Kemper (KMPR) Q4 Earnings and Revenues Beat Estimates

Kemper CorporationKMPR reported fourth-quarter 2016 net operating income of 56 cents per share, which surpassed the Zacks Consensus Estimate of 42 cents by 33.3%. Moreover, the bottom line improved 522.2% from the year-ago quarter. Also, the company's share price rose 3.5% in the last trading session.

Excluding extraordinary items, net income skyrocketed 566.7% year over year to 60 cents per share.

Total revenue rose 4.2% year over year to $642.7 million due to higher earned premiums from Alliance United. The top line also beat the Zacks Consensus Estimate of $631 million by 1.9%.

Total earned premiums increased 3.7% to $561.4 million in the fourth quarter of 2016.

Net investment income inched up 0.6% to $79.9 million due to higher interest income on fixed maturities and non-alternative equity securities. The improvement was partially offset by lower returns on the alternative investments portfolio. Net realized gains on Sales of Investments fell 3.2% year over year to $9.1 million.

Total expenses were down 2.7% to $602.1 million. The decrease in costs is attributable to lower insurance expenses.

2016 Highlights

Kemper's net operating income plunged 81.5% from 2015 to 25 cents per share in 2016.

Total revenue climbed 7.7% year over year to $2.5 billion.

Segment Update

Property & Casualty Insurance segment reported 3.8% year-over-year growth in total revenue to $429.6 million. Earned premiums increased 4.3% to $409.1 million due to higher Personal Automobile premiums. This segment includes the impact of the performance of Alliance United, which was acquired by Kemper on Apr 30, 2015.

The segment reported net operating income of $7 million, which compared favorably with the year-ago loss of $5.1 million. Better underlying performance by Alliance United and lower catastrophe losses resulted in the improvement. Higher underlying loss results in the legacy lines of business and higher levels of adverse prior-year reserve development partially offset the improvement.

Life & Health Insurance segment's total revenue inched up 0.7% year over year to $206.8 million. Earned premiums grew about 2% to 152.3 million. The segment's operating income jumped 29.2% year over year to of $23.0 million. Lower legal expenses contributed to the upside.

Financial Update

As of Dec 31, 2016, Kemper held an investment portfolio worth $6.6 billion. This reflects an improvement of 2.8% from year-end 2015. Cash plunged 28.4% to $115.7 million, whereas total assets grew 2.2% to $8.2 billion from the end of 2015. Shareholders' equity dipped 0.9% to $1.9 billion from year-end 2015.

As of Dec 31, 2016, reported book value per share of $38.52 declined 0.8% from $38.82 at the end of 2015. Excluding net unrealized gains on fixed maturities, book value per share dipped 0.4% to $35 from $35.13 as of Dec 31, 2015.

Share Repurchase and Dividend Update

During 2016, Kemper returned $53.0 million capital to investors through dividends and share buybacks worth $49.2 million and $3.8 million, respectively. Kemper paid dividends worth $12.3 million in the reported quarter.

Kemper Corporation Price, Consensus and EPS Surprise

Kemper Corporation Price, Consensus and EPS Surprise | Kemper Corporation Quote

Zacks Rank

Currently, Kemper Corporation holds a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Performance of Other Insurers

Among other players from the insurance industry that have reported their fourth-quarter earnings so far, the bottom line at Torchmark Corporation TMK , Reinsurance Group of America, Inc. RGA and Assurant, Inc. AIZ beat their respective Zacks Consensus Estimate.

Zacks' Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Torchmark Corporation (TMK): Free Stock Analysis Report

Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis Report

Assurant, Inc. (AIZ): Free Stock Analysis Report

Kemper Corporation (KMPR): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More