KEMPER CORPORATION PARENT COMPANY BALANCE SHEETS (Dollars in Millions) | | | | | | | | | | | | | | | | | December 31, | | | 2025 | | 2024 | | ASSETS | | | | | | Investments in Subsidiaries | | $ | 3,544.0 | | | $ | 3,773.8 | | Fixed Maturities at Fair Value (Amortized Cost: 2025 – $0.5; 2024 - $0.5) | | 0.5 | | | 0.5 | | Equity Securities at Fair Value (Cost: 2025 - $13.8; 2024 - $12.8) | | 11.9 | | | 10.9 | | | | | | | | | | | | | Equity Method Limited Liability Investments | | 17.0 | | | — | | | Short-term Investments | | 118.0 | | | 453.8 | | | Other Investments | | 36.0 | | | 22.2 | | | Cash | | 48.0 | | | 2.3 | | | Other Receivables | | 23.8 | | | 60.9 | | | | | | | | Current Income Taxes | | — | | | 54.3 | | | Right-of-Use Assets | | 6.7 | | | 7.2 | | | Other Assets | | 11.3 | | | 13.1 | | | Total Assets | | $ | 3,817.2 | | | $ | 4,399.0 | | | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | Senior Notes Payable, 4.350% due 2025 (Fair Value: 2025 – $—; 2024 – $448.1) | | $ | — | | | $ | 449.9 | | Senior Notes Payable, 2.400% due 2030 (Fair Value: 2025 – $358.1; 2024 – $338.9) | | 397.9 | | | 397.5 | | Senior Notes Payable, 3.800% due 2032 (Fair Value: 2025 - $369.4; 2024 - $352.2) | | 396.9 | | | 396.5 | | Fixed-Rate Reset Junior Subordinated Debentures, 5.875% due 2062 (Fair Value: 2025 - $140.4; 2024 - $139.2) | | 148.7 | | | 147.7 | | | Current Income Tax Liability | | 27.2 | | | — | | | Deferred Income Tax Liability | | 114.6 | | | 137.0 | | | Liabilities for Benefit Plans | | 30.9 | | | 32.1 | | | Right-of-Use Liabilities | | 19.6 | | | 21.3 | | | Accrued Expenses and Other Liabilities | | — | | | 28.6 | | | Total Liabilities | | 1,135.8 | | | 1,610.6 | | | Shareholders’ Equity: | | | | | | Common Stock | | 5.9 | | | 6.4 | | | Additional Paid-in Capital | | 1,723.9 | | | 1,854.9 | | | Retained Earnings | | 1,157.8 | | | 1,231.6 | | Accumulated Other Comprehensive Loss | | (206.2) | | | (304.5) | | | | | | | | | | | | | Total Shareholders’ Equity | | 2,681.4 | | | 2,788.4 | | | Total Liabilities and Shareholders’ Equity | | $ | 3,817.2 | | | $ | 4,399.0 | |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION PARENT COMPANY STATEMENTS OF INCOME (LOSS) (Dollars in Millions) | | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, | | | | 2025 | | 2024 | | 2023 | | Net Investment Income | | $ | (0.8) | | | $ | 15.9 | | | $ | 8.6 | | | Change in Fair Value of Equity Securities | | — | | | (0.2) | | | (1.5) | | Net Realized Investment Losses | | (0.9) | | | (10.6) | | | (11.9) | | | Impairment Losses | | (0.1) | | | — | | | (0.4) | | | | | | | | | | Total Revenues | | (1.8) | | | 5.1 | | | (5.2) | | | Interest Expense | | 40.5 | | | 58.1 | | | 56.7 | | | | | | | | | | Pension Settlement Expense | | — | | | (2.6) | | | 70.2 | | Other Operating Expenses | | 5.5 | | | 12.7 | | | 6.1 | | | Total Operating Expenses | | 46.0 | | | 68.2 | | | 133.0 | | Loss before Income Taxes and Equity in Net Income (Loss) of Subsidiaries | | (47.8) | | | (63.1) | | | (138.2) | | Income Tax Benefit | | (2.9) | | | (8.8) | | | (28.4) | | Loss before Equity in Net Income (Loss) of Subsidiaries | | (44.9) | | | (54.3) | | | (109.8) | | Equity in Net Income (Loss) of Subsidiaries | | 188.2 | | | 372.1 | | | (162.5) | | | Net Income (Loss) | | 143.3 | | | 317.8 | | | (272.3) | | Less: Net Loss attributable to Noncontrolling Interest | | — | | | — | | | (0.2) | | Net Income (Loss) attributable to Kemper Corporation | | $ | 143.3 | | | $ | 317.8 | | | $ | (272.1) | |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Dollars in Millions) | | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, | | | | 2025 | | 2024 | | 2023 | Net Income (Loss) | | $ | 143.3 | | | $ | 317.8 | | | $ | (272.3) | | Other Comprehensive Income: | | | | | | | | Changes in Net Unrealized Gains (Losses) on Investment Securities: | | | | | | | | Having No Credit Losses Recognized in Consolidated Statements of Loss: | | | | | | | | Securities Held by Subsidiaries | | 160.7 | | | (210.5) | | | 235.0 | | | Securities Held by Parent | | — | | | 0.6 | | | (0.6) | | | Having Credit Losses Recognized in Consolidated Statements of Loss: | | | | | | | | Securities Held by Subsidiaries | | 0.3 | | | (0.6) | | | (0.5) | | | | | | | | | | Reclassification Adjustment for Securities Having No Credit Losses Included in Net Loss: | | | | | | | | Securities Held by Subsidiaries | | 1.6 | | | 8.8 | | | 4.5 | | | Securities Held by Parent | | — | | | 2.4 | | | (0.1) | | | Reclassification Adjustment for Securities Having Credit Losses Included in Net Loss: | | | | | | | | Securities Held by Subsidiaries | | — | | | (0.7) | | | — | | | | | | | | | | Unrecognized Postretirement Benefit Costs Arising During the Year: | | | | | | | | Subsidiaries | | — | | | 0.5 | | | 0.1 | | | Parent | | (0.9) | | | 1.3 | | | (7.4) | | | Reclassification Adjustment for Postretirement Benefit Costs Arising During the Year: | | | | | | | | Subsidiaries | | (0.4) | | | (0.3) | | | (0.3) | | | Parent | | (1.7) | | | (2.8) | | | 66.8 | | | Unrecognized Gain (Loss) on Cash Flow Hedges Arising During the Year: | | | | | | | | Subsidiaries | | 1.5 | | | (6.3) | | | — | | | Parent | | — | | | — | | | — | | | Reclassification Adjustment for Gain (Loss) on Cash Flow Hedges Arising During the Year: | | | | | | | | Subsidiaries | | 0.3 | | | — | | | — | | | Parent | | (0.5) | | | 0.9 | | | (0.2) | | | Change in Discount Rate on Future Life Policyholder Benefits | | (37.3) | | | 278.0 | | | (101.7) | | Other Comprehensive Income Before Income Taxes | | 123.6 | | | 71.3 | | | 195.6 | | Income Tax Expense: | | | | | | | | Changes in Net Unrealized (Losses) Gains on Investment Securities: | | | | | | | | Having No Credit Losses Recognized in Consolidated Statements of Loss: | | | | | | | | Securities Held by Subsidiaries | | 33.7 | | | (44.2) | | | 49.5 | | | Securities Held by Parent | | — | | | 0.1 | | | (0.1) | | | Having Credit Losses Recognized in Consolidated Statements of Loss: | | | | | | | | Securities Held by Subsidiaries | | 0.1 | | | (0.3) | | | (0.2) | | | | | | | | | | Reclassification Adjustment for Securities Having No Credit Losses Included in Net Loss: | | | | | | | | Securities Held by Subsidiaries | | 0.3 | | | 1.8 | | | 1.0 | | | Securities Held by Parent | | — | | | 0.5 | | | (0.1) | | | Reclassification Adjustment for Securities Having Credit Losses Included in Net Loss: | | | | | | | | Securities Held by Subsidiaries | | — | | | (0.3) | | | — | | | | | | | | | | Unrecognized Postretirement Benefit Costs Arising During the Year: | | | | | | | | Subsidiaries | | — | | | 0.1 | | | — | | | Parent | | (0.2) | | | 0.3 | | | (1.3) | | | Reclassification Adjustment for Postretirement Benefit Costs Arising During the Year: | | | | | | | | Subsidiaries | | (0.1) | | | — | | | (0.2) | | | Parent | | (0.4) | | | (0.6) | | | 14.0 | | | Unrecognized Gain (Loss) on Cash Flow Hedges Arising During the Year: | | | | | | | | Subsidiaries | | (0.3) | | | (0.9) | | | — | | | | | | | | | | Reclassification Adjustment for Gain (Loss) on Cash Flow Hedges Arising During the Year: | | | | | | | | Subsidiaries | | 0.1 | | | — | | | — | | | Parent | | (0.1) | | | 0.2 | | | 0.1 | | | Change in Discount Rate on Future Life Policyholder Benefits | | (7.8) | | | 58.3 | | | (21.2) | | Income Tax Expense | | 25.3 | | | 15.0 | | | 41.5 | | | Other Comprehensive Income (Loss) | | 98.3 | | | 56.3 | | | 154.1 | | Total Comprehensive Income (Loss) | | $ | 241.6 | | | $ | 374.1 | | | $ | (118.2) | | | Less: Total Comprehensive Loss attributable to Noncontrolling Interest | | — | | | — | | | (0.2) | | | Total Comprehensive Income (Loss) attributable to Kemper Corporation | | $ | 241.6 | | | $ | 374.1 | | | $ | (118.0) | |
See Accompanying Report of Independent Registered Public Accounting Firm.KEMPER CORPORATION PARENT COMPANY STATEMENTS OF CASH FLOWS (Dollars in Millions) | | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended December 31, | | | | 2025 | | 2024 | | 2023 | | Operating Activities: | | | | | | | Net Income (Loss) | | $ | 143.3 | | | $ | 317.8 | | | $ | (272.3) | | Adjustment Required to Reconcile Net Income (Loss) to Net Cash Provided by Operations: | | | | | | | | Equity in Net Loss (Income) of Subsidiaries | | (188.2) | | | (372.1) | | | 162.5 | | | Cash Dividends from Subsidiaries | | 498.5 | | | 245.4 | | | 320.8 | | | | | | | | | Net Realized Investment Losses | | 0.9 | | | 10.6 | | | 11.9 | | Settlement Related to Defined Benefit Pension Plan | | — | | | (2.6) | | | 70.2 | | | | | | | | | | Impairment Losses | | 0.1 | | | — | | | 0.4 | | | | | | | | | Income from Change in Fair Value of Equity Securities | | — | | | 0.2 | | | 1.5 | | Other | | 139.2 | | | 31.9 | | | (30.6) | | Net Cash Provided by Operating Activities | | 593.8 | | | 231.2 | | | 264.4 | | | Investing Activities: | | | | | | | | Capital Contributed to Subsidiaries | | (3.7) | | | — | | | (177.5) | | | | | | | | | Contribution to Non-Controlling Interest | | (14.0) | | | (18.0) | | | (4.0) | | | | | | | | | | Proceeds from the Sales, Calls and Maturities of Fixed Maturities | | — | | | 35.3 | | | 50.8 | | | Proceeds from the Sales or Paydowns of Investments: | | | | | | | | Equity Securities | | 1.7 | | | 2.7 | | | 14.8 | | | Purchases of Investments: | | | | | | | | | | | | | | | Equity Securities | | (2.7) | | | (3.8) | | | (2.1) | | Net (Purchases) Sales of Short-term Investments | | 298.4 | | | (126.3) | | | (112.2) | | | | | | | | | | Other | | 0.2 | | | (0.1) | | | (23.2) | | Net Cash Provided by (Used in) Investing Activities | | 279.9 | | | (110.2) | | | (253.4) | | | Financing Activities: | | | | | | | | | | | | | | Proceeds from Loans from Subsidiaries | | 250.0 | | | — | | | — | | Repayments of Loans from Subsidiaries | | (250.0) | | | — | | | — | | | Repayment of Long-term Debt | | (450.0) | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Proceeds from Shares Issued under Employee Stock Purchase Plan | | 3.7 | | | 3.8 | | | 4.3 | | | Common Stock Repurchases | | (301.9) | | | (38.9) | | | — | | | Dividends and Dividend Equivalents Paid | | (79.6) | | | (80.1) | | | (79.6) | | | Other | | (0.2) | | | (5.0) | | | (0.5) | | | | | | | | | Net Cash Used in Financing Activities | | (828.0) | | | (120.2) | | | (75.8) | | Net increase (decrease) in cash | | 45.7 | | | 0.8 | | | (64.8) | | Cash, Beginning of Year | | 2.3 | | | 1.5 | | | 66.3 | | Cash, End of Year | | $ | 48.0 | | | $ | 2.3 | | | $ | 1.5 | |
See Accompanying Report of Independent Registered Public Accounting Firm. KEMPER CORPORATION FINANCIAL INFORMATION OF KEMPER CORPORATION NOTES TO FINANCIAL INFORMATION (Dollars in Millions) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial information of Kemper Corporation (“Kemper” or the “Parent Company”) should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Item 8 of this Form 10-K. Kemper’s subsidiaries are accounted for using the equity method of accounting. Equity in Net Income (Loss) of Subsidiaries of these subsidiaries is presented on the Statements of Operations as Equity in Net Income (Loss) of Subsidiaries. NOTE 2. GUARANTEES On July 1, 2022, Kemper executed an indefinite agreement with its subsidiary, Kemper Bermuda Ltd, which requires Kemper to contribute up to $300.0 million in contributed capital to maintain its minimum Enhanced Capital Requirement (“ECR”) as required by the Bermuda Monetary Authority as a Class C insurer. As of December 31, 2025 and 2024, Kemper had contributed $40.0 million under this agreement. NOTE 3. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Kemper received $14.8 million of non-cash dividends from and made $77.4 million of non-cash capital contributions to subsidiaries during 2025. In 2024, Kemper did not receive any non-cash dividends from or make any non-cash capital contributions to subsidiaries. NOTE 4. LEASES Kemper leases certain office space for its current and former corporate headquarters under non-cancelable operating leases. The following table presents operating lease Right-of-Use (“ROU”) assets and lease liabilities at December 31, 2025 and 2024. | | | | | | | | | | | | | | | | DOLLARS IN MILLIONS | | 2025 | | 2024 | | Operating Lease Right-of-Use Assets | | $ | 6.7 | | | $ | 7.2 | | | Operating Lease Liabilities | | 19.6 | | | 21.3 | |
Supplemental cash flow information related to Kemper’s operating leases for the year ended December 31, 2025 and December 31, 2024 respectively are presented follows. | | | | | | | | | | | | | | | | DOLLARS IN MILLIONS | | 2025 | | 2024 | | Operating Cash Flows from Operating Leases (Fixed Payments) | | $ | 2.6 | | | $ | 3.0 | | | Operating Cash Flows from Operating Leases (Liability Reduction) | | 1.8 | | | 2.1 | | | | | | |
Significant judgments and assumptions for determining lease asset and liability as December 31, 2025 and December 31, 2024 respectively are presented below. | | | | | | | | | | | | | | | | DOLLARS IN MILLIONS | | 2025 | | 2024 | | Weighted-average Remaining Lease Term - Operating Leases | | 8.0 years | | 9.0 years | | Weighted-average Discount Rate - Operating Leases | | 4.0 | % | | 4.0 | % |
KEMPER CORPORATION FINANCIAL INFORMATION OF KEMPER CORPORATION NOTES TO FINANCIAL INFORMATION (Dollars in Millions)
NOTE 4. LEASES (Continued) Kemper’s leases do not provide an implicit rate. Accordingly, Kemper uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of its lease payments. Future minimum operating lease payments at December 31, 2025 were: | | | | | | | | | | DOLLARS IN MILLIONS | | Operating
Leases | | 2026 | | $ | 2.6 | | | 2027 | | 2.7 | | | 2028 | | 2.8 | | | 2029 | | 2.8 | | | 2030 | | 2.9 | | | 2031 and Thereafter | | 9.2 | | | Total Future Payments | | $ | 23.0 | | | Less Discount | | 3.4 | | | Present Value of Minimum Lease Payments | | $ | 19.6 | |
NOTE 5. DEBT Redemption of 4.350% Senior Notes Due 2025 On January 15, 2025, Kemper issued a notice of redemption for the entire $450.0 million aggregate principal of 4.350% senior notes originally due February 15, 2025 (the “2025 Senior Notes”) at a redemption price equal to 100% of principal amount of the Notes, plus accrued and unpaid interest on the redemption date. On February 11, 2025 Kemper completed the redemption and the 2025 Senior Notes were repaid in full. 2.400% Senior Notes Due 2030 Kemper has $400.0 million aggregate principal of 2.400% senior notes due September 30, 2030 (the “2030 Senior Notes”). The net proceeds of issuance were $395.8 million, net of discount and transaction costs for an effective yield of 2.52%. The 2030 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time, at Kemper’s option, at specified redemption prices. 3.800% Senior Notes Due 2032 On February 15, 2022, Kemper offered and sold $400.0 million aggregate principal of 3.800% senior notes due February 23, 2032 (the “2032 Senior Notes”). The net proceeds of issuance were $395.1 million, net of discount and transaction costs for an effective yield of 3.950%. The 2032 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time, at Kemper’s option, at specified redemption prices. KEMPER CORPORATION FINANCIAL INFORMATION OF KEMPER CORPORATION NOTES TO FINANCIAL INFORMATION (Dollars in Millions) NOTE 5. DEBT (Continued) In anticipation of the issuance of the 2032 Senior Notes and for risk management purposes, the Company entered into a derivative transaction to hedge the risk of changes in the debt cash flows attributable to changes in the benchmark U.S. Treasury interest rate during the period leading up to the debt issuance (“Treasury Lock”). The effective portion of the gain on the derivative instrument upon discontinuance was $5.9 million before taxes, and is reported as a component of Accumulated Other Comprehensive Loss. The gain is being amortized into earnings and reported in Interest Expense in the same periods that the hedged items affect earnings. Amortization, reported in Interest Expense, was $0.6 million for the year ended December 31, 2025. The Company expects to reclassify $0.5 million of net gain on derivative instruments from AOCI to earnings for the twelve months ended December 31, 2026 as interest expense on the debt is recognized. 5.875% Fixed-Rate Reset Junior Subordinated Debentures Due 2062 On March 10, 2022, Kemper issued $150.0 million aggregate principal amount of 5.875% Fixed-Rate Reset Junior Subordinated Debentures due March 15, 2062 (the “2062 Junior Debentures”). The net proceeds from issuance were $144.7 million, net of discount and transaction costs. The 2062 Junior Debentures will bear interest from and including the date of original issue to, but excluding, March 15, 2027 (the “First Reset Date”) at the fixed rate of 5.875% per annum. The interest rate on the First Reset Date, and subsequent Reset Dates, will be equal to the Five-Year Treasury Rate as of the most recent Reset Date plus 4.140% to be reset on each Reset Date. Interest is due quarterly in arrears beginning on June 15, 2022. The Company has the option to defer interest payments for one or more optional deferral periods of up to five consecutive years, provided that no optional deferral period shall extend beyond March 15, 2062, or any earlier accelerated maturity date arising from an event of default or any earlier redemption of the 2062 Junior Debentures. The 2062 Junior Debentures are unsecured and may be redeemed in whole or in part on the First Reset Date or any time thereafter, at a redemption price equal to the principal amount of the debentures being redeemed plus any accrued and unpaid interest.
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