Kemper Corporation (NYSE: KMPR) reported second quarter 2026 results, which included a non-cash goodwill impairment of $460 million. This has no impact on the cash-generating ability of our businesses, statutory capital, holding company liquidity, or compliance with our debt and revolving credit covenants. Including this charge, Kemper reported a net loss of $464.8 million, or $(7.90) per share, for the second quarter of 2026, compared to net income of $72.6 million, or $1.12 per diluted share, for the second quarter of 2025.

Adjusted Consolidated Net Operating Income¹ was $26.3 million, or $0.45 per share, for the second quarter of 2026, compared to Adjusted Consolidated Net Operating Income¹ of $84.1 million, or $1.30 per diluted share, for the second quarter of 2025.

Summary of quarterly performance:

• Underlying operating performance improved sequentially; reported results included a non-cash goodwill impairment and valuation allowance
• Delivered Adjusted Consolidated Net Operating Income¹ of $26.3 million, or $0.45 per share
• Personal Auto profitability improved, reflecting underwriting actions and continued expense discipline
• Commercial Auto maintained strong underlying performance; reported profitability was impacted by prior-year reserve development
• Life business continued to generate stable operating earnings
• Strengthened leadership and organizational alignment to improve accountability and execution

“This quarter reflects improving underlying operating performance and the actions we’re taking to restore profitability,” said President and CEO Stephen J. McAnena. “While there is more work ahead, we have a clear understanding of where performance must improve and are taking decisive actions to strengthen execution, sharpen accountability, and improve returns across our business. I am confident these actions will position Kemper to deliver stronger, more consistent results and create long-term value for shareholders.”

Revenues

Total revenues for the second quarter of 2026 decreased $132.9 million to $1,092.7 million compared to the second quarter of 2025. The decline was primarily due to lower Specialty Personal Automobile volumes and higher impairment losses, partially offset by higher Specialty Commercial Automobile volumes and net investment income.

Segment Results

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

The Specialty Property and Casualty Insurance segment reported adjusted net operating income of $15.8 million in the second quarter of 2026, compared to adjusted net operating income of $79.0 million in the second quarter of 2025. This decrease was due primarily to an increase in our Specialty Personal Automobile Underlying loss and LAE ratio¹. Specialty Personal Automobile’s Underlying loss and LAE ratio¹ was 83.8 percent, compared to 72.5 percent in the second quarter of 2025. The increase was primarily driven by higher claim severity and frequency in California.

The Life Insurance segment reported adjusted net operating income of $18.3 million for the second quarter of 2026, compared to adjusted net operating income of $12.6 million in the second quarter of 2025. The improvement was primarily driven by higher Net Investment Income and Earned Premiums.

Capital

Total Kemper Corporation Shareholders’ Equity as of June 30, 2026 was $2,192.8 million, a decrease of $488.6 million, or 18 percent, since year-end 2025 primarily driven by net loss for the period. Kemper and its direct non-insurance subsidiaries ended the quarter with cash and investments of $130.0 million, and $350.0 million of available borrowing capacity under the revolving credit agreement.

On May 6, 2026, Kemper announced that its Board of Directors declared a quarterly dividend of $0.32 per share, or $19.3 million. The dividend was paid on June 2, 2026, to its shareholders of record as of May 18, 2026.

Kemper ended the quarter with a book value per share of $37.22, a decrease of 19 percent from $45.71 at the end of 2025. Adjusted book value per share¹ was $27.55 at the end of the quarter, compared to $28.06 at the end of 2025.

Unaudited Condensed Consolidated Statements of (Loss) Income for the three and six months ended June 30, 2026 and 2025 are presented below.

Unaudited business segment revenues for the three and six months ended June 30, 2026 and 2025 are presented below.

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

Unaudited selected financial information for the Life Insurance segment follows.

Use of Non-GAAP Financial Measures

Adjusted Consolidated Net Operating Income is an after-tax, non-GAAP financial measure and is computed by excluding from Net (Loss) Income attributable to Kemper Corporation the after-tax impact of:

(i) Change in Fair Value of Equity and Convertible Securities;

(ii) Net Realized Investment Gains (Losses);

(iii) Impairment Losses;

(iv) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs;

(v) Debt Extinguishment and Other Charges;

(vi) Goodwill Impairment;

(vii) Non-Core Operations; and

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

Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is Net (Loss) Income attributable to Kemper Corporation. There were no applicable significant non-recurring items that Kemper excluded from the calculation of Adjusted Consolidated Net Operating Income for the three and six months ended June 30, 2026 or 2025.

Kemper believes that Adjusted 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. Change in Fair Value of Equity and Convertible Securities, Net Realized Investment Gains (Losses) and Impairment Losses related to investments included in Kemper’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of Kemper’s investments, the timing of which is unrelated to the insurance underwriting process. Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs may vary significantly between periods and are generally driven by the timing of business decisions which are unrelated to the insurance underwriting process. In the second quarter of 2026, the Company completed the sale of Newins and recorded a gain in connection with the transaction. In the third quarter of 2025, a restructuring program was launched to achieve operational and organizational efficiencies. The Company will continue to evaluate additional efficiency opportunities through 2027. Debt Extinguishment and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by Kemper’s financing and refinancing decisions and capital needs, as well as external economic developments such as debt market conditions, the timing of which is unrelated to the insurance underwriting process; and (ii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Goodwill Impairments are excluded because they are infrequent and non-recurring charges. Non-Core Operations includes the results of our Preferred Insurance business which we expect to fully exit. These results are excluded because they are irrelevant to our ongoing operations and do not qualify for Discontinued Operations under GAAP. Significant non-recurring items are excluded because, by their nature, they are not indicative of Kemper’s business or economic trends. The preceding non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures, as they do not fully recognize the profitability of Kemper’s businesses.

A reconciliation of Net (Loss) Income attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income for the three and six months ended June 30, 2026 and 2025 is presented below.

Diluted Adjusted Net Operating Income per Unrestricted Share is a non-GAAP financial measure computed by dividing Adjusted Net Operating Income by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Net (Loss) Income per Unrestricted Share.

A reconciliation of Diluted Net (Loss) Income per Unrestricted Share to Diluted Adjusted Net Operating Income per Unrestricted Share for the three and six months ended June 30, 2026 and 2025 is presented below.

Return on Adjusted Shareholders' Equity is a calculation that uses a non-GAAP financial measure. It is calculated by dividing the period’s annualized Net (Loss) Income attributable to Kemper Corporation, excluding the annualization of the after-tax goodwill impairment and the credit loss allowance recognized on the Reciprocal Exchange surplus notes, by the average shareholders’ equity excluding net unrealized gains and losses on fixed maturities, the change in discount rate on future life policyholder benefits and goodwill. Return on Shareholders’ Equity is the most directly comparable GAAP measure. We use this non-GAAP measure to identify and analyze the change in performance attributable to management efforts between periods. Kemper believes this 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 not influenced by management. Kemper believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.

A reconciliation of Return on Shareholders’ Equity to Return on Adjusted Shareholders’ Equity is presented below:

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 Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding Total Incurred Losses and LAE Ratio, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio.

Kemper believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in Kemper’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause Kemper’s 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 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 Kemper’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 Kemper’s underwriting performance.

Adjusted Book Value Per Share is a calculation that uses a non-GAAP financial measure. It is calculated by dividing shareholders’ equity after excluding the after-tax impact of net unrealized gains and losses on fixed income securities, the change in discount rate on future life policyholder benefits and goodwill by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. Kemper uses the trends in book value per share excluding the after-tax impact of net unrealized gains and losses on fixed income securities, the change in discount rate on future life policyholder benefits and goodwill in conjunction with book value per share to identify and analyze the change in net worth excluding goodwill 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 not influenced by management. Kemper believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.

A reconciliation of Book Value Per Share to Adjusted Book Value Per Share is presented below:

Conference Call

Kemper will host its conference call to discuss second quarter 2026 results on Thursday, August 6, at 8:00 a.m. Eastern (7:00 a.m. Central). The conference call will be accessible via the internet and by telephone at 833.461.5787, Conference ID 170600198. 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 online at the investor section of kemper.com.

More detailed financial information can be found in Kemper’s Investor Financial Supplement and Earnings Call Presentation for the second quarter of 2026, which is available at the investor section of kemper.com.

About Kemper

The Kemper family of companies is one of the nation’s leading specialized insurers. With approximately $12 billion in assets, Kemper is improving the world of insurance by providing affordable and easy-to-use personalized solutions to individuals, families and businesses through its Kemper Auto and Kemper Life brands. Kemper serves over 4.4 million policies, is represented by approximately 24,100 agents and brokers, and has approximately 7,000 associates dedicated to meeting the ever-changing needs of its customers. Learn more about Kemper at kemper.com.

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. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Such statements involve known and unknown risks, uncertainties, and other factors, including but not limited to:

• changes in the frequency and severity of insurance claims;
• claim development and the process of estimating claim reserves;
• the impacts of inflation;
• changes in interest rate environment;
• supply chain disruption;
• product demand and pricing;
• effects of legislative, governmental and regulatory actions;
• heightened competition;
• litigation outcomes and trends;
• investment risks;
• cybersecurity risks or incidents;
• impact of catastrophes; and
• other risks and uncertainties detailed in Kemper’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260805043499/en/