Kemper Corporation

Good afternoon, ladies and gentlemen, and welcome to Kemper's fourth quarter 2024 earnings conference call. My name is Konstantin and I will be your coordinator for 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 Marincano, Kemper's Vice President of Corporate Development and Investor Relations. Mr. Marincano, you may now begin.

Thank you, operator. Good afternoon, everyone, and welcome to Kemper's discussion of our fourth 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 Hunt, Kemper's Executive Vice President, and President of Kemper Auto. We'll make a few opening remarks to provide context around our fourth 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 today, we issued our earnings release and published our earnings presentation and financial supplement. We intend to file our form 10K with the SEC in the coming days. 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 Litigation Reform Act of 1995. These statements include, but are not limited to, the company's outlook on its future, results of operation, and financial conditions. Our actual future results and financial condition may differ materially from these statements. For information on additional risks that may impact these forward-looking statements, please refer to our Form 10-K and our fourth 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, It defined and reconciled all the non-GAAP financial measures to GAAP, but 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 very strong results for the year and even stronger results for the fourth quarter. We're excited to dig into these in more detail. Before we do that, I'd like to make a few broader marketplace comments. We've been experiencing a hard market due to the massive COVID-related inflation spike, which led to a meaningful imbalance between premiums charged and underlying loss trend. Against that backdrop, carriers with competitive advantages and quick responsiveness would be able to rebalance rate and loss trends sooner and realize two things. First, better than normal underwriting profitability and combined ratios. And second, growth rates exceeding long-term averages. You don't have to look further than progressive to see this play out over numerous market cycles in the broader standard and preferred auto market. Given our strong competitive advantages and responsiveness, we rebalance sooner than most of our specialty auto competitors. Because of this, we are capitalizing on the benefits and achieving strong profitability and growth in this business. Clearly, there's some texture when you break this down by geography. Florida and Texas have displayed a more economically balanced regulatory environment, and their markets are moving towards longer term norms more rapidly. California is different. Between its unique regulatory approach, the doubling of auto minimum policy limits that began January 1st, and the associated premium increases, And the second derivative impacts of wildfires, we expect a hard market to remain there for some time. To be clear, we believe we are priced appropriately in California. Our competitive advantages position us very well to continue to meet the needs of an underserved market, grow the business, and deliver strong financial results. Overall, we expect the financial benefits from our competitive advantages in this hard market to continue. And before we turn to our results in more detail, I'd like to take a moment to comment on the recent California wildfires. Kemper is deeply connected to the broader communities impacted. It's where many of our customers, employees, and agents live and work. Our thoughts and support are with all those impacted, and we wish for everyone's safety and resilience throughout the recovery process. That said, relative to our results, these events are not expected to have a meaningful impact on our financials. Now let's move to page four and jump into some specifics on our results. As I said earlier, we delivered a strong year and an even stronger quarter. For the year, we delivered net income of $318 million, and for the quarter, it was $97 million. Our core businesses are performing very well. This is led by our specialty auto business, where our underlying combined ratio was a very strong 91.5% for both the year and the fourth quarter. Matt will dive into this in more detail later, but I want to note that we're very pleased with our PIF growth. Historically, we have seen seasonally low shopping behavior in the fourth quarter. This is usually resulted in sequential quarter PIF decline around 2%. However, this time we delivered 2% growth. This continues the pattern of attractive growth we've seen since early 2024. On a year over year basis, PIF grew over 5%. We expect robust growth trends to continue as we enter the 2025 specialty auto buying season. For our life segment, the underlying business fundamentals remained stable and the business continued to produce strong return on capital and distributable cash flows. Overall, for the year, we generated a strong return on equity of 12% and return on adjusted equity of just over 18%. We have continued to strengthen our balance sheet. We repurchased additional shares during the quarter. We increased our quarterly dividend and we are retiring $450 million of debt next week. Brad will have more on all of these later, With that, I'll turn it over to Brad.