Kemper tumbled in its latest financial results as it reported a net loss of $21.0 million, or $(0.34) per share, for the third quarter of 2025.
This compares to net income of $73.7 million, or $1.14 per diluted share, in the same period last year.
Interim CEO C. Thomas Evans, Jr. called the results “disappointing and below our expectations,” while giving an outline of what comes next for the insurance group.
“We are moving swiftly with a number of actions to enhance execution, improve profitability, and position us for growth,” he said.
Adjusted consolidated net operating income was $20.4 million, down from $105.0 million in the third quarter of 2024. Total revenues for the quarter reached $1.24 billion, an increase of $60.8 million year over year.
The revenue growth was primarily driven by a $98.3 million increase in specialty property & casualty insurance earned premiums, attributed to higher average earned premium per exposure from rate increases. This was partially offset by a $32.7 million reduction in earned premium from non-core operations, reflecting lower volumes as the company exited and ran off its Preferred Insurance business.
Earlier in the year, Kemper reported net income of $99.7 million, or $1.54 per diluted share, for the first quarter of 2025, up from $71.3 million, or $1.10 per diluted share, in the same period last year.
The specialty property and casualty insurance segment posted adjusted net operating income of $7.6 million, a decrease from $103.6 million in the prior year quarter. The decline was mainly due to a higher underlying combined ratio and increased adverse prior year development on bodily injury coverages within commercial automobile insurance.
The segment’s underlying combined ratio was 99.6%, compared to 91.3% in the third quarter of 2024. This increase was primarily the result of higher claim severity, partially offset by higher average earned premiums per exposure from rate increases.
The life insurance segment reported adjusted net operating income of $18.6 million, up from $15.0 million a year earlier. The increase was supported by a reduction in policyholders’ benefits, which the company attributed to favorable changes in mortality experience on life products.
Trailing 12-month operating cash flow was approximately $585 million, remaining near an all-time high. Year-to-date, Kemper generated a 7.1% return on equity and a 10.8% adjusted return on equity.
Book value per share and adjusted book value per share increased 4.8% and 2.4% year over year, respectively. Parent liquidity stood at about $1.0 billion at quarter-end. The company repurchased approximately 5.1 million shares at an average price of $52.65, totaling around $266 million from July 1 through October 31.
“Despite the challenging quarter, we remain on solid financial footing, believe strongly in our strategy, and are confident that we can achieve our full potential. Our company is united by a commitment to serving markets that are often overlooked by other carriers, and we are proud to embrace this responsibility,” Evans said.
The company is currently searching for a new CEO after longtime leader Joseph P. Lacher, Jr. exited his role last month.
