AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a-” (Excellent) of the property/casualty subsidiaries and affiliated insurance companies of Kemper Corporation (Kemper) [NYSE: KMPR], collectively referred to as Kemper Property & Casualty Group (Kemper P&C or the group). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of Kemper’s life subsidiaries, collectively referred to as Kemper Life Group (Kemper Life) (Chicago, IL). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb-” (Good) and the Long-Term Issue Credit Ratings (Long-Term IRs) and indicative Long-Term IRs of Kemper, the ultimate parent, headquartered in Chicago, IL. The outlook of these Credit Ratings (ratings) is stable. (See below for further discussion and a detailed listing of all companies and ratings.)

Lastly, AM Best has withdrawn the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Infinity Preferred Insurance Company (Cincinnati, OH), each with a stable outlook. Infinity Preferred Insurance Company was previously a subsidiary of Kemper and was sold as a clean shell with no remaining policyholder liabilities on Aug. 1, 2025.

The ratings of Kemper P&C reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Kemper P&C’s very strong balance sheet strength assessment reflects its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by excellent financial flexibility and generally favorable reserve development trends. While the group and overall consolidated Kemper Corporation experienced volatility in results between 2021 and 2023, leading to material surplus swings and heightened underwriting and financial leverage, results and key balance sheet metrics have improved markedly in 2024 and through 2025 thus far. The group has returned to generating underwriting gains, which has strengthened surplus levels and stabilized risk-adjusted capitalization. Furthermore, Kemper’s financial leverage has improved substantially through the first half of 2025 owing to the company paying down all of its $450.0 million aggregate principal of 4.35% senior unsecured notes due Feb. 15, 2025 with available cash.

The group also continues to benefit from the implicit and explicit support from its parent company, as well as strategic initiatives such as the exit from preferred home and auto lines and the Kemper Bermuda initiative. These initiatives have provided meaningful capital relief at the enterprise level. However, AM Best notes that Kemper’s capital management policy is aimed at maintaining capital fungibility across the organization. As such, the P&C operating entities are expected to remain a significant source of dividends going forward as profitability continues to improve.

Kemper P&C’s operating performance is currently assessed as marginal, primarily due to significant underwriting losses sustained over the past five years. However, recent results indicate meaningful improvement and stabilization, as the group’s profitability initiatives led to operating income gains in 2024 and through the first half of 2025. Key contributors to this turnaround include rate increases – primarily in the group’s primary market of California – and the implementation of tighter underwriting guidelines. With profitability now restored, Kemper P&C has eased some of its underwriting restrictions in an effort to resume growth in its book of business. AM Best will continue to monitor this growth strategy, along with ongoing regulatory developments, to assess the sustainability of the group’s improved operating performance.

The ratings of Kemper Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, appropriate ERM, and consideration of the group’s affiliation with lead rating unit, Kemper P&C.

In 2022, Kemper Life announced that it was entering into an agreement with Kemper Bermuda to cede 80% of its life business to its offshore affiliate. This initiative, along with a reserve review reduction completed in late 2023, has resulted in the release of over $600 million in dividends to the parent company, Kemper. While management has completed its initiatives related to the Kemper Life business, the balance sheet has stabilized through 2024. Furthermore, the Kemper Life business continues to provide steady underlying earnings, reflective of its adequate operating performance.

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with stable outlooks for the members of Kemper Property & Casualty Group:

• Trinity Universal Insurance Company
• Alpha Property & Casualty Insurance Company
• Capitol County Mutual Fire Insurance Company
• Charter Indemnity Company
• Financial Indemnity Company
• Infinity Insurance Company
• Infinity Assurance Insurance Company
• Infinity Auto Insurance Company
• Infinity Casualty Insurance Company
• Infinity Indemnity Insurance Company
• Infinity Safeguard Insurance Company
• Infinity Select Insurance Company
• Infinity Standard Insurance Company
• Infinity County Mutual Insurance Company
• Kemper Independence Insurance Company
• Merastar Insurance Company
• Mutual Savings Fire Insurance Company
• Kemper Financial Indemnity Company
• Old Reliable Casualty Company
• Response Insurance Company
• Response Worldwide Direct Auto Insurance Company
• Response Worldwide Insurance Company
• Union National Fire Insurance Company
• United Casualty Insurance Company of America
• Unitrin Advantage Insurance Company
• Unitrin Auto and Home Insurance Company
• Unitrin County Mutual Insurance Company
• Unitrin Direct Insurance Company
• Unitrin Direct Property & Casualty Company
• Unitrin Preferred Insurance Company
• Unitrin Safeguard Insurance Company
• Valley Property & Casualty Insurance Company
• Warner Insurance Company

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with stable outlooks for the members of Kemper Life Group:

• United Insurance Company of America
• Mutual Savings Life Insurance Company
• The Reliable Life Insurance Company
• Union National Life Insurance Company

The following Long-Term IRs have been affirmed with stable outlooks:

Kemper Corporation—

-- “bbb-” (Good) on $400 million 2.4% senior unsecured notes, due 2030

-- “bbb-” (Good) on $400 million 3.8% senior unsecured notes, due 2032

-- “bb” (Fair) on $150 million junior subordinated debentures, due 2062

The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks for the shelf registration:

Kemper Corporation—

-- “bbb-” (Good) on senior unsecured debt

-- “bb+” (Fair) on subordinated debt

-- “bb” (Fair) on preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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