Kemper Corporation

Good afternoon, ladies and gentlemen, and welcome to Kemper's third quarter 2024 earnings conference call. My name is Ina, 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, Michael Marinaccio. Kemper's Vice President of Corporate Development and Investor Relations, Mr. Marinaccio, you may begin.

Thank you. Good afternoon, everyone, and welcome to Kemper's discussion of our third quarter 2024 results. This afternoon, you'll hear from Joe Locker, Kemper's President and Chief Executive Officer, Brad Camden, Kemper's Executive Vice President and Chief Financial Officer, and Matt Hunton, Kemper's Executive Vice President and President of Kemper Auto. We'll make a few opening remarks to provide context around our third quarter results, followed by a Q&A session. During the interactive portion of the call, our presenters will be joined by Chris Flint, Kemper's Executive Vice President and President of Kemper Life, Dwayne Sanders, Kemper's Executive Vice President and Chief Claims Officer for P&C, and John Buscelli, Kemper's Executive Vice President and Chief Investment Officer. After the markets closed, we issued our earnings release filed our form 10Q with the SEC, and published our earnings presentation and financial supplement. You can find these documents in the investor section of our website, Kemper.com. Our discussion today may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Allegation Reform Act of 1995. These statements include, but are not limited to, the company's outlook and its future results of operation and financial condition. Our actual future results and financial conditions may differ materially from these statements. For information on additional risks that may impact these forward-looking statements, please refer to our 2023 Form 10-K and our third quarter earnings release. This afternoon's discussion also includes non-GAAP financial measures we believe are meaningful to investors. In our financial supplement, earnings presentation, and earnings release, we've defined and reconciled all non-GAAP financial measures to GAAP, are required in accordance with SEC rules. You can find each of these documents in the investor section of our website, Kemper.com. All comparative references will be to the corresponding 2023 period unless otherwise stated. I will now turn the call over to Joe. Thank you, Michael.

Good afternoon, everyone, and thank you for joining us today. I'm pleased to report that we delivered another quarter of strong financial results. This was led by our specialty auto business, which again generated sequential quarter fifth growth and an underlying combined ratio in the low 90s. We continue to observe both a hard market and increased consumer shopping behavior. Given this backdrop, we anticipate continued significant profitable growth in our auto business for the foreseeable future. Additionally, our light business continued to deliver stable underlying operating results. Overall, we generated a strong return on equity, return on adjusted equity, and growth in book value per share. Now let's move to page four and jump into some specifics on this quarter's results. We delivered 74 million of net income, an ROE of approximately 11%, and an adjusted ROE of about 17%. Specialty PNC generated a healthy underlying combined ratio of 91.3%. This is a significant year-over-year improvement and gives us a great foundation for continued profitable growth. On our last call, We said we expected PIF to grow at a more modest rate in the second half of this year due to seasonal shopping behavior in our auto business. Encouragingly, we saw shopping behavior higher than that historical level. This resulted in sequential quarter PIF growth in the mid-single digits. We continue to see robust demand for our products and expect PIF growth to persist. Matt will discuss this in more detail later. The underlying business fundamentals of our life segment remain stable, and the business continued to produce strong return on capital and distributable cash flows. Next, our capital and liquidity position enabled us to repurchase $25 million in shares this quarter. Furthermore, we plan to fully retire the $450 million of debt which is coming due next February. Brad will have more on this later. Lastly, I'd like to take a moment to address recent catastrophes. First, we extend our concern and support to all those affected by these events. We hope for everyone's safety and resilience through the recovery process. Relative to our results, these events did not have a particularly large impact on our financials. Total catastrophe losses for the third quarter were approximately 16 million, of which about 11 million was within our preferred P&T business, which is in Wyandotte. This includes the impact of Hurricane Helene, Additionally, our preliminary estimates related to Hurricane Milton, a fourth quarter event, are only about $1 million. With that, I'll turn the call over to Brad.