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KEMPER REPORTS SECOND-QUARTER OPERATING EARNINGS OF $20.8 MILLION

 KEMPER REPORTS SECOND-QUARTER OPERATING EARNINGS OF $20.8 MILLION
 LONG GROVE, Ill., Aug. 7 /PRNewswire/ -- Kemper Corporation (NYSE: KEM) today reported operating earnings of $20.8 million, or $.43 per share, for the quarter ended June 30, 1992, compared with $52.3 million, or $1.08 per share, for the same period in 1991.
 "While operating earnings were down for the quarter, margins in our life insurance business improved over first-quarter 1992, consistent with our expectations. In addition, we saw steady growth in Kemper's asset management business," said David B. Mathis, chairman, president and chief executive officer. "However, securities brokerage had a negative impact on second-quarter operating earnings, primarily due to the previously announced $13.2 million after-tax increase in legal reserves."
 Second-quarter 1992 earnings were down in the life insurance segment, compared with the same period last year, because of the shift toward more conservative, lower-yielding investments and a higher level of underperforming real estate-related assets.
 The company recorded a second-quarter 1992 net loss of $10.0 million, or $.20 per share, compared with net income of $53.1 million, or $1.10 per share, in the second quarter of 1991. Second quarter 1992 results included after-tax realized investment losses of $30.8 million, or $.63 per share, compared with after-tax realized investment gains of $0.8 million, or $.02 per share, in the year-ago period. Included in the 1992 second-quarter investment results are after-tax charges of $14.8 million related to an increase in the company's provision for real estate-related losses, due in part to write-downs of certain assets transferred to real estate owned. The 1992 and 1991 second-quarter investment results are also net of after tax charges to write down certain below investment-grade securities of $3.8 million and $15.9 million, respectively.
 Revenue for the 1992 second quarter fell to $723.4 million, compared with $774.6 million in the same period last year, primarily reflecting investment losses realized in 1992.
 For the first six months of 1992, operating earnings totaled $55.9 million, or $1.15 per share, compared with $101.6 million, or $2.11 per share, for the first half of 1991.
 Net income for the first six months of 1992 was $19.9 million, or $.41 per share, compared with $104.6 million, or $2.18 per share, for the year-ago
period. Net income included after-tax realized investment losses of $36.0 million, or $.74 per share, and after-tax realized investment gains of $3.0 million, or $.07 per share, for the first six months of 1992 and 1991, respectively.
 Revenue totaled $1.54 billion for both the first half of 1992 and 1991. (See table on page 8 for more information on Kemper Corporation's consolidated results.)
 KEMPER CORPORATION
 Investment Services
 (in millions, except per share data and assets under management)
 Periods ended Six months Three months
 June 30: 1992 1991 1992 1991
 Net income (loss)
 Asset management $ 43.3 $ 40.2 $ 22.6 $ 21.0
 Securities brokerage (15.9) 3.2 (19.4) 2.2
 Other (8.7) (2.1) (2.8) .0
 Total $ 18.7 $ 41.3 $ .4 $ 23.2
 Net income (loss)
 per share
 Asset management $ .89 $ .83 $ .47 $ .43
 Securities brokerage (.32) .07 (.39) .05
 Other (.18) (.04) (.06) .00
 Total $ .39 $ .86 $ .02 $ .48
 Revenue
 Asset management $201.4 $180.1 $100.7 $ 90.8
 Securities brokerage 400.7 370.1 188.1 189.9
 Assets under management 6/30/92 12/31/91 6/30/91
 (in billions) $67.6 $65.9 $60.0
 Kemper's asset management operations, represented primarily by Kemper Financial Services, Inc. (KFS), reported net income of $43.3 million, or $.89 per share, for the first six months of 1992, up from $40.2 million, or $.83 per share, in the same period of 1991.
 "Growth in asset management fees, reflecting strong sales and improved retention of fixed-income and equity mutual funds, led to the increased earnings. Moreover, KFS continued to maintain an attractive profit margin, despite increased expenses to enhance data processing systems and to promote certain products, both expected to benefit the company over the long term," Mathis said.
 The securities brokerage operations, represented primarily by Kemper Securities, Inc., reported a net loss of $15.9 million, or $.32 per share, for the first six months of 1992, due to $13.2 million in after- tax charges related to an increase in the operations' legal reserve and a $6.0 million charge for federal income tax adjustments. Together, these charges represented $.40 per share. For the first six months of 1991, these operations reported net income of $3.2 million, or $.07 per share.
 An increase in mutual fund sales contributed to the securities brokerage operations' increase in revenue for the first six months of 1992.
 The investment services segment also includes the net corporate expenses of Kemper Financial Companies, Inc., its interest expense, preferred stock dividends and other operations.
 Life Insurance
 (In millions, except per share data)
 Periods ended Six months Three months
 June 30: 1992 1991 1992 1991
 Operating earnings $ 18.6 $ 36.1 $ 13.2 $ 19.0
 Per share .38 .75 .26 .39
 Net income (loss) (16.2) 11.9 (11.5) 3.5
 Per share (.34) .25 (.25) .07
 Revenue 333.6 400.6 159.5 201.5
 Sales 557.9 611.3 287.8 286.9
 Kemper Corporation's life insurance segment reported operating earnings of $18.6 million, or $.38 per share, for the first half of 1992, compared with
$36.1 million, or $.75 per share, in the same period of 1991. A combination of factors was responsible for the decline, including Kemper's 1991 actions repositioning the life insurance segment's investment portfolios to reflect the more conservative nature of today's consumer, increased real estate joint venture operating losses and foregone investment income on real estate-related assets.
 The life insurance segment's net income for the first six months of 1992 included after-tax realized investment losses of $34.8 million, or $.72 per share, compared with losses of $24.2 million, or $.50 per share, in the first half of 1991. The 1992 first-half investment results reflect $18.4 million after tax related to an increase in the provision for real estate-related losses, due in part to write-downs of certain assets transferred to real estate owned. In addition, $6.6 million in write-downs of certain below investment-grade securities affected first-half 1992 investment results, compared with $27.6 million in the year-ago period.
 Sales of variable annuities increased by 197 percent during the first half of the year. In line with the company's strategy and the lower interest rate environment, fixed annuity sales declined. Variable annuity sales represented 32 percent of total annuity sales, compared with 9 percent in the year-ago period.
 "The growth in variable annuities, along with improving spreads on fixed annuities and the ongoing consolidation of administrative and marketing functions at our two life companies, will help position them for profitability levels more consistent with our expectations," Mathis said.
 Reinsurance
 (In millions, except per share data)
 Periods ended Six months Three months
 June 30: 1992 1991 1992 1991
 Operating earnings $ 8.2 $ 10.8 $ 3.1 $ 4.4
 Per share .17 .22 .06 .09
 Net income 8.3 20.9 0.9 10.7
 Per share .17 .44 .02 .22
 Revenue 317.8 259.3 136.9 133.9
 Net premiums written 288.9 226.6 140.3 127.3
 Statutory combined ratio
 (As a percent) 105.7 107.9 104.1 109.2
 Kemper's reinsurance segment reported operating earnings of $8.2 million, or $.17 per share, in the first six months of 1992, compared with $10.8 million, or $.22 per share, in the year-ago period.
 The decline in operating earnings primarily reflects a drop in the segment's net investment income resulting from lower yields and reduced invested assets. The reduction in invested assets reflects cash outlays to commute certain contracts and higher paid claims.
 Net income for the first six months of 1992 included after-tax realized investment gains of $0.1 million, or $.00 per share, compared with $10.1 million, or $.22 per share, a year earlier. In 1991, the segment took advantage of favorable stock market conditions to realize gains in its equity portfolio.
 Growth in writings by overseas subsidiaries contributed to the 27.5 percent increase in net premiums written.
 Property-Casualty Insurance
 (In millions, except per share data)
 Periods ended Six months Three months
 June 30: 1992 1991 1992 1991
 Operating earnings $ 10.9 $ 11.2 $ 3.8 $ 5.3
 Per share .22 .24 .08 .11
 Net income 9.9 28.3 0.1 15.3
 Per share .21 .59 .01 .32
 Revenue 280.6 300.6 134.5 153.4
 Net premiums written 261.0 257.8 137.5 137.5
 Statutory combined ratio
 (As a percent) 102.5 102.3 103.0 102.5
 Kemper's property-casualty insurance segment produced operating earnings of $10.9 million, or $.22 per share, in the first six months of 1992, compared with $11.2 million, or $.24 per share, in the year-ago period.
 Net income for the first six months of 1992 included after-tax realized investment losses of $1.0 million, or $.01 per share, compared with gains of $17.1 million, or $.35 per share, in the year ago period. Like the reinsurance segment, the property-casualty insurance segment took advantage of favorable stock market conditions in 1991 to realize gains in its equity portfolio.
 "The leveling off in net premiums written in the property-casualty insurance segment reflects Kemper's strategy of eliminating unprofitable business and pursuing rates sufficient to meet our earnings objectives," Mathis noted.
 Other Operations and Corporate
 The other operations and corporate category reported a net loss of $0.8 million, or $.02 per share, for the first six months of 1992, compared with net income of $2.2 million, or $.04 per share, in the first six months of 1991. An increase in holding company overhead, including interest expense, caused the decline.
 This category also includes Kemper Risk Management Services (KRMS), a partnership between National Loss Control Service Corporation, Kemper's risk management subsidiary, and Kemper National Services, Inc., the medical and disability loss containment subsidiary of Lumbermens Mutual Casualty Company. KRMS's contribution to Kemper's operating results remained relatively flat for the first six months of 1992, compared with the same period of 1991, even though Kemper Corporation's share in the operating results of KRMS dropped to 75 percent in 1992. These results reflect increased revenue and a leveling off of expenses.
 Kemper Corporation is a nonoperating holding company with subsidiaries in asset management, securities brokerage, life insurance, reinsurance, property-casualty insurance and risk management.
 NOTE: Operating earnings denote net income excluding realized investment results.
 -0- 8/7/92 R
 /CONTACT: Janice Kalmar, 708-540-4465, or Ira Nathanson, 708-540-4463, both of Kemper/
 (KEM) CO: Kemper Corporation ST: Illinois IN: FIN INS SU: ERN


SB -- NY004 -- 7955 08/07/92 10:48 EDT
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