AM Best Affirms Credit Ratings of Kemper Corporation, Its Affiliates and Subsidiaries
BY Business Wire | CORPORATE | 09/13/24 04:09 PM EDT OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of ?a-? (Excellent) of the property/casualty subsidiaries and affiliated insurance companies of Kemper Corporation
The ratings of Kemper P&C reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Kemper P&C?s earnings and balance sheet strength have been significantly impacted in recent years by substantial operating losses, largely driven by inflation-related severity increases. This led to sharp fluctuations in surplus levels, mixed reserve development trends and elevated underwriting leverage. The group?s concentration in California further pressured results, as the state?s regulatory environment made it difficult for Kemper P&C to secure necessary rate adjustments for a prolonged period. Nonetheless, Kemper P&C?s strategic rate adjustments and non-rate actions have proven effective, with operating results stabilizing and showing significant improvement through late 2023 and in the first half of 2024. Consequently, the group has resumed generating underlying surplus gains, strengthening its risk-adjusted capitalization and overall balance sheet. The group?s balance sheet strength is further supported by both implicit and explicit support from its parent company, Kemper Corp.
While Kemper P&C and Kemper Corp.
The ratings of Kemper Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, appropriate ERM, and consideration of the group?s affiliation with lead rating unit, Kemper P&C.
In 2022, Kemper Life announced that it was entering into an agreement with Kemper Bermuda to cede 80% of its life business to its offshore affiliate. This initiative, along with a reserve review reduction completed in late 2023, has resulted in the release of over $600 million in dividends to the parent company, Kemper Corp.
The stable outlooks for Kemper Corp.
The FSR of A- (Excellent) and the Long-Term ICRs of ?a-? (Excellent) have been affirmed with stable outlooks for the members of Kemper Property & Casualty Group:
- Trinity Universal Insurance Company
- Alpha Property & Casualty Insurance Company
- Capitol County Mutual Fire Insurance Company
- Charter Indemnity Company
- Financial Indemnity Company
- Infinity Insurance Company
- Infinity Assurance Insurance Company
- Infinity Auto Insurance Company
- Infinity Casualty Insurance Company
- Infinity Indemnity Insurance Company
- Infinity Preferred Insurance Company
- Infinity Safeguard Insurance Company
- Infinity Select Insurance Company
- Infinity Standard Insurance Company
- Infinity County Mutual Insurance Company
- Kemper Independence Insurance Company
- Merastar Insurance Company
- Mutual Savings Fire Insurance Company
- Kemper Financial Indemnity Company
- Old Reliable Casualty Company
- Response Insurance Company
- Response Worldwide Direct Auto Insurance Company
- Response Worldwide Insurance Company
- Union National Fire Insurance Company
- United Casualty Insurance Company of America
- Unitrin Advantage Insurance Company
- Unitrin Auto and Home Insurance Company
- Unitrin County Mutual Insurance Company
- Unitrin Direct Insurance Company
- Unitrin Direct Property & Casualty Company
- Unitrin Preferred Insurance Company
- Unitrin Safeguard Insurance Company
- Valley Property & Casualty Insurance Company
- Warner Insurance Company
The FSR of A- (Excellent) and the Long-Term ICRs of ?a-? (Excellent) have been affirmed with stable outlooks for the members of Kemper Life Group:
- United Insurance Company of America
- Mutual Savings Life Insurance Company
- The Reliable Life Insurance Company
- Union National Life Insurance Company
The following Long-Term IRs have been affirmed with stable outlooks:
Kemper Corporation?
-- ?bbb-? (Good) on $450 million 4.35% senior unsecured notes, due 2025
-- ?bbb-? (Good) on $400 million 2.4% senior unsecured notes, due 2030
-- ?bbb-? (Good) on $400 million 3.8% senior unsecured notes, due 2032
-- ?bb? (Fair) on $150 million junior subordinated debentures, due 2062
The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks for the shelf registration:
Kemper Corporation?
-- ?bbb-? (Good) on senior unsecured debt
-- ?bb+? (Fair) on subordinated debt
-- ?bb? (Fair) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best?s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best?s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best?s Credit Ratings, Best?s Performance Assessments, Best?s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best?s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright ? 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Source: AM Best