UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2015 

Kemper Corporation

(Exact name of registrant as specified in its charter)

 

Commission File Number: 001-18298

 

DE		95-4255452
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

One East Wacker Drive, Chicago, IL 60601

(Address of principal executive offices, including zip code)

312-661-4600

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2.below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Section 2. – Financial Information

Item 2.02.	Results of Operations and Financial Condition.

On August 6, 2015, the Registrant issued a press release announcing its financial results for the second quarter of 2015 and the availability of the Registrant’s second quarter investor supplement on the Registrant’s web site. The press release and the investor supplement are furnished as Exhibits 99.1 and 99.2 to this report. The information contained in the press release and the investor supplement are furnished and not filed pursuant to instruction B.2 of Form 8-K.

Section 9. – Financial Statements and Exhibits.

Item 9.01.	Financial Statements and Exhibits.

(d) Exhibits

99.1    Registrant’s press release dated August 6, 2015.

99.2    Second Quarter 2015 Investor Supplement of Kemper Corporation.     

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				Kemper Corporation
Date:	August 6, 2015			/S/    FRANK J. SODARO
				Frank J. Sodaro
				Senior Vice President and Chief Financial Officer

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Exhibit Index

99.1			Registrant’s press release dated August 6, 2015.
99.2			Second Quarter 2015 Investor Supplement of Kemper Corporation.

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Exhibit 99.1

 

		Kemper Corporation One East Wacker Drive Chicago, IL 60601 kemper.com
	Press Release

August 6, 2015

Kemper Corporation Reports Second Quarter 2015 Earnings

◦	Completed the acquisition of Alliance United Group

◦	Increased earned premiums and total revenues by $30 million and $67 million, respectively

◦	Delivered net income of $30 million in the quarter, up from $9 million in the prior year

CHICAGO - (Business Wire) - Kemper Corporation (NYSE: KMPR) reported today net income of $29.7 million, or $0.57 per diluted share, for the second quarter of 2015, compared to $9.3 million, or $0.17 per share, for the second quarter of 2014. Consolidated net operating income¹ was $6.7 million, or $0.13 per diluted share, for the second quarter of 2015, compared to $9.6 million, or $0.18 per share, for the second quarter of 2014. Net operating income decreased primarily from a lower level of favorable reserve development and a software write-off in the Property & Casualty segment and higher legal expenses in the Life & Health segment, partially offset by lower catastrophe losses.

		Three Months Ended								Six Months Ended
(Dollars in Millions, Except Per Share Amounts) (Unaudited)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Consolidated Net Operating Income 1		$	6.7			$	9.6			$	28.5			$	41.1
Income from Continuing Operations		27.4				9.3				40.9				44.5
Net Income		29.7				9.3				43.2				44.4
Impact of Catastrophe Losses and Related Loss Adjustment Expense (LAE) on Net Income		$	(24.2	)		$	(41.1	)		$	(30.9	)		$	(51.7	)
Diluted Net Income Per Share From:
Consolidated Net Operating Income 1		$	0.13			$	0.18			$	0.55			$	0.74
Continuing Operations		0.53				0.17				0.79				0.80
Net Income		0.57				0.17				0.83				0.80
Impact of Catastrophe Losses and Related LAE on Net Income Per Share		$	(0.46	)		$	(0.75	)		$	(0.59	)		$	(0.94	)

“Net income for the quarter increased more than $20 million over the prior year, largely from $31 million of net realized gains on the sales of equity securities as we repositioned our portfolio, but operating results were mixed. Our top line growth was offset by higher than planned catastrophes and a software write-off on the Property & Casualty side, as well as, higher benefits and expenses on the Life & Health side,” commented Donald G. Southwell, Kemper’s Chairman, President and Chief Executive Officer.

“We’re excited about putting some of our excess capital to work with the acquisition of Alliance United Group and welcome them into the Kemper family. Alliance United brings $350 million of annualized premiums to Kemper and accounted for $62 million of earned premiums in the quarter. We expect this acquisition will be a source of growth going forward.

“In the Life & Health segment, the increase in net investment income was overshadowed by a modest increase in our policyholder benefits and higher legal expenses in the quarter,” concluded Southwell.

¹ Consolidated net operating income is an after-tax, non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” for additional information.

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Capital

During the second quarter of 2015, Kemper repurchased nearly 50,000 shares of its common stock at a total cost of $1.8 million, or $36.57 per share, and paid dividends of $12.5 million. For the first half of 2015, total capital returned to shareholders was $48.5 million, which consisted of $23.7 million from repurchases and $24.8 million from dividends. Additionally, Kemper deployed roughly $150 million of capital with the acquisition of Alliance United. We anticipate Alliance United will generate approximately $350 million of earned premiums in its first full year with Kemper.

Kemper ended the quarter with a book value per share excluding net unrealized gains on fixed maturities of $34.71, essentially flat with year-end 2014, as net operating income was more than offset by dividends. Book value per share was $38.85, down 3 percent from $39.88 at the end of 2014, largely from the impact of higher yields on the fixed maturities portfolio.

In June 2015, Kemper amended its revolving credit agreement, which extended the expiration four years. The new credit agreement expires in June 2020 and allows, if expanded, for a maximum facility limit of $300 million during the term.

Revenues

Total revenues for the second quarter of 2015 increased $66.7 million, or 12 percent, to $609.2 million, driven by $31.9 million higher earned premiums from the Property & Casualty Insurance segment and $30.5 million higher net realized gains. Earned premiums in the Property & Casualty Insurance segment increased $62.1 million from the Alliance United acquisition. Excluding the Alliance United acquisition, earned premiums in the Property & Casualty segment decreased $30.2 million, primarily from the impact of profit improvement actions taken over the past couple of years. Throughout the first half of 2015, the company saw early indications of higher new business sales and improved retention ratios.

During the second quarter, Kemper sold nearly $150 million of equity securities for tax and portfolio asset allocation purposes, generating net realized gains of $30.7 million.

Net investment income was $76.7 million in the second quarter of 2015, compared to $72.6 million in 2014. The increase was primarily the result of higher income from the alternative investments portfolio.

The investment portfolio in total generated a pre-tax equivalent annualized book yield of 5.4 percent for the second quarter of 2015, compared to 5.0 percent in 2014.

2

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Segment Results

Kemper completed its acquisition of Alliance United on April 30, 2015. The results of Alliance United’s operations since the acquisition date are included in the Property & Casualty Insurance segment.

Unless otherwise noted, (i) the segment results discussed below are presented on an after-tax basis, (ii) prior-year development includes both catastrophe and non-catastrophe losses and LAE, (iii) catastrophe losses and LAE exclude the impact of prior-year development (iv) underlying loss ratio includes loss and LAE, and (v) all comparisons are made to the prior year quarter.

		Three Months Ended								Six Months Ended
(Dollars in Millions) (Unaudited)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Segment Net Operating Income (Loss):
Property & Casualty Insurance		$	(2.6	)		$	(1.2	)		$	10.8			$	13.2
Life & Health Insurance		14.3				15.9				30.4				38.0
Total Segment Net Operating Income		11.7				14.7				41.2				51.2
Corporate and Other Net Operating Loss		(5.0		)		(5.1		)		(12.7		)		(10.1		)
Consolidated Net Operating Income		6.7				9.6				28.5				41.1
Net Income (Loss) From:
Net Realized Gains on Sales of Investments		22.1				2.4				24.3				6.6
Net Impairment Losses Recognized in Earnings		(1.4		)		(2.7		)		(6.0		)		(3.2		)
Loss from Early Extinguishment of Debt		—				—				(5.9		)		—
Income from Continuing Operations		$	27.4			$	9.3			$	40.9			$	44.5

The Property & Casualty Insurance segment reported a net operating loss of $2.6 million in the second quarter of 2015, compared to a loss of $1.2 million in 2014. Results decreased primarily from $10.3 million of lower favorable prior year reserve development, a $7.2 million software write-off and a higher underlying loss and LAE ratio, mostly offset by $17.2 million lower catastrophe losses and an improved insurance expense ratio, excluding the software write-off. Kemper decided to discontinue development of a billing system, which resulted in the write-off.

The underlying loss and LAE ratio increased 4.3 percentage points in the second quarter of 2015, to 70.3 percent, driven by the change in mix of business from the Alliance United acquisition. Non-standard auto insurance tends to have a higher loss and LAE ratio with a lower expense ratio, net of fees. Excluding the Alliance United acquisition, the underlying loss and LAE ratio increased 1.1 percentage points, primarily from the impacts of current year development, an uptick in non-standard auto frequency and higher severity in homeowners, partially offset by higher average earned premium. The Property & Casualty Insurance segment’s expense ratio, excluding the write-off, improved 3.0 percentage points to 25.3 percent in the second quarter of 2015, largely from the impact of the Alliance United acquisition. Excluding the Alliance United acquisition and the software write-off, the expense ratio was relatively flat.

The Life & Health Insurance segment reported net operating income of $14.3 million for the second quarter of 2015, compared to $15.9 million in 2014. Results decreased as higher policyholder benefits and higher expenses, primarily legal costs, more than offset higher net investment income.

Corporate and Other net operating loss was essentially flat compared to the second quarter of 2014, as a $2.3 million tax benefit from settling tax years 2007 - 2011 and $0.8 million lower interest expense, were offset by $2.7 million higher employee retirement benefits, primarily from the impacts of low interest rates on the pension liability.

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Unaudited condensed consolidated statements of income for the three and six months ended June 30, 2015 and 2014 are presented below:

		Three Months Ended								Six Months Ended
(Dollars in Millions, Except Per Share Amounts)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Revenues:
Earned Premiums		$	500.1			$	470.3			$	931.4			$	947.9
Net Investment Income		76.7				72.6				147.3				143.7
Other Income		0.6				0.2				1.5				0.3
Net Realized Gains on Sales of Investments		34.0				3.5				37.4				10.1
Other-than-temporary Impairment Losses:
Total Other-than-temporary Impairment Losses		(2.2		)		(4.1		)		(9.2		)		(4.9		)
Portion of Losses Recognized in Other Comprehensive Income		—				—				—				—
Net Impairment Losses Recognized in Earnings		(2.2		)		(4.1		)		(9.2		)		(4.9		)
Total Revenues		609.2				542.5				1,108.4				1,097.1
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses		375.1				347.5				672.8				675.4
Insurance Expenses		162.1				161.3				307.0				313.4
Write-off of Long-lived Asset		11.1				—				11.1				—
Loss from Early Extinguishment of Debt		—				—				9.1				—
Interest and Other Expenses		26.6				22.5				56.3				45.2
Total Expenses		574.9				531.3				1,056.3				1,034.0
Income from Continuing Operations before Income Taxes		34.3				11.2				52.1				63.1
Income Tax Expense		(6.9		)		(1.9		)		(11.2		)		(18.6		)
Income from Continuing Operations		27.4				9.3				40.9				44.5
Income (Loss) from Discontinued Operations		2.3				—				2.3				(0.1		)
Net Income		$	29.7			$	9.3			$	43.2			$	44.4
Income from Continuing Operations Per Unrestricted Share:
Basic		$	0.53			$	0.17			$	0.79			$	0.80
Diluted		$	0.53			$	0.17			$	0.79			$	0.80
Net Income Per Unrestricted Share:
Basic		$	0.57			$	0.17			$	0.83			$	0.80
Diluted		$	0.57			$	0.17			$	0.83			$	0.80
Weighted-average Outstanding (Shares in Thousands):
Unrestricted Shares - Basic		51,728.1				54,666.5				51,800.5				54,989.7
Unrestricted Shares and Equivalent Shares - Diluted		51,806.1				54,773.1				51,887.7				55,108.1
Dividends Paid to Shareholders Per Share		$	0.24			$	0.24			$	0.48			$	0.48

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Unaudited business segment revenues for the three and six months ended June 30, 2015 and 2014 are presented below:

		Three Months Ended								Six Months Ended
(Dollars in Millions)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
REVENUES:
Property & Casualty Insurance:
Earned Premiums:
Personal Automobile		$	252.6			$	212.0			$	442.4			$	428.3
Homeowners		71.6				79.0				144.2				158.7
Other Personal		11.7				12.9				23.4				26.1
Total Personal		335.9				303.9				610.0				613.1
Commercial Automobile		13.5				13.6				27.0				26.7
Total Earned Premiums		349.4				317.5				637.0				639.8
Net Investment Income		18.6				19.5				33.4				37.1
Other Income		0.1				0.2				0.4				0.3
Total Property & Casualty Insurance		368.1				337.2				670.8				677.2
Life & Health Insurance:
Earned Premiums:
Life		96.0				97.2				184.0				194.8
Accident and Health		35.7				36.2				72.5				75.0
Property		19.0				19.4				37.9				38.3
Total Earned Premiums		150.7				152.8				294.4				308.1
Net Investment Income		53.5				48.0				103.9				98.2
Other Income		0.2				—				1.0				—
Total Life & Health Insurance		204.4				200.8				399.3				406.3
Total Segment Revenues		572.5				538.0				1,070.1				1,083.5
Net Realized Gains on Sales of Investments		34.0				3.5				37.4				10.1
Net Impairment Losses Recognized in Earnings		(2.2		)		(4.1		)		(9.2		)		(4.9		)
Other		4.9				5.1				10.1				8.4
Total Revenues		$	609.2			$	542.5			$	1,108.4			$	1,097.1

5

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KEMPER CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Millions)
	Jun 30, 2015				Dec 31, 2014
Assets:	(Unaudited)
Investments:
Fixed Maturities at Fair Value	$	4,764.0			$	4,777.6
Equity Securities at Fair Value	562.9				632.2
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings	173.5				184.8
Fair Value Option Investments	160.0				53.3
Short-term Investments at Cost which Approximates Fair Value	338.4				342.2
Other Investments	451.0				449.6
Total Investments	6,449.8				6,439.7
Cash	93.8				76.1
Receivables from Policyholders	335.2				295.3
Other Receivables	267.1				187.0
Deferred Policy Acquisition Costs	317.5				303.3
Goodwill	318.5				311.8
Current and Deferred Income Tax Assets	34.2				—
Other Assets	239.0				220.2
Total Assets	$	8,055.1			$	7,833.4
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life and Health	$	3,312.8			$	3,273.7
Property and Casualty	874.4				733.9
Total Insurance Reserves	4,187.2				4,007.6
Unearned Premiums	606.2				536.9
Liabilities for Income Taxes	3.6				36.5
Debt at Amortized Cost	750.2				752.1
Accrued Expenses and Other Liabilities	495.6				409.6
Total Liabilities	6,042.8				5,742.7
Shareholders’ Equity:
Common Stock	5.2				5.2
Paid-in Capital	657.1				660.1
Retained Earnings	1,204.7				1,202.7
Accumulated Other Comprehensive Income	145.3				222.7
Total Shareholders’ Equity	2,012.3				2,090.7
Total Liabilities and Shareholders’ Equity	$	8,055.1			$	7,833.4

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Unaudited selected financial information for the Property & Casualty Insurance segment follows:

		Three Months Ended								Six Months Ended
(Dollars in Millions)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	348.2			$	308.7			$	627.9			$	613.0
Earned Premiums		$	349.4			$	317.5			$	637.0			$	639.8
Net Investment Income		18.6				19.5				33.4				37.1
Other Income		0.1				0.2				0.4				0.3
Total Revenues		368.1				337.2				670.8				677.2
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		245.5				209.4				444.0				439.8
Catastrophe Losses and LAE		35.4				61.9				45.7				77.9
Prior Years:
Non-catastrophe Losses and LAE		(1.4		)		(14.5		)		(6.4		)		(27.2		)
Catastrophe Losses and LAE		(2.4		)		(5.1		)		(4.6		)		(7.8		)
Total Incurred Losses and LAE		277.1				251.7				478.7				482.7
Insurance Expenses, Excluding Write-off of Long-lived Asset		88.3				89.8				171.4				179.5
Write-off of Long-lived Asset		11.1				—				11.1				—
Operating Profit (Loss)		(8.4		)		(4.3		)		9.6				15.0
Income Tax Benefit (Expense)		5.8				3.1				1.2				(1.8		)
Segment Net Operating Income (Loss)		$	(2.6	)		$	(1.2	)		$	10.8			$	13.2
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		70.3		%		66.0		%		69.6		%		68.7		%
Current Year Catastrophe Losses and LAE Ratio		10.1				19.5				7.2				12.2
Prior Years Non-catastrophe Losses and LAE Ratio		(0.4		)		(4.6		)		(1.0		)		(4.3		)
Prior Years Catastrophe Losses and LAE Ratio		(0.7		)		(1.6		)		(0.7		)		(1.2		)
Total Incurred Loss and LAE Ratio		79.3				79.3				75.1				75.4
Insurance Expense Ratio, Excluding Write-off of Long-lived Asset		25.3				28.3				26.9				28.1
Impact on Ratio from Write-off of Long-lived Asset		3.2				—				1.7				—
Combined Ratio		107.8		%		107.6		%		103.7		%		103.5		%
Underlying Combined Ratio
Current Year Non-catastrophe Losses and LAE Ratio		70.3		%		66.0		%		69.6		%		68.7		%
Insurance Expense Ratio		25.3				28.3				26.9				28.1
Impact on Ratio from Write-off of Long-lived Asset		3.2				—				1.7				—
Underlying Combined Ratio		98.8		%		94.3		%		98.2		%		96.8		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		98.8		%		94.3		%		98.2		%		96.8		%
Current Year Catastrophe Losses and LAE Ratio		10.1				19.5				7.2				12.2
Prior Years Non-catastrophe Losses and LAE Ratio		(0.4		)		(4.6		)		(1.0		)		(4.3		)
Prior Years Catastrophe Losses and LAE Ratio		(0.7		)		(1.6		)		(0.7		)		(1.2		)
Combined Ratio as Reported		107.8		%		107.6		%		103.7		%		103.5		%

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Unaudited selected financial information for the Life & Health Insurance segment follows:

		Three Months Ended								Six Months Ended
(Dollars in Millions)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Earned Premiums:
Life		$	96.0			$	97.2			$	184.0			$	194.8
Accident and Health		35.7				36.2				72.5				75.0
Property		19.0				19.4				37.9				38.3
Total Earned Premiums		150.7				152.8				294.4				308.1
Net Investment Income		53.5				48.0				103.9				98.2
Other Income		0.2				—				1.0				—
Total Revenues		204.4				200.8				399.3				406.3
Policyholders’ Benefits and Incurred Losses and LAE		98.0				95.8				194.1				192.8
Insurance Expenses		84.2				80.3				158.2				154.2
Operating Profit		22.2				24.7				47.0				59.3
Income Tax Expense		(7.9		)		(8.8		)		(16.6		)		(21.3		)
Segment Net Operating Income		$	14.3			$	15.9			$	30.4			$	38.0

Use of Non-GAAP Financial Measures

Consolidated Net Operating Income

Consolidated Net Operating Income is an after-tax, non-GAAP financial measure computed by excluding from income from continuing operations the after-tax impact of 1) net realized gains on sales of investments, 2) net impairment losses recognized in earnings related to investments, 3) loss from early extinguishment of debt and 4) significant non-recurring or infrequent items that may not be indicative of ongoing operations. Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is income from continuing operations.

Kemper believes that Consolidated Net Operating Income provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. Net realized gains on sales of investments and net impairment losses recognized in earnings related to investments included in Kemper’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the company’s investments, the timing of which is unrelated to the insurance underwriting process. Loss from Early Extinguishment of Debt 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. Significant non-recurring items are excluded because, by their nature, they are not indicative of Kemper’s business or economic trends.

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A reconciliation of Consolidated Net Operating Income to Income from Continuing Operations for the three and six months ended June 30, 2015 and 2014 is presented below:

		Three Months Ended								Six Months Ended
(Dollars in Millions) (Unaudited)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Consolidated Net Operating Income		$	6.7			$	9.6			$	28.5			$	41.1
Net Income (Loss) From:
Net Realized Gains on Sales of Investments		22.1				2.4				24.3				6.6
Net Impairment Losses Recognized in Earnings		(1.4		)		(2.7		)		(6.0		)		(3.2		)
Loss from Early Extinguishment of Debt		—				—				(5.9		)		—
Income from Continuing Operations		$	27.4			$	9.3			$	40.9			$	44.5

Diluted Consolidated Net Operating Income Per Unrestricted Share

Diluted Consolidated Net Operating Income Per Unrestricted Share is a non-GAAP financial measure computed by dividing Consolidated Net Operating Income attributed to unrestricted shares by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Income from Continuing Operations Per Unrestricted Share.

A reconciliation of Diluted Consolidated Net Operating Income Per Unrestricted Share to Diluted Income from Continuing Operations Per Unrestricted Share for the three and six months ended June 30, 2015 and 2014 is presented below:

		Three Months Ended								Six Months Ended
(Unaudited)		Jun 30, 2015				Jun 30, 2014				Jun 30, 2015				Jun 30, 2014
Diluted Consolidated Net Operating Income Per Unrestricted Share		$	0.13			$	0.18			$	0.55			$	0.74
Net Income (Loss) Per Unrestricted Share From:
Net Realized Gains on Sales of Investments		0.43				0.04				0.47				0.12
Net Impairment Losses Recognized in Earnings		(0.03		)		(0.05		)		(0.12		)		(0.06		)
Loss from Early Extinguishment of Debt		—				—				(0.11		)		—
Diluted Income from Continuing Operations Per Unrestricted Share		$	0.53			$	0.17			$	0.79			$	0.80

Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities

Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains on fixed income securities by total Common Shares Issued and Outstanding. Book Value Per Share is the most directly comparable GAAP financial measure. Kemper uses the trend in book value per share, excluding the after-tax impact of net unrealized gains on fixed income securities in conjunction with book value per share to identify and analyze the change in net worth attributable to management efforts between periods. Kemper believes the non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management. Kemper believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.

9

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A reconciliation of the numerator used in the computation of Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Book Value Per Share at June 30, 2015 and December 31, 2014 is presented below:

(Dollars in Millions) (Unaudited)		Jun 30, 2015				Dec 31, 2014
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities		$	1,797.9			$	1,808.5
Net Unrealized Gains on Fixed Maturities		214.4				282.2
Shareholders’ Equity		$	2,012.3			$	2,090.7

Underlying Combined Ratio

Underlying Combined Ratio is a non-GAAP financial measure, that is computed by adding the current year non-catastrophe losses and LAE ratio with the insurance expense (including write-offs of long-lived assets) ratio. The most directly comparable GAAP financial measure is the combined ratio, which is computed by adding total incurred losses and LAE, including the impact of catastrophe losses, and loss and LAE reserve development from prior years with the insurance expense ratio. Kemper believes the underlying combined ratio is useful to investors and is used by management to reveal the trends in Kemper’s property and casualty insurance businesses that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on incurred losses and LAE and the combined ratio. Prior-year reserve development is caused by unexpected loss development on historical reserves. 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. Kemper believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing its underwriting performance. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.

Conference Call

Kemper will discuss its second quarter 2015 results in a conference call on Friday, August 7, at 11 a.m. Eastern Time. Kemper’s conference call will be accessible via the internet and by telephone. The phone number for Kemper’s conference call is 866.393.1565. To listen via webcast, register online at the investor section of kemper.com at least 15 minutes prior to the webcast to download and install any necessary software.

A replay of the call will be available through August 21, 2015 at 855.859.2056 using conference ID number 81109478.

More detailed financial information can be found in Kemper’s Investor Financial Supplement for the second quarter of 2015, which is available at the investor section of kemper.com.

About Kemper

The Kemper family of companies is one of the nation’s leading insurers. With $8 billion in assets, Kemper is improving the world of insurance by offering personalized solutions for individuals, families and businesses. Kemper's businesses collectively: 

•	Offer insurance for home, auto, life, health and valuables

•	Service six million policies

•	Are represented by more than 20,000 independent agents and brokers

•	Employ 6,000 associates dedicated to providing exceptional service

•	Are licensed to sell insurance in 50 states and the District of Columbia

Learn more about Kemper.

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Caution Regarding Forward-Looking Statements

This press release may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events, and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.

Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict, and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those listed in periodic reports filed by Kemper with the Securities and Exchange Commission (the “SEC”). No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this press release. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.

Source: Kemper Corporation

Contact
Investors: Diana Hickert-Hill	312.661.4930 or investor.relations@kemper.com

11

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Exhibit 99.2

Investor Supplement

Second Quarter 2015

The financial statements and financial exhibits included herein are unaudited. These financial statements and exhibits should be read in conjunction with the Company’s periodic reports on Form 10-K, Form 10-Q and Form 8-K. The results of operations for interim periods should not be considered indicative of results to be expected for the full year.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures to analyze the Company’s operating performance for the periods presented. Because the Company’s calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing the Company’s non-GAAP financial measures to those of other companies. For detailed disclosures on non-GAAP financial measures please refer to the “Definitions of Non-GAAP Financial Measures” on Page 29.

 

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Kemper Corporation

Investor Supplement

Second Quarter 2015

Table of Contents

 

	Page
Consolidated Financial Highlights	3
Consolidated Statements of Income	4
Consolidated Balance Sheets	5
Consolidated Statements of Cash Flows	6-7
Capital Metrics	8
Debt Outstanding and Ratings	9
Segment Summary Results:
Revenues	10
Operating Profit (Loss)	11
Net Operating Income (Loss)	11
Earned Premiums by Product	12
Net Investment Income by Segment	12
Catastrophe Frequency and Severity	13
Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information	14-15
Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information by Product:
Standard Personal Automobile Insurance	16
Non-standard Personal Automobile Insurance	17
Total Personal Automobile Insurance	18
Commercial Automobile Insurance	19
Total Automobile Insurance	20
Homeowners Insurance	21
Other Personal Lines	22
Life & Health Insurance Segment - Results of Operations and Selected Financial Information	23
Details of Investment Performance	24
Details of Invested Assets	25
Investment Concentration	26
Municipal Bond Securities	27
Investments in Limited Liability Companies and Limited Partnerships	28
Definitions of Non-GAAP Financial Measures	29-30

 

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Kemper Corporation Consolidated Financial Highlights (Dollars in Millions, Except Per Share Amounts) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
For Period Ended
Earned Premiums		$	500.1			$	431.3			$	451.5			$	462.8			$	470.3			$	477.6			$	931.4			$	947.9
Net Investment Income		76.7				70.6				93.1				72.3				72.6				71.1				147.3				143.7
Net Investment Gains (Losses) and Other Income		32.4				(2.7		)		15.1				4.7				(0.4		)		5.9				29.7				5.5
Total Revenues		$	609.2			$	499.2			$	559.7			$	539.8			$	542.5			$	554.6			$	1,108.4			$	1,097.1
Consolidated Net Operating Income 1		$	6.7			$	21.8			$	53.9			$	2.1			$	9.6			$	31.5			$	28.5			$	41.1
Income from Continuing Operations		$	27.4			$	13.5			$	63.3			$	4.8			$	9.3			$	35.2			$	40.9			$	44.5
Net Income		$	29.7			$	13.5			$	65.4			$	4.7			$	9.3			$	35.1			$	43.2			$	44.4
Per Unrestricted Common Share Amounts:
Basic:
Consolidated Net Operating Income 1		$	0.13			$	0.42			$	1.02			$	0.04			$	0.18			$	0.56			$	0.55			$	0.74
Income from Continuing Operations		$	0.53			$	0.26			$	1.20			$	0.09			$	0.17			$	0.63			$	0.79			$	0.80
Net Income		$	0.57			$	0.26			$	1.24			$	0.09			$	0.17			$	0.63			$	0.83			$	0.80
Diluted:
Consolidated Net Operating Income 1		$	0.13			$	0.42			$	1.02			$	0.04			$	0.18			$	0.56			$	0.55			$	0.74
Income from Continuing Operations		$	0.53			$	0.26			$	1.20			$	0.09			$	0.17			$	0.63			$	0.79			$	0.80
Net Income		$	0.57			$	0.26			$	1.24			$	0.09			$	0.17			$	0.63			$	0.83			$	0.80
Dividends Paid to Shareholders Per Share		$	0.24			$	0.24			$	0.24			$	0.24			$	0.24			$	0.24			$	0.48			$	0.48
At Period End
Total Assets		$	8,055.1			$	7,885.0			$	7,833.4			$	7,905.3			$	7,969.8			$	7,944.2
Insurance Reserves		$	4,187.2			$	4,019.6			$	4,007.6			$	4,041.7			$	4,064.2			$	4,067.3
Debt		$	750.2			$	750.0			$	752.1			$	751.9			$	751.7			$	751.4
Shareholders’ Equity		$	2,012.3			$	2,109.9			$	2,090.7			$	2,104.5			$	2,138.6			$	2,144.7
Shareholders’ Equity Excluding Goodwill		$	1,693.8			$	1,798.1			$	1,778.9			$	1,792.7			$	1,826.8			$	1,832.9
Common Shares Issued and Outstanding (In Millions)		51.803				51.826				52.418				52.666				53.497				55.408
Book Value Per Share2		$	38.85			$	40.71			$	39.88			$	39.96			$	39.98			$	38.71
Book Value Per Share Excluding Goodwill1,2		$	32.70			$	34.69			$	33.94			$	34.04			$	34.15			$	33.08
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities1,2		$	34.71			$	34.64			$	34.50			$	35.31			$	35.32			$	35.13
Debt to Total Capitalization2		27.2		%		26.2		%		26.5		%		26.3		%		26.0		%		25.9		%
Rolling 12 Months Return on 5-point Average Shareholders Equity2,3		5.4		%		4.4		%		5.4		%		5.0		%		8.2		%		9.4		%
1 Non-GAAP Measure. See page 29 for definition.
2 See Capital Metrics on page 8 for detail calculations.
3 Rolling 12 Months Return on 5-point Average Shareholders Equity is calculated by taking the last 12 months of Net Income (Loss) divided by the 5-point average Shareholders’ Equity. The 5-point Average Shareholders’ Equity is calculated by using a 5-point quarter average of Shareholders’ Equity for the 12 month period.

 

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Kemper Corporation Consolidated Statements of Income (Dollars in Millions, Except Per Share Amounts)  (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Revenues:
Earned Premiums		$	500.1			$	431.3			$	451.5			$	462.8			$	470.3			$	477.6			$	931.4			$	947.9
Net Investment Income		76.7				70.6				93.1				72.3				72.6				71.1				147.3				143.7
Other Income		0.6				0.9				0.6				0.5				0.2				0.1				1.5				0.3
Net Realized Gains on Sales of Investments		34.0				3.4				21.0				8.0				3.5				6.6				37.4				10.1
Other-than-temporary Impairment Losses:
Total Other-than-temporary Impairment Losses		(2.2		)		(7.0		)		(6.5		)		(3.8		)		(4.1		)		(0.8		)		(9.2		)		(4.9		)
Portion of Losses Recognized in Other Comprehensive Income		—				—				—				—				—				—				—				—
Net Impairment Losses Recognized in Earnings		(2.2		)		(7.0		)		(6.5		)		(3.8		)		(4.1		)		(0.8		)		(9.2		)		(4.9		)
Total Revenues		609.2				499.2				559.7				539.8				542.5				554.6				1,108.4				1,097.1
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses		375.1				297.7				285.8				300.5				347.5				327.9				672.8				675.4
Insurance Expenses		162.1				144.9				156.4				158.6				161.3				152.1				307.0				313.4
Write-off of Long-lived Asset		11.1				—				—				54.6				—				—				11.1				—
Loss from Early Extinguishment of Debt		—				9.1				—				—				—				—				9.1				—
Interest and Other Expenses		26.6				29.7				24.4				22.1				22.5				22.7				56.3				45.2
Total Expenses		574.9				481.4				466.6				535.8				531.3				502.7				1,056.3				1,034.0
Income from Continuing Operations before Income Taxes		34.3				17.8				93.1				4.0				11.2				51.9				52.1				63.1
Income Tax Benefit (Expense)		(6.9		)		(4.3		)		(29.8		)		0.8				(1.9		)		(16.7		)		(11.2		)		(18.6		)
Income from Continuing Operations		27.4				13.5				63.3				4.8				9.3				35.2				40.9				44.5
Discontinued Operations:
Income (Loss) from Discontinued Operations before Income Taxes		3.5				—				3.4				(0.2		)		—				(0.2		)		3.5				(0.2		)
Income Tax Benefit (Expense)		(1.2		)		—				(1.3		)		0.1				—				0.1				(1.2		)		0.1
Income (Loss) from Discontinued Operations		2.3				—				2.1				(0.1		)		—				(0.1		)		2.3				(0.1		)
Net Income		$	29.7			$	13.5			$	65.4			$	4.7			$	9.3			$	35.1			$	43.2			$	44.4
Income from Continuing Operations Per Unrestricted Share:
Basic		$	0.53			$	0.26			$	1.20			$	0.09			$	0.17			$	0.63			$	0.79			$	0.80
Diluted		$	0.53			$	0.26			$	1.20			$	0.09			$	0.17			$	0.63			$	0.79			$	0.80
Net Income Per Unrestricted Share:
Basic		$	0.57			$	0.26			$	1.24			$	0.09			$	0.17			$	0.63			$	0.83			$	0.80
Diluted		$	0.57			$	0.26			$	1.24			$	0.09			$	0.17			$	0.63			$	0.83			$	0.80
Dividends Paid to Shareholders Per Share		$	0.24			$	0.24			$	0.24			$	0.24			$	0.24			$	0.24			$	0.48			$	0.48
Weighted Average Unrestricted Common Shares Outstanding (in Millions)		51.728				51.873				52.465				52.605				54.667				55.313				51.801				54.990

 

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Kemper Corporation Consolidated Balance Sheets (Dollars in Millions)  (Unaudited)
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014
Assets:
Investments:
Fixed Maturities at Fair Value		$	4,764.0			$	4,803.1			$	4,777.6			$	4,697.2			$	4,680.0			$	4,619.5
Equity Securities at Fair Value		562.9				628.6				632.2				661.4				646.2				648.3
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings		173.5				168.1				184.8				222.8				227.1				239.0
Fair Value Option Investments		160.0				54.2				53.3				50.6				40.3				—
Short-term Investments at Cost which Approximates Fair Value		338.4				357.3				342.2				316.2				480.1				506.9
Other Investments		451.0				450.1				449.6				450.5				448.3				448.2
Total Investments		6,449.8				6,461.4				6,439.7				6,398.7				6,522.0				6,461.9
Cash		93.8				87.7				76.1				93.1				61.8				65.0
Receivables from Policyholders		335.2				293.1				295.3				314.4				313.5				319.5
Other Receivables		267.1				197.0				187.0				247.5				190.5				225.5
Deferred Policy Acquisition Costs		317.5				305.6				303.3				306.7				304.8				301.8
Goodwill		318.5				311.8				311.8				311.8				311.8				311.8
Current and Deferred Income Tax Assets		34.2				10.9				—				4.3				10.1				—
Other Assets		239.0				217.5				220.2				228.8				255.3				258.7
Total Assets		$	8,055.1			$	7,885.0			$	7,833.4			$	7,905.3			$	7,969.8			$	7,944.2
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life and Health		$	3,312.8			$	3,299.5			$	3,273.7			$	3,260.8			$	3,249.0			$	3,237.7
Property and Casualty		874.4				720.1				733.9				780.9				815.2				829.6
Total Insurance Reserves		4,187.2				4,019.6				4,007.6				4,041.7				4,064.2				4,067.3
Unearned Premiums		606.2				530.0				536.9				568.2				571.8				582.5
Liabilities for Income Taxes		3.6				58.2				36.5				48.7				53.4				30.6
Debt at Amortized Cost		750.2				750.0				752.1				751.9				751.7				751.4
Accrued Expenses and Other Liabilities		495.6				417.3				409.6				390.3				390.1				367.7
Total Liabilities		6,042.8				5,775.1				5,742.7				5,800.8				5,831.2				5,799.5
Shareholders’ Equity:
Common Stock		5.2				5.2				5.2				5.3				5.3				5.5
Paid-in Capital		657.1				655.1				660.1				662.2				671.3				693.5
Retained Earnings		1,204.7				1,189.3				1,202.7				1,155.6				1,183.4				1,231.5
Accumulated Other Comprehensive Income		145.3				260.3				222.7				281.4				278.6				214.2
Total Shareholders’ Equity		2,012.3				2,109.9				2,090.7				2,104.5				2,138.6				2,144.7
Total Liabilities and Shareholders’ Equity		$	8,055.1			$	7,885.0			$	7,833.4			$	7,905.3			$	7,969.8			$	7,944.2

 

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Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions)  (Unaudited)
		Six Months Ended
		Jun 30, 2015				Jun 30, 2014
Operating Activities:
Net Income		$	43.2			$	44.4
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities:
Increase in Deferred Policy Acquisition Costs		(14.2		)		(1.9		)
Amortization of Intangible Assets Acquired		4.5				3.7
Equity in Earnings of Equity Method Limited Liability Investments		(3.5		)		(4.8		)
Distribution of Accumulated Earnings of Equity Method Limited Liability Investments		1.3				12.4
Increase in Value of Fair Value Option Investments Reported in Net Investment Income		(2.7		)		(0.3		)
Amortization of Investment Securities and Depreciation of Investment Real Estate		7.0				7.3
Net Realized Gains on Sales of Investments		(37.4		)		(10.1		)
Net Impairment Losses Recognized in Earnings		9.2				4.9
Loss from Early Extinguishment of Debt		9.1				—
Depreciation of Property and Equipment		6.5				8.8
Write-off of Long-lived Asset		11.1				—
Decrease in Receivables		7.9				28.9
Increase in Insurance Reserves		23.3				2.6
Decrease in Unearned Premiums		(3.1		)		(27.1		)
Change in Income Taxes		(27.9		)		(12.4		)
Increase in Accrued Expenses and Other Liabilities		27.5				5.5
Other, Net		18.9				10.7
Net Cash Provided by Operating Activities (Carryforward to page 7)		80.7				72.6

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Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions)  (Unaudited)
		Six Months Ended
		Jun 30, 2015				Jun 30, 2014
Net Cash Provided by Operating Activities (Carryforward from page 6)		80.7				72.6
Investing Activities:
Sales, Paydowns and Maturities of Fixed Maturities		404.0				342.8
Purchases of Fixed Maturities		(309.7		)		(225.7		)
Sales of Equity Securities		143.4				69.9
Purchases of Equity Securities		(103.7		)		(81.0		)
Return of Investment of Equity Method Limited Liability Investments		21.0				26.4
Acquisitions of Equity Method Limited Liability Investments		(10.5		)		(16.0		)
Sales of Fair Value Option Investments		—				2.9
Purchases of Fair Value Option Investments		(104.0		)		(42.9		)
Decrease (Increase) in Short-term Investments		22.2				(198.0		)
Improvements of Investment Real Estate		(0.8		)		(1.3		)
Sales of Investment Real Estate		—				0.9
Acquisition of Business, Net of Cash Acquired		(57.6		)		—
Increase in Other Investments		(1.4		)		(2.4		)
Acquisition of Software		(5.6		)		(5.6		)
Disposition of Subsidiary, Net of Cash Disposed		—				8.9
Other, Net		(1.4		)		(4.6		)
Net Cash Used by Investing Activities		(4.1		)		(125.7		)
Financing Activities:
Net Proceeds from Issuances of Debt		288.8				144.2
Repayments of Debt		(300.3		)		—
Common Stock Repurchases		(25.2		)		(70.1		)
Dividends and Dividend Equivalents Paid		(24.8		)		(26.6		)
Cash Exercise of Stock Options		1.9				—
Other, Net		0.7				0.9
Net Cash Provided (Used) by Financing Activities		(58.9		)		48.4
Increase (Decrease) in Cash		17.7				(4.7		)
Cash, Beginning of Year		76.1				66.5
Cash, End of Period		$	93.8			$	61.8

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Kemper Corporation Capital Metrics (Dollars and Shares in Millions, Except Per Share Amounts) (Unaudited)
		Three Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014
Book Value Per Share
Numerator
Shareholders’ Equity		$	2,012.3			$	2,109.9			$	2,090.7			$	2,104.5			$	2,138.6			$	2,144.7
Less: Goodwill		(318.5		)		(311.8		)		(311.8		)		(311.8		)		(311.8		)		(311.8		)
Shareholders’ Equity Excluding Goodwill		$	1,693.8			$	1,798.1			$	1,778.9			$	1,792.7			$	1,826.8			$	1,832.9
Shareholders’ Equity		$	2,012.3			$	2,109.9			$	2,090.7			$	2,104.5			$	2,138.6			$	2,144.7
Less: Net Unrealized Gains on Fixed Maturities		(214.4		)		(314.6		)		(282.2		)		(244.9		)		(249.0		)		(198.3		)
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities		$	1,797.9			$	1,795.3			$	1,808.5			$	1,859.6			$	1,889.6			$	1,946.4
Denominator
Common Shares Issued and Outstanding		51.803				51.826				52.418				52.666				53.497				55.408
Book Value Per Share		$	38.85			$	40.71			$	39.88			$	39.96			$	39.98			$	38.71
Book Value Per Share Excluding Goodwill		$	32.70			$	34.69			$	33.94			$	34.04			$	34.15			$	33.08
Book Value Per Share Excluding Unrealized on Fixed Maturities		$	34.71			$	34.64			$	34.50			$	35.31			$	35.32			$	35.13
Return on Shareholders’ Equity
Numerator
Rolling 12 Months Net Income		$	113.3			$	92.9			$	114.5			$	104.3			$	169.7			$	194.4
Denominator (5-point Average)
5-point Average Shareholders’ Equity		$	2,091.2			$	2,117.7			$	2,106.0			$	2,089.7			$	2,069.8			$	2,076.5
Rolling 12 Months Return on Average Shareholders' Equity (5-point Average)		5.4		%		4.4		%		5.4		%		5.0		%		8.2		%		9.4		%
Debt and Total Capitalization
Debt		$	750.2			$	750.0			$	752.1			$	751.9			$	751.7			$	751.4
Shareholders’ Equity		2,012.3				2,109.9				2,090.7				2,104.5				2,138.6				2,144.7
Total Capitalization		$	2,762.5			$	2,859.9			$	2,842.8			$	2,856.4			$	2,890.3			$	2,896.1
Ratio of Debt to Shareholders’ Equity		37.3		%		35.5		%		36.0		%		35.7		%		35.1		%		35.0		%
Ratio of Debt to Total Capitalization		27.2		%		26.2		%		26.5		%		26.3		%		26.0		%		25.9		%
Parent Company Liquidity
Kemper Holding Company Cash and Investments		$	378.8			$	290.2			$	330.3			$	302.4			$	302.7			$	255.9
Borrowings Available Under Credit Agreement		225.0				225.0				225.0				225.0				225.0				225.0
Parent Company Liquidity		$	603.8			$	515.2			$	555.3			$	527.4			$	527.7			$	480.9
Capital Returned to Shareholders
Common Stock Repurchased		$	1.8			$	21.9			$	9.0			$	29.9			$	68.3			$	8.3
Cash Dividends Paid		12.5				12.3				12.6				12.6				13.3				13.3
Total Capital Returned to Shareholders		$	14.3			$	34.2			$	21.6			$	42.5			$	81.6			$	21.6

 

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Kemper Corporation Debt Outstanding and Ratings (Dollars in Millions) (Unaudited)
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014
Kemper Corporation:
Notes Payable under Revolving Credit Agreement		$	—			$	—			$	—			$	—			$	—			$	—
Senior Notes at Amortized Cost:
6.00% Senior Notes due November 30, 2015		—				—				249.5				249.4				249.3				249.2
6.00% Senior Notes due May 15, 2017		358.8				358.6				358.5				358.3				358.2				358.0
4.35% Senior Notes due February 15, 2025		247.3				247.3				—				—				—				—
7.375% Subordinated Debentures due February 27, 2054 at Amortized Cost		144.1				144.1				144.1				144.2				144.2				144.2
Debt Outstanding		$	750.2			$	750.0			$	752.1			$	751.9			$	751.7			$	751.4
Subsidiary Debt:
Federal Home Loan Bank of Dallas		—				—				—				—				—				—
Federal Home Loan Bank of Chicago		—				—				—				—				—				—
		A.M. Best				Moody’s				S&P				Fitch
As of Date of Financial Supplement
Kemper Debt Ratings:
Senior Notes Payable		bbb-				Baa3				BBB-				BBB-
Subordinated Debentures		bb+				Ba1				BB				BB
Insurance Company Financial Strength Ratings:
Trinity Universal Insurance Company		A-				A3				A-				A-
United Insurance Company of America		A-				A3				A-				A-
Reserve National Insurance Company		A-				NR				NR				NR

NR - Not Rated

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Kemper Corporation Segment Revenues (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Revenues:
Property & Casualty Insurance:
Earned Premiums:
Personal Automobile		$	252.6			$	189.8			$	198.0			$	205.1			$	212.0			$	216.3			$	442.4			$	428.3
Homeowners		71.6				72.6				75.8				77.9				79.0				79.7				144.2				158.7
Other Personal		11.7				11.7				12.2				12.6				12.9				13.2				23.4				26.1
Total Personal		335.9				274.1				286.0				295.6				303.9				309.2				610.0				613.1
Commercial Automobile		13.5				13.5				14.0				14.1				13.6				13.1				27.0				26.7
Total Earned Premiums		349.4				287.6				300.0				309.7				317.5				322.3				637.0				639.8
Net Investment Income		18.6				14.8				17.1				18.5				19.5				17.6				33.4				37.1
Other Income		0.1				0.3				0.1				0.1				0.2				0.1				0.4				0.3
Total Property & Casualty Insurance		368.1				302.7				317.2				328.3				337.2				340.0				670.8				677.2
Life & Health Insurance:
Earned Premiums:
Life		96.0				88.0				96.0				96.8				97.2				97.6				184.0				194.8
Accident and Health		35.7				36.8				36.5				37.1				36.2				38.8				72.5				75.0
Property		19.0				18.9				19.0				19.2				19.4				18.9				37.9				38.3
Total Earned Premiums		150.7				143.7				151.5				153.1				152.8				155.3				294.4				308.1
Net Investment Income		53.5				50.4				71.3				49.2				48.0				50.2				103.9				98.2
Other Income		0.2				0.8				0.5				0.4				—				—				1.0				—
Total Life & Health Insurance		204.4				194.9				223.3				202.7				200.8				205.5				399.3				406.3
Total Segment Revenues		572.5				497.6				540.5				531.0				538.0				545.5				1,070.1				1,083.5
Net Realized Gains on Sales of Investments		34.0				3.4				21.0				8.0				3.5				6.6				37.4				10.1
Net Impairment Losses Recognized in Earnings		(2.2		)		(7.0		)		(6.5		)		(3.8		)		(4.1		)		(0.8		)		(9.2		)		(4.9		)
Other		4.9				5.2				4.7				4.6				5.1				3.3				10.1				8.4
Total Revenues		$	609.2			$	499.2			$	559.7			$	539.8			$	542.5			$	554.6			$	1,108.4			$	1,097.1

 

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Kemper Corporation Segment Operating Results (Dollars in Millions)  (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Segment Operating Profit (Loss):
Property & Casualty Insurance		$	(8.4	)		$	18.0			$	36.0			$	(23.9	)		$	(4.3	)		$	19.3			$	9.6			$	15.0
Life & Health Insurance		22.2				24.8				51.2				31.4				24.7				34.6				47.0				59.3
Total Segment Operating Profit		13.8				42.8				87.2				7.5				20.4				53.9				56.6				74.3
Corporate and Other Operating Loss		(11.3		)		(12.3		)		(8.6		)		(7.7		)		(8.6		)		(7.8		)		(23.6		)		(16.4		)
Total Operating Profit (Loss)		2.5				30.5				78.6				(0.2		)		11.8				46.1				33.0				57.9
Net Realized Gains on Sales of Investments		34.0				3.4				21.0				8.0				3.5				6.6				37.4				10.1
Net Impairment Losses Recognized in Earnings		(2.2		)		(7.0		)		(6.5		)		(3.8		)		(4.1		)		(0.8		)		(9.2		)		(4.9		)
Loss from Early Extinguishment of Debt		—				(9.1		)		—				—				—				—				(9.1		)		—
Income from Continuing Operations before Income Taxes		$	34.3			$	17.8			$	93.1			$	4.0			$	11.2			$	51.9			$	52.1			$	63.1
Segment Net Operating Income (Loss):
Property & Casualty Insurance		$	(2.6	)		$	13.4			$	25.3			$	(13.6	)		$	(1.2	)		$	14.4			$	10.8			$	13.2
Life & Health Insurance		14.3				16.1				33.5				20.3				15.9				22.1				30.4				38.0
Total Segment Net Operating Income		11.7				29.5				58.8				6.7				14.7				36.5				41.2				51.2
Corporate and Other Net Operating Loss		(5.0		)		(7.7		)		(4.9		)		(4.6		)		(5.1		)		(5.0		)		(12.7		)		(10.1		)
Consolidated Operating Income		6.7				21.8				53.9				2.1				9.6				31.5				28.5				41.1
Net Income (Loss) From:
Net Realized Gains on Sales of Investments		22.1				2.2				13.6				5.2				2.4				4.2				24.3				6.6
Net Impairment Losses Recognized in Earnings		(1.4		)		(4.6		)		(4.2		)		(2.5		)		(2.7		)		(0.5		)		(6.0		)		(3.2		)
Loss from Early Extinguishment of Debt		—				(5.9		)		—				—				—				—				(5.9		)		—
Income from Continuing Operations		$	27.4			$	13.5			$	63.3			$	4.8			$	9.3			$	35.2			$	40.9			$	44.5

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Kemper Corporation Segment Operating Results (Dollars in Millions)  (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Earned Premiums by Product:
Personal Automobile		$	252.6			$	189.8			$	198.0			$	205.1			$	212.0			$	216.3			$	442.4			$	428.3
Homeowners		71.6				72.6				75.8				77.9				79.0				79.7				144.2				158.7
Other Personal Property and Casualty Insurance		30.7				30.6				31.2				31.8				32.3				32.1				61.3				64.4
Commercial Automobile		13.5				13.5				14.0				14.1				13.6				13.1				27.0				26.7
Life		96.0				88.0				96.0				96.8				97.2				97.6				184.0				194.8
Accident and Health		35.7				36.8				36.5				37.1				36.2				38.8				72.5				75.0
Total Earned Premiums		$	500.1			$	431.3			$	451.5			$	462.8			$	470.3			$	477.6			$	931.4			$	947.9
Net Investment Income by Segment:
Property & Casualty Insurance:
Equity Method Limited Liability Investments		$	3.0			$	0.2			$	(0.5	)		$	4.3			$	2.1			$	2.5			$	3.2			$	4.6
All Other Net Investment Income		15.6				14.6				17.6				14.2				17.4				15.1				30.2				32.5
Net Investment Income		18.6				14.8				17.1				18.5				19.5				17.6				33.4				37.1
Life & Health Insurance:
Equity Method Limited Liability Investments		0.9				(1.0		)		(0.1		)		0.1				(1.1		)		0.7				(0.1		)		(0.4		)
All Other Net Investment Income		52.6				51.4				71.4				49.1				49.1				49.5				104.0				98.6
Net Investment Income		53.5				50.4				71.3				49.2				48.0				50.2				103.9				98.2
Total Segment Net Investment Income		72.1				65.2				88.4				67.7				67.5				67.8				137.3				135.3
Unallocated Net Investment Income:
Equity Method Limited Liability Investments		0.3				0.1				(0.1		)		0.5				0.3				0.3				0.4				0.6
All Other Net Investment Income		4.3				5.3				4.8				4.1				4.8				3.0				9.6				7.8
Unallocated Net Investment Income		4.6				5.4				4.7				4.6				5.1				3.3				10.0				8.4
Net Investment Income		$	76.7			$	70.6			$	93.1			$	72.3			$	72.6			$	71.1			$	147.3			$	143.7

 

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Kemper Corporation Catastrophe Frequency and Severity (Dollars in Millions) (Unaudited)
		Six Months Ended Jun 30, 2015
		Property & Casualty Insurance Segment							Life & Health Insurance Segment							Consolidated
		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		23			$	29.6			15			$	1.8			23			$	30.6
$5 - $10		2			16.1				—			—				2			16.9
$10 - $15		—			—				—			—				—			—
$15 - $20		—			—				—			—				—			—
$20 - $25		—			—				—			—				—			—
Greater Than $25		—			—				—			—				—			—
Total		25			$	45.7			15			$	1.8			25			$	47.5
		Six Months Ended Jun 30, 2014
		Property & Casualty Insurance Segment							Life & Health Insurance Segment							Consolidated
		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		15			$	21.0			13			$	1.7			15			$	21.7
$5 - $10		3			18.5				—			—				3			19.2
$10 - $15		1			11.8				—			—				1			12.1
$15 - $20		—			—				—			—				—			—
$20 - $25		—			—				—			—				—			—
Greater Than $25		1			26.6				—			—				1			26.6
Total		20			$	77.9			13			$	1.7			20			$	79.6

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Kemper Corporation Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	348.2			$	279.7			$	269.1			$	307.0			$	308.7			$	304.3			$	627.9			$	613.0
Earned Premiums		349.4				287.6				300.0				309.7				317.5				322.3				637.0				639.8
Net Investment Income		18.6				14.8				17.1				18.5				19.5				17.6				33.4				37.1
Other Income		0.1				0.3				0.1				0.1				0.2				0.1				0.4				0.3
Total Revenues		368.1				302.7				317.2				328.3				337.2				340.0				670.8				677.2
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		245.5				198.5				198.6				206.8				209.4				230.4				444.0				439.8
Catastrophe Losses and LAE		35.4				10.3				4.4				14.2				61.9				16.0				45.7				77.9
Prior Years:
Non-catastrophe Losses and LAE		(1.4		)		(5.0		)		(8.1		)		(3.3		)		(14.5		)		(12.7		)		(6.4		)		(27.2		)
Catastrophe Losses and LAE		(2.4		)		(2.2		)		(0.8		)		(7.2		)		(5.1		)		(2.7		)		(4.6		)		(7.8		)
Total Incurred Losses and LAE		277.1				201.6				194.1				210.5				251.7				231.0				478.7				482.7
Insurance Expenses, Excluding Write-off of Long-lived Assets		88.3				83.1				87.1				87.1				89.8				89.7				171.4				179.5
Write-off of Long-lived Asset2		11.1				—				—				54.6				—				—				11.1				—
Operating Profit (Loss)		(8.4		)		18.0				36.0				(23.9		)		(4.3		)		19.3				9.6				15.0
Income Tax Benefit (Expense)		5.8				(4.6		)		(10.7		)		10.3				3.1				(4.9		)		1.2				(1.8		)
Segment Net Operating Income (Loss)		$	(2.6	)		$	13.4			$	25.3			$	(13.6	)		$	(1.2	)		$	14.4			$	10.8			$	13.2
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		70.3		%		69.0		%		66.2		%		66.8		%		66.0		%		71.4		%		69.6		%		68.7		%
Current Year Catastrophe Losses and LAE Ratio		10.1				3.6				1.5				4.6				19.5				5.0				7.2				12.2
Prior Years Non-catastrophe Losses and LAE Ratio		(0.4		)		(1.7		)		(2.7		)		(1.1		)		(4.6		)		(3.9		)		(1.0		)		(4.3		)
Prior Years Catastrophe Losses and LAE Ratio		(0.7		)		(0.8		)		(0.3		)		(2.3		)		(1.6		)		(0.8		)		(0.7		)		(1.2		)
Total Incurred Loss and LAE Ratio		79.3				70.1				64.7				68.0				79.3				71.7				75.1				75.4
Insurance Expense Ratio, Excluding Write-off of Long-lived Asset		25.3				28.9				29.0				28.1				28.3				27.8				26.9				28.1
Impact on Ratio from Write-off of Long-lived Asset		3.2				—				—				17.6				—				—				1.7				—
Combined Ratio		107.8		%		99.0		%		93.7		%		113.7		%		107.6		%		99.5		%		103.7		%		103.5		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		70.3		%		69.0		%		66.2		%		66.8		%		66.0		%		71.4		%		69.6		%		68.7		%
Insurance Expense Ratio, Excluding write-off of Long-lived Asset		25.3				28.9				29.0				28.1				28.3				27.8				26.9				28.1
Impact on Ratio from Write-off of Long-lived Asset		3.2				—				—				17.6				—				—				1.7				—
Underlying Combined Ratio		98.8		%		97.9		%		95.2		%		112.5		%		94.3		%		99.2		%		98.2		%		96.8		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		98.8		%		97.9		%		95.2		%		112.5		%		94.3		%		99.2		%		98.2		%		96.8		%
Current Year Catastrophe Losses and LAE Ratio		10.1				3.6				1.5				4.6				19.5				5.0				7.2				12.2
Prior Years Non-catastrophe Losses and LAE Ratio		(0.4		)		(1.7		)		(2.7		)		(1.1		)		(4.6		)		(3.9		)		(1.0		)		(4.3		)
Prior Years Catastrophe Losses and LAE Ratio		(0.7		)		(0.8		)		(0.3		)		(2.3		)		(1.6		)		(0.8		)		(0.7		)		(1.2		)
Combined Ratio as Reported		107.8		%		99.0		%		93.7		%		113.7		%		107.6		%		99.5		%		103.7		%		103.5		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.
2 The Write-off of Long-lived Assets has not been allocated to product lines. Accordingly, Results of Operations and Selected Financial Information presented on pages 16 to 22 of this Investor Supplement exclude the write-off.

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Kemper Corporation Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information (continued) (Dollars in Millions) (Unaudited)
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014
Insurance Reserves:
Automobile		$	631.8			$	483.4			$	501.4			$	524.2			$	545.4			$	568.9
Homeowners		119.4				108.1				102.4				118.8				128.3				114.4
Other Personal		50.3				48.5				47.3				47.5				47.2				47.9
Insurance Reserves		$	801.5			$	640.0			$	651.1			$	690.5			$	720.9			$	731.2
Insurance Reserves:
Loss Reserves:
Case		$	540.5			$	426.8			$	423.6			$	447.6			$	460.8			$	468.1
Incurred but Not Reported		142.8				124.1				135.8				148.9				162.5				164.2
Total Loss Reserves		683.3				550.9				559.4				596.5				623.3				632.3
LAE Reserves		118.2				89.1				91.7				94.0				97.6				98.9
Insurance Reserves		$	801.5			$	640.0			$	651.1			$	690.5			$	720.9			$	731.2

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Kemper Corporation Property & Casualty Insurance Segment Standard Personal Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	112.2			$	106.5			$	110.6			$	123.9			$	126.9			$	124.8			$	218.7			$	251.7
Earned Premiums		$	113.4			$	115.9			$	122.8			$	129.2			$	134.6			$	139.3			$	229.3			$	273.9
Net Investment Income		6.7				5.6				8.3				8.8				9.6				8.9				12.3				18.5
Other Income		—				0.2				—				—				—				—				0.2				—
Total Revenues		120.1				121.7				131.1				138.0				144.2				148.2				241.8				292.4
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		78.1				81.8				90.8				91.3				93.1				102.2				159.9				195.3
Catastrophe Losses and LAE		2.3				0.2				0.1				1.2				6.8				0.8				2.5				7.6
Prior Years:
Non-catastrophe Losses and LAE		(4.0		)		(7.2		)		(6.1		)		(4.0		)		(10.3		)		(11.1		)		(11.2		)		(21.4		)
Catastrophe Losses and LAE		(0.1		)		(0.1		)		—				(0.1		)		—				(0.2		)		(0.2		)		(0.2		)
Total Incurred Losses and LAE		76.3				74.7				84.8				88.4				89.6				91.7				151.0				181.3
Insurance Expenses		33.1				34.4				36.4				37.0				39.3				38.8				67.5				78.1
Operating Profit		10.7				12.6				9.9				12.6				15.3				17.7				23.3				33.0
Income Tax Expense		(2.9		)		(3.7		)		(2.6		)		(3.5		)		(4.6		)		(5.2		)		(6.6		)		(9.8		)
Segment Net Operating Income		$	7.8			$	8.9			$	7.3			$	9.1			$	10.7			$	12.5			$	16.7			$	23.2
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		68.9		%		70.6		%		74.0		%		70.7		%		69.2		%		73.3		%		69.8		%		71.3		%
Current Year Catastrophe Losses and LAE Ratio		2.0				0.2				0.1				0.9				5.1				0.6				1.1				2.8
Prior Years Non-catastrophe Losses and LAE Ratio		(3.5		)		(6.2		)		(5.0		)		(3.1		)		(7.7		)		(8.0		)		(4.9		)		(7.8		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		(0.1		)		—				(0.1		)		—				(0.1		)		(0.1		)		(0.1		)
Total Incurred Loss and LAE Ratio		67.3				64.5				69.1				68.4				66.6				65.8				65.9				66.2
Insurance Expense Ratio		29.2				29.7				29.6				28.6				29.2				27.9				29.4				28.5
Combined Ratio		96.5		%		94.2		%		98.7		%		97.0		%		95.8		%		93.7		%		95.3		%		94.7		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		68.9		%		70.6		%		74.0		%		70.7		%		69.2		%		73.3		%		69.8		%		71.3		%
Insurance Expense Ratio		29.2				29.7				29.6				28.6				29.2				27.9				29.4				28.5
Underlying Combined Ratio		98.1		%		100.3		%		103.6		%		99.3		%		98.4		%		101.2		%		99.2		%		99.8		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		98.1		%		100.3		%		103.6		%		99.3		%		98.4		%		101.2		%		99.2		%		99.8		%
Current Year Catastrophe Losses and LAE Ratio		2.0				0.2				0.1				0.9				5.1				0.6				1.1				2.8
Prior Years Non-catastrophe Losses and LAE Ratio		(3.5		)		(6.2		)		(5.0		)		(3.1		)		(7.7		)		(8.0		)		(4.9		)		(7.8		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		(0.1		)		—				(0.1		)		—				(0.1		)		(0.1		)		(0.1		)
Combined Ratio as Reported		96.5		%		94.2		%		98.7		%		97.0		%		95.8		%		93.7		%		95.3		%		94.7		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Property & Casualty Insurance Segment Non-standard Personal Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	135.3			$	85.6			$	68.5			$	78.2			$	73.2			$	82.9			$	220.9			$	156.1
Earned Premiums		$	139.2			$	73.9			$	75.2			$	75.9			$	77.4			$	77.0			$	213.1			$	154.4
Net Investment Income		3.8				2.6				2.6				3.1				3.2				2.9				6.4				6.1
Other Income		0.1				0.1				0.1				0.1				0.1				0.1				0.2				0.2
Total Revenues		143.1				76.6				77.9				79.1				80.7				80.0				219.7				160.7
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		115.9				59.3				59.2				58.5				60.0				60.9				175.2				120.9
Catastrophe Losses and LAE		3.0				0.2				0.3				0.4				3.0				0.1				3.2				3.1
Prior Years:
Non-catastrophe Losses and LAE		2.9				2.2				1.4				0.9				(1.6		)		(0.2		)		5.1				(1.8		)
Catastrophe Losses and LAE		(0.1		)		—				—				(0.2		)		(0.1		)		—				(0.1		)		(0.1		)
Total Incurred Losses and LAE		121.7				61.7				60.9				59.6				61.3				60.8				183.4				122.1
Insurance Expenses		25.5				18.5				18.8				18.8				18.3				18.4				44.0				36.7
Operating Profit (Loss)		(4.1		)		(3.6		)		(1.8		)		0.7				1.1				0.8				(7.7		)		1.9
Income Tax Benefit (Expense)		2.5				1.5				0.9				0.2				(0.1		)		—				4.0				(0.1		)
Segment Net Operating Income (Loss)		$	(1.6	)		$	(2.1	)		$	(0.9	)		$	0.9			$	1.0			$	0.8			$	(3.7	)		$	1.8
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		83.2		%		80.2		%		78.7		%		77.1		%		77.5		%		79.2		%		82.2		%		78.4		%
Current Year Catastrophe Losses and LAE Ratio		2.2				0.3				0.4				0.5				3.9				0.1				1.5				2.0
Prior Years Non-catastrophe Losses and LAE Ratio		2.1				3.0				1.9				1.2				(2.1		)		(0.3		)		2.4				(1.2		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		—				—				(0.3		)		(0.1		)		—				—				(0.1		)
Total Incurred Loss and LAE Ratio		87.4				83.5				81.0				78.5				79.2				79.0				86.1				79.1
Insurance Expense Ratio		18.3				25.0				25.0				24.8				23.6				23.9				20.6				23.8
Combined Ratio		105.7		%		108.5		%		106.0		%		103.3		%		102.8		%		102.9		%		106.7		%		102.9		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		83.2		%		80.2		%		78.7		%		77.1		%		77.5		%		79.2		%		82.2		%		78.4		%
Insurance Expense Ratio		18.3				25.0				25.0				24.8				23.6				23.9				20.6				23.8
Underlying Combined Ratio		101.5		%		105.2		%		103.7		%		101.9		%		101.1		%		103.1		%		102.8		%		102.2		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		101.5		%		105.2		%		103.7		%		101.9		%		101.1		%		103.1		%		102.8		%		102.2		%
Current Year Catastrophe Losses and LAE Ratio		2.2				0.3				0.4				0.5				3.9				0.1				1.5				2.0
Prior Years Non-catastrophe Losses and LAE Ratio		2.1				3.0				1.9				1.2				(2.1		)		(0.3		)		2.4				(1.2		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		—				—				(0.3		)		(0.1		)		—				—				(0.1		)
Combined Ratio as Reported		105.7		%		108.5		%		106.0		%		103.3		%		102.8		%		102.9		%		106.7		%		102.9		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Property & Casualty Insurance Segment Total Personal Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	247.5			$	192.1			$	179.1			$	202.1			$	200.1			$	207.7			$	439.6			$	407.8
Earned Premiums		$	252.6			$	189.8			$	198.0			$	205.1			$	212.0			$	216.3			$	442.4			$	428.3
Net Investment Income		10.5				8.2				10.9				11.9				12.8				11.8				18.7				24.6
Other Income		0.1				0.3				0.1				0.1				0.1				0.1				0.4				0.2
Total Revenues		263.2				198.3				209.0				217.1				224.9				228.2				461.5				453.1
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		194.0				141.1				150.0				149.8				153.1				163.1				335.1				316.2
Catastrophe Losses and LAE		5.3				0.4				0.4				1.6				9.8				0.9				5.7				10.7
Prior Years:
Non-catastrophe Losses and LAE		(1.1		)		(5.0		)		(4.7		)		(3.1		)		(11.9		)		(11.3		)		(6.1		)		(23.2		)
Catastrophe Losses and LAE		(0.2		)		(0.1		)		—				(0.3		)		(0.1		)		(0.2		)		(0.3		)		(0.3		)
Total Incurred Losses and LAE		198.0				136.4				145.7				148.0				150.9				152.5				334.4				303.4
Insurance Expenses		58.6				52.9				55.2				55.8				57.6				57.2				111.5				114.8
Operating Profit		6.6				9.0				8.1				13.3				16.4				18.5				15.6				34.9
Income Tax Expense		(0.4		)		(2.2		)		(1.7		)		(3.3		)		(4.7		)		(5.2		)		(2.6		)		(9.9		)
Segment Net Operating Income		$	6.2			$	6.8			$	6.4			$	10.0			$	11.7			$	13.3			$	13.0			$	25.0
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		76.8		%		74.4		%		75.8		%		73.0		%		72.2		%		75.4		%		75.8		%		73.8		%
Current Year Catastrophe Losses and LAE Ratio		2.1				0.2				0.2				0.8				4.6				0.4				1.3				2.5
Prior Years Non-catastrophe Losses and LAE Ratio		(0.4		)		(2.6		)		(2.4		)		(1.5		)		(5.6		)		(5.2		)		(1.4		)		(5.4		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		(0.1		)		—				(0.1		)		—				(0.1		)		(0.1		)		(0.1		)
Total Incurred Loss and LAE Ratio		78.4				71.9				73.6				72.2				71.2				70.5				75.6				70.8
Insurance Expense Ratio		23.2				27.9				27.9				27.2				27.2				26.4				25.2				26.8
Combined Ratio		101.6		%		99.8		%		101.5		%		99.4		%		98.4		%		96.9		%		100.8		%		97.6		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		76.8		%		74.4		%		75.8		%		73.0		%		72.2		%		75.4		%		75.8		%		73.8		%
Insurance Expense Ratio		23.2				27.9				27.9				27.2				27.2				26.4				25.2				26.8
Underlying Combined Ratio		100.0		%		102.3		%		103.7		%		100.2		%		99.4		%		101.8		%		101.0		%		100.6		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		100.0		%		102.3		%		103.7		%		100.2		%		99.4		%		101.8		%		101.0		%		100.6		%
Current Year Catastrophe Losses and LAE Ratio		2.1				0.2				0.2				0.8				4.6				0.4				1.3				2.5
Prior Years Non-catastrophe Losses and LAE Ratio		(0.4		)		(2.6		)		(2.4		)		(1.5		)		(5.6		)		(5.2		)		(1.4		)		(5.4		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		(0.1		)		—				(0.1		)		—				(0.1		)		(0.1		)		(0.1		)
Combined Ratio as Reported		101.6		%		99.8		%		101.5		%		99.4		%		98.4		%		96.9		%		100.8		%		97.6		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Property & Casualty Insurance Segment Commercial Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	14.5			$	14.0			$	12.3			$	13.7			$	15.3			$	14.3			$	28.5			$	29.6
Earned Premiums		$	13.5			$	13.5			$	14.0			$	14.1			$	13.6			$	13.1			$	27.0			$	26.7
Net Investment Income		1.1				1.0				0.9				0.9				1.0				1.0				2.1				2.0
Other Income		—				—				—				—				—				—				—				—
Total Revenues		14.6				14.5				14.9				15.0				14.6				14.1				29.1				28.7
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		10.0				10.8				10.4				11.5				11.6				11.1				20.8				22.7
Catastrophe Losses and LAE		0.2				—				—				0.1				0.1				—				0.2				0.1
Prior Years:
Non-catastrophe Losses and LAE		(0.6		)		(0.2		)		(1.9		)		(0.6		)		0.4				(0.5		)		(0.8		)		(0.1		)
Catastrophe Losses and LAE		—				—				—				—				—				—				—				—
Total Incurred Losses and LAE		9.6				10.6				8.5				11.0				12.1				10.6				20.2				22.7
Insurance Expenses		3.6				3.8				4.3				3.6				3.5				3.5				7.4				7.0
Operating Profit (Loss)		1.4				0.1				2.1				0.4				(1.0		)		—				1.5				(1.0		)
Income Tax Benefit (Expense)		(0.4		)		0.1				(0.6		)		(0.1		)		0.4				0.1				(0.3		)		0.5
Segment Net Operating Income (Loss)		$	1.0			$	0.2			$	1.5			$	0.3			$	(0.6	)		$	0.1			$	1.2			$	(0.5	)
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		74.0		%		80.0		%		74.3		%		81.6		%		85.4		%		84.7		%		77.1		%		85.0		%
Current Year Catastrophe Losses and LAE Ratio		1.5				—				—				0.7				0.7				—				0.7				0.4
Prior Years Non-catastrophe Losses and LAE Ratio		(4.4		)		(1.5		)		(13.6		)		(4.3		)		2.9				(3.8		)		(3.0		)		(0.4		)
Prior Years Catastrophe Losses and LAE Ratio		—				—				—				—				—				—				—				—
Total Incurred Loss and LAE Ratio		71.1				78.5				60.7				78.0				89.0				80.9				74.8				85.0
Insurance Expense Ratio		26.7				28.1				30.7				25.5				25.7				26.7				27.4				26.2
Combined Ratio		97.8		%		106.6		%		91.4		%		103.5		%		114.7		%		107.6		%		102.2		%		111.2		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		74.0		%		80.0		%		74.3		%		81.6		%		85.4		%		84.7		%		77.1		%		85.0		%
Insurance Expense Ratio		26.7				28.1				30.7				25.5				25.7				26.7				27.4				26.2
Underlying Combined Ratio		100.7		%		108.1		%		105.0		%		107.1		%		111.1		%		111.4		%		104.5		%		111.2		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		100.7		%		108.1		%		105.0		%		107.1		%		111.1		%		111.4		%		104.5		%		111.2		%
Current Year Catastrophe Losses and LAE Ratio		1.5				—				—				0.7				0.7				—				0.7				0.4
Prior Years Non-catastrophe Losses and LAE Ratio		(4.4		)		(1.5		)		(13.6		)		(4.3		)		2.9				(3.8		)		(3.0		)		(0.4		)
Prior Years Catastrophe Losses and LAE Ratio		—				—				—				—				—				—				—				—
Combined Ratio as Reported		97.8		%		106.6		%		91.4		%		103.5		%		114.7		%		107.6		%		102.2		%		111.2		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Property & Casualty Insurance Segment Total Automobile Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	262.0			$	206.1			$	191.4			$	215.8			$	215.4			$	222.0			$	468.1			$	437.4
Earned Premiums		$	266.1			$	203.3			$	212.0			$	219.2			$	225.6			$	229.4			$	469.4			$	455.0
Net Investment Income		11.6				9.2				11.8				12.8				13.8				12.8				20.8				26.6
Other Income		0.1				0.3				0.1				0.1				0.1				0.1				0.4				0.2
Total Revenues		277.8				212.8				223.9				232.1				239.5				242.3				490.6				481.8
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		204.0				151.9				160.4				161.3				164.7				174.2				355.9				338.9
Catastrophe Losses and LAE		5.5				0.4				0.4				1.7				9.9				0.9				5.9				10.8
Prior Years:
Non-catastrophe Losses and LAE		(1.7		)		(5.2		)		(6.6		)		(3.7		)		(11.5		)		(11.8		)		(6.9		)		(23.3		)
Catastrophe Losses and LAE		(0.2		)		(0.1		)		—				(0.3		)		(0.1		)		(0.2		)		(0.3		)		(0.3		)
Total Incurred Losses and LAE		207.6				147.0				154.2				159.0				163.0				163.1				354.6				326.1
Insurance Expenses		62.2				56.7				59.5				59.4				61.1				60.7				118.9				121.8
Operating Profit		8.0				9.1				10.2				13.7				15.4				18.5				17.1				33.9
Income Tax Expense		(0.8		)		(2.1		)		(2.3		)		(3.4		)		(4.3		)		(5.1		)		(2.9		)		(9.4		)
Segment Net Operating Income		$	7.2			$	7.0			$	7.9			$	10.3			$	11.1			$	13.4			$	14.2			$	24.5
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		76.6		%		74.7		%		75.6		%		73.5		%		73.0		%		75.9		%		75.8		%		74.5		%
Current Year Catastrophe Losses and LAE Ratio		2.1				0.2				0.2				0.8				4.4				0.4				1.3				2.4
Prior Years Non-catastrophe Losses and LAE Ratio		(0.6		)		(2.6		)		(3.1		)		(1.7		)		(5.1		)		(5.1		)		(1.5		)		(5.1		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		—				—				(0.1		)		—				(0.1		)		(0.1		)		(0.1		)
Total Incurred Loss and LAE Ratio		78.0				72.3				72.7				72.5				72.3				71.1				75.5				71.7
Insurance Expense Ratio		23.4				27.9				28.1				27.1				27.1				26.5				25.3				26.8
Combined Ratio		101.4		%		100.2		%		100.8		%		99.6		%		99.4		%		97.6		%		100.8		%		98.5		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		76.6		%		74.7		%		75.6		%		73.5		%		73.0		%		75.9		%		75.8		%		74.5		%
Insurance Expense Ratio		23.4				27.9				28.1				27.1				27.1				26.5				25.3				26.8
Underlying Combined Ratio		100.0		%		102.6		%		103.7		%		100.6		%		100.1		%		102.4		%		101.1		%		101.3		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		100.0		%		102.6		%		103.7		%		100.6		%		100.1		%		102.4		%		101.1		%		101.3		%
Current Year Catastrophe Losses and LAE Ratio		2.1				0.2				0.2				0.8				4.4				0.4				1.3				2.4
Prior Years Non-catastrophe Losses and LAE Ratio		(0.6		)		(2.6		)		(3.1		)		(1.7		)		(5.1		)		(5.1		)		(1.5		)		(5.1		)
Prior Years Catastrophe Losses and LAE Ratio		(0.1		)		—				—				(0.1		)		—				(0.1		)		(0.1		)		(0.1		)
Combined Ratio as Reported		101.4		%		100.2		%		100.8		%		99.6		%		99.4		%		97.6		%		100.8		%		98.5		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Property & Casualty Insurance Segment Homeowners Insurance - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	74.2			$	63.1			$	66.5			$	78.6			$	80.5			$	70.9			$	137.3			$	151.4
Earned Premiums		$	71.6			$	72.6			$	75.8			$	77.9			$	79.0			$	79.7			$	144.2			$	158.7
Net Investment Income		5.9				4.8				4.3				4.6				4.6				3.9				10.7				8.5
Other Income		—				—				—				—				0.1				—				—				0.1
Total Revenues		77.5				77.4				80.1				82.5				83.7				83.6				154.9				167.3
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		36.5				39.8				31.4				38.1				37.9				49.1				76.3				87.0
Catastrophe Losses and LAE		28.4				9.6				3.8				12.3				50.4				14.3				38.0				64.7
Prior Years:
Non-catastrophe Losses and LAE		0.1				(0.4		)		(0.7		)		1.5				(1.6		)		(0.7		)		(0.3		)		(2.3		)
Catastrophe Losses and LAE		(2.1		)		(2.2		)		(0.8		)		(6.0		)		(4.4		)		(2.1		)		(4.3		)		(6.5		)
Total Incurred Losses and LAE		62.9				46.8				33.7				45.9				82.3				60.6				109.7				142.9
Insurance Expenses		22.9				23.0				24.0				24.1				25.1				25.4				45.9				50.5
Operating Profit (Loss)		(8.3		)		7.6				22.4				12.5				(23.7		)		(2.4		)		(0.7		)		(26.1		)
Income Tax Benefit (Expense)		3.6				(2.1		)		(7.3		)		(3.9		)		8.7				1.2				1.5				9.9
Segment Net Operating Income (Loss)		$	(4.7	)		$	5.5			$	15.1			$	8.6			$	(15.0	)		$	(1.2	)		$	0.8			$	(16.2	)
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		50.9		%		54.9		%		41.5		%		48.9		%		48.0		%		61.6		%		52.9		%		54.7		%
Current Year Catastrophe Losses and LAE Ratio		39.7				13.2				5.0				15.8				63.8				17.9				26.4				40.8
Prior Years Non-catastrophe Losses and LAE Ratio		0.1				(0.6		)		(0.9		)		1.9				(2.0		)		(0.9		)		(0.2		)		(1.4		)
Prior Years Catastrophe Losses and LAE Ratio		(2.9		)		(3.0		)		(1.1		)		(7.7		)		(5.6		)		(2.6		)		(3.0		)		(4.1		)
Total Incurred Loss and LAE Ratio		87.8				64.5				44.5				58.9				104.2				76.0				76.1				90.0
Insurance Expense Ratio		32.0				31.7				31.7				30.9				31.8				31.9				31.8				31.8
Combined Ratio		119.8		%		96.2		%		76.2		%		89.8		%		136.0		%		107.9		%		107.9		%		121.8		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		50.9		%		54.9		%		41.5		%		48.9		%		48.0		%		61.6		%		52.9		%		54.7		%
Insurance Expense Ratio		32.0				31.7				31.7				30.9				31.8				31.9				31.8				31.8
Underlying Combined Ratio		82.9		%		86.6		%		73.2		%		79.8		%		79.8		%		93.5		%		84.7		%		86.5		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		82.9		%		86.6		%		73.2		%		79.8		%		79.8		%		93.5		%		84.7		%		86.5		%
Current Year Catastrophe Losses and LAE Ratio		39.7				13.2				5.0				15.8				63.8				17.9				26.4				40.8
Prior Years Non-catastrophe Losses and LAE Ratio		0.1				(0.6		)		(0.9		)		1.9				(2.0		)		(0.9		)		(0.2		)		(1.4		)
Prior Years Catastrophe Losses and LAE Ratio		(2.9		)		(3.0		)		(1.1		)		(7.7		)		(5.6		)		(2.6		)		(3.0		)		(4.1		)
Combined Ratio as Reported		119.8		%		96.2		%		76.2		%		89.8		%		136.0		%		107.9		%		107.9		%		121.8		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Property & Casualty Insurance Segment Other Personal Lines - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Net Premiums Written		$	12.0			$	10.5			$	11.2			$	12.6			$	12.8			$	11.4			$	22.5			$	24.2
Earned Premiums		$	11.7			$	11.7			$	12.2			$	12.6			$	12.9			$	13.2			$	23.4			$	26.1
Net Investment Income		1.1				0.8				1.0				1.1				1.1				0.9				1.9				2.0
Other Income		—				—				—				—				—				—				—				—
Total Revenues		12.8				12.5				13.2				13.7				14.0				14.1				25.3				28.1
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE		5.0				6.8				6.8				7.4				6.8				7.1				11.8				13.9
Catastrophe Losses and LAE		1.5				0.3				0.2				0.2				1.6				0.8				1.8				2.4
Prior Years:
Non-catastrophe Losses and LAE		0.2				0.6				(0.8		)		(1.1		)		(1.4		)		(0.2		)		0.8				(1.6		)
Catastrophe Losses and LAE		(0.1		)		0.1				—				(0.9		)		(0.6		)		(0.4		)		—				(1.0		)
Total Incurred Losses and LAE		6.6				7.8				6.2				5.6				6.4				7.3				14.4				13.7
Insurance Expenses		3.2				3.4				3.6				3.6				3.6				3.6				6.6				7.2
Operating Profit		3.0				1.3				3.4				4.5				4.0				3.2				4.3				7.2
Income Tax Expense		(0.9		)		(0.4		)		(1.1		)		(1.5		)		(1.3		)		(1.0		)		(1.3		)		(2.3		)
Segment Net Operating Income		$	2.1			$	0.9			$	2.3			$	3.0			$	2.7			$	2.2			$	3.0			$	4.9
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio		42.8		%		58.1		%		55.8		%		58.6		%		52.8		%		53.7		%		50.4		%		53.2		%
Current Year Catastrophe Losses and LAE Ratio		12.8				2.6				1.6				1.6				12.4				6.1				7.7				9.2
Prior Years Non-catastrophe Losses and LAE Ratio		1.7				5.1				(6.6		)		(8.7		)		(10.9		)		(1.5		)		3.4				(6.1		)
Prior Years Catastrophe Losses and LAE Ratio		(0.9		)		0.9				—				(7.1		)		(4.7		)		(3.0		)		—				(3.8		)
Total Incurred Loss and LAE Ratio		56.4				66.7				50.8				44.4				49.6				55.3				61.5				52.5
Insurance Expense Ratio		27.4				29.1				29.5				28.6				27.9				27.3				28.2				27.6
Combined Ratio		83.8		%		95.8		%		80.3		%		73.0		%		77.5		%		82.6		%		89.7		%		80.1		%
Underlying Combined Ratio 1
Current Year Non-catastrophe Losses and LAE Ratio		42.8		%		58.1		%		55.8		%		58.6		%		52.8		%		53.7		%		50.4		%		53.2		%
Insurance Expense Ratio		27.4				29.1				29.5				28.6				27.9				27.3				28.2				27.6
Underlying Combined Ratio		70.2		%		87.2		%		85.3		%		87.2		%		80.7		%		81.0		%		78.6		%		80.8		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio		70.2		%		87.2		%		85.3		%		87.2		%		80.7		%		81.0		%		78.6		%		80.8		%
Current Year Catastrophe Losses and LAE Ratio		12.8				2.6				1.6				1.6				12.4				6.1				7.7				9.2
Prior Years Non-catastrophe Losses and LAE Ratio		1.7				5.1				(6.6		)		(8.7		)		(10.9		)		(1.5		)		3.4				(6.1		)
Prior Years Catastrophe Losses and LAE Ratio		(0.9		)		0.9				—				(7.1		)		(4.7		)		(3.0		)		—				(3.8		)
Combined Ratio as Reported		83.8		%		95.8		%		80.3		%		73.0		%		77.5		%		82.6		%		89.7		%		80.1		%
1 Underlying Combined Ratio is a non-GAAP measure, which is computed as the difference between three operating ratios: the combined ratio, the effect of catastrophes (excluding development of prior-year catastrophes) on the combined ratio and the effect of prior-year reserve development at the reporting date (including development on prior-year catastrophes) on the combined ratio.

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Kemper Corporation Life & Health Insurance Segment - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Results of Operations
Earned Premiums:
Life		$	96.0			$	88.0			$	96.0			$	96.8			$	97.2			$	97.6			$	184.0			$	194.8
Accident and Health		35.7				36.8				36.5				37.1				36.2				38.8				72.5				75.0
Property		19.0				18.9				19.0				19.2				19.4				18.9				37.9				38.3
Total Earned Premiums		150.7				143.7				151.5				153.1				152.8				155.3				294.4				308.1
Net Investment Income		53.5				50.4				71.3				49.2				48.0				50.2				103.9				98.2
Other Income		0.2				0.8				0.5				0.4				—				—				1.0				—
Total Revenues		204.4				194.9				223.3				202.7				200.8				205.5				399.3				406.3
Policyholders’ Benefits and Incurred Losses and LAE		98.0				96.1				91.7				89.9				95.8				97.0				194.1				192.8
Insurance Expenses		84.2				74.0				80.4				81.4				80.3				73.9				158.2				154.2
Operating Profit		22.2				24.8				51.2				31.4				24.7				34.6				47.0				59.3
Income Tax Expense		(7.9		)		(8.7		)		(17.7		)		(11.1		)		(8.8		)		(12.5		)		(16.6		)		(21.3		)
Segment Net Operating Income		$	14.3			$	16.1			$	33.5			$	20.3			$	15.9			$	22.1			$	30.4			$	38.0

 

		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014
Insurance Reserves:
Future Policyholder Benefits		$	3,255.7			$	3,238.9			$	3,214.7			$	3,202.5			$	3,189.5			$	3,173.8
Incurred Losses and LAE Reserves:
Life		37.5				40.2				38.8				38.7				39.4				42.6
Accident and Health		19.6				20.4				20.2				19.6				20.1				21.3
Property		5.2				3.7				4.5				4.3				5.3				5.6
Total Incurred Losses and LAE Reserves		62.3				64.3				63.5				62.6				64.8				69.5
Insurance Reserves		$	3,318.0			$	3,303.2			$	3,278.2			$	3,265.1			$	3,254.3			$	3,243.3

 

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Kemper Corporation Details of Investment Performance (Dollars in Millions)
		Three Months Ended																								Six Months Ended
		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Net Investment Income
Interest and Dividends on Fixed Maturities		$	58.3			$	59.5			$	57.4			$	56.1			$	56.9			$	57.0			$	117.8			$	113.9
Dividends on Equity Securities		8.7				7.7				34.1				7.7				10.8				7.3				16.4				18.1
Equity Method Limited Liability Investments		4.2				(0.7		)		(0.7		)		4.9				1.3				3.5				3.5				4.8
Fair Value Option Investments		1.8				0.9				(1.3		)		0.3				0.3				—				2.7				0.3
Short-term Investments		0.1				—				0.1				0.1				0.2				0.2				0.1				0.4
Real Estate		3.0				2.9				2.9				3.1				2.9				3.2				5.9				6.1
Loans to Policyholders		5.1				5.3				5.2				5.2				5.0				5.1				10.4				10.1
Other		—				—				0.1				—				—				—				—				—
Total Investment Income		81.2				75.6				97.8				77.4				77.4				76.3				156.8				153.7
Investment Expenses:
Real Estate		2.9				2.7				2.7				3.1				2.7				2.8				5.6				5.5
Other Investment Expenses		1.6				2.3				2.0				2.0				2.1				2.4				3.9				4.5
Total Investment Expenses		4.5				5.0				4.7				5.1				4.8				5.2				9.5				10.0
Net Investment Income		$	76.7			$	70.6			$	93.1			$	72.3			$	72.6			$	71.1			$	147.3			$	143.7
Net Realized Gains on Sales of Investments
Fixed Maturities:
Gains on Sales		$	3.9			$	2.0			$	2.0			$	0.2			$	0.4			$	4.4			$	5.9			$	4.8
Losses on Sales		(0.5		)		(0.1		)		(0.2		)		—				—				—				(0.6		)		—
Equity Securities:
Gains on Sales		31.4				1.5				21.4				7.9				3.0				0.8				32.9				3.8
Losses on Sales		(0.7		)		—				(2.0		)		—				—				—				(0.7		)		—
Real Estate:
Losses on Sales		—				—				—				—				—				(0.2		)		—				(0.2		)
Other Investments:
Gain on Sale of Subsidiary		—				—				—				—				—				1.6				—				1.6
Losses on Sales		(0.1		)		—				—				—				(0.1		)		—				(0.1		)		(0.1		)
Trading Securities Net Gains (Losses)		—				—				(0.2		)		(0.1		)		0.2				—				—				0.2
Net Realized Gains on Sales of Investments		$	34.0			$	3.4			$	21.0			$	8.0			$	3.5			$	6.6			$	37.4			$	10.1
Net Impairment Losses Recognized in Earnings
Fixed Maturities		$	(1.6	)		$	(2.4	)		$	(0.1	)		$	(2.2	)		$	(3.1	)		$	(0.3	)		$	(4.0	)		$	(3.4	)
Equity Securities		(0.6		)		(4.6		)		(4.0		)		(1.6		)		(1.0		)		(0.5		)		(5.2		)		(1.5		)
Real Estate		—				—				(2.4		)		—				—				—				—				—
Net Impairment Losses Recognized in Earnings		$	(2.2	)		$	(7.0	)		$	(6.5	)		$	(3.8	)		$	(4.1	)		$	(0.8	)		$	(9.2	)		$	(4.9	)

 

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Kemper Corporation Details of Invested Assets (Dollars in Millions) (Unaudited)
		Jun 30, 2015							Dec 31, 2014							Dec 31, 2013
		Carrying Value				Percent of Total1			Carrying Value				Percent of Total1			Carrying Value				Percent of Total1
Fixed Maturities Reported at Fair Value:
U.S. Government and Government Agencies and Authorities		$	341.2			5.3	%		$	345.5			5.4	%		$	362.2			5.9	%
States and Political Subdivisions		1,531.3				23.7			1,477.1				22.9			1,361.0				22.1
Corporate Securities:
Bonds and Notes		2,810.2				43.6			2,878.5				44.7			2,793.7				45.4
Redeemable Preferred Stocks		5.4				0.1			6.7				0.1			7.4				0.1
Collaterized Loan Obligations		70.4				1.1			64.4				1.0			44.7				0.7
Other Mortgage- and Asset-backed		5.5				0.1			5.4				0.1			6.0				0.1
Subtotal Fixed Maturities Reported at Fair Value		4,764.0				73.9			4,777.6				74.2			4,575.0				74.3
Equity Securities Reported at Fair Value:
Preferred Stocks		112.1				1.7			109.5				1.7			110.2				1.8
Common Stocks		38.8				0.6			133.8				2.1			189.5				3.1
Other Equity Interests:
Exchange Traded Funds		212.1				3.3			202.7				3.1			124.9				2.0
Limited Liability Companies and Limited Partnerships		199.9				3.1			186.2				2.9			173.9				2.8
Subtotal Equity Securities Reported at Fair Value		562.9				8.7			632.2				9.8			598.5				9.7
Equity Method Limited Liability Investments		173.5				2.7			184.8				2.9			245.1				4.0
Fair Value Option Investments		160.0				2.5			53.3				0.8			—				—
Short-term Investments at Cost which Approximates Fair Value		338.4				5.2			342.2				5.3			284.7				4.6
Other Investments:
Loans to Policyholders at Unpaid Principal		284.8				4.4			283.4				4.4			275.4				4.5
Real Estate at Depreciated Cost		159.1				2.5			160.9				2.5			167.1				2.7
Trading Securities at Fair Value		5.0				0.1			4.9				0.1			5.0				0.1
Other		2.1				—			0.4				—			0.5				—
Subtotal Other Investments		451.0				7.0			449.6				7.0			448.0				7.3
Total Investments		$	6,449.8			100.0	%		$	6,439.7			100.0	%		$	6,151.3			100.0	%
S&P Equivalent Rating for Fixed Maturities
AAA, AA, A		$	3,241.2			68.0	%		$	3,249.3			68.0	%		$	3,128.1			68.4	%
BBB		1,078.0				22.6			1,156.4				24.2			1,119.9				24.5
BB, B		211.0				4.4			166.7				3.5			144.6				3.1
CCC or Lower		233.8				4.9			205.2				4.3			182.4				4.0
Total Investments in Fixed Maturities		$	4,764.0			100.0	%		$	4,777.6			100.0	%		$	4,575.0			100.0	%
Duration (in Years)
Total Investments in Fixed Maturities		6.6							6.9							6.8
1 Sum of percentages for individual lines may not equal subtotals and grand total due to rounding.

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Kemper Corporation Investment Concentration (Dollars in Millions) (Unaudited)
		Jun 30, 2015							Dec 31, 2014							Dec 31, 2013
Fair Value of Non-governmental Fixed Maturities by Industry		Amount				Percent of Total Investments			Amount				Percent of Total Investments			Amount				Percent of Total Investments
Manufacturing		$	1,175.9			18.2	%		$	1,247.4			19.4	%		$	1,196.9			19.5	%
Finance, Insurance and Real Estate		713.6				11.1			785.6				12.2			767.9				12.5
Services		358.7				5.6			305.0				4.7			277.5				4.5
Transportation, Communication and Utilities		330.6				5.1			312.9				4.9			306.7				5.0
Mining		143.4				2.2			139.7				2.2			143.1				2.3
Wholesale Trade		74.6				1.2			69.7				1.1			60.7				1.0
Retail Trade		74.6				1.2			74.5				1.2			75.6				1.2
Agriculture, Forestry and Fishing		15.9				0.2			15.3				0.2			18.8				0.3
Other		4.2				0.1			4.9				0.1			4.6				0.1
Total Fair Value of Non-governmental Fixed Maturities		$	2,891.5			44.9	%		$	2,955.0			46.0	%		$	2,851.8			46.4	%

 

				Jun 30, 2015
Ten Largest Investment Exposures 1				Fair Value				Percent of Total Investments
Fixed Maturities:
States and Political Subdivisions:
Texas				$	85.5			1.3	%
Ohio				74.8				1.2
Michigan				71.9				1.1
Georgia				71.2				1.1
Florida				65.6				1.0
Colorado				63.3				1.0
Wisconsin				58.7				0.9
Louisiana				54.7				0.8
Equity Securities - Other Equity Interests:
Vanguard Total Stock Market ETF				88.8				1.4
iShares® Core S&P 500 ETF				71.2				1.1
Total				$	705.7			10.9	%

 

1	Excluding Investments in U.S. Government and Government Agencies and Authorities and Obligations of States and Political Subdivisions pre-refunded with U.S. government and government agencies obligations held in Trust at June 30, 2015.

 

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Kemper Corporation Municipal Bonds (excluding Pre-refunded Bonds) (Dollars in Millions) (Unaudited)
		Jun 30, 2015
		State General Obligation				Political Subdivision General Obligation				Revenue				Total Fair Value				Percent of Total Muni Bond1			Percent of Total Investments1
Texas		$	17.7			$	19.3			$	48.5			$	85.5			6.0	%		1.3	%
Ohio		40.0				4.9				29.9				74.8				5.3			1.2
Michigan		37.0				—				34.9				71.9				5.1			1.1
Georgia		51.0				7.1				13.1				71.2				5.0			1.1
Florida		49.4				—				16.2				65.6				4.6			1.0
Colorado		—				15.9				47.4				63.3				4.5			1.0
Wisconsin		50.4				6.9				1.4				58.7				4.1			0.9
Louisiana		24.9				4.3				25.5				54.7				3.9			0.8
Arkansas		52.1				—				—				52.1				3.7			0.8
New York		6.2				2.6				41.9				50.7				3.6			0.8
Washington		18.1				0.3				31.5				49.9				3.5			0.8
North Carolina		17.5				3.3				23.1				43.9				3.1			0.7
Oregon		40.1				—				1.1				41.2				2.9			0.6
Massachusetts		2.7				1.5				30.3				34.5				2.4			0.5
Minnesota		26.4				0.4				5.5				32.3				2.3			0.5
Utah		16.6				1.6				14.0				32.2				2.3			0.5
Virginia		—				19.4				11.3				30.7				2.2			0.5
Connecticut		24.2				—				5.3				29.5				2.1			0.5
Nevada		22.2				7.2				—				29.4				2.1			0.5
Indiana		—				—				27.9				27.9				2.0			0.4
Delaware		17.4				—				9.2				26.6				1.9			0.4
Maryland		0.6				21.4				3.5				25.5				1.8			0.4
New Jersey		—				5.4				19.6				25.0				1.8			0.4
California		0.3				—				24.7				25.0				1.8			0.4
Pennsylvania		11.5				2.7				10.4				24.6				1.7			0.4
South Carolina		20.0				3.1				—				23.1				1.6			0.4
Tennessee		4.4				7.3				9.7				21.4				1.5			0.3
Missouri		—				—				18.5				18.5				1.3			0.3
Iowa		—				—				17.2				17.2				1.2			0.3
District of Columbia		—				4.9				12.0				16.9				1.2			0.3
Illinois		2.6				5.1				9.0				16.7				1.2			0.3
Idaho		—				10.6				5.3				15.9				1.1			0.2
Rhode Island		10.7				—				5.1				15.8				1.1			0.2
Kentucky		—				—				15.2				15.2				1.1			0.2
Hawaii		15.0				—				—				15.0				1.1			0.2
Alabama		6.1				—				8.7				14.8				1.0			0.2
Arizona		—				0.8				13.7				14.5				1.0			0.2
New Mexico		—				—				13.0				13.0				0.9			0.2
Nebraska		—				6.6				5.3				11.9				0.8			0.2
All Other States		21.6				—				39.9				61.5				4.3			1.0
Total (1)		$	606.7			$	162.6			$	648.8			$	1,418.1			100.0	%		22.0	%
1 Sum of percentages for individual lines may not equal total due to rounding.

 

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Kemper Corporation Investments in Limited Liability Companies and Limited Partnerships (Dollars in Millions) (Unaudited)
		Unfunded Commitment				Reported Value
Asset Class		Jun 30, 2015				Jun 30, 2015				Dec 31, 2014
Reported as Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings:
Distressed Debt		$	—			$	82.2			$	93.0
Secondary Transactions		17.9				43.9				48.9
Mezzanine Debt		26.0				26.0				27.0
Senior Debt		3.4				9.0				5.0
Growth Equity		—				4.9				5.3
Leveraged Buyout		0.1				4.8				3.9
Other		—				2.7				1.7
Total Equity Method Limited Liability Investments		47.4				173.5				184.8
Reported as Other Equity Interests at Fair Value:
Mezzanine Debt		62.0				73.4				69.7
Senior Debt		21.8				31.7				21.4
Distressed Debt		6.5				18.1				18.2
Secondary Transactions		11.4				13.5				15.6
Hedge Fund		—				9.4				9.1
Leveraged Buyout		2.0				6.3				8.0
Other		1.6				47.5				44.2
Total Reported as Other Equity Interests at Fair Value		105.3				199.9				186.2
Reported as Fair Value Option Investments:
Hedge Fund		—				160.0				53.3
Total Investments in Limited Liability Companies and Limited Partnerships		$	152.7			$	533.4			$	424.3

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Kemper Corporation

Definitions of Non-GAAP Financial Measures

The Company believes that investors’ understanding of Kemper’s performance is enhanced by the disclosure of the following non-GAAP financial measures. The methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities, is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains on fixed income securities by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. The Company uses the trend in book value per share, excluding the after-tax impact of net unrealized gains on fixed income securities in conjunction with book value per share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes the non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management. The Company believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. 

Book Value Per Share Excluding Goodwill, is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the recorded Goodwill asset by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. Book Value Per Share Excluding Goodwill, also referred to as Tangible Book Value Per Share, is a common measure used by analysts and investors to compare similar companies.

Consolidated Net Operating Income is an after-tax, non-GAAP financial measure and is computed by excluding from Income from Continuing Operations the after-tax impact of:

1) Net Realized Gains on Sales of Investments;

2) Net Impairment Losses Recognized in Earnings related to investments;

3) Loss from Early Extinguishment of Debt; and

4) Significant non-recurring or infrequent items that may not be indicative of ongoing operations.

Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is Income from Continuing Operations.

The Company believes that Consolidated Net Operating Income provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. Net Realized Gains on Sales of Investments and Net Impairment Losses Recognized in Earnings related to investments included in the Company’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the Company’s investments, the timing of which is unrelated to the insurance underwriting process. Loss from Early Extinguishment of Debt 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. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.

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Kemper Corporation

Definitions of Non-GAAP Financial Measures (continued)

A reconciliation of Consolidated Net Operating Income to Income from Continuing Operations is presented below:

		Three Months Ended																								Six Months Ended
Dollars in Millions (Unaudited)		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Consolidated Net Operating Income		$	6.7			$	21.8			$	53.9			$	2.1			$	9.6			$	31.5			$	28.5			$	41.1
Net Income (Loss) From:
Net Realized Gains on Sales of Investments		22.1				2.2				13.6				5.2				2.4				4.2				24.3				6.6
Net Impairment Losses Recognized in Earnings		(1.4		)		(4.6		)		(4.2		)		(2.5		)		(2.7		)		(0.5		)		(6.0		)		(3.2		)
Loss from Early Extinguishment of Debt		—				(5.9		)		—				—				—				—				(5.9		)		—
Income from Continuing Operations		$	27.4			$	13.5			$	63.3			$	4.8			$	9.3			$	35.2			$	40.9			$	44.5

Consolidated Net Operating Income Per Unrestricted Share is a non-GAAP financial measure. It is computed by dividing Consolidated Net Operating Income by the weighted average unrestricted shares outstanding. The most directly comparable GAAP financial measure is Income from Continuing Operations Per Unrestricted Share‐basic.

A reconciliation of Consolidated Net Operating Income Per Unrestricted Share-basic to Income from Continuing Operations Per Unrestricted Share-basic is presented below:

		Three Months Ended																								Six Months Ended
(Unaudited)		Jun 30, 2015				Mar 31, 2015				Dec 31, 2014				Sep 30, 2014				Jun 30, 2014				Mar 31, 2014				Jun 30, 2015				Jun 30, 2014
Consolidated Net Operating Income Per Unrestricted Share		$	0.13			$	0.42			$	1.02			$	0.04			$	0.18			$	0.56			$	0.55			$	0.74
Net Income (Loss) Per Unrestricted Share From:
Net Realized Gains on Sales of Investments		0.43				0.04				0.26				0.10				0.04				0.08				0.47				0.12
Net Impairment Losses Recognized in Earnings		(0.03		)		(0.09		)		(0.08		)		(0.05		)		(0.05		)		(0.01		)		(0.12		)		(0.06		)
Loss from Early Extinguishment of Debt		—				(0.11		)		—				—				—				—				(0.11		)		—
Income from Continuing Operations Per Unrestricted Share		$	0.53			$	0.26			$	1.20			$	0.09			$	0.17			$	0.63			$	0.79			$	0.80

Underlying Combined Ratio is a non-GAAP financial measure. It is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense (including write-offs of long-lived assets) Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding total incurred losses and LAE, including the impact of catastrophe losses and loss and LAE reserve development from prior years with the Insurance Expense (including write-offs of long-lived assets) Ratio. The Company believes the underlying combined ratio is useful to investors and is used by management to reveal the trends in the Company’s property and casualty insurance businesses that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses cause loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of our 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. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business. 

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