Kemper Estimates Cat Loss for Q2 - Analyst Blog

Kemper Corporation ( KMPR ) foresees pre-tax loss stemming from severe storms in April and May. The multiline insurer estimates pre-tax catastrophe losses between $40 million to $50 million in the second quarter of 2014.

The losses stemmed from severe storms, particularly from wind and hailstorms occurred between May 18 and May 23. The storms in turn affected policyholders in Montana, Pennsylvania, Illinois, South Carolina and North Carolina.

However, Kemper does not expect its catastrophe reinsurance program aid it recover any of these losses. The Zacks Consensus Estimate for the second quarter is currently pegged at 54 cents, which also translate into a year-over-year decline of 2.4%.

Kemper Corporation, in the first quarter, suffered due to higher catastrophe losses. The bottom line missed the Zacks Consensus Estimate and deteriorated from the year-ago earnings due to lower net investment income, higher catastrophe losses and increased expenses. Net operating income of the Property & Casualty Insurance segment was affected by catastrophe losses that increased $4.7 million. This combined with other deterrents lowered income by about 50%. Combined ratio decreased 210 basis points in the last quarter.

Dismal first-quarter earnings were also a drag on the Zacks Consensus Estimate as most of the analysts moved south in the last 30 days. It declined 8% to $2.36 for 2014 while fell 1.4% to $2.75 for 2015.

Kemper currently carries a Zacks Rank #4 (Sell). Some better-ranked multi-line insurers include Horace Mann Educators Corp . ( HMN ), Old Republic International Corporation ( ORI ) and Radian Group Inc . ( RDN ). While Horace Mann and Old Republic International sport a Zacks Rank #1 (Strong Buy), Radian Group carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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