Kemper’s fourth quarter results were met with a negative market reaction, as revenue and earnings both fell short of Wall Street expectations. Management attributed the underperformance primarily to ongoing challenges in the Specialty Auto segment, notably higher bodily injury claims severity in California and mandatory customer refunds in Florida due to statutory profit limits. Interim CEO Carl Evans acknowledged, “Our results this quarter did not meet expectations,” and highlighted the impact of recent regulatory changes and increased legal system costs. The company’s Life Insurance business, in contrast, provided stability and steady cash flow, but could not offset the auto segment volatility.
Is now the time to buy KMPR? Find out in our full research report (it’s free for active Edge members).
Kemper (KMPR) Q4 CY2025 Highlights:
- Revenue: $1.14 billion vs analyst estimates of $1.20 billion (4.3% year-on-year decline, 5.6% miss)
- Adjusted EPS: $0.25 vs analyst expectations of $0.86 (70.8% miss)
- Adjusted Operating Income: -$8.1 million (-0.7% margin, 107% year-on-year decline)
- Operating Margin: -1.2%, down from 10% in the same quarter last year
- Market Capitalization: $1.90 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Kemper’s Q4 Earnings Call
- Brian Meredith (UBS) asked about profitability differences between California and other states. President Matt Hunton explained that California's combined ratio remains elevated due to higher bodily injury costs, while Florida and Texas are more profitable and within target ranges.
- Andrew Kligerman (TD Cowen) inquired about the timeline for normalizing California’s combined ratio and the impact on policies in force. CFO Bradley Camden responded that improvement depends on timely rate approvals and that further declines in California policy count are likely until rates are implemented.
- Mitchell Rubin (Raymond James) questioned the timing and competitive impact of the new personal auto product rollout. Hunton detailed that pilots in Arizona and Oregon improved competitiveness, with launches in Florida and Texas expected in the next few quarters, pending regulatory approval.
- Jon Paul Newsome (Piper Sandler) asked about Florida rate adjustments and future profitability. Hunton clarified that current profitability is strong, and future rate adjustments are being justified with regulators to maintain healthy margins.
- Mitch Rubin (Raymond James) requested an update on capital allocation priorities. Camden reaffirmed that capital will prioritize regulatory requirements, organic growth, and debt repayment, with no acquisitions planned.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) approval and implementation of California personal auto rate increases, (2) the rollout and performance of new personal auto products in Florida and Texas, and (3) further realization of restructuring-related cost savings. Progress on capital allocation discipline and policy growth outside California will also serve as important indicators of execution.
Kemper currently trades at $32.51, down from $38.50 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
The Best Stocks for High-Quality Investors
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.