By Chris Munro

Feb 6 - (The Insurer) - Shares in Kemper Corporation traded up almost 5 percent on Thursday morning as investors responded favourably to the carrier’s fourth quarter 2024 earnings, while president and CEO Joseph Lacher provided a bullish outlook on the firm’s prospects.

As of 10:23am in New York, Kemper’s shares were trading at $70.92, up 3.5 percent from Wednesday’s close of $68.57.

Earlier on Thursday, Kemper’s stock was changing hands at $71.75 apiece, an increase of 4.6 percent compared with Wednesday’s close.

The positive movement came after Chicago, Illinois-based Kemper reported Q4 2024 earnings that included a 6.4 percentage point improvement in its specialty P&C combined ratio to 92.1 percent.

That helped fuel what was a comfortable earnings beat for Kemper, with the carrier’s adjusted consolidated net operating income per diluted share of $1.78 coming in well ahead of both the prior-year period’s $0.78 and the $1.36 consensus estimate, as per S&P Capital IQ.

On a call with analysts to discuss the results, Lacher was positive about Kemper’s business.

“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,” the executive said.

“Against that backdrop, carriers with competitive advantages and quick responsiveness would be able to rebalance rate and loss trends sooner and realise two things.

“First, better-than-normal underwriting profitability and combined ratios. And second, growth rates exceeding long-term averages,” Lacher said.

“Given our strong competitive advantages and responsiveness, we rebound sooner than most of our specialty auto competitors. Because of this, we are capitalising on the benefits and achieving strong profitability and growth in this business,” he added.

“Overall, we expect the financial benefits from our competitive advantages in this hard market to continue,” Lacher declared.

Kemper’s chief financial officer Bradley Camden also shared his views on the auto specialist’s prospects.

“We expect continued strong profitability,” he said.

“Our performance this quarter was driven by the results of our two core businesses.

“Specialty auto delivered an attractive 91.7 percent underlying combined ratio and generated $101mn of adjusted net operating income.

“Given the current market environment and the strength of our specialty auto franchise, we expect continued profitable growth,” Camden said.

Matthew Hunton, executive vice president and president of Kemper Auto, said the company should also benefit from the increased customer shopping activity that has arisen in the auto market owing to what he described as “the current period of rapid price increases and more restrained carrier underwriting”.

“The specialty auto market has a more fragmented group of smaller competitors,” said Hunton.

“With this environment and our distinct competitive advantages, we are significantly growing our book. We expect these conditions to continue for some time.”

Kemper’s specialty P&C business generated $948.9mn of net premiums written in the three months to 31 December 2024, compared with $719.7mn in the prior-year period.

“The growth we achieved in the fourth quarter was outstanding,” said Hunton.

“Traditionally, [policies in force] would have shrunk about 2 percent from the third to the fourth quarter, but instead, we grew units by 1.7 percent.

“This growth is in line with our production overperformance of the last two quarters,” he said.