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KEMPER REPORTS FOURTH-QUARTER NET INCOME OF $43.9 MILLION, OR $.91 PER SHARE

 KEMPER REPORTS FOURTH-QUARTER NET INCOME OF $43.9 MILLION,
 OR $.91 PER SHARE
 LONG GROVE, Ill., Feb. 4 /PRNewswire/ -- Kemper Corp. (NYSE: KEM) today reported net income of $43.9 million, or $.91 per share, for the quarter ended Dec. 31, 1991, down from $46.7 million, or $.98 per share, for the same period in 1990. Included in net income are after-tax realized investment gains of $5.2 million, or $.11 per share, in the fourth quarter of 1991, compared with $3.4 million, or $.07 per share, in the same period of 1990.
 Fourth-quarter 1991 investment gains from the sale of fixed-income and equity securities were largely offset by a pre-tax $135 million reserve, or $89.1 million after tax, related to the company's mortgage loan and real estate portfolio. The gains are also net of after-tax charges to write down certain below investment-grade securities of $17.2 million in the fourth quarter of 1991 vs. $5.8 million in the comparable period of 1990.
 "The double-dip recession, strongly indicated in the fourth quarter, depressed real estate markets most recently in those areas where our portfolio is invested," said David B. Mathis, chairman of the board, president and chief executive officer of Kemper Corp. "In particular, the economies of California and Illinois, two states where approximately half of Kemper's real estate holdings are located, deteriorated significantly during the fourth quarter of 1991."
 The company regularly monitors its investment portfolio and as part of this process reviews its assets for possible impairments of carrying value.
 "The scope and results of the just completed review of our real estate-related portfolio reflect this adverse environment," Mathis added. "Although the company recorded no increase in nonperforming third-party mortgage loans in the fourth quarter, these negative developments in the real estate markets generally, coupled with an increased level of operating loss from real estate joint ventures and the nature of commercial real estate, suggest there is now greater risk of loss in the portfolio," he explained. "We believe this reserve prudently reflects these realities.
 "Throughout 1991 we took a number of actions designed to strengthen the market and financial positions of our life insurance subsidiaries. In the fourth quarter, we added $40.8 million in capital to the life companies and reduced below investment-grade securities holdings by an additional $234.1 million, primarily by taking advantage of market opportunities to make sales," Mathis said.
 He noted that despite the real estate-related reserve, the life insurance segment's statutory surplus ratio rose to 7.86 percent at Dec. 31, 1991, from the Sept. 30, 1991, ratio of 7.56 percent.
 Revenue for the 1991 fourth quarter increased 8.0 percent to $800.8 million, from $741.2 million in the same period last year.
 1991 Results
 Net income for 1991 was $204.5 million, or $4.25 per share, compared with $11.9 million, or $.25 per share, in 1990. Excluding after-tax charges of $126.7 million related to the restructuring of the company's securities brokerage operations and $19.5 million for an arbitration award, net income for 1990 was $158.1 million, or $3.26 per share. On this basis, net income for 1991 was up 30.4 percent over 1990.
 After-tax realized investment gains were $2.4 million, or $.05 per share, in 1991, compared with $19.5 million, or $.40 per share, in 1990. The 1991 results reflect the $89.1 million after-tax impact of the real estate-related reserve and $64.5 million of after-tax charges to write down certain below investment-grade securities. Such write-downs totaled $17.7 million in 1990.
 By year-end 1991, holdings of below investment-grade securities had declined, primarily as a result of sales, to 9.2 percent of the company's total invested assets from 19.5 percent a year earlier. At Dec. 31, 1991, Kemper's mortgage loan, real estate and real estate related assets increased, primarily due to funding previously existing commitments, to approximately 27 percent of total invested assets, compared with 24 percent a year earlier.
 Operating earnings from continuing operations in 1991 were $4.20 per share, compared with a loss of $0.15 per share in 1990. Revenue grew 6.5 percent in 1991 to $3.12 billion, from $2.93 billion in 1990.
 "Our operating earnings per share from continuing operations set a new high in 1991, despite several challenges," Mathis said. "We are pleased with the continued solid performance of our asset management business, the improvement in our property-casualty insurance business and the turnaround in the securities brokerage operations."
 Life Insurance
 Kemper Corp.'s life insurance segment reported 1991 net income of $9.1 million, or $.19 per share. In 1990, this segment had net income of $61.3 million, or $1.27 per share.
 The 1991 results include after-tax realized investment losses of $67.0 million, compared with losses of $18.8 million in 1990. The 1991 losses reflect the segment's $80.4 million after-tax real estate related reserve and $57.3 million of after-tax write-downs of certain below investment-grade securities. Such write-downs totaled $17.3 million in 1990.
 In 1991, operating earnings totaled $76.2 million, compared with $80.1 million in 1990. The 1991 earnings were down mainly as a result of after-tax foregone investment income on nonperforming securities of $35.3 million in 1991, compared with $16.9 million in 1990.
 Revenue was $737.7 million in 1991, compared with $802.9 million the previous year, representing a decrease of 8.1 percent.
 "In a difficult year for the life insurance industry, our life insurance companies ended 1991 financially stronger," Mathis said.
 Investment Services
 The investment services segment, which consists primarily of Kemper's asset management and securities brokerage operations, reported net income of $73.3 million, or $1.52 per share, for 1991, compared with a net loss of $131.9 million, or $2.72 per share, in 1990. Excluding the $146.2 million in after-tax charges related to the restructuring of the company's securities brokerage operations and an arbitration award, this segment's 1990 net income was $14.3 million.
 Revenue for 1991 was $1.16 billion, compared with $1.11 billion in 1990.
 Net income within Kemper's asset management operations, represented by Kemper Financial Services, Inc. (KFS), was $81.7 million for 1991, compared with $70.0 million in 1990.
 Assets under management by KFS at Dec. 31 were $65.9 billion, compared with $63.9 billion at Sept. 30, 1991, and $63.4 billion at Dec. 31, 1990. The 1991 amounts reflect the loss of an institutional money market account from a nonaffiliated brokerage firm, representing $7.3 billion in assets at March 31, 1991.
 "We are pleased with the performance of our asset management business in 1991," Mathis said. "Brisk sales due to market conditions and the investment performance of our equity and fixed income mutual funds boosted higher-margin assets under management."
 Kemper's securities brokerage operations reported 1991 net income of $6.5 million. For 1990, these operations posted a net loss of $193.5 million which included the previously mentioned $146.2 million in charges. Excluding the charges, the securities brokerage operations posted a loss of $47.3 million for 1990.
 "The restructuring returned our securities brokerage operations to profitability. I know this business has not fully realized its potential, and that remains the challenge," Mathis said.
 Reinsurance
 Kemper's reinsurance segment generated 1991 net income of $35.4 million, or $.74 per share, compared with $36.5 million, or $.75 per share, in 1990. Included in the segment's 1991 net income are after-tax realized investment gains of $14.8 million, compared with $16.2 million in 1990.
 Operating earnings were $.43 per share, compared with $.42 per share in 1990.
 Revenue for 1991 was $586.0 million, compared with $433.9 million in 1990. Net premiums written increased 47.9 percent to $526.0 million for 1991, compared with $355.6 million in 1990. Reinsurance premium from overseas led the growth.
 For 1991, the segment's statutory combined ratio (the sum of the loss and loss expense ratio and the underwriting expense ratio) improved to 105.6 percent, from 113.2 percent in 1990, mainly due to a decline in insured catastrophe losses and lower expense ratios.
 "While the combined ratio improved, net investment income was down mainly due to commutations of certain contracts and lower investment yields. We also experienced continuing soft prices in the domestic market," Mathis said.
 Property-Casualty Insurance
 Kemper's property-casualty insurance segment produced 1991 net income of $84.7 million, or $1.76 per share, compared with $29.9 million, or $.62 per share, in 1990.
 These figures include after-tax realized investment gains of $58.6 million and $17.2 million for 1991 and 1990, respectively.
 Revenue for 1991 increased to $646.0 million, from $542.8 million in 1990. Net premiums written were up 5.6 percent in 1991 to $525.1 million, from $497.4 million in the previous year.
 The segment's statutory combined ratio improved to 101.6 percent, from 107.0 percent in 1990, in part due to a decline in weather related losses.
 Operating earnings were $.54 per share, compared with $.26 per share in 1990.
 "From an operating standpoint, our property-casualty insurance companies had a good year in 1991. Strict underwriting, expense controls and rate increases in certain states contributed to the improved performance," Mathis said. "From an investment standpoint, we took advantage of the run-up in the equity securities markets."
 Other Operations and Corporate
 The other operations and corporate category reported net income of $2.0 million, or $.04 per share, in 1991, compared with $16.1 million, or $.33 per share, in 1990.
 This category includes the operations of Kemper Risk Management Services (KRMS), a partnership formed April 1, 1991, between National Loss Control Service Corp., Kemper's risk management subsidiary, and Kemper National Services, Inc., a subsidiary of Lumbermens Mutual Casualty Company. KRMS's higher-than-expected operating expenses in a year of transition contributed to the decline in earnings. Kemper Corp.'s share of KRMS's operating results was 87.5 percent through 1991 and decreases 12.5 percentage points per year to 50 percent in 1994 and thereafter.
 The category also includes interest expense and holding company overhead.
 Kemper Corp. is a nonoperating holding company with subsidiaries in investment services, life insurance, reinsurance, property-casualty insurance and risk management.
 Notes:
 -- Operating earnings is defined as net income excluding realized investment gains or losses.
 -- Statutory surplus ratio is defined as life insurance statutory surplus divided by policyholder liabilities.
 -- David B. Mathis succeeded Joseph E. Luecke as chairman of the board and chief executive officer of Kemper Corp. on Feb. 1, 1992.
 -0- 2/4/92
 /CONTACT: Janice Kalmar, 708-540-4465, or Ira Nathanson, 708-540-4463, both of Kemper/
 (KEM) CO: Kemper Corp. ST: Illinois IN: INS SU: ERN


GK -- NY034 -- 6669 02/04/92 12:04 EST
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