Kemper swings to preliminary Q3 profit as auto underwriting improves

Overview

• U.S. specialized insurer expects preliminary Q3 net income attributable to Kemper shareholders of about $52 mln, reversing a prior-quarter loss

• Preliminary adjusted consolidated net operating income rose to about $60 mln from $26 mln sequentially

• Specialty Auto combined ratio improved to 99.2%, helped by $23 mln favorable prior-year reserve development

Outlook

• Kemper did not provide specific financial guidance for future quarters or the full year in its press release

Result Drivers

• RESERVE DEVELOPMENT - Q3 results included $23 mln favorable prior-year reserve development

• UNDERWRITING IMPROVEMENT - Specialty Auto combined ratio improved by 4.8 percentage points from Q2

• INVESTMENT INCOME - Consolidated net investment income rose to $107 mln from $105 mln in Q2

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "hold"

• Wall Street's median 12-month price target for Kemper Corporation is $42.00, about 43.1% above its October 27 closing price of $29.36

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)