Acquisition of Business (Notes)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Subsequent Event- Acquisition of Infinity

On July 2, 2018, Kemper acquired 100% of the outstanding common stock of Infinity Property and Casualty Corporation (“Infinity”), pursuant to the terms of the merger agreement dated February 13, 2018.

The Company has not yet completed the process of estimating the fair value of assets acquired and liabilities assumed, including, but not limited to, receivables, intangible assets, unearned premium reserves, certain tax-related balances and certain other asset and liabilities. Accordingly, the Company’s preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as the Company completes the process, which would also likely impact the Company’s allocation of the purchase price to Goodwill. In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, changes if any, to the preliminary estimates and allocation as a result of events or conditions as of the acquisition date, will be reported in the Company’s financial statements as an adjustment to the assets acquired and liabilities assumed. During the first quarter of 2019, the Company further refined its estimate of certain bonus accruals, other liabilities and related tax-related balances, decreasing liabilities assumed by $0.9 million and decreasing goodwill by $0.9 million. The Company has allocated all of the goodwill associated with the Infinity acquisition to the Specialty Property & Casualty Insurance segment. The factors that contributed to the recognition of goodwill include synergies from economies of scale within the underwriting and claims operations, acquiring a talented workforce and cost savings opportunities.

Based on the Company’s preliminary allocation of the purchase price as of March 31, 2019, the fair value of the assets acquired and liabilities assumed were:

(Dollars in Millions)
Investments	$	1,569.3
Short Term Investments	98.8
Cash	4.0
Receivables from Policyholders	583.4
Other Receivables	31.7
Value of Intangible Assets Acquired (Reported in Other Assets)	262.7
Current Income Tax Assets	0.8
Goodwill1	788.5
Other Assets	102.1
Property and Casualty Insurance Reserves	(713.6		)
Unearned Premiums	(715.6		)
Debt	(282.1		)
Deferred Income Tax Liabilities	(11.7		)
Accrued Expenses and Other Liabilities	(169.6		)
Total Purchase Price	1,548.7

¹Non-deductible for tax-purposes.