Business Segments

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company is engaged, through its subsidiaries, in the property and casualty insurance and life and health insurance businesses. The Company conducts its operations through two operating segments: Specialty Property & Casualty Insurance and Life Insurance.

The Specialty Property & Casualty Insurance segment’s principal products are specialty personal automobile and commercial automobile insurance. These products are distributed primarily through independent agents and brokers. The Life Insurance segment’s principal products are individual life, accident, supplemental health and property insurance. Career agents employed by the Company distribute these products. Corporate and Other operations include interest expense, board of directors’ fees, and general corporate expenses incurred by the Company which are not allocated to other businesses. Non-Core Operations includes the results of our Preferred Insurance business which the Company expects to fully exit.

Segment Adjusted Net Operating Income

The Company analyzes the operating performance of each segment using segment adjusted net operating income. Segment adjusted net operating income does not equate to “net income” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s Chief Operating Decision Maker (“CODM”) to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Segment adjusted net operating income is calculated by adjusting each segment’s income after income taxes for the following items:

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

(ii) Net Realized Investment Gains;

(iii) Impairment Losses;

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

(v) Debt Extinguishment, Pension Settlement and Other Charges;

(vi) Goodwill Impairment Charges;

(vii) Non-Core Operations; and

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

Note 3 - Business Segments (Continued)

These items are important to an understanding of overall results of operations. Segment adjusted net operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of segment adjusted net operating income may differ from that used by other companies. The Company, however, believes that the presentation of segment adjusted net operating income, as measured for management purposes, enhances the understanding of results of operations by highlighting the underlying profitability factors of its businesses.

Total Segment, Non-Core Operations, and Corporate and Other assets at March 31, 2025 and December 31, 2024 were:

(Dollars in Millions)	Mar 31, 2025		Dec 31, 2024
Segment Assets:
Specialty Property & Casualty Insurance1	$	6,527.3	$	6,352.9
Life Insurance	4,850.6		4,731.7
Total Segment Assets	11,377.9		11,084.6
Corporate and Other	374.1		774.7
Non-Core Operations	715.3		771.1
Total Assets1	$	12,467.3	$	12,630.4
1Includes $61.0 million and $41.5 million attributable to Kemper Reciprocal as of March 31, 2025 and December 31, 2024, respectively, which is reported as a consolidated variable interest entity.

Earned Premiums by product line, including a reconciliation to Total Earned Premiums, for the three months ended March 31, 2025 and 2024 were:

	Three Months Ended
(Dollars in Millions)	Mar 31, 2025		Mar 31, 2024
Specialty Property & Casualty Insurance:
Personal Automobile	$	753.7	$	675.3
Commercial Automobile	208.5		164.7
Total Specialty Property & Casualty Insurance	962.2		840.0
Life Insurance:
Life	83.7		80.6
Accident and Health	5.5		5.6
Property	10.5		11.1
Total Life Insurance	99.7		97.3
Total Segment Earned Premiums	1,061.9		937.3
Non-Core Operations	26.0		94.6
Total Earned Premiums	$	1,087.9	$	1,031.9

Note 3 - Business Segments (Continued)

Segment Revenues, including a reconciliation to Total Revenues, for the three months ended March 31, 2025 and 2024 were:

	Three Months Ended
(Dollars in Millions)	Mar 31, 2025		Mar 31, 2024
Segment Revenues:
Specialty Property & Casualty Insurance:
Earned Premiums	$	962.2	$	840.0
Net Investment Income	50.5		41.1
Other Income	1.3		1.4
Total Specialty Property & Casualty Insurance	1,014.0		882.5
Life Insurance:
Earned Premiums	99.7		97.3
Net Investment Income	48.4		44.3
Other Income	0.7		0.3
Total Life Insurance	148.8		141.9
Total Segment Revenues	1,162.8		1,024.4
Change in Fair Value of Equity and Convertible Securities	0.1		3.4
Net Realized Investment Gains	0.9		6.6
Impairment Losses	0.3		(1.5)
Non-Core Operations	27.9		106.2
Other	1.0		3.9
Total Revenues	$	1,193.0	$	1,143.0

Note 3 - Business Segments (Continued)

Significant Segment Expenses that were regularly provided to the CODM for the three months ended March 31, 2025 and 2024 were:

	Three Months Ended
(Dollars in Millions)	Mar 31, 2025		Mar 31, 2024
Segment Expenses:
Specialty Property & Casualty Insurance:
Current Year
Non-catastrophe Losses and LAE	682.3		609.0
Catastrophe Losses and LAE	3.8		4.1
Prior Years
Non-catastrophe Losses and LAE	0.5		5.3
Catastrophe Losses and LAE	0.2		0.7
Total Incurred Losses and LAE	686.8		619.1
Policy Acquisition Costs1	132.3		113.2
Business Unit Operating Costs2	37.7		30.5
Corporate Overhead Costs3	35.1		33.2
Total Insurance Expenses	205.1		176.9
Income Tax Expense	24.2		17.3
Total Specialty Property & Casualty Insurance	916.1		813.3
Life Insurance:
Policyholders’ Benefits and Incurred Losses and LAE	62.2		63.0
Policy Acquisition Costs1	29.7		31.2
Business Unit Operating Costs2	27.5		23.3
Corporate Overhead Costs3	9.2		10.4
Total Insurance Expenses	66.4		64.9
Income Tax Expense	3.0		2.1
Total Life Insurance	131.6		130.0
Total Segment Expenses	$	1,047.7	$	943.3
1Policy acquisition costs primarily represents commissions and premium taxes that are incurred by the Company as a result of underwriting insurance policies and reflect the impacts of deferral and amortization of certain of these costs in accordance with the Company’s accounting policies.
2Business unit operating costs are general expenses incurred by the Company's segments as part of ongoing operations and includes employee, IT, and facilities expenses.
3Corporate overhead costs represents general expenses and other shared service expenses which are allocated across the Company.

Note 3 - Business Segments (Continued)

Total Segment Adjusted Net Operating Income, including a reconciliation to Net Income attributable to Kemper Corporation, for the three months ended March 31, 2025 and 2024 was:

	Three Months Ended
(Dollars in Millions)	Mar 31, 2025		Mar 31, 2024
Segment Adjusted Net Operating Income:
Specialty Property & Casualty Insurance
Revenues	$	1,014.0	$	882.5
Expenses	(916.1)		(813.3)
Specialty Property & Casualty Insurance Adjusted Net Operating Income	97.9		69.2
Life Insurance
Revenues	148.8		141.9
Expenses	(131.6)		(130.0)
Life Insurance Adjusted Net Operating Income	17.2		11.9
Total Segment Adjusted Net Operating Income	115.1		81.1
Corporate and Other Adjusted Net Operating Loss	(11.4)		(12.5)
Less: Net Loss attributable to Noncontrolling Interest	(2.7)		(1.1)
Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities	0.1		2.7
Net Realized Investment Gains	0.7		5.2
Impairment Losses	0.2		(1.2)
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs	(4.2)		(10.1)
Debt Extinguishment, Pension Settlement and Other Charges	0.4		—
Non-Core Operations	(3.9)		5.0
Net Income attributable to Kemper Corporation	$	99.7	$	71.3