited to, the following: • Competitiveness of prices charged for insurance policies; • Sophistication of pricing segmentation; • Design and introduction of insurance products to meet emerging consumer trends; • Ability to manage potential additional costs or losses that may be associated with writing new business; • Ability to attract and retain experienced industry talent, including for senior executive leadership positions; • Selection and retention of agents and other business partners; • Compensation paid to agents; • Underwriting discipline; • Selectiveness of sales markets; • Effectiveness of marketing materials and name recognition; • Product and technological innovation; 18 • Effectiveness of online servicing platforms; • Ability to settle claims timely, efficiently, and without incurring extra-contractual liability; • Ability to detect and prevent fraudulent insurance claims; • Effectiveness of deployment and use of information technology across all aspects of operations; • Ability to control operating expenses; • Financial strength ratings; and • Quality of services provided to, and ease of doing business with, career agents, independent agents, brokers, or policyholders.
Well-capitalized new entrants to the property and casualty insurance industry, or existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition, which may adversely impact our business and profitability.
Well-capitalized new entrants to the property and casualty insurance industry, existing competitors in the specialty property and casualty insurance industry that receive substantial infusions of capital or access to third-party capital, or established property and casualty insurance companies that expand their product offerings to compete in the specialty automobile insurance market provide increasing competition, which may adversely impact our business and profitability.
The Company’s deferred tax assets could become impaired which would adversely impact the Company’s results of operations and financial condition . The realization of deferred tax assets depends on the recognition of sufficient taxable income and character.
Such a charge could have an adverse effect on our results of operations or financial condition. The Company’s deferred tax assets could become impaired which would adversely impact the Company’s results of operations and financial condition . The realization of deferred tax assets depends on the recognition of sufficient taxable income and character.
The assumptions used by management to measure fair values could turn out to be different 23 than the actual amounts that may be realized in an orderly transaction with a willing market participant could be either lower or higher than the Company’s estimates of fair value.
The assumptions used by management to measure fair values could turn out to be different than the actual amounts that may be realized in an orderly transaction with a willing market participant. The Company reviews its investment portfolio for factors that may indicate that a decline in the fair value of an investment is other-than-temporary.
Kemper maintains insurance coverage to limit its risk exposure to certain perils, including cybersecurity, errors and omissions, directors and officers liability insurance, fiduciary, insurance company professional liability and other financial indemnity coverages. The market for certain of these coverages has tightened over recent periods and the availability of these coverages could be significantly reduced in the future.
Kemper maintains insurance coverage to limit its risk exposure to certain perils, including cybersecurity, errors and omissions, directors and officers liability insurance, fiduciary, insurance company professional liability and other financial indemnity coverages.
These developments and significant changes in, or new interpretations of, existing laws and regulations could make it more expensive for Kemper’s insurance subsidiaries to conduct and grow their businesses which could materially impact the Company’s operating results.
These developments and significant changes in, or new interpretations of, existing laws and regulations could make it more expensive for Kemper’s insurance subsidiaries to conduct and grow their businesses which could materially impact the Company’s operating results. 19 Kemper has a significant concentration of personal automobile insurance business in California and Florida, and the regulatory, legal, competitive, or economic conditions in these states (as well as negative developments in any of these conditions) may adversely affect the Company’s profitability.
The outcomes of these matters are difficult to predict, and the amounts or ranges of potential loss at particular stages in the proceedings are in most cases difficult or impossible to ascertain. Even where the possibility of an adverse outcome is remote under traditional legal analysis, juries sometimes substitute their subjective views in place of facts and established legal principles.
Even where the possibility of an adverse outcome is remote under traditional legal analysis, juries sometimes substitute their subjective views in place of facts and established legal principles.
Legal and regulatory proceedings are unpredictable and could produce one or more unexpected outcomes that could materially and adversely affect the Company’s financial results for any given period. Kemper and its subsidiaries are from time to time involved in lawsuits, regulatory inquiries and other legal proceedings arising out of the ordinary course of their businesses.
Changes in any of these conditions could negatively impact the Company's results of operations. Legal and regulatory proceedings are unpredictable and could produce one or more unexpected outcomes that could materially and adversely affect the Company’s financial results for any given period.
In addition, the Company’s insurance subsidiaries are subject to litigation relating to claims handling practices in connection with otherwise routine claims, including actions that make allegations of bad faith and seek extra-contractual damages. These matters often raise difficult factual and legal issues and are subject to uncertainties and complexities.
Some lawsuits may seek class action status that, if granted, could expose the Company to potentially significant liability by virtue of the size of the putative classes. In addition, the Company’s insurance subsidiaries are subject to litigation relating to claims handling practices in connection with otherwise routine claims, including actions that make allegations of bad faith and seek extra-contractual damages.
Kemper has a significant concentration of personal automobile insurance business in California and Florida, and negative developments in the regulatory, legal or economic conditions in these states may adversely affect the Company’s profitability. California and Florida represented 80% of the Company’s total personal automobile insurance gross written premiums in 2024.
California and Florida represented 82% of the Company’s total personal automobile insurance gross written premiums in 2025. Consequently, the dynamic nature of regulatory, legal, competitive and economic conditions in these states affects Kemper’s revenues and profitability.
Further, both California and Florida have regulations that limit the after-tax return on underwriting profit allowed for an insurer. Changes in any of these conditions could negatively impact the Company's results of operations.
Significant legislative changes relating to Florida PIP coverage that became effective in 2023 have contributed to lower loss costs on certain personal auto accident claims and increased underwriting profitability in Kemper’s Florida personal auto business. Both California and Florida have regulations that limit the after-tax return on underwriting profit allowed for an insurer.
Removed
Consequently, the dynamic nature of regulatory, legal, competitive and economic conditions in these states affects Kemper’s revenues and profitability. Significant legislative changes relating to Florida PIP coverage have recently become effective, but it 19 is too early to determine the ultimate impact of these changes.
Added
These matters often raise difficult factual and legal issues and are subject to uncertainties and complexities. The outcomes of these matters are difficult to predict, and the amounts or ranges of potential loss at particular stages in the proceedings are in most cases difficult or impossible to ascertain.
Removed
The Company reviews its investment portfolio for factors that may indicate that a decline in the fair value of an investment is other-than-temporary.
Added
The Company’s recognized value of goodwill could become impaired which would adversely impact the Company’s results of operations and financial condition . Goodwill represents the excess of amounts paid for acquiring businesses over the fair value of the net assets acquired.
Added
Goodwill is evaluated for impairment annually, or more frequently if conditions warrant, by comparing the carrying value, attributed equity, of a reporting unit to its estimated fair value. Market declines or other events impacting the fair value of a reporting unit could result in a goodwill impairment, resulting in a charge to income.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed10 unchanged
Biggest changeThe Company’s current CISO has significant experience in information security, as do members of the information security team. The Company participates in certain industry cybersecurity intelligence, risk sharing organizations and law enforcement organizations. Kemper’s information security program is an element of the Company’s broader Enterprise Risk Management (ERM) framework.
Biggest changeThe Company’s current CISO has significant experience in information security, as do members of the information security team. The Company participates in certain industry cybersecurity intelligence, risk sharing and law enforcement organizations. Kemper’s information security program is an element of the Company’s broader Enterprise Risk Management (ERM) framework.
This framework employs a management committee structure to review technology, compliance, and operational risks. The Company’s Enterprise Risk Committee (“ERC”), composed of the Chief Executive Officer, the Chief Risk Officer, all executive vice presidents and the head of internal audit, meets at least quarterly to oversee the Company’s ERM framework.
This framework employs a management committee structure to review technology, compliance, and operational risks. The Company’s Enterprise Risk Committee (“ERC”), composed of the Chief Executive Officer, the Chief Risk Officer, 25 all executive vice presidents and the head of internal audit, meets at least quarterly to oversee the Company’s ERM framework.
Through its role in providing oversight for the Company’s ERM framework, the Risk Committee of the Kemper Board of Directors (the “Risk Committee”) provides oversight of the Company’s information security program. On a quarterly basis, management discusses Kemper’s information security program, cybersecurity risks, and related developments with the Risk 25 Committee.
Through its role in providing oversight for the Company’s ERM framework, the Risk Committee of the Kemper Board of Directors (the “Risk Committee”) provides oversight of the Company’s information security program. On a quarterly basis, management discusses Kemper’s information security program, cybersecurity risks, and related developments with the Risk Committee.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeThe latest expiration date of the existing leases is in September 2031. Kemper’s life insurance subsidiaries lease facilities with aggregate square footage of approximately 373,000 at 96 locations in 23 states. The latest expiration date of the existing leases is in October 2029. The properties described above are in good condition.
Biggest changeThe latest expiration date of the existing leases is in September 2031. Kemper’s life insurance subsidiaries lease facilities with aggregate square footage of approximately 297,000 at 95 locations in 23 states. The latest expiration date of the existing leases is in January 2031. The properties described above are in good condition.
The properties utilized in the Company’s operations consist of facilities suitable for general office space, call centers and data processing operations. Leased properties with aggregate square footage of 190,000 are not currently utilized in the Company's operations and are not expected to be utilized by the Company throughout the remainder of their respective lease terms.
The properties utilized in the Company’s operations consist of facilities suitable for general office space, call centers and data processing operations. Leased properties with aggregate square footage of 27,000 are not currently utilized in the Company's operations and are not expected to be utilized by the Company throughout the remainder of their respective lease terms.
Leased Facilities The Company leases four floors, or approximately 92,000 square feet, in an 83-story office building in Chicago, Illinois, for its corporate headquarters. The lease expires on December 31, 2033. Kemper’s property and casualty insurance subsidiaries lease facilities with an aggregate square footage of approximately 500,000 at 91 locations in twelve states.
Leased Facilities The Company leases four floors, or approximately 92,000 square feet, in an 83-story office building in Chicago, Illinois, for its corporate headquarters. The lease expires on December 31, 2033. Kemper’s property and casualty insurance subsidiaries lease facilities with an aggregate square footage of approximately 432,000 at 87 locations in 12 states.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−1 removed2 unchanged
Biggest changeCompany / Index 2019 2020 2021 2022 2023 2024 Kemper Corporation $ 100.00 $ 100.84 $ 78.55 $ 67.40 $ 68.44 $ 95.28 S&P MidCap 400 Index 100.00 113.66 141.80 123.28 143.54 163.54 S&P Supercomposite Insurance Index 100.00 98.70 128.18 140.14 154.07 195.70 28
Biggest changeCompany / Index 2020 2021 2022 2023 2024 2025 Kemper Corporation $ 100.00 $ 77.89 $ 66.84 $ 67.87 $ 94.49 $ 59.06 S&P MidCap 400 Index 100.00 124.76 108.47 126.29 143.89 154.68 S&P Supercomposite Insurance Index 100.00 129.87 141.98 156.10 198.27 206.61 28
See MD&A, “Liquidity and Capital Resources” and Note 18, “Shareholders’ Equity,” to the Consolidated Financial Statements for information on Kemper’s ability and intent to pay dividends.
See MD&A, “Liquidity and Capital Resources” and Note 17 “Shareholders’ Equity,” to the Consolidated Financial Statements for information on Kemper’s ability and intent to pay dividends.
DOLLARS PER SHARE Three Months Ended Year Ended Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 Dec 31, 2024 Cash Dividends Paid to Shareholders (per share) $ 0.31 $ 0.31 $ 0.31 $ 0.31 $ 1.24 Three Months Ended Year Ended DOLLARS PER SHARE Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Dec 31, 2023 Cash Dividends Paid to Shareholders (per share) $ 0.31 $ 0.31 $ 0.31 $ 0.31 $ 1.24 Kemper’s insurance subsidiaries are subject to various state insurance laws that may restrict the ability of these insurance subsidiaries to pay dividends without prior regulatory approval.
DOLLARS PER SHARE Three Months Ended Year Ended Mar 31, 2025 Jun 30, 2025 Sep 30, 2025 Dec 31, 2025 Dec 31, 2025 Cash Dividends Paid to Shareholders (per share) $ 0.32 $ 0.32 $ 0.32 $ 0.32 $ 1.28 Three Months Ended Year Ended DOLLARS PER SHARE Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Dec 31, 2024 Dec 31, 2024 Cash Dividends Paid to Shareholders (per share) $ 0.31 $ 0.31 $ 0.31 $ 0.31 $ 1.24 Kemper’s insurance subsidiaries are subject to various state insurance laws that may restrict the ability of these insurance subsidiaries to pay dividends without prior regulatory approval.
Market Information Kemper’s common stock is traded on the NYSE under the symbol of “KMPR.” Holders As of January 31, 2025, the number of record holders of Kemper’s common stock was 2,408. 26 Dividends Quarterly information pertaining to payment of dividends on Kemper’s common stock is presented below.
Market Information Kemper’s common stock is traded on the NYSE under the symbol of “KMPR.” Holders As of January 31, 2026, the number of record holders of Kemper’s common stock was 2,269. 26 Dividends Quarterly information pertaining to payment of dividends on Kemper’s common stock is presented below.
Issuer Purchases of Equity Securities On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.3 million remaining under the August 6, 2014 authorization, bringing the remaining share repurchase authorization to approximately $333.3 million.
Issuer Purchases of Equity Securities On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.3 million remaining under a prior authorization in 2014, bringing the remaining share repurchase authorization to approximately $333.3 million (the “2014 Repurchase Program”).
Shares repurchased and retired during the three months ended December 31, 2024 were as follows: Total Maximum Number of Shares Dollar Value of Shares Average Purchased as Part that May Yet Be Total Price of Publicly Purchased Under Number of Shares Paid per Announced Plans the Plans or Programs Period Purchased Share or Programs (Dollars in Millions) October 2024 165,511 $ 60.14 165,511 $ 136.7 November 2024 63,250 $ 63.16 63,250 $ 132.8 December 2024 — $ — — $ 132.8 These purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. 27 Kemper Common Stock Performance Graph The following graph assumes $100 invested on December 31, 2019 in (i) Kemper common stock, (ii) the S&P MidCap 400 Index and (iii) the S&P Supercomposite Insurance Index, in each case with dividends reinvested.
Shares repurchased and retired during the three months ended December 31, 2025 were as follows: Total Maximum Number of Shares Dollar Value of Shares Average Purchased as Part that May Yet Be Total Price of Publicly Purchased Under Number of Shares Paid per Announced Plans the Plans or Programs Period Purchased Share or Programs (Dollars in Millions) October 2025 1,655,662 $ 48.07 1,655,662 $ 304.2 November 2025 — $ — — $ 304.2 December 2025 — $ — — $ 304.2 These purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. 27 Kemper Common Stock Performance Graph The following graph assumes $100 invested on December 31, 2020 in (i) Kemper common stock, (ii) the S&P MidCap 400 Index and (iii) the S&P Supercomposite Insurance Index, in each case with dividends reinvested.
Removed
As of December 31, 2024, the remaining share repurchase authorization was $132.8 million under the repurchase program.
Added
On August 5, 2025, Kemper’s Board of Directors approved a new share repurchase authorization, under which the Company can repurchase up to $500.0 million of its common stock (the “2025 Repurchase Program”). In August 2025, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman Sachs & Co.
Added
LLC to repurchase an aggregate of $150.0 million of shares of the Company’s common stock. The transactions under the ASR Agreement were settled and immediately retired during the third and fourth quarters of 2025. As of December 31, 2025, the 2014 Repurchase Program has been completed, and the remaining share repurchase authorization under the 2025 Repurchase Program was $304.2 million.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

143 edited+29 added−25 removed113 unchanged
Biggest changeUnfunded Commitment in Millions Reported Value in Millions Asset Class Dec 31, 2024 Dec 31, 2024 Dec 31, 2023 Reported as Equity Method Limited Liability Investments: Senior Debt $ 48.2 $ 19.1 $ 19.0 Mezzanine Debt 40.8 116.7 125.4 Secondary Transactions 1.6 5.5 7.9 Leveraged Buyout 0.6 7.5 8.6 Growth Equity — — 1.2 Hedge Fund — 0.1 0.1 Distressed Debt — 4.4 7.9 Real Estate — 27.3 41.9 Other 0.1 5.7 9.7 Total Equity Method Limited Liability Investments 91.3 186.3 221.7 Alternative Energy Partnership Investments — 17.6 17.3 Reported as Other Equity Interests at Fair Value: Mezzanine Debt 67.0 116.9 124.0 Leveraged Buyout 30.4 19.2 19.0 Distressed Debt 15.0 11.7 12.4 Senior Debt 8.4 26.3 24.8 Growth Equity 8.0 7.0 6.4 Secondary Transactions 1.6 2.4 2.8 Hedge Funds — — 1.9 Other 0.2 0.1 0.1 Total Reported as Other Equity Interests at Fair Value 130.6 183.6 191.4 Reported as Equity Securities at Modified Cost: Other — 1.8 4.8 Total Reported as Equity Securities at Modified Cost — 1.8 4.8 Total Investments in Limited Liability Companies and Limited Partnerships $ 221.9 $ 389.3 $ 435.2 The Company expects that it will be required to fund its commitments over the next several years.
Biggest changeUnfunded Commitment in Millions Reported Value in Millions Asset Class Dec 31, 2025 Dec 31, 2025 Dec 31, 2024 Reported as Equity Method Limited Liability Investments: Senior Debt $ 56.9 $ 21.1 $ 19.1 Mezzanine Debt 38.8 115.5 116.7 Secondary Transactions 1.6 1.9 5.5 Leveraged Buyout 0.1 6.5 7.5 Real Estate — 24.1 27.3 Distressed Debt — 1.4 4.4 Other 0.1 5.5 5.8 Total Equity Method Limited Liability Investments 97.5 176.0 186.3 Reported as Other Equity Interests at Fair Value: Mezzanine Debt 82.3 115.8 116.9 Leveraged Buyout 41.0 40.5 19.2 Distressed Debt 16.1 10.8 11.7 Senior Debt 6.1 25.5 26.3 Growth Equity 5.7 10.7 7.0 Secondary Transactions 1.0 1.3 2.4 Real Estate — 0.1 — Other 0.3 5.6 0.1 Total Reported as Other Equity Interests at Fair Value 152.5 210.3 183.6 Reported as Other Investments: Other Equity Investments 1 0.1 5.9 19.4 Total Investments in Limited Liability Companies and Limited Partnerships $ 250.1 $ 392.2 $ 389.3 1 In 2025, the Company elected to change the presentation of Alternative Energy Partnership Investments and Equity Securities at Modified Costs by including them within Other Equity Investments.
Additional information pertaining to the estimation of, and development of, the Company’s Property and Casualty Insurance Reserves is contained in Item 1 of Part I of this 2024 Annual Report under the heading “Property and Casualty Loss and Loss Adjustment Expense Reserves.” Goodwill Recoverability The Company tests goodwill for recoverability at the reporting unit level on an annual basis, or whenever events or circumstances indicate the fair value of a reporting unit may have declined below its carrying value.
Additional information pertaining to the estimation of, and development of, the Company’s Property and Casualty Insurance Reserves is contained in Item 1 of Part I of this 2025 Annual Report under the heading “Property and Casualty Loss and Loss Adjustment Expense Reserves.” Goodwill Recoverability The Company tests goodwill for recoverability at the reporting unit level on an annual basis, or whenever events or circumstances indicate the fair value of a reporting unit may have declined below its carrying value.
See MD&A, “Critical Accounting Estimates,” of this 2024 Annual Report for additional information pertaining to the Company’s process of estimating property and casualty insurance reserves for losses and LAE, and the estimated variability thereof, development of property and casualty insurance losses and LAE, and a discussion of some of the variables that may impact them. 36 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) SPECIALTY PROPERTY & CASUALTY INSURANCE Selected financial information for the Specialty Property & Casualty Insurance segment is presented below.
See MD&A, “Critical Accounting Estimates,” of this 2025 Annual Report for additional information pertaining to the Company’s process of estimating property and casualty insurance reserves for losses and LAE, and the estimated variability thereof, development of property and casualty insurance losses and LAE, and a discussion of some of the variables that may impact them. 36 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) SPECIALTY PROPERTY & CASUALTY INSURANCE Selected financial information for the Specialty Property & Casualty Insurance segment is presented below.
ISO-classified catastrophes are assigned a unique serial number recognized throughout the insurance industry. 34 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CATASTROPHES (Continued) The number of ISO-classified catastrophic events and catastrophe losses and LAE, net of reinsurance recoveries, (excluding loss and LAE reserve development) by range of loss and business segment for the years ended December 31, 2024, 2023 and 2022 are presented below.
ISO-classified catastrophes are assigned a unique serial number recognized throughout the insurance industry. 34 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CATASTROPHES (Continued) The number of ISO-classified catastrophic events and catastrophe losses and LAE, net of reinsurance recoveries, (excluding loss and LAE reserve development) by range of loss and business segment for the years ended December 31, 2025, 2024 and 2023 are presented below.
The prices that the Company might realize from actual sales of investments are likely to vary from their respective estimated fair values at December 31, 2024 due to changing market conditions and limitations inherent in the estimation process. The classification of a company’s investment in a financial instrument may affect its reported results.
The prices that the Company might realize from actual sales of investments are likely to vary from their respective estimated fair values at December 31, 2025 due to changing market conditions and limitations inherent in the estimation process. The classification of a company’s investment in a financial instrument may affect its reported results.
See Note 2, “Summary of Accounting Policies and Accounting Changes” to the Consolidated Financial Statements for discussion on adoption of these ASUs and impacts to the Company’s financial statements. For all recently issued accounting pronouncements with effective dates after December 31, 2024, the Company is currently evaluating the impact of this guidance on its financial statements. 61 Item 7A.
See Note 2, “Summary of Accounting Policies and Accounting Changes” to the Consolidated Financial Statements for discussion on adoption of these ASUs and impacts to the Company’s financial statements. For all recently issued accounting pronouncements with effective dates after December 31, 2025, the Company is currently evaluating the impact of this guidance on its financial statements. 61 Item 7A.
LOSS AND LAE RESERVE DEVELOPMENT Increases (decreases) in the Company’s property and casualty loss and LAE reserves for the years ended December 31, 2024, 2023 and 2022 to recognize adverse (favorable) loss and LAE reserve development from prior accident years in continuing operations, hereinafter also referred to as “reserve development” in the discussion of segment results, are presented below .
LOSS AND LAE RESERVE DEVELOPMENT Increases (decreases) in the Company’s property and casualty loss and LAE reserves for the years ended December 31, 2025, 2024 and 2023 to recognize adverse (favorable) loss and LAE reserve development from prior accident years in continuing operations, hereinafter also referred to as “reserve development” in the discussion of segment results, are presented below .
The Equity Securities at Fair Value portfolio’s weighted-average beta was calculated using each security’s assumed forward looking betas based on underlying investment characteristics weighted by the fair value of such securities as of December 31, 2024 and 2023. For equity securities without observable market inputs, the Company assumed a beta of 1.00 at December 31, 2024 and 2023. 62
The Equity Securities at Fair Value portfolio’s weighted-average beta was calculated using each security’s assumed forward looking betas based on underlying investment characteristics weighted by the fair value of such securities as of December 31, 2025 and 2024. For equity securities without observable market inputs, the Company assumed a beta of 1.00 at December 31, 2025 and 2024. 62
Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of the Company’s insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance.
Because reserve development relates to the re-estimation of losses from earlier periods, it has minimal bearing on the performance of the Company’s insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance.
(Dollars in Millions) 2024 2023 Preferred Stocks $ 1.0 $ 1.8 Common Stocks 2.2 — Other Equity Interests: Exchange Traded Funds (0.6) 0.6 Limited Liability Companies and Limited Partnerships (5.3) 2.3 Total Other Equity Interests (5.9) 2.9 Change in Fair Value of Equity Securities (2.7) 4.7 Change in Fair Value of Convertible Securities — — Change in Fair Value of Equity and Convertible Securities $ (2.7) $ 4.7 Net Realized Gains (Losses) on Sales of Investments The components of Net Realized Investment Gains (Losses) for the year ended December 31, 2024, 2023 and 2022 are presented below.
(Dollars in Millions) 2025 2024 Preferred Stocks $ (0.1) $ 1.0 Common Stocks (1.0) 2.2 Other Equity Interests: Exchange Traded Funds — (0.6) Limited Liability Companies and Limited Partnerships (3.2) (5.3) Total Other Equity Interests (3.2) (5.9) Change in Fair Value of Equity Securities (4.3) (2.7) Change in Fair Value of Convertible Securities — — Change in Fair Value of Equity and Convertible Securities $ (4.3) $ (2.7) Net Realized Gains (Losses) on Sales of Investments The components of Net Realized Investment Gains (Losses) for the year ended December 31, 2025, 2024 and 2023 are presented below.
Depending on the terms of a particular policy, future premiums from the policyholder may be required for the policy to remain in force. The Company estimates that future cash inflows would total $4.3 billion using the same assumptions used to estimate the cash outflows.
Depending on the terms of a particular policy, future premiums from the policyholder may be required for the policy to remain in force. The Company estimates that future cash inflows would total $4.1 billion using the same assumptions used to estimate the cash outflows.
For investments in fixed maturities classified as held to maturity, a company is required to carry the investment at amortized cost, with only amortization occurring during the period recognized into income. None of the Company’s investments in fixed maturities were classified as held to maturity at December 31, 2024.
For investments in fixed maturities classified as held to maturity, a company is required to carry the investment at amortized cost, with only amortization occurring during the period recognized into income. None of the Company’s investments in fixed maturities were classified as held to maturity at December 31, 2025.
For preferred stock equity securities, the Company assumed an adverse and instantaneous increase of 100 basis points in market interest rates from their levels at both December 31, 2024 and 2023. All other variables were held constant.
For preferred stock equity securities, the Company assumed an adverse and instantaneous increase of 100 basis points in market interest rates from their levels at both December 31, 2025 and 2024. All other variables were held constant.
Fixed Maturities Impairment Losses recognized in the Consolidated Statements of Income (Loss) for the year ended December 31, 2024 related primarily to investments in securities with direct write-downs and in Fixed Maturities where the Company established an allowance for expected credit losses.
Fixed Maturities Impairment Losses recognized in the Consolidated Statements of Income (Loss) for the year ended December 31, 2025 related primarily to investments in securities with direct write-downs and in Fixed Maturities where the Company established an allowance for expected credit losses.
The Company measured equity price sensitivity assuming an adverse and instantaneous 30% decrease in the Standard and Poor’s Stock Index (the “S&P 500”) from its level at December 31, 2024 and 2023, with all other variables held constant.
The Company measured equity price sensitivity assuming an adverse and instantaneous 30% decrease in the Standard and Poor’s Stock Index (the “S&P 500”) from its level at December 31, 2025 and 2024, with all other variables held constant.
See the “Reinsurance” subsection of the “Property and Casualty Insurance Business” and “Life Insurance Business” sections of Item 1(c), “Description of Business,” and Note 26, “Catastrophe Reinsurance,” to the Consolidated Financial Statements for additional information on the Company’s reinsurance programs.
See the “Reinsurance” subsection of the “Property and Casualty Insurance Business” and “Life Insurance Business” sections of Item 1(c), “Description of Business,” and Note 25, “Catastrophe Reinsurance,” to the Consolidated Financial Statements for additional information on the Company’s reinsurance programs.
For Debt, the Company assumed an adverse and instantaneous decrease of 100 basis points in market interest rates from their levels at December 31, 2024 and 2023. All other variables were held constant.
For Debt, the Company assumed an adverse and instantaneous decrease of 100 basis points in market interest rates from their levels at December 31, 2025 and 2024. All other variables were held constant.
For the interest rate sensitivity analysis presented below, the Company assumed an adverse and instantaneous increase of 100 basis points in the yield curve at both December 31, 2024 and 2023 for Investments in Fixed Maturities.
For the interest rate sensitivity analysis presented below, the Company assumed an adverse and instantaneous increase of 100 basis points in the yield curve at both December 31, 2025 and 2024 for Investments in Fixed Maturities.
These factors include governmental actions, including court decisions interpreting existing laws, regulations or policy provisions, developments related to insurance policy claims and coverage issues, adverse or favorable outcomes in pending claims litigation, the number and severity of insurance claims, the impact of inflation on insurance claims and the impact of required participation in windpools and joint underwriting associations and residual market assessments.
These factors include governmental actions, including court decisions interpreting existing laws, regulations or policy provisions, developments related to insurance policy claims and coverage issues, adverse or favorable outcomes in pending claims litigation, the number and severity of insurance claims, the impact of inflation on insurance claims and the impact of required participation in wind pools and joint underwriting associations and residual market assessments.
There were no applicable significant non-recurring items that the Company excluded from the calculation of Adjusted Consolidated Net Operating Income (Loss) for the years ended December 31, 2024, 2023 or 2022.
There were no applicable significant non-recurring items that the Company excluded from the calculation of Adjusted Consolidated Net Operating Income (Loss) for the years ended December 31, 2025, 2024 or 2023.
Management believes that its property and casualty insurance subsidiaries maintain adequate levels of liquidity in the event that they were to experience several future catastrophic events over a relatively short period of time. 53 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) LIQUIDITY AND CAPITAL RESOURCES (Continued) Information about the Company’s cash flows for the years ended December 31, 2024, 2023 and 2022 is presented below.
Management believes that its property and casualty insurance subsidiaries maintain adequate levels of liquidity in the event that they were to experience several future catastrophic events over a relatively short period of time. 52 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) LIQUIDITY AND CAPITAL RESOURCES (Continued) Information about the Company’s cash flows for the years ended December 31, 2025, 2024 and 2023 is presented below.
Changes in these factors from their December 31, 2024 evaluation date could result in the Company determining that a decline in the fair value exists for an investment held and evaluated at December 31, 2024.
Changes in these factors from their December 31, 2025 evaluation date could result in the Company determining that a decline in the fair value exists for an investment held and evaluated at December 31, 2025.
Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures 31 Summary of Results 32 Catastrophes 34 Loss and LAE Reserve Development 35 Specialty Property & Casualty Insurance 37 Life Insurance 42 Investment Results 43 Investment Quality and Concentrations 46 Investments in Limited Liability Companies and Limited Partnerships 49 Insurance, Interest and Other Expenses 50 Income Taxes 51 Liquidity and Capital Resources 51 Contractual Obligations 54 Critical Accounting Estimates 55 Recently Issued Accounting Pronouncements 61 30 NON-GAAP FINANCIAL MEASURES Pursuant to the rules and regulations of the SEC, the Company is required to file consolidated financial statements prepared in accordance with the accounting principles generally accepted in the United States (“GAAP”).
Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measures 31 Summary of Results 32 Catastrophes 34 Loss and LAE Reserve Development 35 Specialty Property & Casualty Insurance 37 Life Insurance 42 Investment Results 43 Investment Quality and Concentrations 45 Investments in Limited Liability Companies and Limited Partnerships 48 Insurance, Interest and Other Expenses 49 Income Taxes 50 Liquidity and Capital Resources 50 Contractual Obligations 53 Critical Accounting Estimates 55 Recently Issued Accounting Pronouncements 61 30 NON-GAAP FINANCIAL MEASURES Pursuant to the rules and regulations of the SEC, the Company is required to file consolidated financial statements prepared in accordance with the accounting principles generally accepted in the United States (“GAAP”).
As a result of the analysis, the Company determined that a valuation allowance was required as of December 31, 2024 against certain foreign deferred tax assets which had been recorded during 2024.
As a result of the analysis, the Company determined that a valuation allowance was required as of December 31, 2025 against certain foreign deferred tax assets which had been recorded during 2025.
The FASB issues Accounting Standards Updates (“ASUs”) to amend the authoritative literature in the FASB ASC. The Company has adopted all recently issued accounting pronouncements with effective dates prior to January 1, 2025.
The FASB issues Accounting Standards Updates (“ASUs”) to amend the authoritative literature in the FASB ASC. The Company has adopted all recently issued accounting pronouncements with effective dates prior to January 1, 2026.
The Company has elected the fair value option for investments in fixed maturities with equity conversion features. As of December 31, 2024, the Company no longer holds any investments with equity conversion features.
The Company has elected the fair value option for investments in fixed maturities with equity conversion features. As of December 31, 2025, the Company no longer holds any investments with equity conversion features.
Treasury securities. 47 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INVESTMENT QUALITY AND CONCENTRATIONS (Continued) The following table summarizes the fair value of the Company’s ten largest investment exposures in a single issuer, excluding investments in U.S. Government, Government Agencies and Authorities, and Short-term Investments, at December 31, 2024.
Treasury securities. 46 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INVESTMENT QUALITY AND CONCENTRATIONS (Continued) The following table summarizes the fair value of the Company’s ten largest investment exposures in a single issuer, excluding investments in U.S. Government, Government Agencies and Authorities, and Short-term Investments, at December 31, 2025.
As of December 31, 2024, the Company had $75.0 million notional amount of derivatives holdings. The Company measures its sensitivity to market risk by evaluating the change in its financial assets and liabilities relative to fluctuations in interest rates and equity prices.
As of December 31, 2025, the Company had $0.0 million notional amount of derivatives holdings. The Company measures its sensitivity to market risk by evaluating the change in its financial assets and liabilities relative to fluctuations in interest rates and equity prices.
Coverage under the catastrophe reinsurance program is provided in various contracts and layers. The Company’s Property & Casualty Insurance business also purchase reinsurance from the FHCF for hurricane losses in Florida at retentions lower than its catastrophe reinsurance program. The Company had no material recoveries under its catastrophe reinsurance treaties for the years ended December 31, 2024, 2023 and 2022.
Coverage under the catastrophe reinsurance program is provided in various contracts and layers. The Company’s Property & Casualty Insurance business also purchases reinsurance from the FHCF for hurricane losses in Florida at retentions lower than its catastrophe reinsurance program. The Company had no material recoveries under its catastrophe reinsurance treaties for the years ended December 31, 2025, 2024 and 2023.
The Company’s investments in common stock equity securities were correlated with the S&P 500 using the portfolio’s weighted-average beta of 0.34 and 0.35 at December 31, 2024 and 2023, respectively. Beta measures a stock’s relative volatility in relation to the rest of the stock market, with the S&P 500 having a beta coefficient of 1.00.
The Company’s investments in common stock equity securities were correlated with the S&P 500 using the portfolio’s weighted-average beta of 0.27 and 0.34 at December 31, 2025 and 2024, respectively. Beta measures a stock’s relative volatility in relation to the rest of the stock market, with the S&P 500 having a beta coefficient of 1.00.
Change in Fair Value of Equity and Convertible Securities The components of Change in Fair Value of Equity and Convertible Securities for the years ended December 31, 2024 and 2023 are presented below.
Change in Fair Value of Equity and Convertible Securities The components of Change in Fair Value of Equity and Convertible Securities for the years ended December 31, 2025 and 2024 are presented below.
For these advances, United Insurance held pledged securities in a custodial account with the FHLB of Chicago with a fair value of $619.3 million at December 31, 2024. The fair value of the collateral pledged must be maintained at certain specified levels above the borrowed amount, which can vary depending on the assets pledged.
For these advances, United Insurance held pledged securities in a custodial account with the FHLB of Chicago with a fair value of $661.3 million at December 31, 2025. The fair value of the collateral pledged must be maintained at certain specified levels above the borrowed amount, which can vary depending on the assets pledged.
Total amortized cost of Long-term Debt, Current and Non-Current, outstanding at December 31, 2024 and December 31, 2023 was: (Dollars in Millions) Dec 31, 2024 Dec 31, 2023 Senior Notes Current: 4.350% Senior Notes due February 15, 2025 $ 449.9 $ — Non-Current 4.350% Senior Notes due February 15, 2025 — 449.6 2.400% Senior Notes due September 30, 2030 397.5 397.0 3.800% Senior Notes due February 23, 2032 396.5 396.0 5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062 147.7 146.6 Total Long-term Debt Outstanding $ 1,391.6 $ 1,389.2 See Note 24, “Debt,” to the Consolidated Financial Statements for more information regarding the Company’s long-term debt.
Total amortized cost of Long-term Debt, Current and Non-Current, outstanding at December 31, 2025 and December 31, 2024 was: (Dollars in Millions) Dec 31, 2025 Dec 31, 2024 Senior Notes Current: 4.350% Senior Notes due February 15, 2025 $ — $ 449.9 Non-Current 2.400% Senior Notes due September 30, 2030 397.9 397.5 3.800% Senior Notes due February 23, 2032 396.9 396.5 5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062 148.7 147.7 Total Long-term Debt Outstanding $ 943.5 $ 1,391.6 See Note 23, “Debt,” to the Consolidated Financial Statements for more information regarding the Company’s long-term debt.
At December 31, 2024, approximately 95.7% of the Company’s fixed maturity investment portfolio was rated investment-grade, which the Company defines as a security issued by a high quality obligor with at least a relatively stable credit profile and where it is highly likely that all contractual payments of principal and interest will timely occur and carry a rating from the National Association of Insurance Commissioners (“NAIC”) of 1 or 2.
At December 31, 2025, approximately 93.8% of the Company’s fixed maturity investment portfolio was rated investment-grade, which the Company defines as a security issued by a high quality obligor with at least a relatively stable credit profile and where it is highly likely that all contractual payments of principal and interest will timely occur and carry a rating from the National Association of Insurance Commissioners (“NAIC”) of 1 or 2.
The following table summarizes the credit quality of the Company’s fixed maturity investment portfolio at December 31, 2024 and 2023.
The following table summarizes the credit quality of the Company’s fixed maturity investment portfolio at December 31,2025 and 2024.
Year Ended Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 DOLLARS IN MILLIONS Number of Events Losses and LAE Number of Events Losses and LAE Number of Events Losses and LAE Range of Losses and LAE Per Event: Below $5 69 $ 47.7 68 $ 77.7 59 $ 54.6 $5 - $10 3 17.6 3 19.0 2 10.2 $10 - $15 — — — — 1 14.5 $15 - $20 — — — — $20 - $25 — — — — Greater Than $25 — — — — Total 72 $ 65.3 71 $ 96.7 62 $ 79.3 Specialty Property & Casualty Insurance $ 19.9 $ 34.5 $ 23.0 Life Insurance 2.2 2.2 1.8 Non-Core Operations 43.2 60.0 54.5 Total Catastrophe Losses and LAE $ 65.3 $ 96.7 $ 79.3 Catastrophe Reinsurance The Company primarily manages its exposure to catastrophes and other natural disasters through a combination of geographical diversification, restrictions on the amount and location of new business production in such regions, modifications of, and/or limitations to coverages and deductibles for certain perils in such regions and a catastrophe reinsurance program for the Company’s Property & Casualty Insurance business.
Year Ended Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 DOLLARS IN MILLIONS Number of Events Losses and LAE Number of Events Losses and LAE Number of Events Losses and LAE Range of Losses and LAE Per Event: Below $5 55 $ 17.5 69 $ 47.7 68 $ 77.7 $5 - $10 — — 3 17.6 3 19.0 $10 - $15 — — — — — — $15 - $20 — — — — — — $20 - $25 — — — — — — Greater Than $25 — — — — — — Total 55 $ 17.5 72 $ 65.3 71 $ 96.7 Specialty Property & Casualty Insurance $ 11.5 $ 19.9 $ 34.5 Life Insurance 1.2 2.2 2.2 Non-Core Operations 4.8 43.2 60.0 Total Catastrophe Losses and LAE $ 17.5 $ 65.3 $ 96.7 Catastrophe Reinsurance The Company primarily manages its exposure to catastrophes and other natural disasters through a combination of geographical diversification, restrictions on the amount and location of new business production in such regions, modifications of, and/or limitations to coverages and deductibles for certain perils in such regions and a catastrophe reinsurance program for the Company’s Property & Casualty Insurance business.
The components of Impairment Losses in the Consolidated Statements of Income (Loss) for the year ended December 31, 2024, 2023, 2022 were: 2024 2023 2022 (Dollars in Millions) Amount Number of Issuers Amount Number of Issuers Amount Number of Issuers Fixed Maturities $ (4.8) 20 $ (0.1) 21 $ (25.8) 57 Equity Securities at Modified Cost (0.4) 3 (0.5) 1 — — Real Estate (0.4) 7 — — — — Other (0.2) 1 (0.5) 6 — — Impairment Losses 1 $ (5.8) $ (1.1) $ (25.8) I Includes losses from intent-to-sell securities and direct write-down securities of $3.3 million, $2.0 million and $23.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The components of Impairment Losses in the Consolidated Statements of Income (Loss) for the year ended December 31, 2025, 2024, 2023 were: 2025 2024 2023 (Dollars in Millions) Amount Number of Issuers Amount Number of Issuers Amount Number of Issuers Fixed Maturities $ (10.8) 18 $ (4.8) 20 $ (0.1) 21 Equity Securities at Modified Cost — — (0.4) 3 (0.5) 1 Real Estate 0.1 3 (0.4) 7 — — Other (0.1) 7 (0.2) 1 (0.5) 6 Impairment Losses 1 $ (10.8) $ (5.8) $ (1.1) I Includes losses from intent-to-sell securities and direct write-down securities of $1.1 million, $3.3 million and $2.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
See Note 23, “Policyholder Obligations,” to the Consolidated Financial Statements for additional information about the United Insurance advances and related funding agreements. 52 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) LIQUIDITY AND CAPITAL RESOURCES (Continued) Common Stock Repurchases On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.3 million remaining under the previous authorization.
See Note 22, “Policyholder Obligations,” to the Consolidated Financial Statements for additional information about the United Insurance advances and related funding agreements. 51 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) LIQUIDITY AND CAPITAL RESOURCES (Continued) Common Stock Repurchases On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.3 million remaining under a previous authorization in 2014 (the “2014 Repurchase Program”).
The Company estimates that its specialty personal automobile insurance loss and LAE reserves could have varied by $41.8 million in either direction at December 31, 2024 for all accident years combined under this scenario. In addition to the factors described above, other factors may also impact loss reserve development in future periods.
The Company estimates that its specialty personal automobile insurance loss and LAE reserves could have varied by $50.4 million in either direction at December 31, 2025 for all accident years combined under this scenario. In addition to the factors described above, other factors may also impact loss reserve development in future periods.
Both the reported and fair values of the Company’s investments in fixed maturities classified as available for sale were $6,409.6 million at December 31, 2024. Equity securities with readily determinable fair values are recorded as Equity Securities at Fair Value with changes in fair values recognized into income for the period reported.
Both the reported and fair values of the Company’s investments in fixed maturities classified as available for sale were $6,743.3 million at December 31, 2025. Equity securities with readily determinable fair values are recorded as Equity Securities at Fair Value with changes in fair values recognized into income for the period reported.
Additional information pertaining to these investments at December 31, 2024 and 2023 is presented below.
Additional information pertaining to these investments at December 31, 2025 and 2024 is presented below.
The Company’s effective income tax rate, which was 19.6%, 21.6% and 22.7% for 2024, 2023, and 2022 respectively, differs from the federal corporate income tax rate due primarily to (1) the effects of tax-exempt investment income, (2) nontaxable income associated with the change in cash surrender value on Company-Owned Life Insurance, (3) Alternative Energy Partnership Investment and general business tax credits, (4) a permanent difference between the amount of long-term equity-based compensation expense recognized under GAAP and the amount deductible in the computation of Federal taxable income (5) a permanent difference associated with nondeductible executive compensation, (6) an impairment of non-tax deductible goodwill, (7) impact of deferred taxes in foreign jurisdictions, and (8) a change in valuation allowance.
The Company’s effective income tax rate, which was 17.5%, 19.6% and 21.6% for 2025, 2024, and 2023 respectively, differs from the federal corporate income tax rate due primarily to (1) the effects of tax-exempt investment income, (2) nontaxable income associated with the change in cash surrender value on Company-Owned Life Insurance, (3) general business tax credits, (4) a permanent difference between the amount of long-term equity-based compensation expense recognized under GAAP and the amount deductible for Federal tax purposes, (5) a permanent difference associated with nondeductible executive compensation, (6) an impairment of non-tax deductible goodwill, (7) impact of deferred taxes in foreign jurisdictions, and (8) a change in valuation allowance related to foreign deferred assets.
SUMMARY OF RESULTS Net Income attributable to Kemper Corporation was $317.8 million ($4.95 per unrestricted common share) for the year ended December 31, 2024, compared to Net Loss attributable to Kemper Corporation of $272.1 million ($(4.25) per unrestricted common share) for the year ended December 31, 2023. 32 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) SUMMARY OF RESULTS (Continued) A reconciliation of Net Income (Loss) attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income (Loss) (a non-GAAP financial measure) for the years ended December 31, 2024, 2023 and 2022 is presented below.
SUMMARY OF RESULTS Net Income attributable to Kemper Corporation was $143.3 million ($2.31 per unrestricted common share) for the year ended December 31, 2025, compared to Net Income attributable to Kemper Corporation of $317.8 million ($4.95 per unrestricted common share) for the year ended December 31, 2024. 32 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) SUMMARY OF RESULTS (Continued) A reconciliation of Net Income (Loss) attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income (Loss) (a non-GAAP financial measure) for the years ended December 31, 2025, 2024 and 2023 is presented below.
Accordingly, the sum of the amounts presented above for Life and Health Insurance Policy Benefits significantly exceeds the amount of Life and Health Insurance Reserves reported on the Company’s Consolidated Balance Sheets at December 31, 2024. 54 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CONTRACTUAL OBLIGATIONS (Continued) In addition to the contractual obligations included above, the Company had certain investment commitments totaling $221.9 million at December 31, 2024.
Accordingly, the sum of the amounts presented above for Life and Health Insurance Policy Benefits significantly exceeds the amount of Life and Health Insurance Reserves reported on the Company’s Consolidated Balance Sheets at December 31, 2025. 53 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CONTRACTUAL OBLIGATIONS (Continued) In addition to the contractual obligations included above, the Company had certain investment commitments totaling $250.1 million at December 31, 2025.
United Insurance had outstanding advances from the FHLB of Chicago totaling $541.3 million at December 31, 2024. These advances were made in connection with the Company’s spread lending program. The proceeds related to these advances were used to purchase fixed maturity securities to earn incremental net investment income.
United Insurance had outstanding advances from the FHLB of Chicago totaling $513.8 million at December 31, 2025. These advances were made in connection with the Company’s spread lending program. The proceeds related to these advances were used to purchase fixed maturity securities to earn incremental net investment income.
Dividends to Shareholders Kemper paid a quarterly dividend of $0.31 per common share for each quarter of 2024 and $0.31 per common share for each quarter of 2023, respectively. Dividends and dividend equivalents paid were $80.1 million, $80.1 million and $79.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Dividends to Shareholders Kemper paid a quarterly dividend of $0.32 per common share for each quarter of 2025 and $0.31 per common share for each quarter of 2024, respectively. Dividends and dividend equivalents paid were $79.6 million, $80.1 million and $80.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
DOLLARS IN MILLIONS 2024 2023 2022 Increase (Decrease) in Total Loss and LAE Reserves Related to Prior Years: Non-catastrophe $ 23.8 $ 168.9 $ (10.5) Catastrophe 6.0 (9.1) (4.1) Increase (Decrease) in Total Loss and LAE Reserves Related to Prior Years $ 29.8 $ 159.8 $ (14.6) 35 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) LOSS AND LAE RESERVE DEVELOPMENT (Continued) See MD&A, “Specialty Property & Casualty Insurance,” MD&A, “Life Insurance,” and Note 6, “Property and Casualty Insurance Reserves,” to the Consolidated Financial Statements for additional information on the Company’s reserve development.
DOLLARS IN MILLIONS 2025 2024 2023 Increase in Total Loss and LAE Reserves Related to Prior Years: Non-catastrophe $ 76.3 $ 23.8 $ 168.9 Catastrophe 0.7 6.0 (9.1) Increase in Total Loss and LAE Reserves Related to Prior Years $ 77.0 $ 29.8 $ 159.8 35 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) LOSS AND LAE RESERVE DEVELOPMENT (Continued) See MD&A, “Specialty Property & Casualty Insurance,” MD&A, “Life Insurance,” and Note 5, “Property and Casualty Insurance Reserves,” to the Consolidated Financial Statements for additional information on the Company’s reserve development.
Overall 2024 Compared with 2023 The Specialty Property & Casualty Insurance segment reported Total Segment Adjusted Net Operating Income of $376.3 million for the year ended December 31, 2024, compared to Total Segment Adjusted Net Operating Loss of $57.1 million in 2023.
Overall 2025 Compared with 2024 The Specialty Property & Casualty Insurance segment reported Total Segment Adjusted Net Operating Income of $187.1 million for the year ended December 31, 2025, compared to Total Segment Adjusted Net Operating Income of $376.3 million in 2024.
Earned Premiums increased by $6.3 million for the year ended December 31, 2024, compared to 2023, due primarily to changes in assumptions as part of the annual assumption update for Deferred Profit Liability in 2024 ($4.8 million reduction in Earned Premiums) as compared to 2023 ($15.0 million reduction in Earned Premiums).
Earned Premiums decreased by $0.5 million for the year ended December 31, 2025, compared to 2024, due primarily to changes in assumptions as part of the annual assumption update for Deferred Profit Liability in 2025 ($6.3 million reduction in Earned Premiums) as compared to 2024 ($4.8 million reduction in Earned Premiums).
Kemper’s insurance subsidiaries collectively paid $213.3 million, $640.9 million and $311.7 million in dividends to Kemper in 2024, 2023 and 2022, respectively. In 2025, Kemper’s US based insurance subsidiaries capacity to pay dividends to Kemper without prior regulatory approval is estimated to be $211.7 million as of the filing date.
Kemper’s US based insurance subsidiaries collectively paid $448.9 million, $213.3 million and $640.9 million in dividends to Kemper in 2025, 2024 and 2023, respectively. As of the filing date, Kemper’s US based insurance subsidiaries capacity to pay dividends to Kemper without prior regulatory approval is estimated to be $8.6 million.
The Company had $2,611.9 million an d $2,680.5 million of gross loss and LAE reserves at December 31, 2024 and 2023, respectively. 57 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CRITICAL ACCOUNTING ESTIMATES (Continued) Property and Casualty Insurance Reserves for the Company’s business segments at December 31, 2024 and 2023 were: DOLLARS IN MILLIONS 2024 2023 Business Segments: Specialty Property & Casualty Insurance 1 $ 2,347.9 $ 2,308.7 Life Insurance 2.7 2.9 Total Business Segments 2,350.6 2,311.6 Non-Core Operations 261.7 356.4 Unallocated Reserves 9.0 12.5 Total Property and Casualty Insurance Reserves 1 $ 2,621.3 $ 2,680.5 1 Includes $9.4 million attributable to Kemper Reciprocal as of December 31, 2024, which is reported as a consolidated variable interest entity.
The Company had $2,910.8 million an d $2,611.9 million of gross loss and LAE reserves at December 31, 2025 and 2024, respectively. 57 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CRITICAL ACCOUNTING ESTIMATES (Continued) Property and Casualty Insurance Reserves for the Company’s business segments at December 31, 2025 and 2024 were: DOLLARS IN MILLIONS 2025 2024 Business Segments: Specialty Property & Casualty Insurance 1 $ 2,769.4 $ 2,347.9 Life Insurance 1.9 2.7 Total Business Segments 2,771.3 2,350.6 Non-Core Operations 161.9 261.7 Unallocated Reserves 7.0 9.0 Total Property and Casualty Insurance Reserves 1 $ 2,940.2 $ 2,621.3 1 Includes $29.4 million and $9.4 million attributable to Kemper Reciprocal as of December 31, 2025 and 2024, respectively, which is reported as a consolidated variable interest entity.
The amount of expense recognized for long-term equity-based compensation expense under GAAP was $0.5 million lower than the amount that would be deductible under the IRC in 2024, compared to $1.4 million higher in 2023. The amount of nondeductible executive compensation was $16.8 million in 2024, compared to $8.5 million in 2023.
The amount of expense recognized for long-term equity-based compensation expense under GAAP was $3.0 million lower than the amount that would be deductible under the IRC in 2025, compared to $0.5 million lower in 2024. The amount of nondeductible executive compensation was $32.0 million in 2025, compared to $16.8 million in 2024.
Debt Extinguishment, Pension Settlement and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by the Company’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 the Company, 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.
Debt Extinguishment, Pension Settlement and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by the Company’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 the Company, 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. 31 NON-GAAP FINANCIAL MEASURES (Continued) Goodwill Impairment Charges are excluded because they are infrequent and non-recurring charges.
DOLLARS IN MILLIONS 2024 2023 2022 Net Premiums Written $ 797.7 $ 627.9 $ 629.3 Earned Premiums $ 725.0 $ 654.7 $ 549.7 Incurred Losses and LAE related to: Current Year: Non-catastrophe Losses and LAE $ 530.1 $ 510.5 $ 415.3 Catastrophe Losses and LAE 5.4 4.9 2.3 Prior Years: Non-catastrophe Losses and LAE 7.2 24.2 3.5 Catastrophe Losses and LAE — — 0.1 Total Incurred Losses and LAE $ 542.7 $ 539.6 $ 421.2 Ratios Based On Earned Premiums Current Year Non-catastrophe Losses and LAE Ratio 73.2 % 78.0 % 75.6 % Current Year Catastrophe Losses and LAE Ratio 0.7 0.7 0.4 Prior Years Non-catastrophe Losses and LAE Ratio 1.0 3.7 0.6 Prior Years Catastrophe Losses and LAE Ratio — — — Total Incurred Loss and LAE Ratio 74.9 % 82.4 % 76.6 % Insurance Expense Ratio 19.1 % 17.6 % 18.2 % Combined Ratio 94.0 % 100.0 % 94.8 % Underlying Combined Ratio Current Year Non-catastrophe Losses and LAE Ratio 73.2 % 78.0 % 75.6 % Insurance Expense Ratio 19.1 % 17.6 % 18.2 % Underlying Combined Ratio 92.3 % 95.6 % 93.8 % Non-GAAP Measure Reconciliation Combined Ratio as Reported 94.0 % 100.0 % 94.8 % Less: Current Year Catastrophe Losses and LAE Ratio 0.7 % 0.7 % 0.4 % Prior Years Non-catastrophe Losses and LAE Ratio 1.0 % 3.7 % 0.6 % Prior Years Catastrophe Losses and LAE Ratio — % — % — % Underlying Combined Ratio 92.3 % 95.6 % 93.8 % 2024 Compared with 2023 Earned premiums from commercial automobile insurance increased by $70.3 million in 2024, compared to 2023, due primarily to higher average earned premium per exposure resulting from rate increases and targeted mix shifts.
DOLLARS IN MILLIONS 2025 2024 2023 Net Premiums Written $ 978.7 $ 797.7 $ 627.9 Earned Premiums $ 900.8 $ 725.0 $ 654.7 Incurred Losses and LAE related to: Current Year: Non-catastrophe Losses and LAE $ 654.2 $ 530.1 $ 510.5 Catastrophe Losses and LAE 2.8 5.4 4.9 Prior Years: Non-catastrophe Losses and LAE 76.2 7.2 24.2 Catastrophe Losses and LAE 0.3 — — Total Incurred Losses and LAE $ 733.5 $ 542.7 $ 539.6 Ratios Based On Earned Premiums Current Year Non-catastrophe Losses and LAE Ratio 72.6 % 73.2 % 78.0 % Current Year Catastrophe Losses and LAE Ratio 0.3 0.7 0.7 Prior Years Non-catastrophe Losses and LAE Ratio 8.5 1.0 3.7 Prior Years Catastrophe Losses and LAE Ratio — — — Total Incurred Loss and LAE Ratio 81.4 % 74.9 % 82.4 % Insurance Expense Ratio 18.3 % 19.1 % 17.6 % Combined Ratio 99.7 % 94.0 % 100.0 % Underlying Combined Ratio Current Year Non-catastrophe Losses and LAE Ratio 72.6 % 73.2 % 78.0 % Insurance Expense Ratio 18.3 % 19.1 % 17.6 % Underlying Combined Ratio 90.9 % 92.3 % 95.6 % Non-GAAP Measure Reconciliation Combined Ratio as Reported 99.7 % 94.0 % 100.0 % Less: Current Year Catastrophe Losses and LAE Ratio 0.3 % 0.7 % 0.7 % Prior Years Non-catastrophe Losses and LAE Ratio 8.5 % 1.0 % 3.7 % Prior Years Catastrophe Losses and LAE Ratio — % — % — % Underlying Combined Ratio 90.9 % 92.3 % 95.6 % 2025 Compared with 2024 Earned premiums from commercial automobile insurance increased by $175.8 million in 2025, compared to 2024, due primarily to higher average earned premiums per exposure resulting from rate increases and targeted mix shifts, and higher business volumes.
(Dollars in Millions) 2024 2023 2022 Net Cash Provided by (Used in) Operating Activities $ 382.9 $ (134.2) $ (210.3) Net Cash (Used in) Provided by Investing Activities (244.4) 107.9 (108.4) Net Cash (Used in) Provided by Financing Activities (137.2) (122.0) 382.9 Cash available for investment activities is dependent on cash flow from Operating Activities and Financing Activities and the level of cash the Company elects to maintain.
(Dollars in Millions) 2025 2024 2023 Net Cash Provided by (Used in) Operating Activities $ 584.5 $ 382.9 $ (134.2) Net Cash Provided by (Used in) Investing Activities 336.2 (244.4) 107.9 Net Cash Used in Financing Activities (860.1) (137.2) (122.0) Cash available for investment activities is dependent on cash flow from Operating Activities and Financing Activities and the level of cash the Company elects to maintain.
The Company expects that the proceeds from distributions from these investments will be the primary source of funding of such commitments. 49 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INSURANCE, INTEREST AND OTHER EXPENSES Expenses for the year ended December 31, 2024, 2023 and 2022 were: DOLLARS IN MILLIONS 2024 2023 2022 Insurance and Other Expenses: Insurance Expenses: Policy Acquisition Costs $ 641.6 $ 707.6 $ 838.5 Business Unit Operating Costs 277.4 256.1 282.4 Corporate Overhead Costs 194.9 200.0 207.8 Insurance Expenses 1,113.9 1,163.7 1,328.7 Other Expenses: Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs 40.3 120.3 62.9 Pension Settlement (2.6) 70.2 — Other Corporate Costs 28.5 11.4 12.3 Other Expenses 66.2 201.9 75.2 Insurance and Other Expenses 1,180.1 1,365.6 1,403.9 Interest Expense 56.9 56.1 54.7 Loss from Early Extinguishment of Debt — — 3.7 Goodwill Impairment — 49.6 — Total Insurance, Interest, and Other Expenses $ 1,237.0 $ 1,471.3 $ 1,462.3 Insurance and Other Expenses Insurance Expenses were $1,113.9 million in 2024 compared to $1,163.7 million in 2023.
The Company expects that the proceeds from distributions from these investments will be the primary source of funding of such commitments. 48 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INSURANCE, INTEREST AND OTHER EXPENSES Expenses for the year ended December 31, 2025, 2024 and 2023 were: DOLLARS IN MILLIONS 2025 2024 2023 Insurance and Other Expenses: Insurance Expenses: Policy Acquisition Costs $ 678.2 $ 641.6 $ 707.6 Business Unit Operating Costs 310.7 277.4 256.1 Corporate Overhead Costs 178.5 194.9 200.0 Insurance Expenses 1,167.4 1,113.9 1,163.7 Other Expenses: Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs 38.0 40.3 120.3 Pension Settlement — (2.6) 70.2 Other Corporate Costs 9.6 28.5 11.4 Other Expenses 47.6 66.2 201.9 Insurance and Other Expenses 1,215.0 1,180.1 1,365.6 Interest Expense 38.5 56.9 56.1 Goodwill Impairment — — 49.6 Total Insurance, Interest, and Other Expenses $ 1,253.5 $ 1,237.0 $ 1,471.3 Insurance and Other Expenses Insurance Expenses were $1,167.4 million for the year ended December 31, 2025 compared to $1,113.9 million for the year ended December 31, 2024.
Amended and Extended Credit Agreement On March 15, 2022, the Company entered into an amended and extended credit agreement. The amended and extended credit agreement increased the borrowing capacity of the existing unsecured credit agreement to $600.0 million and extended the maturity date to March 15, 2027.
The amended and extended credit agreement increased the borrowing capacity of the existing unsecured credit agreement to $600.0 million and extended the maturity date to March 15, 2027.
At December 31, 2024, the Company had $834.7 million invested in U.S. Treasury bills and short-term bonds and $202.4 million invested in money market funds, which primarily invest in U.S.
At December 31, 2025, the Company had $94.4 million invested in U.S. Treasury bills and short-term bonds and $233.4 million invested in money market funds, which primarily invest in U.S.
The Company periodically uses short-term FHLB borrowings for a combination of cash management and risk management purposes, in addition to long-term FHLB borrowings for spread lending purposes. During 2024, United Insurance received advances of $101.7 million from the FHLB of Chicago and made repayments of $117.8 million.
The Company periodically uses short-term FHLB borrowings for a combination of cash management and risk management purposes, in addition to long-term FHLB borrowings for spread lending purposes. During 2025, United Insurance received advances of $30.0 million from the FHLB of Chicago and made repayments of $57.4 million.
Accordingly, both the reported and fair values of the Company’s investments in Equity Securities at Fair Value were $218.5 million at December 31, 2024.
Accordingly, both the reported and fair values of the Company’s investments in Equity Securities at Fair Value were $306.4 million at December 31, 2025.
(Dollars in Millions) 2024 2023 2022 Earned Premiums $ 393.9 $ 387.6 $ 571.5 Net Investment Income 170.6 193.4 216.5 Change in Value of Alternative Energy Partnership Investments 0.6 0.7 (5.3) Other Income (Loss) 0.5 (0.2) (0.6) Total Revenues 565.6 581.5 782.1 Policyholders’ Benefits and Incurred Losses and LAE 234.5 243.4 360.8 Insurance Expenses 272.1 275.8 343.3 Segment Adjusted Operating Income 59.0 62.3 78.0 Income Tax Expense 8.8 10.5 9.2 Total Segment Adjusted Net Operating Income $ 50.2 $ 51.8 $ 68.8 INSURANCE RESERVES (Dollars in Millions) Dec 31, 2024 Dec 31, 2023 Insurance Reserves: Future Policyholder Benefits $ 3,154.3 $ 3,375.6 Incurred Losses and LAE Reserves: Life 40.8 42.1 Accident and Health 4.6 4.7 Property 2.7 2.9 Total Incurred Losses and LAE Reserves 48.1 49.7 Total Insurance Reserves $ 3,202.4 $ 3,425.3 See Note 2 “Summary of Accounting Policies and Accounting Changes,” to the Consolidated Financial Statements under the sub-caption “Insurance Reserves” for additional discussion. 2024 Compared with 2023 The Life Insurance Segment reported Total Segment Adjusted Net Operating Income of $50.2 million in 2024, compared to $51.8 million in 2023.
(Dollars in Millions) 2025 2024 2023 Earned Premiums $ 393.4 $ 393.9 $ 387.6 Net Investment Income 188.2 170.6 193.4 Other Income 1.6 1.1 0.5 Total Revenues 583.2 565.6 581.5 Policyholders’ Benefits and Incurred Losses and LAE 238.7 234.5 243.4 Insurance Expenses 264.4 272.1 275.8 Segment Adjusted Operating Income 80.1 59.0 62.3 Income Tax Expense 11.6 8.8 10.5 Total Segment Adjusted Net Operating Income $ 68.5 $ 50.2 $ 51.8 INSURANCE RESERVES (Dollars in Millions) Dec 31, 2025 Dec 31, 2024 Insurance Reserves: Future Policyholder Benefits $ 3,248.1 $ 3,154.3 Incurred Losses and LAE Reserves: Life 35.0 40.8 Accident and Health 4.4 4.6 Property 1.9 2.7 Total Incurred Losses and LAE Reserves 41.3 48.1 Total Insurance Reserves $ 3,289.4 $ 3,202.4 See Note 2 “Summary of Accounting Policies and Accounting Changes,” to the Consolidated Financial Statements under the sub-caption “Insurance Reserves” for additional discussion. 2025 Compared with 2024 The Life Insurance Segment reported Total Segment Adjusted Net Operating Income of $68.5 million in 2025, compared to $50.2 million in 2024.
Dec 31, 2024 Dec 31, 2023 DOLLARS IN MILLIONS Fair Value Percentage of Total Investments Fair Value Percentage of Total Investments Finance, Insurance and Real Estate $ 1,969.1 22.2 % $ 2,070.5 23.3 % Manufacturing 1,014.3 11.4 1,077.6 12.1 Transportation, Communication and Utilities 793.0 8.9 807.3 9.1 Services 582.9 6.6 639.4 7.2 Mining 153.3 1.7 174.3 2.0 Retail Trade 125.7 1.4 156.0 1.8 Construction 11.7 0.1 4.4 — Other 33.0 0.4 35.2 0.4 Total Investments in Non-governmental Fixed Maturities $ 4,683.0 52.7 % $ 4,964.7 55.9 % The following table summarizes the fair value of the Company’s investments in non-governmental fixed maturities by range of amount invested at December 31, 2024.
Dec 31, 2025 Dec 31, 2024 DOLLARS IN MILLIONS Fair Value Percentage of Total Investments Fair Value Percentage of Total Investments Finance, Insurance and Real Estate $ 2,048.2 23.6 % $ 1,969.1 22.2 % Manufacturing 961.1 11.1 1,014.3 11.4 Transportation, Communication and Utilities 884.6 10.2 793.0 8.9 Services 648.0 7.5 582.9 6.6 Mining 177.7 2.0 153.3 1.7 Retail Trade 110.1 1.3 125.7 1.4 Construction 10.5 0.1 11.7 0.1 Other 34.4 0.4 33.0 0.4 Total Investments in Non-governmental Fixed Maturities $ 4,874.6 56.2 % $ 4,683.0 52.7 % The following table summarizes the fair value of the Company’s investments in non-governmental fixed maturities by range of amount invested at December 31,2025.
There were 63,840,442 shares and 64,111,555 shares of common stock outstanding at December 31, 2024 and 2023, respectively. Long-term Debt The Company designates debt obligations as either short-term or long-term based on maturity date at issuance.
No preferred shares were issued or outstanding at December 31, 2025 and 2024. There were 58,666,644 shares and 63,840,442 shares of common stock outstanding at December 31, 2025 and 2024, respectively. Long-term Debt The Company designates debt obligations as either short-term or long-term based on maturity date at issuance.
Incurred Loss and LAE were $2,541.7 million or 71.1% of earned premiums for the year ended December 31, 2024 compared to $3,141.9 million or 86.5% of earned premiums, in 2023.
Incurred Loss and LAE were $3,077.2 million or 78.4% of earned premiums for the year ended December 31, 2025, compared to $2,541.7 million or 71.1% of earned premiums, in 2024.
Kemper made capital contributions to insurance subsidiaries of $18.0 million, $489.1 million and $270.0 million during 2024, 2023 and 2022, respectively. Sources and Uses of Funds The Company directly held cash and investments totaling $547.6 million at December 31, 2024, compared to $464.5 million at December 31, 2023.
Kemper made capital contributions to consolidated insurance subsidiaries and variable interest entity of $91.4 million, $18.0 million and $489.1 million during 2025, 2024 and 2023, respectively. Sources and Uses of Funds The Company directly held cash and investments totaling $145.4 million at December 31, 2025, compared to $547.6 million at December 31, 2024.
DOLLARS IN MILLIONS 2024 2023 Change from 2023 to 2024 2022 Change from 2022 to 2023 Net Income (Loss) attributable to Kemper Corporation $ 317.8 $ (272.1) $ 589.9 $ (286.6) $ 14.5 Less: Change in Fair Value of Equity and Convertible Securities $ (2.1) $ 3.7 $ (5.8) $ (63.1) $ 66.8 Net Realized Investment Gains (Losses) 10.4 (14.7) 25.1 3.4 (18.1) Impairment Losses (4.6) (0.9) (3.7) (20.4) 19.5 Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs (31.8) (95.0) 63.2 (61.3) (33.7) Debt Extinguishment, Pension Settlement and Other Charges (7.4) (55.5) 48.1 (2.9) (52.6) Goodwill Impairment Charge — (45.5) 45.5 — (45.5) Non-Core Operations (28.2) (17.0) (11.2) (25.9) 8.9 Adjusted Consolidated Net Operating Income (Loss) $ 381.5 $ (47.2) $ 428.7 $ (116.4) $ 69.2 Components of Adjusted Consolidated Net Operating Income (Loss): Segment Adjusted Net Operating Income (Loss): Specialty Property & Casualty Insurance $ 376.3 $ (57.1) $ 433.4 $ (147.4) $ 90.3 Life Insurance 50.2 51.8 (1.6) 68.8 (17.0) Total Segment Adjusted Net Operating Income (Loss) 426.5 (5.3) 431.8 (78.6) 73.3 Corporate and Other Adjusted Net Operating Loss (50.3) (42.1) (8.2) (37.8) (4.3) Less: Net Loss attributable to Noncontrolling Interest (5.3) (0.2) (5.1) — (0.2) Adjusted Consolidated Net Operating Income (Loss) $ 381.5 $ (47.2) $ 428.7 $ (116.4) $ 69.2 Net Income (Loss) attributable to Kemper Corporation 2024 Compared with 2023 Net Income (Loss) attributable to Kemper Corporation increased by $589.9 million in 2024, compared to 2023, due primarily to higher Adjusted Consolidated Net Operating Income and lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs from the completion of certain strategic initiatives and lower costs in connection with the 2023 cost structure optimization initiatives.
DOLLARS IN MILLIONS 2025 2024 Change from 2024 to 2025 2023 Change from 2023 to 2024 Net Income (Loss) attributable to Kemper Corporation $ 143.3 $ 317.8 $ (174.5) $ (272.1) $ 589.9 Less: Change in Fair Value of Equity and Convertible Securities $ (3.4) $ (2.1) $ (1.3) $ 3.7 $ (5.8) Net Realized Investment Gains (Losses) 4.3 10.4 (6.1) (14.7) 25.1 Impairment Losses (8.5) (4.6) (3.9) (0.9) (3.7) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs (43.1) (31.8) (11.3) (95.0) 63.2 Debt Extinguishment, Pension Settlement and Other Charges 0.4 (7.4) 7.8 (55.5) 48.1 Goodwill Impairment Charge — — — (45.5) 45.5 Non-Core Operations (31.9) (28.2) (3.7) (17.0) (11.2) Adjusted Consolidated Net Operating Income (Loss) $ 225.5 $ 381.5 $ (156.0) $ (47.2) $ 428.7 Components of Adjusted Consolidated Net Operating Income: Segment Adjusted Net Operating Income: Specialty Property & Casualty Insurance $ 187.1 $ 376.3 $ (189.2) $ (57.1) $ 433.4 Life Insurance 68.5 50.2 18.3 51.8 (1.6) Total Segment Adjusted Net Operating Income 255.6 426.5 (170.9) (5.3) 431.8 Corporate and Other Adjusted Net Operating Loss (40.8) (50.3) 9.5 (42.1) (8.2) Less: Net Loss attributable to Noncontrolling Interest (10.7) (5.3) (5.4) (0.2) (5.1) Adjusted Consolidated Net Operating Income $ 225.5 $ 381.5 $ (156.0) $ (47.2) $ 428.7 Net Income (Loss) attributable to Kemper Corporation 2025 Compared with 2024 Net Income (Loss) attributable to Kemper Corporation decreased by $174.5 million in 2025, compared to 2024, due primarily to lower Adjusted Consolidated Net Operating Income.
DOLLARS IN MILLIONS Fair Value Percentage of Total Investments Fixed Maturities: States including their Political Subdivisions: California $ 133.2 1.5 % Texas 101.2 1.1 Michigan 81.7 0.9 Georgia 68.8 0.8 New York 59.8 0.7 Pennsylvania 55.7 0.6 Florida 53.0 0.6 Louisiana 37.4 0.4 Virginia 35.6 0.4 Colorado 35.1 0.4 Total $ 661.5 7.4 % 48 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INVESTMENTS IN LIMITED LIABILITY COMPANIES AND LIMITED PARTNERSHIPS The Company owns investments in various limited liability investment companies and limited partnerships that primarily invest in mezzanine debt, senior debt, real estate and leveraged buyouts.
DOLLARS IN MILLIONS Fair Value Percentage of Total Investments Fixed Maturities: States including their Political Subdivisions: California $ 134.8 1.6 % Texas 105.4 1.2 Michigan 84.8 1.0 Georgia 69.4 0.8 New York 61.2 0.7 Florida 54.2 0.6 Pennsylvania 47.3 0.5 Virginia 35.6 0.4 Louisiana 35.6 0.4 Colorado 34.9 0.4 Total $ 663.2 7.6 % 47 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INVESTMENTS IN LIMITED LIABILITY COMPANIES AND LIMITED PARTNERSHIPS The Company owns investments in various limited liability investment companies and limited partnerships that primarily invest in senior debt and mezzanine debt.
(Dollars in Millions) 2024 2023 2022 Net Premiums Written $ 3,685.4 $ 3,305.4 $ 3,934.4 Earned Premiums $ 3,576.4 $ 3,632.5 $ 4,046.4 Net Investment Income 189.6 168.3 140.7 Change in Value of Alternative Energy Partnership Investments 1.4 1.6 (9.9) Other Income 4.7 4.5 6.0 Total Revenues 3,772.1 3,806.9 4,183.2 Incurred Losses and LAE related to: Current Year: Non-catastrophe Losses and LAE 2,514.8 2,974.5 3,569.2 Catastrophe Losses and LAE 19.9 34.5 23.0 Prior Years: Non-catastrophe Losses and LAE 6.3 135.2 (14.6) Catastrophe Losses and LAE 0.7 (2.3) 0.6 Total Incurred Losses and LAE 2,541.7 3,141.9 3,578.2 Insurance Expenses 759.5 741.3 801.9 Segment Adjusted Operating Income (Loss) 470.9 (76.3) (196.9) Income Tax Expense (Benefit) 94.6 (19.2) (49.5) Total Segment Adjusted Net Operating Income (Loss) $ 376.3 $ (57.1) $ (147.4) Ratios Based On Earned Premiums Current Year Non-catastrophe Losses and LAE Ratio 70.3 % 82.0 % 88.2 % Current Year Catastrophe Losses and LAE Ratio 0.6 0.9 0.6 Prior Years Non-catastrophe Losses and LAE Ratio 0.2 3.7 (0.4) Prior Years Catastrophe Losses and LAE Ratio — (0.1) — Total Incurred Loss and LAE Ratio 71.1 86.5 88.4 Insurance Expense Ratio 21.2 20.4 19.8 Combined Ratio 92.3 % 106.9 % 108.2 % Underlying Combined Ratio Current Year Non-catastrophe Losses and LAE Ratio 70.3 % 82.0 % 88.2 % Insurance Expense Ratio 21.2 20.4 19.8 Underlying Combined Ratio 91.5 % 102.4 % 108.0 % Non-GAAP Measure Reconciliation Combined Ratio 92.3 % 106.9 % 108.2 % Less: Current Year Catastrophe Losses and LAE Ratio 0.6 0.9 0.6 Prior Years Non-catastrophe Losses and LAE Ratio 0.2 3.7 (0.4) Prior Years Catastrophe Losses and LAE Ratio — (0.1) — Underlying Combined Ratio 91.5 % 102.4 % 108.0 % 37 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) SPECIALTY PROPERTY & CASUALTY INSURANCE (Continued) INSURANCE RESERVES (Dollars in Millions) Dec 31, 2024 Dec 31, 2023 Insurance Reserves: Personal Automobile $ 1,626.0 $ 1,711.9 Commercial Automobile 721.9 596.8 Total Insurance Reserves $ 2,347.9 $ 2,308.7 Insurance Reserves: Loss and Allocated LAE Reserves: Case and Allocated LAE $ 921.8 $ 999.9 Incurred But Not Reported 1,250.6 1,132.8 Total Loss and LAE Reserves 2,172.4 2,132.7 Unallocated LAE Reserves 175.5 176.0 Total Insurance Reserves 1 $ 2,347.9 $ 2,308.7 1 Includes $9.4 million attributable to Kemper Reciprocal as of December 31, 2024, which is reported as a consolidated variable interest entity.
(Dollars in Millions) 2025 2024 2023 Net Premiums Written $ 3,912.8 $ 3,685.4 $ 3,305.4 Earned Premiums $ 3,925.7 $ 3,576.4 $ 3,632.5 Net Investment Income 211.2 189.6 168.3 Other Income 8.9 6.1 6.1 Total Revenues 4,145.8 3,772.1 3,806.9 Incurred Losses and LAE related to: Current Year: Non-catastrophe Losses and LAE 2,991.1 2,514.8 2,974.5 Catastrophe Losses and LAE 11.5 19.9 34.5 Prior Years: Non-catastrophe Losses and LAE 74.8 6.3 135.2 Catastrophe Losses and LAE (0.2) 0.7 (2.3) Total Incurred Losses and LAE 3,077.2 2,541.7 3,141.9 Insurance Expenses 836.6 759.5 741.3 Segment Adjusted Operating Income (Loss) 232.0 470.9 (76.3) Income Tax Expense (Benefit) 44.9 94.6 (19.2) Total Segment Adjusted Net Operating Income (Loss) $ 187.1 $ 376.3 $ (57.1) Ratios Based On Earned Premiums Current Year Non-catastrophe Losses and LAE Ratio 76.2 % 70.3 % 82.0 % Current Year Catastrophe Losses and LAE Ratio 0.3 0.6 0.9 Prior Years Non-catastrophe Losses and LAE Ratio 1.9 0.2 3.7 Prior Years Catastrophe Losses and LAE Ratio — — (0.1) Total Incurred Loss and LAE Ratio 78.4 71.1 86.5 Insurance Expense Ratio 21.3 21.2 20.4 Combined Ratio 99.7 % 92.3 % 106.9 % Underlying Combined Ratio Current Year Non-catastrophe Losses and LAE Ratio 76.2 % 70.3 % 82.0 % Insurance Expense Ratio 21.3 21.2 20.4 Underlying Combined Ratio 97.5 % 91.5 % 102.4 % Non-GAAP Measure Reconciliation Combined Ratio 99.7 % 92.3 % 106.9 % Less: Current Year Catastrophe Losses and LAE Ratio 0.3 0.6 0.9 Prior Years Non-catastrophe Losses and LAE Ratio 1.9 0.2 3.7 Prior Years Catastrophe Losses and LAE Ratio — — (0.1) Underlying Combined Ratio 97.5 % 91.5 % 102.4 % 37 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) SPECIALTY PROPERTY & CASUALTY INSURANCE (Continued) INSURANCE RESERVES (Dollars in Millions) Dec 31, 2025 Dec 31, 2024 Insurance Reserves: Personal Automobile $ 1,826.8 $ 1,626.0 Commercial Automobile 942.6 721.9 Total Insurance Reserves $ 2,769.4 $ 2,347.9 Insurance Reserves: Loss and Allocated LAE Reserves: Case and Allocated LAE $ 960.4 $ 921.8 Incurred But Not Reported 1,610.9 1,250.6 Total Loss and LAE Reserves 2,571.3 2,172.4 Unallocated LAE Reserves 198.1 175.5 Total Insurance Reserves 1 $ 2,769.4 $ 2,347.9 1 Includes $29.4 million and $9.4 million attributable to Kemper Reciprocal as of December 31, 2025 and 2024, which is reported as a consolidated variable interest entity.
Acquisition and Disposition Related Transaction Costs, Integration Costs, and 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.
Acquisition and Disposition Related Transaction Costs, Integration Costs, and 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 carrying value of FHLB of Chicago common stock was $16.9 million and $16.6 million at December 31, 2024 and December 31, 2023, respectively. The carrying value of FHLB of Dallas common stock was $8.8 million and $3.6 million at December 31, 2024 and December 31, 2023, respectively.
The carrying value of FHLB of Chicago common stock was $17.7 million and $16.9 million at December 31, 2025 and December 31, 2024, respectively. The carrying value of FHLB of Dallas common stock was $2.1 million and $8.8 million at December 31, 2025 and December 31, 2024, respectively.
If interest rates decreased by 100 basis points, the Company’s liability for future policyholder benefits as of December 31, 2024 would increase by $420.1 million, and if interest rates increased by 100 basis points, the Company’s liability for future policyholder benefits as of December 31, 2024 would decrease by $321.7 million.
If interest rates decreased by 100 basis points, the Company’s liability for future policyholder benefits as of December 31, 2025 would increase by $404.4 million, and if interest rates increased by 100 basis points, the Company’s liability for future policyholder benefits as of December 31, 2025 would decrease by $316.0 million.
The Company’s actuaries’ quarterly selections are summed by product and/or coverage levels to create the actuarial indication of the ultimate losses. More often than not, the actuarial indication for a particular product line and accident quarter or year is most heavily weighted toward the incurred loss development methodology, particularly for short-tail lines such as personal automobile insurance.
More often than not, the actuarial indication for a particular product line and accident quarter or year is most heavily weighted toward the incurred loss development methodology, particularly for short-tail lines such as personal automobile insurance.
Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio, lower adverse prior year development and lower catastrophe losses.
Incurred losses and LAE as a percentage of earned premiums increased primarily due to a deterioration in the underlying loss and LAE ratio and adverse prior year development in commercial automobile.
The fair value of the Company’s investments measured and reported at fair value was $6,624.4 million at December 31, 2024, of which $6,231.8 million, or 94%, were investments that were based on quoted market prices or significant fair value inputs that are observable, $209.0 million, or 3%, were investments where at least one significant fair value inputs was unobservable and $183.6 million or 3% were investments for which fair value is measured using the net asset value (“NAV”) per share practical expedient.
The fair value of the Company’s investments measured and reported at fair value was $7,050.2 million at December 31, 2025, of which $6,496.3 million, or 92%, were investments that were based on quoted market prices or significant fair value inputs that are observable, $343.6 million, or 5%, were investments where at least one significant fair value inputs was unobservable and $210.3 million or 3% were investments for which fair value is measured using the net asset value (“NAV”) per share practical expedient.
The effective income tax rate for 2024 and 2023 differs from the federal statutory income tax rate primarily due to investments in Company-Owned Life Insurance, Tax-Exempt Investment Income and Dividends Received Deductions.
The effective income tax rate for 2025 and 2024 differs from the federal statutory income tax rate primarily due to investments in Company-Owned Life Insurance, tax-exempt investment income and an increase in nondeductible executive compensation.
Conversely, an increase in the fair value or disposal of an investment with a previously established credit allowance will result in the reversal of impairment losses reported in the Consolidated Statements of Income (Loss) in the period.
Conversely, an increase in the fair value 44 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) INVESTMENT RESULTS (Continued) or disposal of an investment with a previously established credit allowance will result in the reversal of impairment losses reported in the Consolidated Statements of Income (Loss) in the period.
Changes in the fair value of investments in fixed maturities classified as available for sale are not recognized in income during the period, but rather are recognized as a separate component of 55 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CRITICAL ACCOUNTING ESTIMATES (Continued) Accumulated Other Comprehensive Loss (“AOCI”) until realized.
Changes in the fair value of investments in fixed maturities classified as available for sale are not recognized in income during the period, but rather are recognized as a separate component of Accumulated Other Comprehensive Loss (“AOCI”) until realized.
The Company holds certain equity investments without readily determinable fair values at cost, less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments from the same issuer.
The Company holds certain equity investments without readily determinable fair values at cost, less impairment, if any, plus or minus changes resulting from 55 Kemper Corporation and Subsidiaries Management’s Discussion and Analysis of Financial Condition and Results of Operations—(Continued) CRITICAL ACCOUNTING ESTIMATES (Continued) observable price changes in orderly transactions for identical or similar investments from the same issuer.
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 31 NON-GAAP FINANCIAL MEASURES (Continued) results are excluded because they are irrelevant to our ongoing operations and do not qualify for Discontinued Operations under GAAP.
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 GAAP. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.
(Dollars in Millions) 2024 2023 2022 Investment Income: Interest on Fixed Income Securities 1,2 $ 315.3 $ 323.3 $ 290.0 Dividends on Equity Securities Excluding Alternative Investments 5.4 4.4 6.3 Alternative Investments: Equity Method Limited Liability Investments (18.2) 10.5 31.3 Limited Liability Investments Included in Equity Securities 24.5 19.0 42.1 Total Alternative Investments 6.3 29.5 73.4 Short-term Investments 33.5 18.0 3.7 Loans to Policyholders 21.0 20.9 21.5 Real Estate 8.8 8.9 10.1 Company-Owned Life Insurance 35.7 29.2 37.9 Other 8.2 12.9 7.7 Total Investment Income 434.2 447.1 450.6 Investment Expenses: Real Estate 8.7 8.8 7.9 Other Investment Expenses 1 18.0 18.6 20.1 Total Investment Expenses 26.7 27.4 28.0 Net Investment Income $ 407.5 $ 419.7 $ 422.6 1 In 2024, the Company changed its presentation of the details of investment performance to report interest expense incurred on Federal Home Loan Bank ("FHLB") borrowings as an offset to interest on fixed income securities since FHLB borrowings are used for spread lending purposes.
(Dollars in Millions) 2025 2024 2023 Investment Income: Interest on Fixed Income Securities 1 $ 309.4 $ 315.3 $ 323.3 Dividends on Equity Securities Excluding Alternative Investments 8.0 5.4 4.4 Alternative Investments: Equity Method Limited Liability Investments (7.0) (18.2) 10.5 Limited Liability Investments Included in Equity Securities 13.7 24.5 19.0 Total Alternative Investments 6.7 6.3 29.5 Short-term Investments 22.8 33.5 18.0 Loans to Policyholders 20.8 21.0 20.9 Real Estate 9.4 8.8 8.9 Company-Owned Life Insurance 42.9 35.7 29.2 Other 11.5 8.2 12.9 Total Investment Income 431.5 434.2 447.1 Investment Expenses: Real Estate 9.0 8.7 8.8 Other Investment Expenses 1 17.5 18.0 18.6 Total Investment Expenses 26.5 26.7 27.4 Net Investment Income $ 405.0 $ 407.5 $ 419.7 1 Reduced by interest expense incurred on FHLB borrowings used for spread lending purposes of $18.7 million, $20.3 million and $22.7 million for the year ended December 31, 2025, 2024, and 2023, respectively. 2025 Compared with 2024 Net Investment Income was $405.0 million and $407.5 million for the years ended December 31, 2025 and 2024, respectively.

… 117 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed8 unchanged
Biggest change(Continued) The estimated adverse effects on the fair value of the Company’s financial instruments at December 31, 2024 using these assumptions were: DOLLARS IN MILLIONS Fair Value Pro Forma Increase (Decrease) Interest Rate Risk Equity Price Risk Total Market Risk ASSETS Investments in Fixed Maturities $ 6,411.3 $ (456.2) $ — $ (456.2) Investments in Equity Securities 218.5 (0.5) (19.3) (19.8) LIABILITIES Debt $ 1,278.4 $ 43.3 $ — $ 43.3 The estimated adverse effects on the fair value of the Company’s financial instruments at December 31, 2023 using these assumptions were: DOLLARS IN MILLIONS Fair Value Pro Forma Increase (Decrease) Interest Rate Risk Equity Price Risk Total Market Risk ASSETS Investments in Fixed Maturities $ 6,883.6 $ (513.5) $ — (513.5) Investments in Equity Securities 225.8 (0.6) (21.5) (22.1) LIABILITIES Debt $ 1,213.4 $ 50.6 $ — $ 50.6 The market risk sensitivity analysis assumes that the composition of the Company’s interest rate sensitive assets and liabilities, including, but not limited to, credit quality, and the equity price sensitive assets existing at the beginning of the period remains constant over the period being measured.
Biggest change(Continued) The estimated adverse effects on the fair value of the Company’s financial instruments at December 31, 2025 using these assumptions were: DOLLARS IN MILLIONS Fair Value Pro Forma Increase (Decrease) Interest Rate Risk Equity Price Risk Total Market Risk ASSETS Investments in Fixed Maturities $ 6,785.4 $ (510.1) $ — $ (510.1) Investments in Equity Securities 306.4 (0.3) (22.3) (22.6) LIABILITIES Debt $ 868.0 $ 37.6 $ — $ 37.6 The estimated adverse effects on the fair value of the Company’s financial instruments at December 31, 2024 using these assumptions were: DOLLARS IN MILLIONS Fair Value Pro Forma Increase (Decrease) Interest Rate Risk Equity Price Risk Total Market Risk ASSETS Investments in Fixed Maturities $ 6,411.3 $ (456.2) $ — (456.2) Investments in Equity Securities 218.5 (0.5) (19.3) (19.8) LIABILITIES Debt $ 1,278.4 $ 43.3 $ — $ 43.3 The market risk sensitivity analysis assumes that the composition of the Company’s interest rate sensitive assets and liabilities, including, but not limited to, credit quality, and the equity price sensitive assets existing at the beginning of the period remains constant over the period being measured.

Other KMPR 10-K year-over-year comparisons