KMPR 2014 03.31.14 EX 99.2 Supplement




	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 Results:
Revenues	10
Operating Profit	11
Net Operating Income	11
Earned Premiums by Product	12
Net Investment Income by Segment	12
Catastrophe Frequency and Severity	13
Life & Health Insurance Segment - Results of Operations and Selected Financial Information	14
Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information	15-16
Property & Casualty Insurance Segment - Premiums and Losses and LAE by Product:
Personal Automobile Insurance	17
Commercial Automobile Insurance	18
Total Automobile Insurance	19
Homeowners Insurance	20
Other Personal Lines	21
Investment Performance	22
Invested Assets	23
Investment Concentration	24
Municipal Bond Securities	25
Investments in Limited Liability Companies and Limited Partnerships	26
Definitions of Non-GAAP Financial Measures	27-28

Kemper Corporation Consolidated Financial Highlights (Dollars in Millions, Except Per Share Amounts) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
For Period Ended
Earned Premiums	$	477.6		$	495.6		$	507.5		$	512.8		$	509.9
Net Investment Income	71.1			76.9			82.4			74.6			80.8
Net Investment Gains and Other Income	5.9			13.5			45.8			1.5			25.2
Total Revenues	$	554.6		$	586.0		$	635.7		$	588.9		$	615.9

Consolidated Net Operating Income ¹	$	31.5		$	46.3		$	38.9		$	31.7		$	42.3
Income from Continuing Operations	$	35.2		$	54.8		$	68.6		$	32.5		$	58.6
Net Income	$	35.1		$	55.2		$	70.1		$	34.0		$	58.4

Per Unrestricted Common Share Amounts:
Basic:
Consolidated Net Operating Income ¹	$	0.56		$	0.83		$	0.69		$	0.55		$	0.72
Income from Continuing Operations	$	0.63		$	0.98		$	1.21		$	0.56		$	1.00
Net Income	$	0.63		$	0.99		$	1.24		$	0.59		$	1.00
Diluted:
Consolidated Net Operating Income ¹	$	0.56		$	0.83		$	0.69		$	0.55		$	0.72
Income from Continuing Operations	$	0.63		$	0.98		$	1.21		$	0.56		$	1.00
Net Income	$	0.63		$	0.99		$	1.23		$	0.59		$	1.00

Dividends Paid to Shareholders Per Share	$	0.24		$	0.24		$	0.24		$	0.24		$	0.24

At Period End
Total Assets	$	7,944.2		$	7,656.4		$	7,745.9		$	7,820.8		$	8,056.2
Insurance Reserves	$	4,067.3		$	4,061.0		$	4,086.1		$	4,108.6		$	4,117.1
Debt	$	751.4		$	606.9		$	606.7		$	611.9		$	611.6
Shareholders’ Equity	$	2,144.7		$	2,051.5		$	2,009.1		$	2,005.0		$	2,172.4
Shareholders’ Equity Excluding Goodwill	$	1,832.9		$	1,739.7		$	1,697.3		$	1,693.2		$	1,860.6
Common Shares Issued and Outstanding (In Millions)	55.408			55.653			56.025			57.061			58.322
Book Value Per Share²	$	38.71		$	36.86		$	35.86		$	35.14		$	37.25
Book Value Per Share Excluding Goodwill^1,2	$	33.08		$	31.26		$	30.30		$	29.67		$	31.90
Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities^1,2	$	35.13		$	34.49		$	32.93		$	31.91		$	31.55
Debt to Total Capitalization²	25.9		%	22.8		%	23.2		%	23.4		%	22.0		%
Rolling 12 Months Return on 5-point AverageShareholders Equity^2,3	9.4		%	10.5		%	7.8		%	7.0		%	5.5		%

¹ Non-GAAP Measure. See page 27 for definition.
²See 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.

Kemper Corporation Consolidated Statements of Income (Dollars in Millions, Except Per Share Amounts) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Revenues:
Earned Premiums	$	477.6		$	495.6		$	507.5		$	512.8		$	509.9
Net Investment Income	71.1			76.9			82.4			74.6			80.8
Other Income	0.1			0.3			0.1			0.2			0.2
Net Realized Gains on Sales of Investments	6.6			20.8			49.1			2.3			26.9
Other-than-temporary Impairment Losses:
Total Other-than-temporary Impairment Losses	(0.8		)	(7.6		)	(3.5		)	(2.3		)	(2.4		)
Portion of Losses Recognized in Other Comprehensive Income	—			—			0.1			1.3			0.5
Net Impairment Losses Recognized in Earnings	(0.8		)	(7.6		)	(3.4		)	(1.0		)	(1.9		)
Total Revenues	554.6			586.0			635.7			588.9			615.9
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses	327.9			315.5			338.3			354.2			349.2
Insurance Expenses	152.1			162.9			170.1			163.1			158.3
Interest and Other Expenses	22.7			26.2			25.3			25.2			23.8
Total Expenses	502.7			504.6			533.7			542.5			531.3
Income from Continuing Operations before Income Taxes	51.9			81.4			102.0			46.4			84.6
Income Tax Expense	(16.7		)	(26.6		)	(33.4		)	(13.9		)	(26.0		)
Income from Continuing Operations	35.2			54.8			68.6			32.5			58.6
Discontinued Operations:
Income (Loss) from Discontinued Operations before Income Taxes	(0.2		)	0.6			2.2			2.5			(0.4		)
Income Tax Benefit (Expense)	0.1			(0.2		)	(0.7		)	(1.0		)	0.2
Income (Loss) from Discontinued Operations	(0.1		)	0.4			1.5			1.5			(0.2		)
Net Income	$	35.1		$	55.2		$	70.1		$	34.0		$	58.4
Income from Continuing Operations Per Unrestricted Share:
Basic	$	0.63		$	0.98		$	1.21		$	0.56		$	1.00
Diluted	$	0.63		$	0.98		$	1.21		$	0.56		$	1.00
Net Income Per Unrestricted Share:
Basic	$	0.63		$	0.99		$	1.24		$	0.59		$	1.00
Diluted	$	0.63		$	0.99		$	1.23		$	0.59		$	1.00
Dividends Paid to Shareholders Per Share	$	0.24		$	0.24		$	0.24		$	0.24		$	0.24
Weighted Average Unrestricted Common Shares Outstanding (in Millions)	55.313			55.412			56.366			57.519			58.131

Kemper Corporation Consolidated Balance Sheets (Dollars in Millions) (Unaudited)

	Mar 31, 2014		Dec 31, 2013		Sep 30, 2013		Jun 30, 2013		Mar 31, 2013
Assets:
Investments:
Fixed Maturities at Fair Value	$	4,619.5	$	4,575.0	$	4,645.0	$	4,701.1	$	4,856.5
Equity Securities at Fair Value	648.3		598.5		567.4		545.0		554.1
Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings	239.0		245.1		231.4		241.7		248.1
Short-term Investments at Cost	506.9		284.7		286.8		239.3		362.8
Other Investments	448.2		448.0		446.2		496.0		494.8
Total Investments	6,461.9		6,151.3		6,176.8		6,223.1		6,516.3
Cash	65.0		66.5		76.1		69.5		97.5
Receivable from Policyholders	319.5		331.6		354.2		357.5		363.2
Other Receivables	225.5		193.1		203.9		206.2		202.7
Deferred Policy Acquisition Costs	301.8		302.9		308.5		308.4		304.5
Goodwill	311.8		311.8		311.8		311.8		311.8
Current and Deferred Income Tax Assets	—		31.8		61.6		85.7		—
Other Assets	258.7		267.4		253.0		258.6		260.2
Total Assets	$	7,944.2	$	7,656.4	$	7,745.9	$	7,820.8	$	8,056.2
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life and Health	$	3,237.7	$	3,217.5	$	3,201.5	$	3,189.6	$	3,174.8
Property and Casualty	829.6		843.5		884.6		919.0		942.3
Total Insurance Reserves	4,067.3		4,061.0		4,086.1		4,108.6		4,117.1
Unearned Premiums	582.5		598.9		635.3		640.3		646.8
Liabilities for Income Taxes	30.6		8.3		6.6		6.5		25.8
Debt at Amortized Cost	751.4		606.9		606.7		611.9		611.6
Accrued Expenses and Other Liabilities	367.7		329.8		402.1		448.5		482.5
Total Liabilities	5,799.5		5,604.9		5,736.8		5,815.8		5,883.8
Shareholders’ Equity:
Common Stock	5.5		5.6		5.6		5.7		5.8
Paid-in Capital	693.5		694.8		698.0		709.1		722.5
Retained Earnings	1,231.5		1,215.8		1,184.4		1,151.7		1,158.0
Accumulated Other Comprehensive Income	214.2		135.3		121.1		138.5		286.1
Total Shareholders’ Equity	2,144.7		2,051.5		2,009.1		2,005.0		2,172.4
Total Liabilities and Shareholders’ Equity	$	7,944.2	$	7,656.4	$	7,745.9	$	7,820.8	$	8,056.2

Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions) (Unaudited)

	Three Months Ended						Year Ended
	Mar 31, 2014			Mar 31, 2013			Dec 31, 2013
Operating Activities:
Net Income	$	35.1		$	58.4		$	217.7
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities:
Decrease (Increase) in Deferred Policy Acquisition Costs	1.1			(1.1		)	0.5
Amortization of Life Insurance in Force Acquired and Customer Relationships Acquired	1.8			2.1			8.3
Equity in Earnings of Equity Method Limited Liability Investments	(3.5		)	(8.6		)	(26.4		)
Distribution of Accumulated Earnings of Equity Method Limited Liability Investments	7.0			3.4			15.4
Amortization of Investment Securities and Depreciation of Investment Real Estate	3.8			4.6			16.2
Net Realized Gains on Sales of Investments	(6.6		)	(26.9		)	(99.1		)
Net Impairment Losses Recognized in Earnings	0.8			1.9			13.9
Depreciation of Property and Equipment	4.3			4.2			17.4
Decrease (Increase) in Other Receivables	(13.6		)	8.7			43.5
Increase (Decrease) in Insurance Reserves	6.0			(15.7		)	(72.5		)
Decrease in Unearned Premiums	(16.4		)	(4.1		)	(52.0		)
Change in Income Taxes	10.1			25.3			57.9
Increase (Decrease) in Accrued Expenses and Other Liabilities	2.3			20.7			(54.8		)
Other, Net	4.9			8.4			36.1
Net Cash Provided by Operating Activities (Carryforward to page 7)	37.1			81.3			122.1

Kemper Corporation Consolidated Statements of Cash Flows (Dollars in Millions) (Unaudited)

	Three Months Ended						Year Ended
	Mar 31, 2014			Mar 31, 2013			Dec 31, 2013
Net Cash Provided by Operating Activities (Carryforward from page 6)	37.1			81.3			122.1
Investing Activities:
Sales, Paydowns and Maturities of Fixed Maturities	188.8			297.5			664.4
Purchases of Fixed Maturities	(98.6		)	(307.5		)	(744.5		)
Sales of Equity Securities	35.1			24.9			182.1
Purchases of Equity Securities	(67.0		)	(40.7		)	(213.4		)
Sales of and Return of Investment of Equity Method Limited Liability Investments	10.1			13.1			31.3
Acquisitions of Equity Method Limited Liability Investments	(7.5		)	(5.1		)	(20.5		)
Decrease (Increase) in Short-term Investments	(224.8		)	(36.3		)	41.8
Acquisition and Improvements of Investment Real Estate	(0.8		)	(1.0		)	(5.4		)
Sales of Investment Real Estate	0.9			3.8			102.7
Increase in Other Investments	(1.8		)	(2.0		)	(9.1		)
Acquisition of Software	(3.0		)	(6.6		)	(15.2		)
Disposition of Business, Net of Cash Disposed	8.9			3.8			3.8
Other, Net	(2.5		)	(4.2		)	(13.2		)
Net Cash Provided (Used) by Investing Activities	(162.2		)	(60.3		)	4.8
Financing Activities:
Net Proceeds from Issuance of Subordinated Debentures	144.2			—			—
Repayments of Debt	—			—			(5.5		)
Common Stock Repurchases	(7.7		)	(6.5		)	(100.4		)
Dividends and Dividend Equivalents Paid	(13.3		)	(14.0		)	(54.9		)
Cash Exercise of Stock Options	—			—			1.7
Other, Net	0.4			0.7			2.4
Net Cash Provided (Used) by Financing Activities	123.6			(19.8		)	(156.7		)
Increase (Decrease) in Cash	(1.5		)	1.2			(29.8		)
Cash, Beginning of Year	66.5			96.3			96.3
Cash, End of Period	$	65.0		$	97.5		$	66.5

Kemper Corporation Capital Metrics (Dollars and Shares in Millions, Except Per Share Amounts) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Book Value Per Share
Numerator
Shareholders’ Equity	$	2,144.7		$	2,051.5		$	2,009.1		$	2,005.0		$	2,172.4
Less: Goodwill	(311.8		)	(311.8		)	(311.8		)	(311.8		)	(311.8		)
Shareholders’ Equity Excluding Goodwill	$	1,832.9		$	1,739.7		$	1,697.3		$	1,693.2		$	1,860.6
Shareholders’ Equity	$	2,144.7		$	2,051.5		$	2,009.1		$	2,005.0		$	2,172.4
Less: Net Unrealized Gains on Fixed Maturities	(198.3		)	(132.2		)	(164.0		)	(184.2		)	(332.4		)
Shareholders’ Equity Excluding Net Unrealized Gains on Fixed Maturities	$	1,946.4		$	1,919.3		$	1,845.1		$	1,820.8		$	1,840.0
Denominator
Common Shares Issued and Outstanding	55.408			55.653			56.025			57.061			58.322
Book Value Per Share	$	38.71		$	36.86		$	35.86		$	35.14		$	37.25
Book Value Per Share Excluding Goodwill	$	33.08		$	31.26		$	30.30		$	29.67		$	31.90
Book Value Per Share Excluding Unrealized on Fixed Maturities	$	35.13		$	34.49		$	32.93		$	31.91		$	31.55

Return on Shareholders’ Equity
Numerator
Rolling 12 Months Net Income	$	194.4		$	217.7		$	164.4		$	149.9		$	118.2
Denominator (5-point Average)
5-point Average Shareholders’ Equity	$	2,076.5		$	2,079.9		$	2,110.5		$	2,138.5		$	2,163.8
Rolling 12 Months Return on Average Shareholders Equity (5-point Average)	9.4		%	10.5		%	7.8		%	7.0		%	5.5		%

Debt and Total Capitalization
Debt	$	751.4		$	606.9		$	606.7		$	611.9		$	611.6
Shareholders’ Equity	2,144.7			2,051.5			2,009.1			2,005.0			2,172.4
Total Capitalization	$	2,896.1		$	2,658.4		$	2,615.8		$	2,616.9		$	2,784.0
Ratio of Debt to Shareholders’ Equity	35.0		%	29.6		%	30.2		%	30.5		%	28.2		%
Ratio of Debt to Total Capitalization	25.9		%	22.8		%	23.2		%	23.4		%	22.0		%

Parent Company Liquidity
Kemper Holding Company Cash and Investments	$	255.9		$	156.7		$	152.6		$	124.3		$	187.4
Borrowings Available Under Credit Agreement	225.0			225.0			325.0			325.0			325.0
Parent Company Liquidity	$	480.9		$	381.7		$	477.6		$	449.3		$	512.4

Capital Returned to Shareholders
Common Stock Repurchased	$	8.3		$	15.2		$	36.3		$	42.4		$	6.5
Cash Dividends Paid	13.3			13.4			13.6			13.9			14.0
Total Capital Returned to Shareholders	$	21.6		$	28.6		$	49.9		$	56.3		$	20.5

Kemper Corporation Debt Outstanding and Ratings (Dollars in Millions) (Unaudited)

	Mar 31, 2014		Dec 31, 2013		Sep 30, 2013		Jun 30, 2013		Mar 31, 2013
Notes Payable under Revolving Credit Agreements	$	—	$	—	$	—	$	—	$	—
Senior Notes at Amortized Cost:
6.00% Senior Notes due May 15, 2017	358.0		357.9		357.8		357.6		357.4
6.00% Senior Notes due November 30, 2015	249.2		249.0		248.9		248.8		248.7
7.375% Subordinated Debentures due February 27, 2054 at Amortized Cost	144.2		—		—		—		—
Mortgage Note Payable at Amortized Cost	—		—		—		5.5		5.5
Debt Outstanding	$	751.4	$	606.9	$	606.7	$	611.9	$	611.6

	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

Kemper Corporation Segment Revenues (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Revenues:
Property & Casualty Insurance
Earned Premiums	$	322.3		$	338.2		$	348.7		$	353.9		$	352.1
Net Investment Income	17.6			23.0			21.3			21.5			25.1
Other Income	0.1			0.1			0.1			0.1			0.2
Total Property & Casualty Insurance	340.0			361.3			370.1			375.5			377.4
Life & Health Insurance:
Earned Premiums	155.3			157.4			158.8			158.9			157.8
Net Investment Income	50.2			50.6			56.5			49.8			53.0
Other Income	—			0.1			—			0.1			—
Total Life & Health Insurance	205.5			208.1			215.3			208.8			210.8
Total Segment Revenues	545.5			569.4			585.4			584.3			588.2
Net Realized Gains on Sales of Investments	6.6			20.8			49.1			2.3			26.9
Net Impairment Losses Recognized in Earnings	(0.8		)	(7.6		)	(3.4		)	(1.0		)	(1.9		)
Other	3.3			3.4			4.6			3.3			2.7
Total Revenues	$	554.6		$	586.0		$	635.7		$	588.9		$	615.9

Kemper Corporation Segment Operating Results (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Segment Operating Profit:
Property & Casualty Insurance	$	19.3		$	41.6		$	32.2		$	25.6		$	40.2
Life & Health Insurance	34.6			38.6			35.2			31.2			31.9
Total Segment Operating Profit	53.9			80.2			67.4			56.8			72.1
Corporate and Other Operating Loss	(7.8		)	(12.0		)	(11.1		)	(11.7		)	(12.5		)
Total Operating Profit	46.1			68.2			56.3			45.1			59.6
Net Realized Gains on Sales of Investments	6.6			20.8			49.1			2.3			26.9
Net Impairment Losses Recognized in Earnings	(0.8		)	(7.6		)	(3.4		)	(1.0		)	(1.9		)
Income from Continuing Operations before Income Taxes	$	51.9		$	81.4		$	102.0		$	46.4		$	84.6
Segment Net Operating Income:
Property & Casualty Insurance	$	14.4		$	29.1		$	23.4		$	19.1		$	29.0
Life & Health Insurance	22.1			24.9			22.9			20.3			21.2
Total Segment Net Operating Income	36.5			54.0			46.3			39.4			50.2
Corporate and Other Net Operating Loss	(5.0		)	(7.7		)	(7.4		)	(7.7		)	(7.9		)
Consolidated Operating Income	31.5			46.3			38.9			31.7			42.3
Unallocated Net Income (Loss) From:
Net Realized Gains on Sales of Investments	4.2			13.5			31.9			1.5			17.5
Net Impairment Losses Recognized in Earnings	(0.5		)	(5.0		)	(2.2		)	(0.7		)	(1.2		)
Income from Continuing Operations	$	35.2		$	54.8		$	68.6		$	32.5		$	58.6

Kemper Corporation Segment Operating Results (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014		Dec 31, 2013		Sep 30, 2013		Jun 30, 2013		Mar 31, 2013
Earned Premiums by Product:
Life	$	97.6	$	97.8	$	98.4	$	98.6	$	97.9
Accident and Health	38.8		40.2		40.7		40.3		40.2
Property and Casualty:
Personal Lines:
Automobile	216.3		229.7		239.1		244.6		245.7
Homeowners	79.7		81.4		82.3		82.1		80.4
Other Personal	32.1		32.9		33.5		34.1		33.6
Total Personal Lines	328.1		344.0		354.9		360.8		359.7
Commercial Automobile	13.1		13.6		13.5		13.1		12.1
Total Earned Premiums	$	477.6	$	495.6	$	507.5	$	512.8	$	509.9
Net Investment Income by Segment:
Property & Casualty Insurance:
Equity Method Limited Liability Investments	$	2.5	$	5.0	$	3.4	$	2.3	$	5.8
All Other Net Investment Income	15.1		18.0		17.9		19.2		19.3
Net Investment Income	17.6		23.0		21.3		21.5		25.1
Life & Health Insurance:
Equity Method Limited Liability Investments	0.7		1.2		3.8		1.1		2.3
All Other Net Investment Income	49.5		49.4		52.7		48.7		50.7
Net Investment Income	50.2		50.6		56.5		49.8		53.0
Total Segment Net Investment Income	67.8		73.6		77.8		71.3		78.1
Unallocated Net Investment Income:
Equity Method Limited Liability Investments	0.3		0.3		0.5		0.2		0.5
All Other Net Investment Income	3.0		3.0		4.1		3.1		2.2
Unallocated Net Investment Income	3.3		3.3		4.6		3.3		2.7
Net Investment Income	$	71.1	$	76.9	$	82.4	$	74.6	$	80.8

Kemper Corporation Catastrophe Frequency and Severity (Dollars in Millions) (Unaudited)

	Three Months Ended Mar 31, 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	6	$	9.1	4	$	0.3	6	$	9.4
$5 - $10	1	6.9		—	—		1	6.9
$10 - $15	—	—		—	—		—	—
$15 - $20	—	—		—	—		—	—
$20 - $25	—	—		—	—		—	—
Greater Than $25	—	—		—	—		—	—
Total	7	$	16.0	4	$	0.3	7	$	16.3

	Three Months Ended Mar 31, 2013
	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	4	$	8.7	4	$	2.4	4	$	11.1
$5 - $10	—	—		—	—		—	—
$10 - $15	—	—		—	—		—	—
$15 - $20	—	—		—	—		—	—
$20 - $25	—	—		—	—		—	—
Greater Than $25	—	—		—	—		—	—
Total	4	$	8.7	4	$	2.4	4	$	11.1

Kemper Corporation Life & Health Insurance Segment - Results of Operation and Selected Financial Information (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Results of Operations
Earned Premiums:
Life	$	97.6		$	97.8		$	98.4		$	98.6		$	97.9
Accident and Health	38.8			40.2			40.7			40.3			40.2
Property	18.9			19.4			19.7			20.0			19.7
Total Earned Premiums	155.3			157.4			158.8			158.9			157.8
Net Investment Income	50.2			50.6			56.5			49.8			53.0
Other Income	—			0.1			—			0.1			—
Total Revenues	205.5			208.1			215.3			208.8			210.8
Policyholders’ Benefits and Incurred Losses and LAE	97.0			91.0			94.6			99.4			102.9
Insurance Expenses	73.9			78.5			85.5			78.2			76.0
Operating Profit	34.6			38.6			35.2			31.2			31.9
Income Tax Expense	(12.5		)	(13.7		)	(12.3		)	(10.9		)	(10.7		)
Segment Net Operating Income	$	22.1		$	24.9		$	22.9		$	20.3		$	21.2

Kemper Corporation Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Results of Operations
Net Premiums Written	$	304.3		$	302.9		$	345.0		$	348.9		$	345.4
Earned Premiums:
Personal:
Automobile	$	216.3		$	229.7		$	239.1		$	244.6		$	245.7
Homeowners	79.7			81.4			82.3			82.1			80.4
Other Personal	13.2			13.5			13.8			14.1			13.9
Total Personal	309.2			324.6			335.2			340.8			340.0
Commercial Automobile	13.1			13.6			13.5			13.1			12.1
Total Earned Premiums	322.3			338.2			348.7			353.9			352.1
Net Investment Income	17.6			23.0			21.3			21.5			25.1
Other Income	0.1			0.1			0.1			0.1			0.2
Total Revenues	340.0			361.3			370.1			375.5			377.4
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE	230.4			237.7			245.1			246.3			251.1
Catastrophe Losses and LAE	16.0			2.1			10.4			25.9			8.7
Prior Years:
Non-catastrophe Losses and LAE	(12.7		)	(11.1		)	(10.2		)	(12.2		)	(12.0		)
Catastrophe Losses and LAE	(2.7		)	(4.1		)	(1.7		)	(5.2		)	(1.5		)
Total Incurred Losses and LAE	231.0			224.6			243.6			254.8			246.3
Insurance Expenses	89.7			95.1			94.3			95.1			90.9
Operating Profit	19.3			41.6			32.2			25.6			40.2
Income Tax Expense	(4.9		)	(12.5		)	(8.8		)	(6.5		)	(11.2		)
Segment Net Operating Income	$	14.4		$	29.1		$	23.4		$	19.1		$	29.0
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio	71.4		%	70.3		%	70.3		%	69.6		%	71.3		%
Current Year Catastrophe Losses and LAE Ratio	5.0			0.6			3.0			7.3			2.5
Prior Years Non-catastrophe Losses and LAE Ratio	(3.9		)	(3.3		)	(2.9		)	(3.4		)	(3.4		)
Prior Years Catastrophe Losses and LAE Ratio	(0.8		)	(1.2		)	(0.5		)	(1.5		)	(0.4		)
Total Incurred Loss and LAE Ratio	71.7			66.4			69.9			72.0			70.0
Incurred Expense Ratio	27.8			28.1			27.0			26.9			25.8
Combined Ratio	99.5		%	94.5		%	96.9		%	98.9		%	95.8		%
Underlying Combined Ratio ¹
Current Year Non-catastrophe Losses and LAE Ratio	71.4		%	70.3		%	70.3		%	69.6		%	71.3		%
Incurred Expense Ratio	27.8			28.1			27.0			26.9			25.8
Underlying Combined Ratio	99.2		%	98.4		%	97.3		%	96.5		%	97.1		%
Non-GAAP Measure Reconciliation
Underlying Combined Ratio	99.2		%	98.4		%	97.3		%	96.5		%	97.1		%
Current Year Catastrophe Losses and LAE Ratio	5.0			0.6			3.0			7.3			2.5
Prior Years Non-catastrophe Losses and LAE Ratio	(3.9		)	(3.3		)	(2.9		)	(3.4		)	(3.4		)
Prior Years Catastrophe Losses and LAE Ratio	(0.8		)	(1.2		)	(0.5		)	(1.5		)	(0.4		)
Combined Ratio as Reported	99.5		%	94.5		%	96.9		%	98.9		%	95.8		%


¹Underlying 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.

Kemper Corporation Property & Casualty Insurance Segment - Results of Operations and Selected Financial Information (continued) (Dollars in Millions) (Unaudited)

	Mar 31, 2014		Dec 31, 2013		Sep 30, 2013		Jun 30, 2013		Mar 31, 2013
Insurance Reserves:
Automobile	$	568.9	$	595.1	$	614.9	$	638.4	$	649.3
Homeowners	114.4		99.9		118.2		122.6		122.4
Other Personal	47.9		47.6		47.1		46.9		50.3
Insurance Reserves	$	731.2	$	742.6	$	780.2	$	807.9	$	822.0
Insurance Reserves:
Loss Reserves:
Case	$	468.1	$	471.2	$	491.8	$	509.0	$	514.7
Incurred but Not Reported	164.2		169.0		180.5		184.6		190.2
Total Loss Reserves	632.3		640.2		672.3		693.6		704.9
LAE Reserves	98.9		102.4		107.9		114.3		117.1
Insurance Reserves	$	731.2	$	742.6	$	780.2	$	807.9	$	822.0

Kemper Corporation Property & Casualty Insurance Segment Personal Automobile Insurance - Premiums and Losses and LAE (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Premiums
Net Premiums Written	$	207.7		$	204.2		$	232.9		$	233.0		$	244.1

Earned Premiums	$	216.3		$	229.7		$	239.1		$	244.6		$	245.7

Losses and LAE
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE	$	163.1		$	189.5		$	181.3		$	184.0		$	186.9
Catastrophe Losses and LAE	0.9			0.1			0.8			4.2			2.5
Prior Years:
Non-catastrophe Losses and LAE	(11.3		)	(7.6		)	(6.9		)	(8.5		)	(6.9		)
Catastrophe Losses and LAE	(0.2		)	0.1			(0.1		)	(0.3		)	0.1
Total Incurred Losses and LAE	$	152.5		$	182.1		$	175.1		$	179.4		$	182.6

Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio	75.4		%	82.6		%	75.8		%	75.2		%	76.1		%
Current Year Catastrophe Losses and LAE Ratio	0.4			—			0.3			1.7			1.0
Prior Years Non-catastrophe Losses and LAE Ratio	(5.2		)	(3.3		)	(2.9		)	(3.5		)	(2.8		)
Prior Years Catastrophe Losses and LAE Ratio	(0.1		)	—			—			(0.1		)	—
Total Incurred Loss and LAE Ratio	70.5		%	79.3		%	73.2		%	73.3		%	74.3		%

Kemper Corporation Property & Casualty Insurance Segment Commercial Automobile Insurance - Premiums and Losses and LAE (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Premiums
Net Premiums Written	$	14.3		$	12.3		$	12.7		$	14.4		$	14.3

Earned Premiums	$	13.1		$	13.6		$	13.5		$	13.1		$	12.1

Losses and LAE
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE	$	11.1		$	10.6		$	10.9		$	12.8		$	9.4
Catastrophe Losses and LAE	—			(0.1		)	0.1			0.1			—
Prior Years:
Non-catastrophe Losses and LAE	(0.5		)	(1.0		)	(2.0		)	(0.7		)	0.7
Catastrophe Losses and LAE	—			—			—			—			—
Total Incurred Losses and LAE	$	10.6		$	9.5		$	9.0		$	12.2		$	10.1

Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio	84.7		%	78.0		%	80.8		%	97.6		%	77.7		%
Current Year Catastrophe Losses and LAE Ratio	—			(0.7		)	0.7			0.8			—
Prior Years Non-catastrophe Losses and LAE Ratio	(3.8		)	(7.4		)	(14.8		)	(5.3		)	5.8
Prior Years Catastrophe Losses and LAE Ratio	—			—			—			—			—
Total Incurred Loss and LAE Ratio	80.9		%	69.9		%	66.7		%	93.1		%	83.5		%

Kemper Corporation Property & Casualty Insurance Segment Total Automobile Insurance - Premiums and Losses and LAE (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Premiums
Net Premiums Written	$	222.0		$	216.5		$	245.6		$	247.4		$	258.4

Earned Premiums	$	229.4		$	243.3		$	252.6		$	257.7		$	257.8

Losses and LAE
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE	$	174.2		$	200.1		$	192.2		$	196.8		$	196.3
Catastrophe Losses and LAE	0.9			—			0.9			4.3			2.5
Prior Years:
Non-catastrophe Losses and LAE	(11.8		)	(8.6		)	(8.9		)	(9.2		)	(6.2		)
Catastrophe Losses and LAE	(0.2		)	0.1			(0.1		)	(0.3		)	0.1
Total Incurred Losses and LAE	$	163.1		$	191.6		$	184.1		$	191.6		$	192.7

Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio	75.9		%	82.3		%	76.0		%	76.4		%	76.1		%
Current Year Catastrophe Losses and LAE Ratio	0.4			—			0.4			1.7			1.0
Prior Years Non-catastrophe Losses and LAE Ratio	(5.1		)	(3.5		)	(3.5		)	(3.6		)	(2.4		)
Prior Years Catastrophe Losses and LAE Ratio	(0.1		)	—			—			(0.1		)	—
Total Incurred Loss and LAE Ratio	71.1		%	78.8		%	72.9		%	74.4		%	74.7		%

Kemper Corporation Property & Casualty Insurance Segment Homeowners Insurance - Premiums and Losses and LAE (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Premiums
Net Premiums Written	$	70.9		$	74.2		$	85.4		$	87.0		$	74.3

Earned Premiums	$	79.7		$	81.4		$	82.3		$	82.1		$	80.4

Losses and LAE
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE	$	49.1		$	30.9		$	47.6		$	43.1		$	48.8
Catastrophe Losses and LAE	14.3			2.2			8.8			21.2			6.0
Prior Years:
Non-catastrophe Losses and LAE	(0.7		)	(3.0		)	(0.3		)	(1.0		)	(4.6		)
Catastrophe Losses and LAE	(2.1		)	(3.8		)	(1.6		)	(4.2		)	(1.6		)
Total Incurred Losses and LAE	$	60.6		$	26.3		$	54.5		$	59.1		$	48.6

Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio	61.6		%	38.0		%	57.8		%	52.5		%	60.6		%
Current Year Catastrophe Losses and LAE Ratio	17.9			2.7			10.7			25.8			7.5
Prior Years Non-catastrophe Losses and LAE Ratio	(0.9		)	(3.7		)	(0.4		)	(1.2		)	(5.7		)
Prior Years Catastrophe Losses and LAE Ratio	(2.6		)	(4.7		)	(1.9		)	(5.1		)	(2.0		)
Total Incurred Loss and LAE Ratio	76.0		%	32.3		%	66.2		%	72.0		%	60.4		%

Kemper Corporation Property & Casualty Insurance Segment Other Personal Lines - Premiums and Losses and LAE (Dollars in Millions) (Unaudited)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Premiums
Net Premiums Written	$	11.4		$	12.2		$	14.0		$	14.5		$	12.7

Earned Premiums	$	13.2		$	13.5		$	13.8		$	14.1		$	13.9

Losses and LAE
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE	$	7.1		$	6.7		$	5.3		$	6.4		$	6.0
Catastrophe Losses and LAE	0.8			(0.1		)	0.7			0.4			0.2
Prior Years:
Non-catastrophe Losses and LAE	(0.2		)	0.5			(1.0		)	(2.0		)	(1.2		)
Catastrophe Losses and LAE	(0.4		)	(0.4		)	—			(0.7		)	—
Total Incurred Losses and LAE	$	7.3		$	6.7		$	5.0		$	4.1		$	5.0

Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio	53.7		%	49.6		%	38.3		%	45.5		%	43.2		%
Current Year Catastrophe Losses and LAE Ratio	6.1			(0.7		)	5.1			2.8			1.4
Prior Years Non-catastrophe Losses and LAE Ratio	(1.5		)	3.7			(7.2		)	(14.2		)	(8.6		)
Prior Years Catastrophe Losses and LAE Ratio	(3.0		)	(3.0		)	—			(5.0		)	—
Total Incurred Loss and LAE Ratio	55.3		%	49.6		%	36.2		%	29.1		%	36.0		%

Kemper Corporation Details of Investment Performance (Dollars in Millions)

	Three Months Ended
	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Net Investment Income
Interest and Dividends on Fixed Maturities	$	57.0		$	58.3		$	59.5		$	58.6		$	59.1
Dividends on Equity Securities	7.3			8.9			11.3			9.0			8.8
Equity Method Limited Liability Investments	3.5			6.5			7.7			3.6			8.6
Short-term Investments	0.2			0.1			—			—			—
Real Estate	3.2			3.1			3.7			6.6			7.4
Loans to Policyholders	5.1			5.1			5.0			4.8			4.9
Total Investment Income	76.3			82.0			87.2			82.6			88.8
Investment Expenses:
Real Estate	2.8			3.0			3.0			6.0			6.3
Other Investment Expenses	2.4			2.1			1.8			2.0			1.7
Total Investment Expenses	5.2			5.1			4.8			8.0			8.0
Net Investment Income	$	71.1		$	76.9		$	82.4		$	74.6		$	80.8
Net Realized Gains on Sales of Investments
Fixed Maturities:
Gains on Sales	$	4.4		$	1.3		$	2.5		$	1.4		$	25.7
Losses on Sales	—			(0.4		)	—			—			—
Equity Securities:
Gains on Sales	0.8			19.9			0.7			0.8			0.4
Losses on Sales	—			(0.2		)	(0.2		)	—			(0.1		)
Equity Method Limited Liability Investments:
Gains on Sales	—			—			2.3			0.2			—
Real Estate:
Gains on Sales	—			—			43.6			—			0.6
Losses on Sales	(0.2		)	—			—			—			—
Other Investments:
Gain on Sale of Subsidiary	1.6			—			—			—			—
Gains on Sales	—			—			—			—			0.1
Losses on Sales	—			—			—			(0.1		)	—
Trading Securities Net Gains	—			0.2			0.2			—			0.2
Net Realized Gains on Sales of Investments	$	6.6		$	20.8		$	49.1		$	2.3		$	26.9
Net Impairment Losses Recognized in Earnings
Fixed Maturities	$	(0.3	)	$	(5.9	)	$	(2.2	)	$	(0.5	)	$	(1.7	)
Equity Securities	(0.5		)	(1.7		)	(1.2		)	(0.5		)	(0.2		)
Net Impairment Losses Recognized in Earnings	$	(0.8	)	$	(7.6	)	$	(3.4	)	$	(1.0	)	$	(1.9	)

Kemper Corporation Details of Invested Assets (Dollars in Millions) (Unaudited)

	Mar 31, 2014				Dec 31, 2013				Dec 31, 2012
	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	$	357.3	5.5	%	$	362.2	5.9	%	$	428.9	6.6	%
States and Political Subdivisions	1,364.1		21.1		1,361.0		22.1		1,401.4		21.7
Corporate Securities:
Bonds and Notes	2,840.2		44.0		2,793.7		45.4		2,993.4		46.3
Redeemable Preferred Stocks	7.5		0.1		7.4		0.1		32.6		0.5
Collaterized Loan Obligations	45.0		0.7		44.7		0.7		—		—
Other Mortgage and Asset-backed	5.4		0.1		6.0		0.1		3.9		0.1
Subtotal Fixed Maturities Reported at Fair Value	4,619.5		71.5		4,575.0		74.3		4,860.2		75.2
Equity Securities Reported at Fair Value:
Preferred Stocks	114.9		1.8		110.2		1.8		100.5		1.6
Common Stocks	195.4		3.0		189.5		3.1		154.2		2.4
Other Equity Interests:
Exchange Traded Funds	150.7		2.3		124.9		2.0		125.9		1.9
Limited Liability Companies and Limited Partnerships	187.3		2.9		173.9		2.8		141.3		2.2
Subtotal Equity Securities Reported at Fair Value	648.3		10.0		598.5		9.7		521.9		8.1
Equity Method Limited Liability Investments	239.0		3.7		245.1		4.0		253.0		3.9
Short-term Investments at Cost which Approximates Fair Value	506.9		7.8		284.7		4.6		327.5		5.1
Other Investments:
Loans to Policyholders at Unpaid Principal	277.2		4.3		275.4		4.5		266.3		4.1
Real Estate at Depreciated Cost	165.6		2.6		167.1		2.7		226.2		3.5
Trading Securities at Fair Value	4.9		0.1		5.0		0.1		4.5		0.1
Other	0.5		—		0.5		—		0.5		—
Subtotal Other Investments	448.2		7.0		448.0		7.3		497.5		7.7
Total Investments	$	6,461.9	100.0	%	$	6,151.3	100.0	%	$	6,460.1	100.0	%
S&P Equivalent Rating for Fixed Maturities
AAA, AA, A	$	3,139.9	68.0	%	$	3,128.1	68.4	%	$	3,319.1	68.3	%
BBB	1,148.0		24.9		1,119.9		24.5		1,199.0		24.7
BB, B	121.3		2.6		144.6		3.1		158.9		3.2
CCC or Lower	210.3		4.5		182.4		4.0		183.2		3.8
Total Investments in Fixed Maturities	$	4,619.5	100.0	%	$	4,575.0	100.0	%	$	4,860.2	100.0	%
Duration (in Years)
Total Investments in Fixed Maturities	6.9				6.8				7.1

¹ Sum of percentages for individual lines may not equal subtotals and grand total due to rounding.

Kemper Corporation Investment Concentration (Dollars in Millions) (Unaudited)

	Mar 31, 2014				Dec 31, 2013				Dec 31, 2012
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	$	1,197.8	18.5	%	$	1,196.9	19.5	%	$	1,371.1	21.2	%
Finance, Insurance and Real Estate	779.2		12.1		767.9		12.5		780.8		12.1
Transportation, Communication and Utilities	326.6		5.1		306.7		5.0		289.2		4.5
Services	281.3		4.4		277.5		4.5		298.6		4.6
Mining	146.3		2.3		143.1		2.3		143.4		2.2
Retail Trade	74.2		1.1		75.6		1.2		66.5		1.0
Wholesale Trade	64.9		1.0		60.7		1.0		57.8		0.9
Agriculture, Forestry and Fishing	23.5		0.4		18.8		0.3		19.2		0.3
Other	4.3		0.1		4.6		0.1		3.3		0.1
Total Fair Value of Non-governmental Fixed Maturities	$	2,898.1	45.0	%	$	2,851.8	46.4	%	$	3,029.9	46.9	%

Kemper Corporation Municipal Bonds (excluding Pre-refunded Bonds) (Unaudited)

	Mar 31, 2014
	State General Obligation		Political Subdivision General Obligation		Revenue		Total Fair Value		Percent of Total Muni Bond¹		Percent of Total Investments¹
Texas	$	30.5	$	18.0	$	43.8	$	92.3	7.6	%	1.4	%
Ohio	39.8		4.5		33.1		77.4		6.3		1.2
Florida	62.9		—		4.4		67.3		5.5		1.0
Georgia	48.0		6.5		7.1		61.6		5.1		1.0
Colorado	—		15.3		41.4		56.7		4.7		0.9
Michigan	35.2		—		16.5		51.7		4.2		0.8
Louisiana	32.8		1.4		16.7		50.9		4.2		0.8
Washington	27.0		0.3		22.5		49.8		4.1		0.8
Wisconsin	38.4		6.5		1.3		46.2		3.8		0.7
North Carolina	17.4		1.9		21.9		41.2		3.4		0.6
New York	6.0		—		34.9		40.9		3.4		0.6
Utah	28.5		—		10.3		38.8		3.2		0.6
Oregon	29.1		—		—		29.1		2.4		0.5
Connecticut	23.4		—		5.4		28.8		2.4		0.4
Mississippi	24.3		—		4.2		28.5		2.3		0.4
Indiana	—		—		26.6		26.6		2.2		0.4
Delaware	17.2		—		8.8		26.0		2.1		0.4
Virginia	—		18.4		6.7		25.1		2.1		0.4
Nevada	22.4		1.2		—		23.6		1.9		0.4
South Carolina	19.7		3.1		—		22.8		1.9		0.4
Arkansas	22.3		—		—		22.3		1.8		0.3
Massachusetts	—		—		21.4		21.4		1.8		0.3
Maryland	—		17.8		3.4		21.2		1.7		0.3
Tennessee	4.5		7.1		9.2		20.8		1.7		0.3
Minnesota	14.6		4.4		1.7		20.7		1.7		0.3
New Jersey	—		5.3		13.5		18.8		1.5		0.3
Missouri	—		—		17.9		17.9		1.5		0.3
Iowa	—		—		16.8		16.8		1.4		0.3
Kentucky	—		1.1		14.4		15.5		1.3		0.2
Rhode Island	10.3		—		5.0		15.3		1.3		0.2
Pennsylvania	11.2		2.3		1.3		14.8		1.2		0.2
Hawaii	14.5		—		—		14.5		1.2		0.2
Arizona	—		3.0		9.9		12.9		1.1		0.2
District of Columbia	—		—		11.3		11.3		0.9		0.2
Nebraska	—		6.2		5.1		11.3		0.9		0.2
Oklahoma	—		—		10.4		10.4		0.9		0.2
California	0.3		—		9.2		9.5		0.8		0.1
West Virginia	9.4		—		—		9.4		0.8		0.1
New Mexico	—		—		9.0		9.0		0.7		0.1
All Other States	12.8		8.0		19.2		40.0		3.3		0.6
Total ⁽¹⁾	$	602.5	$	132.3	$	484.3	$	1,219.1	100.0	%	19.0	%

¹ Sum of percentages for individual lines may not equal total due to rounding.

Kemper Corporation Investments in Limited Liability Companies and Limited Partnerships (Dollars in Millions) (Unaudited)

	Unfunded Commitment		Reported Value
Asset Class	Mar 31, 2014		Mar 31, 2014		Dec 31, 2013
Reported as Equity Method Limited Liability Investments at Cost Plus Cumulative Undistributed Earnings:
Distressed Debt	$	—	$	116.9	$	126.1
Mezzanine Debt	25.5		53.3		46.0
Secondary Transactions	17.5		51.8		54.0
Senior Debt	—		7.3		7.5
Growth Equity	—		5.7		7.8
Leveraged Buyout	0.2		4.0		3.7
Total Equity Method Limited Liability Investments	43.2		239.0		245.1
Reported as Other Equity Interests at Fair Value:
Mezzanine Debt	68.4		70.4		63.8
Distressed Debt	4.2		17.5		14.4
Senior Debt	22.1		14.0		15.0
Secondary Transactions	15.5		13.8		13.7
Hedge Fund	—		12.5		12.5
Leveraged Buyout	3.5		10.0		9.9
Real Estate	—		6.9		6.3
Other	2.4		42.2		38.3
Total Reported as Other Equity Interests at Fair Value	116.1		187.3		173.9
Total Investments in Limited Liability Companies and Limited Partnerships	$	159.3	$	426.3	$	419.0

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.

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 and 3) other 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. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.

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 Incurred Expense Ratio. The most directly comparable GAAP financial measure is the combined ratio, which uses total incurred losses and LAE, including the impact of catastrophe losses and loss and LAE reserve development. 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.



	Mar 31, 2014
Ten Largest Investment Exposures ¹	Fair Value		Percent of Total Investments
Fixed Maturities:
States and Political Subdivisions:
Texas	$	92.3	1.4	%
Ohio	77.4		1.2
Florida	67.3		1.0
Georgia	61.6		1.0
Colorado	56.7		0.9
Michigan	51.7		0.8
Louisiana	50.9		0.8
Washington	49.8		0.8
Equity Method Limited Liability Investments:
Tennenbaum Opportunities Fund V, LLC	72.9		1.1
Vintage Fund IV, LP	51.8		0.8
Total	$	632.4	9.8	%


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 March 31, 2014.



	Three Months Ended
Dollars in Millions (Unaudited)	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Consolidated Net Operating Income	$	31.5		$	46.3		$	38.9		$	31.7		$	42.3
Net Income (Loss) From:
Net Realized Gains on Sales of Investments	4.2			13.5			31.9			1.5			17.5
Net Impairment Losses Recognized in Earnings	(0.5		)	(5.0		)	(2.2		)	(0.7		)	(1.2		)
Income from Continuing Operations	$	35.2		$	54.8		$	68.6		$	32.5		$	58.6



	Three Months Ended
(Unaudited)	Mar 31, 2014			Dec 31, 2013			Sep 30, 2013			Jun 30, 2013			Mar 31, 2013
Consolidated Net Operating Income Per Unrestricted Share	$	0.56		$	0.83		$	0.69		$	0.55		$	0.72
Net Income (Loss) Per Unrestricted Share From:
Net Realized Gains on Sales of Investments	0.08			0.24			0.56			0.02			0.30
Net Impairment Losses Recognized in Earnings	(0.01		)	(0.09		)	(0.04		)	(0.01		)	(0.02		)
Income from Continuing Operations Per Unrestricted Share	$	0.63		$	0.98		$	1.21		$	0.56		$	1.00