Kemper Corp.

The stable outlook reflects our view that Kemper will maintain stable operating performance as it returns to growth in the property/casualty (P/C) business. It also reflects our expectations that fixed-charge coverage will remain above 4x over 2025-2026 and that capital adequacy will remain at the 99.95% level, per our risk-based capital model. We could lower the rating if: Contrary to our expectations, capital deteriorates and we do not believe the company can rebuild it within the next 24 months; or Coverage falls and remains below 4x. We view an upgrade as unlikely within the next two years. In the longer term, an upgrade would depend on: An improvement in the competitive position through greater product or geographic diversification; or Meaningful,

...S&P Global Ratings expects Kemper to maintain capital at the 99.95% level, per its risk-based capital model. We believe the company's conservative and diversified investment portfolio, along with its exit of the more capital-intensive preferred business, supports its capital adequacy. Over the next 24 months, we expect strong operating performance (including investment income) and lower capital requirements after the preferred exit will support robust capitalization. Geographic and business line concentrations could create earnings volatility. In 2021-2023, Kemper's concentration in the personal auto line affected operating performance, but rate and nonrate actions helped revive it. Still, we consider this concentration in our view of the company's business risk. Meanwhile, Kemper is diversifying its business with strong growth in commercial auto, supported by strong rate increases. It's also reducing concentrations in California, Texas, and Florida by expanding into other states. The combination...

Full Report