Kemper Corporation

Good afternoon, ladies and gentlemen, and welcome to Kemper's fourth quarter 2025 earnings conference call. My name is John, and I will be your coordinator for today. At this time, all participants are in a 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 fourth quarter 2025 results. This afternoon, you'll hear from Tom Evans, Kemper's interim CEO, Brad Camden, Kemper's executive vice president and chief financial officer, Matt Hunton, Kemper's Executive Vice President and President of Kemper Auto, and Chris Flint, Kemper's Executive Vice President and President of Kemper Life. 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 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 10-K 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 Compass's outlook on its future results of operation and financial condition. Our 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, We've defined and reconciled all non-GAAP financial measures to GAAP where 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 2024 period unless otherwise stated. I'll now turn the call over to Tom.

Thank you, Michael, and good afternoon, everyone. I'll start with a simple appraisal. Our results this quarter did not meet expectations. We'll walk through the underlying drivers and the actions we're taking to improve the performance in our auto business and increase shareholder value. Before that, I want to offer some context on both the businesses and the operating environment we're presently navigating today. We're a specialty insurer focused on niche underserved markets. We are focused on these markets because they are attractive and there's a continuing need for our products. We know these markets and have the scale, experience, and competitive advantages to succeed. Our portfolio of specialty auto and life insurance businesses may address different customer needs, but both are managed with the same core principles, discipline underwriting, risk management, and long-term value creation. We have identified and are acting on a number of strategic and tactical priorities that will get us to target profitability with growth to follow. We'll discuss these priorities in more detail today. As we've noted before, the specialty auto market is a fast-moving segment. Market shifts often appear in this segment before showing up in other parts of the auto insurance landscape. As an auto underwriter, one of the most important drivers of our long-term success is our ability to accurately predict lost costs and price for business appropriately. This has been more challenging of late because of significant structural changes in key states in which we operate. For example, in California last year, minimum liability insurance limits for auto increased for the first time since 1967, with bodily injury limits doubling and property damage limits tripling. When markets are stable, predicting future costs is more straightforward. However, when changes of this magnitude occur, To pick up against the backdrop of social inflation and legal system abuse, lost cost predictability becomes more difficult and complex. While we anticipated the need to adapt to the new requirements in California, the scale of the disruption exacerbated by elevated severity trends create the pressure on our results over the past several quarters. In Florida, our second largest market, The tort reforms enacted in 2023 have reduced loss costs and made the market more attractive for carriers and affordable for consumers. The result is a significantly more competitive marketplace. This improvement in loss costs led to our $35 million charge this quarter for refunds to personal auto customers under the state's statutory profit limit rules. We view these refunds, which other carriers are also undertaking, as clear evidence of the benefits of tort reform. We have a strong performing book in Florida, and we're making targeted rate adjustments there to be more competitive and support growth. Away from Specialty Auto, I'd highlight that our life insurance business continues to deliver solid performance. This business provides stability and diversification within our overall portfolio, and Chris will provide additional detail shortly. While auto business faces near-term challenges impacting our consolidated results, we're acting quickly and taking purposeful steps to improve financial performance. On slide five, we outline the priorities and actions underway to improve results, enhance operations, and reduce earning volatility through diversification. In particular, I'll note the recent restructuring initiatives, our focus to enhance claims processes, and the introduction of new products to support the acceleration of geographic diversification. Together, these actions will protect and advance our competitive advantages, drive growth, enhance profitability, and ultimately create value for our shareholders. Our objective as a management team is continuous improvement that strengthens performance and positions the company for long-term success. Before turning it over to Brad, Matt, and Chris, I'll provide a brief update on the CEO search. The board search process is well underway, and they have developed a pipeline of highly qualified candidates with the help of a leading independent executive search firm. The board is actively evaluating those candidates with deliberate speed as the board focuses on identifying the right leader for Kempert's next phase. Thank you. And with that, I'll turn it over to Brad.