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KEMPER CORPORATION REPORTS THIRD-QUARTER OPERATING EARNINGS OF $25.4 MILLION

 KEMPER CORPORATION REPORTS THIRD-QUARTER
 OPERATING EARNINGS OF $25.4 MILLION
 LONG GROVE, Ill., Nov. 5 /PRNewswire/ -- Kemper Corporation (NYSE: KEM) today reported operating earnings, including those of the discontinued property-casualty insurance operations, of $25.4 million, or $.52 per share, for the quarter ended Sept. 30, compared with $61.9 million, or $1.26 per share, for the same period in 1991.
 "The previously announced losses in the reinsurance segment of $21.8 million after tax relating to hurricanes Andrew and Iniki and overall lower investment income were primarily responsible for the decline," said David B. Mathis, chairman and chief executive officer. "The life insurance segment's third-quarter operating earnings improved over the first two quarters, an indication that our strategy to improve spreads on fixed annuities while reducing expenses has taken hold."
 On Nov. 4, Kemper Corporation announced its intention to exit the primary property-casualty insurance business as part of its strategic plan to focus on its core businesses. As a result, the company plans to sell its two primary property-casualty insurance subsidiaries, Economy Fire & Casualty Company and Federal Kemper Insurance Company, which previously composed the property-casualty insurance segment. The results of these companies are now reported as discontinued operations.
 Kemper Corporation recorded third-quarter 1992 net income of $4.2 million, or $.09 per share, compared with net income of $56.1 million, or $1.14 per share, in the third quarter of 1991. Third- quarter 1991 net income included a benefit from ceding commissions of $6.6 million after tax resulting from the sale of approximately $400 million of fixed annuity business.
 Third-quarter 1992 results included after-tax realized investment losses of $21.2 million, or $.43 per share, compared with losses of $5.8 million, or $.12 per share, in the year-ago period. Included in the 1992 third-quarter realized investment results are after-tax charges of $29.6 million related to an increase in the company's provision for real estate-related losses.
 The 1992 and 1991 third-quarter investment results are also net of after-tax charges to write down certain below investment-grade securities of $13.6 million and $17.2 million, respectively.
 Revenue from continuing operations for the 1992 third quarter was $582.9 million, compared with $643.3 million in the same period last year.
 NINE-MONTH RESULTS
 Operating earnings, including those of the discontinued operations, totaled $81.2 million, or $1.67 per share, for the first nine months of 1992, compared with $163.5 million, or $3.37 per share, for the year ago period.
 In addition to the hurricane losses and lower investment income, the nine-month 1992 results reflect charges taken by the securities brokerage operations in the second quarter of 1992 of $13.2 million after tax to increase legal reserves and $6.0 million for federal income tax adjustments.
 Net income for the first nine months of 1992 was $24.1 million, or $.50 per share, compared with $160.7 million, or $3.32 per share, for the year-ago
period. Net income included after-tax realized investment losses of $57.1 million, or $1.17 per share, and $2.8 million, or $.05 per share, for the first nine months of 1992 and 1991, respectively. Realized investment results for the first nine months of 1992 reflect a $48.6 million after-tax charge related to increases in the provision for real estate-related losses and $25.6 million in write-downs and restructurings of certain below investment-grade securities. Write- downs of certain below investment-grade securities in the year-ago period totaled $47.3 million after tax.
 Revenue from continuing operations for the first nine months of 1992 was $1.84 billion, compared with $1.87 billion for the year-ago period.
 INVESTMENT SERVICES
 Financial Highlights
 (in millions, except per share data and assets under management)
 Nine months Three months
 Period ended Sept. 30 1992 1991 1992 1991
 Net income (loss)
 Asset management $ 64.3 $ 64.4 $ 19.7 $ 21.6
 Securities brokerage (14.7) 4.7 2.2 2.1
 Total $ 49.6 $ 69.1 $ 21.9 $ 23.7
 Net income (loss)
 per share
 Asset management $ 1.32 $ 1.31 $ .39 $ .43
 Securities brokerage (.30) .10 .05 .04
 Total $ 1.02 $ 1.41 $ .44 $ .47
 Revenue
 Asset management $448.9 $402.7 $148.1 $137.4
 Securities brokerage 514.3 493.4 169.0 164.7
 Assets under 9-30-92 12-31-91 9-30-91
 management at (in billions) $69.2 $65.9 $63.9
 Kemper's asset management operations, represented primarily by Kemper Financial Services, Inc. (KFS), and now including INVEST Financial Corporation, reported net income of $64.3 million, or $1.32 per share, for the first nine months of 1992, compared with $64.4 million, or $1.31 per share, in the same period of 1991. Earnings were flat due to new product and service initiatives, resulting in higher personnel, data processing and promotional costs.
 "While KFS's sales slowed somewhat in the third quarter relative to the first half of the year, 1992 is shaping up to be one of the best years in history for sales of our fixed-income and equity mutual funds," Mathis said.
 The securities brokerage operations, represented by Kemper Securities, Inc., reported a net loss of $14.7 million, or $.30 per share, for the first nine months of 1992, compared with net income of $4.7 million, or $.10 per share, in the year-ago period. The loss was primarily due to the previously mentioned $13.2 million in after-tax charges related to an increase in the operations' legal reserves and a $6.0 million charge for federal income tax adjustments, both taken in the second quarter of 1992.
 LIFE INSURANCE
 Financial Highlights
 (in millions, except per share data)
 Nine months Three months
 Period ended Sept. 30 1992 1991 1992 1991
 Operating earnings $ 45.7 $ 74.5 $ 19.9 $ 34.6
 Per share .94 1.54 .41 .71
 Net income (loss) (4.0) 32.6 5.4 16.9
 Per share (.08) .68 .12 .35
 Revenue 519.5 602.9 175.7 202.2
 Sales 819.7 834.9 261.8 223.6
 Kemper Corporation's life insurance segment reported operating earnings of $45.7 million, or $.94 per share, for the first nine months of 1992, compared
with $74.5 million, or $1.54 per share, in the same period of 1991. The results reflect lower investment income due to a combination of factors, including the company's actions to reposition the life insurance segment's investment portfolios to reflect the more conservative nature of today's consumer and foregone investment income and losses on underperforming real estate- related assets. The 1991 results reflect the previously mentioned benefit of $6.6 million after tax from ceding commissions recorded in the third quarter of 1991.
 The life insurance segment's net income for the first nine months of 1992 included after-tax realized investment losses of $49.7 million, or $1.02 per share, compared with losses of $41.9 million, or $.86 per share, in the year-ago period. Realized investment results for the first nine months of 1992 include $41.0 million after tax related to an increase in the provision for real estate-related losses and $25.3 million after tax in write-downs and restructurings of certain below investment-grade securities. Such write-downs totaled $43.4 million after tax in the first three quarters of 1991.
 Reflecting the company's strategies, variable annuity sales more than doubled in the first nine months of 1992, accounting for 32 percent of total annuity sales, compared with 11 percent in the year-ago period.
 REINSURANCE
 Financial Highlights
 (in millions, except per share data)
 Nine months Three months
 Periods ended Sept. 30 1992 1991 1992 1991
 Operating
 earnings (loss) $ (1.1) $ 13.8 $ (9.3) $ 3.1
 Per share (.02) .29 (.19) .07
 Net income (loss) 1.7 26.3 (6.6) 5.4
 Per share .03 .55 (.14) .11
 Revenue 453.0 420.4 135.2 161.1
 Net premiums
 written 429.1 367.6 140.2 141.0
 Statutory combined
 ratio 110.9pct 107.2pct 124.0pct 106.0pct
 Kemper's reinsurance segment reported an operating loss of $1.1 million, or $.02 per share, in the first nine months of 1992, compared with operating earnings of $13.8 million, or $.29 per share, in the year-ago period.
 "I am encouraged by our early renewal quotation activity which reflects 1992's catastrophes. The market also seems to be demanding better rates and improved terms," Mathis said.
 Net income for the first nine months of 1992 included after-tax realized investment gains of $2.8 million, or $.05 per share, compared with $12.5 million, or $.26 per share, a year earlier. Realized investment results for the 1991 period reflected favorable stock market conditions.
 The 16.7 percent growth in net premiums written was largely due to increased writings in the London market by the reinsurance segment's overseas operations.
 OTHER OPERATIONS AND CORPORATE
 This category includes the holding company income and expenses of both Kemper Corporation and Kemper Financial Companies, Inc. (KFC) as well as the results of their respective real estate subsidiaries. Prior to the third quarter of 1992, results for the real estate subsidiaries were primarily recorded in the life insurance segment, and the corporate results of KFC were recorded in the investment services segment. The other operations category also includes Kemper Corporation's share in the operating results of Kemper Risk Management Services (KRMS), which is 75 percent in 1992.
 The other operations and corporate category reported a net loss of $42.1 million, or $.86 per share, for the first three quarters of 1992, compared with a net loss of $12.6 million, or $.26 per share, for the year-ago period. These results reflect an increase in real estate related losses, including higher joint venture operating losses. An increase in holding company overhead, including interest expense, and reduced income from KRMS due to higher expenses for claims, marketing programs and systems development also contributed to the net loss.
 DISCONTINUED OPERATIONS:
 Property-Casualty Insurance
 Financial Highlights
 (in millions, except per share data)
 Nine months Three months
 Periods ended Sept. 30 1992 1991 1992 1991
 Operating earnings $ 22.5 $ 18.6 $ 11.6 $ 7.4
 Per share .46 .39 .24 .15
 Net income 18.9 45.2 9.0 16.9
 Per share .39 .94 .18 .35
 Revenue 419.5 454.8 138.9 154.2
 Net premiums
 written 396.2 392.7 135.3 134.9
 Statutory combined
 ratio 100.2pct 101.4pct 95.7pct 99.7pct
 Kemper's discontinued operations (the property-casualty insurance segment) reported operating earnings of $22.5 million, or $.46 per share, in the first nine months of 1992, compared with $18.6 million, or $.39 per share, in the year-ago period. Rate increases and lower expenses fueled the improved underwriting results.
 Net income for the first nine months of 1992 included after-tax realized investment losses of $3.5 million, or $.07 per share. In the year-ago period, the segment capitalized on favorable stock market conditions to realize investment gains of $26.6 million after tax, or $.55 per share.
 OTHER DEVELOPMENTS
 Kemper Corporation has classified its fixed-maturities investment portfolio as available for sale and, accordingly, is carrying this portfolio at market value on the balance sheet effective Sept. 30. This classification, which does not impact the company's reported net income, increased the company's book value per share by approximately $3.00 at Sept. 30. Because market values are sensitive to movements in interest rates and other economic developments, this classification is expected to add more volatility to reported book value in future quarters.
 The company also will be adopting SFAS 106, "Accounting for Postretirement Benefits Other than Pensions," effective January 1993. The company currently expects this change in accounting to result in an after-tax charge to first-quarter 1993 operating earnings of approximately $35 million.
 Kemper Corporation is a nonoperating holding company with subsidiaries in asset management, securities brokerage, life insurance, reinsurance, property-casualty insurance and risk management services.
 -0- 11/5/92
 /NOTE TO EDITORS: Operating earnings denote net income excluding realized investment results/
 /CONTACT: Janice Kalmar, 708-540-4465, or Ira Nathanson, 708-540-4463, both of Kemper Corporation Communications Department/
 (KEM) CO: Kemper Corporation ST: Illinois IN: FIN SU: ERN


LR -- NY075 -- 3091 11/05/92 12:16 EST
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