Kemper Corporation

Good afternoon, ladies and gentlemen, and welcome to Kemper's first quarter 2022 earnings conference call. My name is Sam, and I will be your coordinator today. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded for replay purposes. I would now like to introduce your host for today's conference call, Karen Guerra, Kemper's Vice President of Investor Relations. Ms. Guerra, you may begin.

Thank you operator good afternoon, everyone, and welcome to campus discussion of our first quarter 2022 results. This afternoon you'll hear from Joe locker campus President chief executive officer and chairman Jim mckinney campus executive Vice President and chief financial officer and dwayne Sanders campus executive Vice President and property and casualty division President. We'll make a few opening remarks to provide context around our first quarter results and then open the call for a Q&A session. During the interactive portion of our call, our presenters will be joined by John Michelli, Kemper's Executive Vice President and Chief Investment Officer. After the markets closed today, we issued our earnings release and published our earnings presentation and financial supplement and form 10Q. You can find these documents on the investor section of our website at Kemper.com. Our discussion today may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include but are not limited to the company's outlook and its future results of operations and financial condition. Our actual future results and financial condition may differ materially from these statements. These statements may also be impacted by the COVID-19 pandemic. For information on additional risks that may impact our forward-looking statements, please refer to our 2021 Form 10-K as well as our first quarter earnings release. This afternoon's discussion also includes non-GAAP financial measures, and we believe they're meaningful to investors. In our financial supplement earnings presentation and earnings release, we have defined and reconciled all the non-GAAP financial measures to GAAP, where required, in accordance with the SEC rule. You can find each of these documents on the investor section of our website, Kemper.com. All comparative references will be to the corresponding 2021 period unless otherwise stated. I will now turn the call over to Joe.

Thank you, Karen. Good afternoon, everyone, and thank you for joining us. Earlier today, we reported results that showed a marked improvement in our performance from the prior quarter. The profit restoration actions we have implemented are beginning to offset the pandemic-related reopening challenges the industry has faced over the past year. While we are encouraged by the impact our actions are having on our results, we still have work to do to return us to our long-term financial targets. We remain focused and committed to addressing the ongoing environmental pressures and return the business to target profitability. Looking at page four, the insurance industry continues to face environmental headwinds. For example, the consumer price index is running at a 40-year high due to supply and demand imbalances. Many of the subcomponents of this index have had a disproportionate impact on auto insurers. While we've seen some moderation in used car and truck price increases, we've witnessed an acceleration in other areas, such as medical care expenses and auto body repair prices. In aggregate, we believe there will be a prolonged inflationary environment. Our reserve positions, loss ticks, and current and prospective profit improvement actions correspond with this assessment. Our profit restoration initiatives encompass both rate and non-rate actions. Rate activity included filing for over 12 points of rate on 97 percent of our auto book over the past three quarters. Our rate filing activities surpassed the projections we provided last quarter. These actions, along with our other profit improvement initiatives, contributed to an 11-point improvement in our underlying combined ratio quarter over quarter, overcoming the incremental market-related headwinds. When you combine the inflationary environment and our responses, we anticipate continued sequential quarterly combined ratio improvements. In the life and health segment, we continue to see strong demand for our products and persistency above pre-pandemic levels. The segment's financial results continue to be negatively impacted by the pandemic and excess benefit cost. We expect profitability to materially improve as mortality normalizes. Despite the ongoing challenges, our balance sheet remains strong. We have over $1.2 billion of liquidity. We successfully raised additional capital this quarter at attractive rates to refinance the affinity notes and support ongoing activities. In summary, I'm encouraged by the progress we've made on our profit restoration initiatives and the improvement in our results this quarter. We continue to remain a source of strength for our stakeholders and are well-positioned for long-term profitable growth. I'll now turn the call over to Jim to discuss our operating results in more detail.