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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________________
FORM 10-Q
______________________________________________________
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended 6/30/2024
OR
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from              to             
Commission file number 001-18298
______________________________________________________
 Kemper Corporation
(Exact name of registrant as specified in its charter)
______________________________________________________
DE95-4255452
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
200 E. Randolph Street
Suite 3300
ChicagoIL60601
(Address of principal executive offices)(Zip Code)
(312) 661-4600
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.10 per shareKMPRNYSE
5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062KMPBNYSE
______________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x      No ¨ 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x   No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “ accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐
Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐  No  x
64,426,693 shares of common stock, $0.10 par value, were outstanding as of August 1, 2024.


KEMPER CORPORATION
INDEX
  Page
PART I.
Item 1.
 
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 5
Item 6.


Caution Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, including, but not limited to, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), Risk Factors and the accompanying unaudited Condensed Consolidated Financial Statements (including the notes thereto) of Kemper Corporation (“Kemper”) and its subsidiaries (individually and collectively referred to herein as the “Company”), as well as a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary, may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements give expectations or forecasts of future events. The reader can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “believe(s),” “goal(s),” “target(s),” “estimate(s),” “anticipate(s),” “forecast(s),” “project(s),” “plan(s),” “intend(s),” “expect(s),” “might,” “may,” “could” and other terms of similar meaning. Forward-looking statements, in particular, include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.
Any or all forward-looking statements may turn out to be wrong, and, accordingly, Kemper cautions readers not to place undue reliance on such statements. Kemper bases these statements on current expectations and the current economic environment as of the date of this Quarterly Report on Form 10-Q. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance, and actual results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties that may be important in determining the Company’s actual future results and financial condition.
In addition to the factors discussed under Item 1A., “Risk Factors,” of Part I of Kemper’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”), for the year ended December 31, 2023 (the “2023 Annual Report”), the reader should consider the following list of factors that, among others, could cause the Company’s actual results and financial condition to differ materially from estimated results and financial condition.
Factors related to the legal and regulatory environment in which Kemper and its subsidiaries operate
•Evolving policies, practices and interpretations by regulators and courts that increase operating costs and potential liabilities, particularly any that involve retroactive application of new requirements;
•Adverse outcomes in litigation, investigations or other legal or regulatory proceedings involving Kemper or its subsidiaries or affiliates, including proceedings related to its business practices or business practices in the insurance industry;
•Governmental actions, including, but not limited to, implementation of new laws and regulations, and court decisions interpreting existing and future laws and regulations or policy provisions;
•Uncertainties related to regulatory approval of insurance rates, policy forms, insurance products, license applications, business withdrawals, dividends from insurance subsidiaries, acquisitions of businesses or strategic initiatives and other matters within the purview of insurance regulators;
•Increased costs required to address new legal and regulatory requirements; liabilities, costs and other impacts arising from investigations or developments related to cybersecurity, privacy and data governance, including, without limitation, cyber incidents that have occurred or could occur;
Factors relating to insurance claims and related reserves in the Company’s insurance businesses
•The incidence, frequency and severity of catastrophes occurring in any particular reporting period or geographic area, including natural disasters, pandemics and terrorist attacks or other man-made events;
•The frequency and severity of insurance claims (including those associated with catastrophe losses and pandemics);
•The interest rate environment, including proposed rate changes by the U.S. Federal Reserve, which may cause material fluctuations in our life policyholder benefit reserves;
•Changes in facts and circumstances affecting assumptions used in determining loss and loss adjustment expenses (“LAE”) reserves, including, but not limited to, the frequency and severity of insurance claims, changes in claims handling procedures and closure patterns, development patterns and the impacts of technological and other environmental conditions;
•The impact of inflation on insurance claims, including, but not limited to, the effects on material costs, personal injury claims of increasing medical costs and the severity of claims resulting from a catastrophe;
1

•The effects on property claims attributed to supply chain disruption and scarcity of resources available to rebuild damaged structures, including labor and materials and the amount of salvage value recovered for damaged property;
•The rising costs of insurance claims from increased and more targeted litigation, higher jury awards, broader definitions of liability, and other effects of legal system abuse and societal trends referred to as social inflation or legal system abuse;
•Developments related to insurance policy claims and coverage issues, including, but not limited to, interpretations, pronouncements or decisions by courts or regulators that may govern or influence losses incurred in connection with hurricanes and other catastrophes;
•Orders, interpretations or other actions by regulators that impact the reporting, adjustment and payment of claims;
•Changes in the pricing or availability of reinsurance, or in the financial condition of reinsurers and amounts recoverable therefrom;
Factors related to the Company’s ability to compete
•Changes in the ratings of Kemper and/or its insurance company subsidiaries by rating agencies with regard to credit, financial strength, claims paying ability and other areas on which the Company is rated;
•The level of success and costs incurred in realizing or maintaining economies of scale, integrating acquired businesses and implementing significant business initiatives and the timing of the occurrence or completion of such events, including, but not limited to, those related to expense and claims savings, the establishment and operation of Kemper Reciprocal, consolidations, reorganizations and technology;
•Absolute and relative performance of the Company’s products and services, including, but not limited to, the level of success achieved in designing and introducing new insurance products and services;
•Difficulties with technology, data and network security (including as a result of cyber attacks that have occurred or could occur), outsourcing relationships or cloud-based technology that could negatively impact the Company’s ability to conduct business, a heightened risk when substantial numbers of employees utilize work from home arrangements;
•The ability of the Company and its third-party service providers to maintain the availability and required performance of critical systems and manage technology initiatives cost-effectively to address insurance industry developments and regulatory requirements;
•Heightened competition, including, with respect to pricing, consolidations of existing competitors or entry of new competitors and alternate distribution channels, introduction of new technologies, use and enhancements of telematics, refinements of existing products and development of new products by current or future competitors;
•Expected benefits and synergies from mergers, acquisitions, divestitures and/or strategic initiatives that may not be realized to the extent anticipated, within expected time frames or at all, due to a number of factors including, but not limited to, the loss of key agents/brokers, customers or employees, increased costs, fees, expenses and related charges and delays caused by unanticipated developments or factors outside of the Company’s control;
•The successful formulation and execution of the Company’s plan with regard to corporate strategy and significant operational changes;
•Increase in competition as a result of new competitors to the property and casualty insurance industry or existence of competitors that receive substantial infusion of capital or access to third-party capital;
Factors related to the business environment in which Kemper and its subsidiaries operate
•Changes in general economic conditions, including those related to, without limitation, performance of financial markets, interest rates, inflation, unemployment rates, significant global catastrophes and/or pandemics, and fluctuating values of particular investments held by the Company;
•Absolute and relative performance of investments held by the Company;
•Changes in insurance industry trends and significant industry developments;
•Changes in consumer trends, including changes in number of miles driven by automobile insurance policyholders, and significant consumer or product developments;
•Changes in capital requirements, including the calculations thereof, used by regulators and rating agencies;
•Regulatory, accounting or tax changes that may affect the Company’s earnings, the cost of, or demand for, the Company’s products or services or after-tax returns from the Company’s investments;
•The impact of required participation in state windpools and joint underwriting associations, residual market assessments and assessments for insurance industry insolvencies;
2

•Changes in distribution channels, methods or costs resulting from changes in laws or regulations, legal proceedings or market forces;
•Increasing competition and higher costs for executive talent and employees with necessary skills and industry experience;
•Increased costs and risks related to cybersecurity that could materially affect the Company’s operations including, but not limited to, data breaches, cyber attacks, virus or malware attacks, or other infiltrations or incidents affecting system integrity, availability and performance, and actions taken to minimize and remediate the risks of such events that have occurred or could occur;
Other risks and uncertainties described from time to time in Kemper’s filings with the U.S. Securities and Exchange Commission (“SEC”)
Kemper cannot provide any assurances that the results and outcomes contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable or that future events or developments will not cause such statements to be inaccurate. Kemper assumes no obligation to correct or update any forward-looking statements publicly for any changes in events or developments or in the Company’s expectations or results subsequent to the date of this Quarterly Report on Form 10-Q. Kemper advises the reader, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.
3

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars in millions, except per share amounts)
(Unaudited)
Three Months EndedSix Months Ended
 Jun 30, 2024Jun 30, 2023Jun 30,
2024		Jun 30, 2023
Revenues:
Earned Premiums (Changes in Deferred Profit Liability for the Three Months Ended: 2024 - $16.7; 2023 - $16.5 and
Six Months Ended: 2024 - $36.4; 2023 - $35.7)
$1,033.7 $1,166.9 $2,065.6 $2,347.8 
Net Investment Income93.0 106.3 193.4 208.1 
Change in Value of Alternative Energy Partnership Investments0.6 0.8 1.0 1.5 
Other Income2.4 1.7 4.2 2.9 
Change in Fair Value of Equity and Convertible Securities(1.2)2.4 2.2 4.1 
Net Realized Investment Gains (Losses)1.5 (14.4)8.1 (8.0)
Impairment Losses(0.1)(0.9)(1.6)1.2 
Total Revenues1,129.9 1,262.8 2,272.9 2,557.6 
Expenses:
Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses (Changes in Liability for Future Policyholder Benefits for the Three Months Ended: 2024 - $1.6; 2023 - $0.6 and
Six Months Ended: 2024 - $7.6; 2023 - $2.5)
744.4 984.7 1,500.4 2,036.7 
Insurance Expenses244.3 266.1 485.0 535.4 
Interest and Other Expenses49.3 78.3 109.0 155.7 
Goodwill Impairment— 49.6 — 49.6 
Total Expenses1,038.0 1,378.7 2,094.4 2,777.4 
Income (Loss) before Income Taxes91.9 (115.9)178.5 (219.8)
Income Tax (Expense) Benefit(17.5)18.8 (33.9)42.6 
Net Income (Loss)74.4 (97.1)144.6 (177.2)
Less: Net Loss attributable to Noncontrolling Interest(1.0)— (2.1)— 
Net Income (Loss) attributable to Kemper Corporation
$75.4 $(97.1)$146.7 $(177.2)
Net Income (Loss) attributable to Kemper Corporation per Unrestricted Share:
Basic$1.17 $(1.52)$2.28 $(2.77)
Diluted$1.16 $(1.52)$2.26 $(2.77)
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.
4

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
(Unaudited)
Three Months EndedSix Months Ended
Jun 30,
2024		Jun 30, 2023Jun 30,
2024		Jun 30, 2023
Net Income (Loss)
$74.4 $(97.1)$144.6 $(177.2)
Other Comprehensive Income (Loss) Before Income Taxes
Changes in Net Unrealized Holding (Losses) Gains on Investment Securities with:
No Credit Losses Recognized in Condensed Consolidated Statements of Income (Loss)(79.2)(83.2)(188.2)104.0 
Credit Losses Recognized in Condensed Consolidated Statements of Income (Loss)(3.0)(0.1)(1.7)(0.1)
Change in Net Unrecognized Postretirement Benefit Costs(0.8)(0.6)(1.7)(1.1)
Net Loss on Cash Flow Hedges(3.6)(0.1)(3.6)(0.1)
Change in Discount Rate on Future Life Policyholder Benefits108.8 50.6 249.9 (59.2)
Other Comprehensive Income (Loss) Before Income Taxes22.2 (33.4)54.7 43.5 
Other Comprehensive Income Tax (Expense) Benefit(4.5)7.3 (11.2)(9.4)
Other Comprehensive Income (Loss), Net of Taxes17.7 (26.1)43.5 34.1 
Total Comprehensive Income (Loss)92.1 (123.2)188.1 (143.1)
Less: Net Loss attributable to Noncontrolling Interest(1.0)— (2.1)— 
Less: Other Comprehensive Income attributable to Noncontrolling Interest
— — — — 
Less: Total Comprehensive Loss attributable to Noncontrolling Interest(1.0)— (2.1)— 
Comprehensive Income (Loss) attributable to Kemper Corporation
$93.1 $(123.2)$190.2 $(143.1)
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.
5

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions, except per share amounts)
(Unaudited)
Jun 30,
2024		Dec 31, 2023
Assets:
Investments:
Fixed Maturities at Fair Value (Amortized Cost: 2024 - $7,546.9; 2023 - $7,565.8
Allowance for Credit Losses: 2024 - $7.5; 2023 - $8.2)
$6,674.7 $6,881.9 
Equity Securities at Fair Value (Cost: 2024 - $211.6; 2023 - $209.3)
226.6 225.8 
Equity Method Limited Liability Investments205.1 221.7 
Alternative Energy Partnership Investments17.3 17.3 
Short-term Investments at Cost which Approximates Fair Value539.1 520.9 
Company-Owned Life Insurance
523.3 513.5 
Loans to Policyholders
279.8 281.2 
Other Investments202.4 241.9 
Total Investments8,668.3 8,904.2 
Cash107.4 64.1 
Receivables from Policyholders (Allowance for Credit Losses: 2024 - $4.8; 2023 - $13.9)
988.0 959.5 
Other Receivables191.5 200.5 
Deferred Policy Acquisition Costs608.0 591.6 
Goodwill1,250.7 1,250.7 
Current Income Tax Assets56.5 64.5 
Deferred Income Tax Assets185.0 210.4 
Other Assets476.4 492.6 
Assets of Consolidated Variable Interest Entity
Fixed Maturities at Fair Value (Amortized Cost: 2024 - $1.6; 2023 - $1.7
Allowance for Credit Losses: 2024 - $—; 2023 - $—)
1.6 1.7 
Short-term Investments at Cost which Approximates Fair Value4.8 2.0 
Receivables from Policyholders (Allowance for Credit Losses: 2024 - $—; 2023 - $—)
5.2 0.7 
Deferred Policy Acquisition Costs0.3 0.1 
Deferred Income Tax Assets0.6 — 
Other Assets— 0.1 
Total Assets$12,544.3 $12,742.7 
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.
6

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in millions, except per share amounts)
(Unaudited)
June 30,
2024		Dec 31, 2023
Liabilities and Shareholders’ Equity:
Insurance Reserves:
Life and Health$3,202.0 $3,422.4 
Property and Casualty2,567.2 2,680.5 
Total Insurance Reserves5,769.2 6,102.9 
Unearned Premiums1,301.5 1,300.8 
Policyholder Obligations644.4 655.7 
Deferred Income Tax Liabilities68.3 50.6 
Accrued Expenses and Other Liabilities693.8 737.7 
Long-term Debt, Current, at Amortized Cost (Fair Value: 2024 - $444.9; 2023 - $—)
449.8 — 
Long-term Debt, Non-Current, at Amortized Cost (Fair Value: 2024 - $801.4; 2023 - $1,213.4)
940.6 1,389.2 
Liabilities of Consolidated Variable Interest Entity
Insurance Reserves2.4 — 
Unearned Premiums4.9 0.5 
Accrued Expenses and Other Liabilities0.1 0.3 
Total Liabilities9,875.0 10,237.7 
Kemper Corporation Shareholders’ Equity:
Common Stock, $0.10 Par Value, 100,000,000 Shares Authorized; 64,426,521 Shares Issued and Outstanding at June 30, 2024 and 64,111,555 Shares Issued and Outstanding at December 31, 2023
6.4 6.4 
Paid-in Capital1,860.9 1,845.3 
Retained Earnings1,121.2 1,014.3 
Accumulated Other Comprehensive Loss(317.3)(360.8)
Total Kemper Corporation Shareholders’ Equity2,671.2 2,505.2 
Noncontrolling Interest(1.9)(0.2)
Total Shareholders’ Equity2,669.3 2,505.0 
Total Liabilities and Shareholders’ Equity$12,544.3 $12,742.7 
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.
7

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(Unaudited)
 Six Months Ended
 Jun 30,
2024		Jun 30,
2023
Cash Flows from Operating Activities:
Net Income (Loss)
$144.6 $(177.2)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities
Net Realized Investment (Gains) Losses(8.1)8.0 
Impairment Losses1.6 (1.2)
Depreciation and Amortization of Property, Equipment and Software22.4 26.2 
Amortization of Intangibles Assets Acquired5.3 7.9 
Settlement Related to Defined Benefit Pension Plan(2.7)— 
Change in Accumulated Undistributed Earnings of Equity Method Limited Liability Investments23.2 (1.3)
Change in Value of Alternative Energy Partnership Investments(1.0)(1.5)
Change in Fair Value of Equity and Convertible Securities(2.2)(4.1)
Goodwill Impairment— 49.6 
Changes in:
Receivables from Policyholders(32.6)40.3 
Reinsurance Recoverables4.1 11.6 
Deferred Policy Acquisition Costs(16.6)(10.6)
Insurance Reserves(80.7)(47.7)
Unearned Premiums5.1 (39.2)
Income Taxes38.7 72.6 
Other Assets and Liabilities(35.2)0.7 
Net Cash Provided by (Used in) Operating Activities65.9 (65.9)
Cash Flows from Investing Activities:
Proceeds from the Sales, Calls and Maturities of Fixed Maturities629.2 353.0 
Proceeds from the Sales or Paydowns of Investments:
Equity Securities19.3 32.5 
Mortgage Loans71.9 42.5 
Other Investments8.6 5.1 
Purchases of Investments:
Fixed Maturities(578.4)(334.8)
Equity Securities(6.3)(26.2)
Real Estate Investments(0.6)(0.3)
Mortgage Loans(55.3)(44.1)
Other Investments(30.2)(11.6)
Net Purchases of Short-term Investments(12.6)(126.9)
Acquisition of Software and Long-lived Assets(33.0)(25.4)
Settlement Proceeds from Company-Owned Life Insurance6.2 102.2 
Other13.8 (1.1)
Net Cash Provided by (Used in) Investing Activities32.6 (35.1)
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.
8

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in millions)
(Unaudited)
Six Months Ended
Jun 30,
2024		Jun 30,
2023
Net Cash Provided by (Used in) Investing Activities (Carryforward from page 8)
32.6 (35.1)
Cash Flows from Financing Activities:
Proceeds from Policyholder Contract Obligations59.1 114.5 
Repayment of Policyholder Contract Obligations(70.7)(115.8)
Proceeds from Shares Issued under Employee Stock Purchase Plan2.0 2.2 
Dividends Paid(39.8)(39.6)
Other(5.8)0.9 
Net Cash Used in Financing Activities(55.2)(37.8)
Net increase (decrease) in cash1
43.3 (138.8)
Cash, Beginning of Year1
64.1 212.4 
Cash, End of Period1
$107.4 $73.6 
1Includes amounts attributable to Kemper Reciprocal reported as non-controlling interest.
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
(Dollars in millions)
(Unaudited)
Six Months Ended
Jun 30,
2024		Jun 30,
2023
Cash (paid) received during the year for:
Interest$(27.3)$(27.3)
Taxes5.1 114.5 
Operating Leases(11.2)(13.4)
Non-Cash Activities:
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities$7.4 $2.4 
9

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In millions, except per share amounts)
(Unaudited)
Three Months Ended June 30, 2024
Number of
Shares		Common
Stock		Paid-in
Capital		Retained
Earnings		Accumulated Other Comprehensive (Loss) IncomeNoncontrolling InterestTotal
Shareholders’
Equity
Balance, March 31, 2024
64.4 $6.4 $1,852.3 $1,066.1 $(335.0)$(1.1)$2,588.7 
Net Income— — — 75.4 — (1.0)74.4 
Other Comprehensive Income, Net of Taxes (Note 12)
— — — — 17.7 — 17.7 
Cash Dividends and Dividend Equivalents to Shareholders ($0.31 per share)
— — — (20.3)— — (20.3)
Shares Issued Under Employee Stock Purchase Plan (Note 13)
— — 1.1 — — — 1.1 
Equity-based Compensation Cost— — 7.3 — — — 7.3 
Equity-based Awards, Net of Shares Exchanged— — 0.2 — — — 0.2 
Other Changes in Non-Controlling Interest— — — — — 0.2 0.2 
Balance, June 30, 2024
64.4 $6.4 $1,860.9 $1,121.2 $(317.3)$(1.9)$2,669.3 

Three Months Ended June 30, 2023
Number of
Shares		Common
Stock		Paid-in
Capital		Retained
Earnings		Accumulated Other Comprehensive LossNoncontrolling InterestTotal
Shareholders’
Equity
Balance, March 31, 2023
64.0 $6.4 $1,828.9 $1,266.3 $(454.7)$— $2,646.9 
Net Loss— — — (97.1)— — (97.1)
Other Comprehensive Loss, Net of Taxes (Note 12)
— — — — (26.1)— (26.1)
Cash Dividends and Dividend Equivalents to Shareholders ($0.31 per share)
— — — (20.2)— — (20.2)
Shares Issued Under Employee Stock Purchase Plan (Note 13)
— — 1.2 — — — 1.2 
Equity-based Compensation Cost— — 7.1 — — — 7.1 
Equity-based Awards, Net of Shares Exchanged— — 0.4 — — — 0.4 
Balance, June 30, 2023
64.0 $6.4 $1,837.6 $1,149.0 $(480.8)$— $2,512.2 
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.



10

KEMPER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)
(In millions, except per share amounts)
(Unaudited)
Six Months Ended June 30, 2024
Number of
Shares		Common
Stock		Paid-in
Capital		Retained
Earnings		Accumulated Other Comprehensive (Loss) IncomeNoncontrolling InterestTotal
Shareholders’
Equity
Balance, December 31, 2023
64.1 $6.4 $1,845.3 $1,014.3 $(360.8)$(0.2)$2,505.0 
Net Income— — — 146.7 — (2.1)144.6 
Other Comprehensive Income, Net of Taxes (Note 12)
— — — — 43.5 — 43.5 
Cash Dividends and Dividend Equivalents to Shareholders ($0.62 per share)
— — — (39.8)— — (39.8)
Shares Issued Under Employee Stock Purchase Plan (Note 13)
— — 2.0 — — — 2.0 
Equity-based Compensation Cost— — 19.5 — — — 19.5 
Equity-based Awards, Net of Shares Exchanged0.3 — (5.9)— — — (5.9)
Other Changes in Non-Controlling Interest— — — — — 0.4 0.4 
Balance, June 30, 2024
64.4 $6.4 $1,860.9 $1,121.2 $(317.3)$(1.9)$2,669.3 

Six Months Ended June 30, 2023
Number of
Shares		Common
Stock		Paid-in
Capital		Retained
Earnings		Accumulated Other Comprehensive (Loss) IncomeNoncontrolling InterestTotal
Shareholders’
Equity
Balance, December 31, 2022
63.9 $6.4 $1,812.7 $1,366.4 $(514.9)$— $2,670.6 
Net Loss— — — (177.2)— — (177.2)
Other Comprehensive Income, Net of Taxes (Note 12)
— — — — 34.1 — 34.1 
Cash Dividends and Dividend Equivalents to Shareholders ($0.62 per share)
— — — (39.6)— — (39.6)
Shares Issued Under Employee Stock Purchase Plan (Note 13)
— — 2.2 — — — 2.2 
Equity-based Compensation Cost— — 22.7 — — — 22.7 
Equity-based Awards, Net of Shares Exchanged0.1 — — (0.6)— — (0.6)
Balance, June 30, 2023
64.0 $6.4 $1,837.6 $1,149.0 $(480.8)$— $2,512.2 
The Notes to the Condensed Consolidated Financial Statements are an integral part of these financial statements.
11

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 - Basis of Presentation and Accounting Policies
The unaudited Condensed Consolidated Financial Statements include the accounts of Kemper Corporation (“Kemper”) and its subsidiaries which include property and casualty insurance subsidiaries, life insurance subsidiaries (collectively referred to herein as the “Company”), and a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary.
The unaudited Condensed Consolidated Financial Statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) on a basis consistent with reporting interim financial information pursuant to the rules and regulations for Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and include the accounts of Kemper Corporation, its subsidiaries, and a VIE in which the Company is considered the primary beneficiary. All intercompany accounts and transactions have been eliminated.
Certain financial information that is included in the annual financial statements, including certain financial statement footnote disclosures prepared in accordance with GAAP, is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements include all adjustments necessary to fairly present the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements requires significant management estimates. Due to this factor and other factors, such as the seasonal nature of some portions of the insurance business, annualizing the results of operations for the six months ended June 30, 2024 would not necessarily be indicative of the results expected for the full fiscal year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Consolidated Financial Statements and related notes included in Kemper’s Annual Report for the year ended December 31, 2023.
Adoption of New Accounting Guidance
The Company has adopted all recently issued accounting pronouncements with effective dates prior to June 30, 2024.
Guidance Adopted in 2024
In March 2023, the FASB issued ASU 2023-02 Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, which expands the use of the proportional amortization method of accounting to equity investments in other tax credit structures that meet certain criteria. The proportional amortization method results in the tax credit investment being amortized in proportion to the allocation of tax credits and other tax benefits in each period, and a net presentation within the income tax line item. ASU 2023-02 is effective for annual periods beginning after December 15, 2023 and interim periods within those annual periods. The Company adopted the new standard on January 1, 2024. The adoption did not have a material impact on the Company's Condensed Consolidated Financial Statements.
Guidance Not Yet Adopted
In October 2023, the FASB issued ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. For SEC registrants, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company will monitor the removal of various requirements from the current regulations in order to determine when to adopt the related amendments, but does not anticipate the adoption of the new guidance will have a material impact on the Company’s Condensed Consolidated Financial Statements. The Company will continue to evaluate the impact of this guidance on its consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07 Improvements to Reportable Segment Disclosures, which enhances disclosures about significant segment expenses. The new standard does not change the definition or aggregation of operating segments but will add required disclosures of significant expenses for each reportable segment as well as certain other disclosures to help financial statement users understand how the chief operating decision maker evaluates segment expenses and operating results. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring companies to use consistent categories and greater disaggregation of information in the
12

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 1 - Basis of Presentation and Accounting Policies (Continued)
tax rate reconciliation as well as requiring disaggregation of income taxes paid by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
In March 2024, the SEC adopted a final rule requiring registrants to disclose certain climate-related information in their registration statements and annual reports. The rule requires the disclosure of qualitative and quantitative information, with certain information, such as financial statement effects of severe weather events, included in the notes to the audited financial statements. Other disclosure requirements include material climate-related risks, processes to manage and govern those risks, disclosure of targets if the targets materially affect or are reasonably likely to materially affect the Company, and, if material, disclosure of certain greenhouse gas emissions. On April 4, 2024, the SEC issued a voluntary stay of the final rule, pending the outcome of pending litigation. The requirements will be applied prospectively and have phased-in effective dates. For the Company, the Form 10-K for the year ended December 31, 2025, will be the first annual report with new climate-related disclosures. The Company is currently evaluating the impact of adopting the final rule.
Note 2 - Net Income (Loss) Per Unrestricted Share
A reconciliation of the numerator and denominator used in the calculation of Basic Net Income (Loss) Per Unrestricted Share and Diluted Net Income (Loss) Per Unrestricted Share for the three and six months ended June 30, 2024 and 2023 is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions, except per share amounts)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Net Income (Loss) attributable to Kemper Corporation
$75.4 $(97.1)$146.7 $(177.2)
Shares in Thousands  
Weighted-average Unrestricted Shares Outstanding
64,395.0 64,008.5 64,324.7 63,977.7 
Equity-based Compensation Equivalent Shares
496.6 — 507.4 — 
Weighted-average Unrestricted Shares and Equivalent Shares Outstanding Assuming Dilution
64,891.6 64,008.5 64,832.1 63,977.7 
Net Income (Loss) attributable to Kemper Corporation per Unrestricted Share:
(Per Unrestricted Share in Whole Dollars)  
Basic Net Income (Loss) Per Unrestricted Share
$1.17 $(1.52)$2.28 $(2.77)
Diluted Net Income (Loss) Per Unrestricted Share
$1.16 $(1.52)$2.26 $(2.77)
The number of shares of Kemper common stock that were excluded from the calculations of Equity-based Compensation Equivalent Shares and Weighted-average Unrestricted Shares and Equivalent Shares Outstanding Assuming Dilution because the effect of inclusion would be anti-dilutive was 1.6 million and 2.6 million for the three months ended June 30, 2024 and 2023, respectively.
The number of shares of Kemper common stock that were excluded from the calculations of Equity-based Compensation Equivalent Shares and Weighted-average Unrestricted Shares and Equivalent Shares Outstanding Assuming Dilution because the effect of inclusion would be anti-dilutive was 1.7 million and 2.6 million for the six months ended June 30, 2024 and 2023, respectively.
13

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 3 - Business Segments
The Company is engaged, through its subsidiaries, in the property and casualty insurance and life and health insurance businesses. The Company conducts its operations through two operating segments: Specialty Property & Casualty Insurance and Life Insurance.
The Specialty Property & Casualty Insurance segment’s principal products are specialty automobile and commercial automobile insurance. These products are distributed primarily through independent agents and brokers. The Life Insurance segment’s principal products are individual life, accident, supplemental health and property insurance. Career agents employed by the Company distribute these products. Corporate and Other operations include interest expense, board of directors fees, and general corporate expenses incurred by the Company which are not allocated to other businesses. Non-Core Operations includes the results of our Preferred Insurance business which we expect to fully exit.
Segment Adjusted Operating Income (Loss)
The Company analyzes the operating performance of each segment using segment adjusted operating income (loss). Segment adjusted operating income (loss) does not equate to “income (loss) before income taxes” or “net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s Chief Operating Decision Maker (“CODM”) to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Segment adjusted operating income (loss) is calculated by adjusting each segment’s income (loss) before income taxes for the following items:
(i) Change in Fair Value of Equity and Convertible Securities;
(ii) Net Realized Investment Gains (Losses);
(iii) Impairment Losses;
(iv) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs;
(v) Debt Extinguishment, Pension Settlement and Other Charges;
(vi) Goodwill Impairment Charge;
(vii) Non-Core Operations; and
(viii) Significant non-recurring or infrequent items that may not be indicative of ongoing operations
These items are important to an understanding of overall results of operations. Segment adjusted operating income (loss) is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of segment adjusted operating income (loss) may differ from that used by other companies. The Company, however, believes that the presentation of segment adjusted operating income (loss), as measured for management purposes, enhances the understanding of results of operations by highlighting the underlying profitability factors of its businesses.
Earned Premiums by product line, including a reconciliation to Total Earned Premiums, for the three and six months ended June 30, 2024 and 2023 were:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Specialty Property & Casualty Insurance:
Personal Automobile$691.5 $766.6 $1,366.8 $1,554.5 
Commercial Automobile171.1 165.7 335.8 322.0 
Life Insurance:
Life84.4 84.8 165.0 167.0 
Accident and Health5.6 5.8 11.2 11.7 
Property10.8 11.6 21.9 22.8 
Total Segment Earned Premiums963.4 1,034.5 $1,900.7 $2,078.0 
Non-Core Operations70.3 132.4 164.9 269.8 
Total Earned Premiums$1,033.7 $1,166.9 $2,065.6 $2,347.8 
14

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 3 - Business Segments (Continued)
Segment Revenues, including a reconciliation to Total Revenues, for the three and six months ended June 30, 2024 and 2023 were:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Segment Revenues:
Specialty Property & Casualty Insurance:
Earned Premiums$862.6 $932.3 $1,702.6 $1,876.5 
Net Investment Income46.6 44.5 87.7 83.0 
Change in Value of Alternative Energy Partnership Investments0.3 0.4 0.6 0.8 
Other Income1.3 0.7 2.4 1.6 
Total Specialty Property & Casualty Insurance910.8 977.9 1,793.3 1,961.9 
Life Insurance:
Earned Premiums100.8 102.2 198.1 201.5 
Net Investment Income30.5 47.1 74.8 96.9 
Change in Value of Alternative Energy Partnership Investments0.1 0.2 0.2 0.4 
Other Income (Loss)0.1 0.1 0.3 (0.3)
Total Life Insurance131.5 149.6 273.4 298.5 
Total Segment Revenues1,042.3 1,127.5 2,066.7 2,260.4 
Change in Fair Value of Equity and Convertible Securities(1.2)2.4 2.2 4.1 
Net Realized Investment Gains (Losses)1.5 (14.4)8.1 (8.0)
Net Impairment Losses Recognized in Earnings(0.1)(0.9)(1.6)1.2 
Non-Core Operations83.8 145.7 190.0 293.7 
Other3.6 2.5 7.5 6.2 
Total Revenues$1,129.9 $1,262.8 $2,272.9 $2,557.6 

15

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 3 - Business Segments (Continued)
Adjusted Consolidated Operating Income (Loss), including a reconciliation to Income (Loss) before Income Taxes attributable to Kemper Corporation, for the three and six months ended June 30, 2024 and 2023 was:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Segment Adjusted Operating Income (Loss):
Specialty Property & Casualty Insurance$127.9 $(15.0)$214.4 $(89.7)
Life Insurance(1.4)10.1 12.6 24.9 
Total Segment Adjusted Operating Income (Loss)
126.5 (4.9)227.0 (64.8)
Corporate and Other Adjusted Operating Loss
(13.7)(15.3)(29.3)(28.2)
Less: Loss before Income Taxes attributable to Noncontrolling Interest(1.3)— (2.7)— 
Adjusted Consolidated Operating Income (Loss)
114.1 (20.2)200.4 (93.0)
Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities(1.2)2.4 2.2 4.1 
Net Realized Investment Gains (Losses)1.5 (14.4)8.1 (8.0)
Impairment Losses(0.1)(0.9)(1.6)1.2 
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs(6.5)(29.5)(19.3)(58.6)
Debt Extinguishment, Pension Settlement and Other Charges2.7 — 2.7 — 
Goodwill Impairment Charge— (49.6)— (49.6)
Non-Core Operations(17.3)(3.7)(11.3)(15.9)
Income (Loss) before Income Taxes attributable to Kemper Corporation
$93.2 $(115.9)$181.2 $(219.8)
Adjusted Consolidated Net Operating Income (Loss), including a reconciliation to Net Income (Loss) attributable to Kemper Corporation, for the three and six months ended June 30, 2024 and 2023 was:
 Three Months EndedSix Months Ended
(Dollars in Millions and Net of Income Taxes)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Segment Adjusted Net Operating Income (Loss):
Specialty Property & Casualty Insurance$102.3 $(10.8)$171.5 $(69.2)
Life Insurance(0.2)8.9 11.7 22.1 
Total Segment Adjusted Net Operating Income (Loss)
102.1 (1.9)183.2 (47.1)
Corporate and Other Adjusted Net Operating Loss(11.4)(12.3)(23.9)(22.8)
Less: Net Loss attributable to Noncontrolling Interest(1.0)— (2.1)— 
Adjusted Consolidated Net Operating Income (Loss)
91.7 (14.2)161.4 (69.9)
Net Income (Loss) From:
Change in Fair Value of Equity and Convertible Securities(1.0)1.9 1.7 3.2 
Net Realized Investment Gains (Losses)1.2 (12.5)6.4 (7.4)
Impairment Losses(0.1)(0.8)(1.3)0.9 
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs(5.1)(23.3)(15.2)(46.3)
Debt Extinguishment, Pension Settlement and Other Charges2.1 — 2.1 — 
Goodwill Impairment Charge— (45.5)— (45.5)
Non-Core Operations(13.4)(2.7)(8.4)(12.2)
Net Income (Loss) attributable to Kemper Corporation
$75.4 $(97.1)$146.7 $(177.2)
16

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 4 - Property and Casualty Insurance Reserves
Property and Casualty Insurance Reserve activity for the six months ended June 30, 2024 and 2023 was:
 Six Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023
Property and Casualty Insurance Reserves:
Gross of Reinsurance at Beginning of Year$2,680.5 $2,756.9 
Less Reinsurance Recoverables at Beginning of Year27.8 39.6 
Property and Casualty Insurance Reserves, Net of Reinsurance at Beginning of Year2,652.7 2,717.3 
Incurred Losses and LAE related to:
Current Year1,359.2 1,837.5 
Prior Years17.0 67.9 
Total Incurred Losses and LAE1,376.2 1,905.4 
Paid Losses and LAE related to:
Current Year555.1 864.1 
Prior Years932.9 1,107.5 
Total Paid Losses and LAE1,488.0 1,971.6 
Property and Casualty Insurance Reserves, Net of Reinsurance at End of Period2,540.9 2,651.1 
Plus Reinsurance Recoverables at End of Period26.3 29.0 
Property and Casualty Insurance Reserves, Gross of Reinsurance at End of Period$2,567.2 $2,680.1 
    
Property and Casualty Insurance Reserves are estimated based on historical experience patterns and current economic trends. Actual loss experience and loss trends may differ from these historical experience patterns and economic conditions. Loss experience and loss trends emerge over several years from the dates of loss inception. The Company monitors such emerging loss trends on a quarterly basis. Changes in such estimates are included in the Condensed Consolidated Statements of Income (Loss) in the period of change. Additionally, the Company reviews if any premium revisions are appropriate as a result of any incurred losses and loss adjustment expenses (“LAE”) related to prior years recorded in the current period. For the six months ended June 30, 2024 and 2023, no additional premiums or return premiums were recorded.
For the six months ended June 30, 2024, the Company increased its Property and Casualty Insurance Reserves by $17.0 million to recognize adverse development of loss and LAE reserves from prior accident years. Specialty Personal Automobile insurance loss and LAE reserves developed adversely by $7.7 million due primarily to higher than expected settlements for extra-contractual demands related to prior year claims. Commercial Automobile insurance loss and LAE reserves developed favorably by $2.6 million primarily due to favorable emergence in loss patterns related to personal injury protection coverages. Non-Core Operations loss and LAE reserves developed adversely by $11.9 million mainly due to higher than expected large loss emergence.
For the six months ended June 30, 2023, the Company increased its Property and Casualty Insurance Reserves by $67.9 million to recognize adverse development of loss and LAE reserves from prior accident years. Specialty Personal Automobile insurance loss and LAE reserves developed adversely by $40.0 million due primarily to higher than expected emergence in loss patterns within the bodily injury and physical damage coverages. Commercial Automobile insurance loss and LAE reserves developed adversely by $15.2 million due to higher than expected emergence in loss patterns related to bodily injury coverages. Non-Core Operations loss and LAE reserves developed adversely by $12.7 million mainly due to higher than expected emergence in loss patterns related to bodily injury and physical damage coverages.
The Company cannot predict whether loss and LAE reserves will develop favorably or unfavorably from the amounts reported in the Condensed Consolidated Financial Statements. The Company believes that any such development will not have a material effect on the Company’s Condensed Consolidated Shareholders’ Equity, but could have a material effect on the Company’s consolidated financial results for a given period.
17

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 5 - Liability for Future Policyholder Benefits
The Company’s Life Insurance Reserves are reported using the Company’s estimate of its liability for future policyholder benefits.
The liability for future policyholder benefits is grouped by contract type and issue year into cohorts consistent with the grouping used in estimating the associated liability. Significant assumption inputs to the calculation of the liability for future policyholder benefits include mortality, lapses, and discount rates (both accretion and current). The Company’s actuaries review assumptions used to measure the liability for future policyholder benefits for nonparticipating traditional and limited pay long-duration contracts at least annually. If there is a change, assumptions are updated with the recognition and remeasurement recorded in the Company’s Condensed Consolidated Statements of Income (Loss). The Company’s actuaries use a variety of generally accepted actuarial methodologies, in accordance with Actuarial Standards of Practice, in determining the assumptions.
A key assumption in these estimation methodologies is that patterns observed in prior periods are indicative of how policyholder benefits are expected to develop in the future and that such historical data can be used to predict and estimate future losses. However, changes in the Company’s business processes and the macroeconomic environment, by their very nature, are likely to affect the actual to expected experience which generally results in the historical experience factors becoming less reliable over time in predicting how cash flows will ultimately develop. The Company’s actuaries use professional judgment in determining how much weight to place on the actual to expected experience based on the older historical data and how much weight to place on more recent experience data. In some cases, the Company’s actuaries make adjustments to the assumptions to estimate losses. These assumptions are reviewed by the Company’s actuaries and corporate management who apply their collective judgment and determine the appropriate assumptions to adopt for the underlying business. Numerous factors are considered in this determination process, including, but not limited to, the assessed reliability of key assumptions that may be significantly influencing the current actuarial indications, changes in pricing and product offerings, changes in customer base, changes in agency operations or other changes that affect the timing of payments, the policyholder behaviors observed over the recent past, the level of volatility within a particular line of business, and the improvement or deterioration of actuarial indications in the current period as compared to prior periods. Changes in the Company’s assumptions underlying these liabilities over time will occur and may be material.












18

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 5 - Liability for Future Policyholder Benefits (Continued)
The following tables summarize balances and changes in the present value of expected net premiums, present value of expected future policyholder benefits and net liability for future policyholder benefits as of and for the three and six months ended June 30, 2024 and 2023:
Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30, 2024Jun 30, 2023Jun 30, 2024Jun 30, 2023
Present Value of Expected Net PremiumsBalance, Beginning of Period$690.1 $722.4 $675.4 $688.6 
Beginning Balance at Original Discount Rate$723.1 $744.5 $694.7 $728.9 
        Effect of Changes in Cash Flow Assumptions— — — — 
        Effect of Actual Variances from Expected Experience0.4 (13.0)5.7 (12.3)
Adjusted Beginning of Period Balance723.5 731.5 700.4 716.6 
         Issuances25.3 30.1 63.5 61.9 
         Interest Accrual7.9 7.5 15.5 14.5 
         Net Premiums Collected(23.5)(24.0)(46.2)(47.9)
Ending Balance at Original Discount Rate733.2 745.1 733.2 745.1 
         Effect of Changes in Discount Rate Assumptions(40.6)(33.4)(40.6)(33.4)
Balance, End of Period$692.6 $711.7 $692.6 $711.7 
Present Value of Expected Future Policyholder BenefitsBalance, Beginning of Period$3,488.2 $3,699.5 $3,613.2 $3,561.0 
Beginning Balance at Original Discount Rate$3,865.7 $3,916.9 $3,835.9 $3,906.2 
        Effect of Changes in Cash Flow Assumptions— — — — 
        Effect of Actual Variances From Expected Experience(1.3)(13.5)4.2 (13.2)
Adjusted Beginning of Period Balance3,864.4 3,903.4 3,840.1 3,893.0 
         Issuances 25.2 30.1 63.4 61.9 
         Interest Accrual42.6 42.8 85.2 85.2 
         Benefit Payments(57.7)(61.2)(114.2)(125.0)
Ending Balance at Original Discount Rate3,874.5 3,915.1 3,874.5 3,915.1 
         Effect of Changes in Discount Rate Assumptions(494.4)(279.2)(494.4)(279.2)
Balance, End of Period$3,380.1 $3,635.9 $3,380.1 $3,635.9 
Net Liability for Future Policyholder Benefits, pre-flooring$2,687.5 $2,924.2 $2,687.5 $2,924.2 
Cumulative impact of flooring the future Policyholder Benefits Reserve0.6 — 0.6 — 
Net Liability for Future Policyholder Benefits, post-flooring2,688.1 2,924.2 2,688.1 2,924.2 
Less: Reinsurance Recoverable— — — — 
Net Liability for Future Policyholder Benefits, After Reinsurance Recoverable$2,688.1 $2,924.2 $2,688.1 $2,924.2 
The weighted-average liability duration of the liability for future policyholder benefits as calculated under current rates is as follows:
Jun 30, 2024Jun 30, 2023
Weighted-Average Liability Duration of the Liability for Future Policyholder Benefits (Years)14.115.0
19

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 5 - Liability for Future Policyholder Benefits (Continued)
The reconciliation of the net liability for future policyholder benefits to Life and Health Insurance Reserves in the Condensed Consolidated Balance Sheets is as follows:
(Dollars in Millions)Jun 30, 2024Jun 30, 2023
Net Liability for Future Policyholder Benefits, post-flooring$2,688.1 $2,924.2 
Deferred Profit Liability374.1 288.8 
Other1
139.8 150.8 
Total Life and Health Insurance Reserves$3,202.0 $3,363.8 
1Other primarily consists of Accident and Health and Universal Life reserves
The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, is as follows:
(Dollars in Millions)Jun 30, 2024Jun 30, 2023
Expected Future Benefit Payments, undiscounted$10,260.5 $10,170.1 
Expected Future Gross Premiums, undiscounted$4,160.2 $4,436.6 
Expected Future Gross Premiums, discounted$2,737.1 $2,860.4 
The amount of revenue and interest recognized in the Condensed Consolidated Statements of Income (Loss) is as follows:
Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30, 2024Jun 30, 2023Jun 30, 2024Jun 30, 2023
Gross Premiums or Assessments $99.2 $98.5 $200.5 $202.3 
Interest Expense $34.7 $35.3 $69.7 $70.7 
The weighted-average interest rate is as follows:
Jun 30, 2024Jun 30, 2023
Interest Accretion Rate4.51 %4.54 %
Current Discount Rate5.68 %5.17 %
Significant assumption inputs to the calculation of the liability for future policyholder benefits include mortality, lapses, and discount rates (both accretion and current). The Company did not make any changes to mortality and lapse assumptions during the six months ended June 30, 2024 and 2023. Market data that underlies current discount rates is updated as of June 30, 2024.
The balances of and changes in Deferred Profit Liability as of and for the periods indicated are as follows:
Six Months Ended
(Dollars in Millions)Jun 30, 2024Jun 30, 2023
Balance, Beginning of Year$337.8 $253.6 
Profits Deferred81.4 83.3 
Interest Accrual8.1 6.2 
Amortization(53.9)(55.0)
Effect of Actual Variances from Expected Experience and Other Changes0.7 0.7 
Balance, End of Period$374.1 $288.8 
20

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6 - Investments
Fixed Maturities
The amortized cost and fair values of the Company’s Investments in Fixed Maturities at June 30, 2024 were:
 Amortized
Cost		Gross UnrealizedAllowance for Expected Credit LossesFair Value
(Dollars in Millions)GainsLosses
U.S. Government and Government Agencies and Authorities$574.9 $0.7 $(100.1)$— $475.5 
States and Political Subdivisions1,550.9 4.5 (215.4)(0.3)1,339.7 
Foreign Governments5.1 — (0.5)— 4.6 
Corporate Securities:
Bonds and Notes4,095.4 8.3 (509.9)(7.2)3,586.6 
Redeemable Preferred Stocks11.0 0.1 (1.2)— 9.9 
Collateralized Loan Obligations896.4 2.0 (12.5)— 885.9 
Other Mortgage- and Asset-backed413.2 0.1 (40.8)— 372.5 
Investments in Fixed Maturities$7,546.9 $15.7 $(880.4)$(7.5)$6,674.7 
The amortized cost and fair values of the Company’s Investments in Fixed Maturities at December 31, 2023 were:
 Amortized
Cost		Gross UnrealizedAllowance for Expected Credit LossesFair Value
(Dollars in Millions)GainsLosses
U.S. Government and Government Agencies and Authorities$594.1 $1.9 $(84.5)$— $511.5 
States and Political Subdivisions1,575.9 16.3 (189.8)(0.5)1,401.9 
Foreign Governments4.4 — (0.6)— 3.8 
Corporate Securities:
Bonds and Notes4,046.8 35.5 (383.8)(7.7)3,690.8 
Redeemable Preferred Stocks9.0 0.1 (0.8)— 8.3 
Collateralized Loan Obligations973.6 0.7 (24.5)— 949.8 
Other Mortgage- and Asset-backed362.0 0.1 (46.3)— 315.8 
Investments in Fixed Maturities$7,565.8 $54.6 $(730.3)$(8.2)$6,881.9 
Other Receivables included $3.6 million and $0.9 million of unsettled sales of Investments in Fixed Maturities at June 30, 2024 and December 31, 2023, respectively. There were $18.9 million of unsettled purchases of Investments in Fixed Maturities included in Accrued Expenses and Other Liabilities as of June 30, 2024. There were no unsettled purchases of Investments in Fixed Maturities included in Accrued Expenses and Other Liabilities as of December 31, 2023.The amortized cost and estimated fair values of the Company’s Investments in Fixed Maturities at June 30, 2024 by contractual maturity were:
(Dollars in Millions)Amortized CostFair Value
Due in One Year or Less$278.2 $272.4 
Due after One Year to Five Years828.4 799.4 
Due after Five Years to Ten Years1,076.1 931.9 
Due after Ten Years3,593.5 3,038.8 
Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date1,770.7 1,632.2 
Investments in Fixed Maturities $7,546.9 $6,674.7 
21

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6 - Investments (Continued)
The expected maturities of the Company’s Investments in Fixed Maturities may differ from the contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
Investments in Mortgage- and Asset-backed Securities Not Due at a Single Maturity Date at June 30, 2024 consisted of securities issued by the Government National Mortgage Association with a fair value of $219.1 million, securities issued by the Federal National Mortgage Association with a fair value of $93.4 million, securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $61.2 million and securities of other non-governmental issuers with a fair value of $1,258.5 million.
An aging of unrealized losses on the Company’s Investments in Fixed Maturities at June 30, 2024 is presented below.
 Less Than 12 Months12 Months or LongerTotal
(Dollars in Millions)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Fixed Maturities:
U.S. Government and Government Agencies and Authorities$23.7 $(0.2)$404.6 $(99.9)$428.3 $(100.1)
States and Political Subdivisions224.0 (5.9)963.9 (209.5)1,187.9 (215.4)
Foreign Governments0.7 — 1.6 (0.5)2.3 (0.5)
Corporate Securities:
Bonds and Notes595.1 (22.9)2,780.8 (487.0)3,375.9 (509.9)
Redeemable Preferred Stocks3.2 (0.1)6.4 (1.1)9.6 (1.2)
Collateralized Loan Obligations124.5 (0.2)158.5 (12.3)283.0 (12.5)
Other Mortgage- and Asset-backed53.9 (0.1)291.7 (40.7)345.6 (40.8)
Total Fixed Maturities$1,025.1 $(29.4)$4,607.5 $(851.0)$5,632.6 $(880.4)
    
Investment-grade fixed maturity investments comprised $862.8 million and below-investment-grade fixed maturity investments comprised $17.6 million of the unrealized losses on investments in fixed maturities at June 30, 2024. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was approximately 5.4% of the amortized cost basis of the investment.
An aging of unrealized losses on the Company’s Investments in Fixed Maturities at December 31, 2023 is presented below.
 Less Than 12 Months12 Months or LongerTotal
(Dollars in Millions)Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
Fixed Maturities:
U.S. Government and Government Agencies and Authorities$52.0 $(0.8)$401.6 $(83.7)$453.6 $(84.5)
States and Political Subdivisions112.9 (2.3)928.3 (187.5)1,041.2 (189.8)
Foreign Governments— — 1.9 (0.6)1.9 (0.6)
Corporate Securities:
Bonds and Notes198.4 (5.5)2,813.0 (378.3)3,011.4 (383.8)
Redeemable Preferred Stocks— — 7.9 (0.8)7.9 (0.8)
Collateralized Loan Obligations38.8 (0.4)747.7 (24.1)786.5 (24.5)
Other Mortgage- and Asset-backed15.7 (0.1)287.3 (46.2)303.0 (46.3)
Total Fixed Maturities$417.8 $(9.1)$5,187.7 $(721.2)$5,605.5 $(730.3)
22

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6 - Investments (Continued)
Investment-grade fixed maturity investments comprised $704.8 million and below-investment-grade fixed maturity investments comprised $25.5 million of the unrealized losses on investments in fixed maturities at December 31, 2023. For below-investment-grade fixed maturity investments in an unrealized loss position, the unrealized loss amount, on average, was approximately 8.8% of the amortized cost basis of the investment.
Fixed Maturities - Expected Credit Losses
The following table sets forth the change in allowance for credit losses on fixed maturities available-for-sale by major security type for six months ended June 30, 2024. Accrued interest excluded from the amortized cost of fixed income securities total $75.4 million and $77.0 million as of June 30, 2024 and December 31, 2023, respectively, and is reported within the Other Receivables line of the Condensed Consolidated Balance Sheets. The Company monitors accrued interest and writes off amounts when they are not expected to be received.
 States and Political SubdivisionsCorporate Bonds and NotesTotal
(Dollars in Millions)
Balance, Beginning of Year$0.5 $7.7 $8.2 
Additions for Securities for which No Previous Expected Credit Losses were
   Recognized		— 0.4 0.4 
Reductions Due to Sales— (0.7)(0.7)
Net Decrease in Allowance on Securities for which Expected Credit Losses were Previously Recognized(0.2)(0.2)(0.4)
Balance, End of Period$0.3 $7.2 $7.5 
The following table sets forth the change in allowance for credit losses on fixed maturities available-for-sale by major security type for the six months ended June 30, 2023.
 States and Political SubdivisionsCorporate Bonds and NotesTotal
(Dollars in Millions)
Balance, Beginning of Year$0.7 $8.9 $9.6 
Additions for Securities for which No Previous Expected Credit Losses were
   Recognized		— 0.7 0.7 
Reductions Due to Sales— (1.9)(1.9)
Net Decrease in Allowance on Securities for which Expected Credit Losses were Previously Recognized— (1.0)(1.0)
Write-offs Charged Against Allowance(0.3)— (0.3)
Balance, End of Period$0.4 $6.7 $7.1 
Equity Securities
Investments in Equity Securities at Fair Value were $226.6 million and $225.8 million at June 30, 2024 and December 31, 2023, respectively. Net unrealized (losses) gains arising during the six months ended June 30, 2024 and 2023 and recognized in earnings, related to such investments still held as of June 30, 2024 and June 30, 2023, were $(0.6) million and $9.8 million, respectively.
There were no unsettled purchases of Investments in Equity Securities at Fair Value at June 30, 2024 or December 31, 2023. There were $0.0 million and $0.1 million in unsettled sales of Investments in Equity Securities at Fair Value at June 30, 2024 and December 31, 2023, respectively.
Equity Method Limited Liability Investments
Equity Method Limited Liability Investments include investments in limited liability investment companies and limited partnerships in which the Company’s interests are not deemed minor and are accounted for under the equity method of
23

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6 - Investments (Continued)
accounting. The Company’s investments in Equity Method Limited Liability Investments are generally of a passive nature in that the Company does not take an active role in the management of the investment entity.
The Company’s maximum exposure to loss at June 30, 2024 is limited to the total carrying value of $205.1 million. In addition, the Company had outstanding commitments totaling approximately $80.8 million to fund Equity Method Limited Liability Investments at June 30, 2024. At June 30, 2024, 3.3% of Equity Method Limited Liability Investments were reported without a reporting lag. Of the total carrying value, 4.7% were reported with a one-month lag, and the remainder were reported with a greater than one-month but less than or equal to three-month lag.
There were no unsettled purchases or sales of Equity Method Limited Liability Investments at June 30, 2024 or December 31, 2023. Unsettled purchases and sales of Equity Method Limited Liability Investments are carried within Accrued Expenses and Other Liabilities and Other Receivables, respectively, on the Condensed Consolidated Balance Sheets.
Alternative Energy Partnership Investments
Alternative Energy Partnership Investments include partnerships formed to invest in newly installed residential solar leases and power purchase agreements. As a result of this investment, the Company has the right to certain investment tax credits and tax depreciation benefits, and to a lesser extent, cash flows generated from the installed solar systems leased to individual consumers for a fixed period of time. The Hypothetical Liquidation Book Value (“HLBV”) equity method of accounting is used for the Company’s investments in Alternative Energy Partnership Investments.
The Company’s maximum exposure to loss at June 30, 2024 is limited to the total carrying value of $17.3 million. The Company has no outstanding commitments to fund Alternative Energy Partnership Investments as of June 30, 2024. Alternative Energy Partnership Investments are reported on a three-month lag.
Loans to Policyholders
Loans to Policyholders represents funds loaned to policyholders up to the cash surrender value of the associated insurance policies and are carried at the unpaid principal balances due to the Company from the policyholders. Interest income on policy loans is recognized in Net Investment Income at the contract interest rate when earned. Policy loans are fully collateralized by the cash surrender value of the associated insurance policies.
The carrying values of the Company’s Loans to Policyholders at Unpaid Principal investment at June 30, 2024 and December 31, 2023 were $279.8 million and $281.2 million, respectively.
Other Investments
The carrying values of the Company’s Other Investments at June 30, 2024 and December 31, 2023 were:
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Equity Securities at Modified Cost
$24.8 $32.6 
Real Estate at Depreciated Cost93.6 94.7 
Mortgage Loans83.1 99.8 
Other0.9 14.8 
Total Other Investments$202.4 $241.9 
Investments in Equity Securities at Modified Cost were $24.8 million and $32.6 million at June 30, 2024 and December 31, 2023, respectively. The Company performs a qualitative impairment analysis on a quarterly basis consisting of various factors such as earnings performance, current market conditions, changes in credit ratings, changes in the regulatory environment and other factors. If the qualitative analysis identifies the presence of impairment indicators, the Company estimates the fair value of the investment. If the estimated fair value is below the carrying value, the Company records an impairment in the Condensed Consolidated Statements of Loss to reduce the carrying value to the estimated fair value. When the Company identifies observable transactions of the same or similar securities to those held by the Company, the Company increases or decreases the carrying value to the observable transaction price. The Company did not recognize any changes in carrying value due to observable transactions for the six months ended June 30, 2024 and 2023. The Company recognized an impairment of
24

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6 - Investments (Continued)
$0.4 million on Equity Securities at Modified Cost for the six months ended June 30, 2024 as a result of the Company’s impairment analysis. The Company did not recognize any impairments on Equity Securities at Modified Cost for the six months ended June 30, 2023 as a result of the Company’s impairment analysis. The Company recognized no cumulative increases or decreases in the carrying value due to observable transactions and $4.8 million of cumulative impairments on Equity Securities at Modified Cost held as of June 30, 2024. The Company recognized no cumulative increases or decreases in the carrying value due to observable transactions and $8.0 million of cumulative impairments on Equity Securities at Modified Cost held as of December 31, 2023.
Net Investment Income
Net Investment Income for the three and six months ended June 30, 2024 and 2023 was:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Investment Income:
Interest on Fixed Income Securities1,2
$80.2 $79.6 $160.0 $161.1 
Dividends on Equity Securities Excluding Alternative Investments0.9 1.2 3.7 2.2 
Alternative Investments:
Equity Method Limited Liability Investments(14.7)2.8 (16.8)3.9 
Limited Liability Investments Included in Equity Securities6.2 6.3 9.6 8.9 
Total Alternative Investments(8.5)9.1 (7.2)12.8 
Short-term Investments7.3 3.6 14.6 5.9 
Loans to Policyholders5.1 5.1 10.3 10.5 
Real Estate2.2 1.9 4.5 4.3 
Company-Owned Life Insurance8.9 7.4 16.0 16.2 
Other2.6 5.3 5.1 8.3 
Total Investment Income 98.7 113.2 207.0 221.3 
Investment Expenses:
Real Estate2.1 2.2 4.3 4.3 
Other Investment Expenses1,2
3.6 4.7 9.3 8.9 
Total Investment Expenses5.7 6.9 13.6 13.2 
Net Investment Income$93.0 $106.3 $193.4 $208.1 
1In the first quarter of 2024, the Company changed its presentation of the details of investment performance to report interest expense incurred on Federal Home Loan Bank ("FHLB") borrowings as an offset to interest on fixed income securities since FHLB borrowings are used for spread lending purposes. The interest expense incurred on FHLB borrowings was previously reported within Other Investment Expenses. The prior period amounts presented above have been updated to reflect this change in presentation.
2Reduced by interest expense incurred on FHLB borrowings used for spread lending purposes of $5.4 million and $7.5 million for the three months ended June 30, 2024 and 2023, respectively, and $10.6 million and $12.2 million for the six months ended June 30, 2024 and 2023, respectively.
Gross gains and losses on sales of investments in fixed maturities and gains and losses associated with Ultra-Long Treasury Futures for the three and six months ended June 30, 2024 and 2023 were:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Fixed Maturities:
Gains on Sales$2.2 $0.4 $15.0 $1.5 
Losses on Sales(0.3)(6.0)(2.6)(9.3)
(Losses) Gains on Hedging Activity— (8.7)(7.9)(0.3)
25

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 7 - Derivatives
The Company’s earnings, cash flows, and financial position are subject to fluctuations due to changes in prevailing interest rates.
The Company entered into derivative agreements with maturity dates throughout 2024. Derivative instruments are carried at fair value on the Condensed Consolidated Balance Sheets. Derivative instruments in a gain position are presented within Other Investments and those in a loss position are included in Accrued Expenses and Other Liabilities. Changes in the fair values of derivatives are recorded on the Condensed Consolidated Statements of Income (Loss) within Net Realized Investment Gains or Accumulated Other Comprehensive Loss along with the corresponding change in the designated hedge assets.
Interest Rate Risk
The Company’s debt securities valuations utilize the Treasury designated benchmark rate, exposing the Company to variability due to changes in interest rates.
Ultra-Long Treasury Futures
The Company enters into exchange-traded ultra-long Treasury futures (“Treasury Futures”) in order to manage exposure to upcoming changes in the benchmark (Treasury) interest rate of forecasted transactions. These derivatives expire quarterly. As of June 30, 2024, all Treasury Futures held by the Company qualified for hedge accounting as a cash flow hedge. The Company utilizes a rollover hedging strategy that involves continuously establishing short-term derivatives in consecutive contract months to hedge the underlying risk exposure. Under this strategy, the complete set of derivatives are not acquired at hedge inception; rather, short-term derivatives are acquired throughout the hedging period such that maturing derivatives are replaced with new short-term derivatives.
There were treasury futures that expired during the six months ended June 30, 2024, that did not qualify for hedge accounting.
The following table presents the Company’s Ultra-Long Treasury Futures derivatives, primary underlying risk exposure, gross notional amount, and estimated fair value of these derivatives:
June 30, 2024December 31, 2023
(Dollars in Millions)Estimated Fair ValueEstimated Fair Value
Derivative InstrumentPrimary Underlying Risk ExposureGross Notional AmountAssetsLiabilitiesGross Notional AmountAssetsLiabilities
Derivatives Designated as Hedging Instruments:
Treasury FuturesInterest Rate Risk$74.4 $0.8 $— $— $— $— 
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Treasury FuturesInterest Rate Risk$— $— $— $149.7 $14.7 $— 
The below table reflects the amounts of Gains (Losses) deferred into AOCI before taxes, net changes in amounts in AOCI associated with current hedging transactions, and amounts subsequently reclassified into Net Income (Loss) through Net Investment Income for Ultra-Long Treasury Futures qualifying as cash flow hedges for the three and six months ended June 30, 2024 and 2023.
Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Beginning of Period$0.2 $(1.3)$— $(0.4)
(Losses) Gains Deferred in AOCI(5.5)— (4.0)— 
Net Change in AOCI with Current Period Hedging Transactions1.7 — 0.4 — 
Gains (Losses) Reclassified into Income— 1.3 — 0.4 
Net Comprehensive Gains (Losses) from Cash Flow Hedges$(3.6)$— $(3.6)$— 

26

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 7 - Derivatives (Continued)
Treasury Locks
During the fourth quarter of 2016 and the first quarter of 2022, in anticipation of debt issuances shortly thereafter and for risk management purposes, the Company entered into derivative transactions (the “2016 Treasury Lock” and “2022 Treasury Lock,” together the “Treasury Locks”) to hedge the risk of changes in the debt cash flows attributable to changes in the benchmark U.S. Treasury interest rate during the period leading up to the debt issuance.
The Treasury Locks have no remaining gross notional amount or fair value as the hedging relationships have been previously discontinued with the issuance of the associated debt (Senior Notes due February 15, 2025 for the 2016 Treasury Lock and Senior Notes due February 23, 2032 for the 2022 Treasury Lock). The effective portion of the gain (loss) before taxes on the derivative instruments upon discontinuance was $(4.5) million for the 2016 Treasury Lock and $5.9 million on the 2022 Treasury Lock. The gain (loss) upon discontinuance is reported as a component of Accumulated Other Comprehensive Loss. Beginning with the issuance of the associated debt, such gain (loss) is amortized into earnings and reported in Interest and Other Expenses in the same periods that the hedged items affect earnings. Amortization on the 2016 Treasury Lock was $(0.1) million and $(0.3) million for the three and six months ended June 30, 2024 and 2023, respectively. Amortization on the 2022 Treasury Lock was $0.1 million and $0.3 million for the three and six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the remaining amount of derivative gain (loss) before taxes within AOCI to be amortized into earnings is $(1.3) million and $4.5 million on the 2016 Treasury Lock and 2022 Treasury Lock, respectively.
27

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements
The Company classifies its Investments in Fixed Maturities as available-for-sale and reports these investments at fair value. The Company reports equity investments with readily determinable fair values as Equity Securities at Fair Value. Certain investments that are measured at fair value using the net asset value practical expedient are not required to be classified using the fair value hierarchy, but are presented in the following two tables to permit reconciliation of the fair value hierarchy to the amounts presented in the Condensed Consolidated Balance Sheets.
The valuation of assets and liabilities measured at fair value in Company’s Condensed Consolidated Balance Sheets at June 30, 2024 is summarized below. The Company had no material liabilities that are measured and reported at fair values.
 Fair Value Measurements 
(Dollars in Millions)Quoted Prices
in Active Markets
for Identical Assets
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Measured at Net Asset ValueTotal Fair Value
Assets:
Fixed Maturities:
U.S. Government and Government Agencies and Authorities$84.2 $391.3 $— $— $475.5 
States and Political Subdivisions— 1,339.6 0.1 — 1,339.7 
Foreign Governments— 4.6 — — 4.6 
Corporate Securities:
Bonds and Notes— 3,359.3 227.3 — 3,586.6 
Redeemable Preferred Stock— 5.8 4.1 — 9.9 
Collateralized Loan Obligations— 879.1 6.8 — 885.9 
Other Mortgage and Asset-backed— 367.5 5.0 — 372.5 
Total Investments in Fixed Maturities 84.2 6,347.2 243.3 — 6,674.7 
Equity Securities at Fair Value:
Preferred Stocks:
Finance, Insurance and Real Estate— 15.9 — — 15.9 
Other Industries— 6.7 2.3 — 9.0 
Common Stocks:
Finance, Insurance and Real Estate0.6 — — — 0.6 
Other Industries1.0 — 1.1 — 2.1 
Other Equity Interests:
Exchange Traded Funds9.7 — — — 9.7 
Limited Liability Companies and Limited Partnerships— — — 189.3 189.3 
Total Investments in Equity Securities at Fair Value11.3 22.6 3.4 189.3 226.6 
Other Investments:
Derivative Instrument Classified as Cash Flow Hedge— 0.8 — — 0.8 
Total Assets$95.5 $6,370.6 $246.7 $189.3 $6,902.1 
Within the Condensed Consolidated Balance Sheets, the Company discloses the fair value of its Long-term Debt. This fair value is determined using broker/dealer quotes of similar securities, and as such, would be included in Level 2 of the fair value hierarchy.
28

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements (Continued)
The valuation of assets and liabilities measured at fair value in the Company’s Consolidated Balance Sheets at December 31, 2023 is summarized below. The Company had no material liabilities that are measured and reported at fair value.
 Fair Value Measurements 
(Dollars in Millions)Quoted Prices
in Active Markets
for Identical Assets
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Measured at Net Asset Value Total Fair Value
Assets:
Fixed Maturities:
U.S. Government and Government Agencies and Authorities$98.8 $412.7 $— $— $511.5 
States and Political Subdivisions— 1,401.8 0.1 — 1,401.9 
Foreign Governments— 3.8 — — 3.8 
Corporate Securities:
Bonds and Notes— 3,513.7 177.1 — 3,690.8 
Redeemable Preferred Stocks— 1.2 7.1 — 8.3 
Collateralized Loan Obligations— 949.8 — — 949.8 
Other Mortgage and Asset-backed— 310.6 5.2 — 315.8 
Total Investments in Fixed Maturities98.8 6,593.6 189.5 — 6,881.9 
Equity Securities at Fair Value:
Preferred Stocks:
Finance, Insurance and Real Estate— 15.6 — — 15.6 
Other Industries— 7.5 2.4 — 9.9 
Common Stocks:
Finance, Insurance and Real Estate0.6 — — — 0.6 
Other Industries0.2 — 0.4 — 0.6 
Other Equity Interests:
Exchange Traded Funds7.7 — — — 7.7 
Limited Liability Companies and Limited Partnerships— — — 191.4 191.4 
Total Investments in Equity Securities at Fair Value8.5 23.1 2.8 191.4 225.8 
Other Investments:
Derivative Instruments Not Designated as Hedges— 14.7 — — 14.7 
Total Assets$107.3 $6,631.4 $192.3 $191.4 $7,122.4 
The Company’s investments in Fixed Maturities that are classified as Level 1 primarily consist of U.S. Treasury Bonds and Notes. The Company’s investments in Equity Securities at Fair Value that are classified as Level 1 consist of either investments in publicly-traded common stocks or exchange traded funds. The Company’s investments in Fixed Maturities that are classified as Level 2 primarily consist of investments in corporate bonds, obligations of states and political subdivisions, collateralized loan obligations, and mortgage-backed securities of U.S. government agencies. The Company’s investments in Equity Securities at Fair Value that are classified as Level 2 primarily consist of investments in preferred stocks. The Company’s Derivative Instruments Designated as Cash Flow Hedges that are classified as Level 2 primarily consist of hedges to manage exposure to upcoming changes in the benchmark (Treasury) interest rate of forecasted transactions. The Company uses a leading, nationally recognized provider of market data and analytics to price the vast majority of the Company’s Level 2
29

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements (Continued)
measurements. The provider utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid and other market information. Because many fixed maturity securities do not trade on a daily basis, the provider’s evaluated pricing
applications apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing to prepare evaluations. In addition, the provider uses model processes to develop prepayment and interest rate scenarios. The pricing provider’s models and processes also take into account market convention. For each asset class, teams of its evaluators gather information from market sources and integrate relevant credit information, perceived market movements and sector news into the evaluated pricing applications and models. The Company generally validates the measurements obtained from its primary pricing provider by comparing them with measurements obtained from one additional pricing provider that provides either prices from recent market transactions, quotes in inactive markets or evaluations based on its own proprietary models.
The Company investigates significant differences related to the values provided. On completion of its investigation, management exercises judgment to determine the price selected and whether adjustments, if any, to the price obtained from the Company’s primary pricing provider would warrant classification of the price as Level 3. In instances where a measurement cannot be obtained from either pricing provider, the Company generally will evaluate bid prices from one or more binding quotes obtained from market makers to value investments in inactive markets and classified by the Company as Level 2. The Company generally classifies securities when it receives non-binding quotes or indications as Level 3 securities unless the Company can validate the quote or indication against recent transactions in the market.
The table below presents quantitative information about the significant unobservable inputs utilized by the Company in determining fair values for fixed maturity investments classified as Level 3 at June 30, 2024. Valuations for assets presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average yield is calculated based on fair value.
(Dollars in Millions)Unobservable InputTotal Fair ValueRange of Unobservable InputsWeighted-average Yield
Investment-gradeMarket Yield$57.3 3.4 %-13.2 %8.4 %
Non-investment-grade:
Senior DebtMarket Yield78.1 7.3 -51.6 12.5 
Junior DebtMarket Yield36.6 10.0 -25.5 14.3 
OtherVarious71.3 
Total Level 3 Fixed Maturity Investments$243.3 
The table below presents quantitative information about the significant unobservable inputs utilized by the Company in determining fair values for fixed maturity investments classified as Level 3 at December 31, 2023. Valuations for assets presented in the tables below are primarily based on broker/dealer quotes for which there is a lack of transparency as to inputs used to develop the valuations. The quantitative detail of these unobservable inputs is neither provided nor reasonably available to the Company. The weighted average yield is calculated based on fair value.
(Dollars in Millions)Unobservable InputTotal Fair ValueRange of Unobservable InputsWeighted-average Yield
Investment-gradeMarket Yield$60.0 4.2 %-15.8 %8.7 %
Non-investment-grade:
Senior DebtMarket Yield32.6 9.2 -36.7 13.5 
Junior DebtMarket Yield32.5 11.8 -22.5 13.8 
OtherVarious64.4 
Total Level 3 Fixed Maturity Investments$189.5 
30

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements (Continued)
For an investment in a fixed maturity security, an increase in the yield used to determine the fair value of the security will decrease the fair value of the security. A decrease in the yield used to determine fair value will increase the fair value of the security, but for callable securities the fair value increase is generally limited to par, unless security is currently callable at a premium.
Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended June 30, 2024 is presented below.
 Fixed MaturitiesEquity Securities
(Dollars in Millions)Corporate
Bonds
and Notes		States and Political Sub- divisionsRedeemable
Preferred
Stocks		Collateralized Loan ObligationsOther Mortgage-
and Asset-
backed		Preferred
and 
Common
Stocks		Total
Balance, Beginning of Period$180.5 $1.4 $2.2 $— $5.1 $2.7 $191.9 
Total Gains (Losses):
Included in Condensed Consolidated Statements of Income (Loss)
0.1 — — — — 1.9 2.0 
Included in Other Comprehensive Income
(1.7)— — — (0.1)— (1.8)
Purchases59.4 — 1.9 6.8 — 0.5 68.6 
Sales(12.6)— — — — (1.7)(14.3)
Transfers into Level 33.1 — — — — — 3.1 
Transfers out of Level 3(1.5)(1.3)— — — — (2.8)
Balance, End of Period$227.3 $0.1 $4.1 $6.8 $5.0 $3.4 $246.7 
The transfers into and out of Level 3 were due to changes in the availability of market observable inputs.
Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the six months ended June 30, 2024 is presented below.
 Fixed MaturitiesEquity Securities
(Dollars in Millions)Corporate
Bonds
and Notes		States and Political Sub- divisionsRedeemable
Preferred
Stocks		Collateralized Loan ObligationsOther Mortgage-
and Asset-
backed		Preferred
and 
Common
Stocks		Total
Balance, Beginning of Year$177.1 $0.1 $7.1 $— $5.2 $2.8 $192.3 
Total (Losses) Gains:
Included in Condensed Consolidated Statements of Income (Loss)
(0.1)— — — — 1.8 1.7 
Included in Other Comprehensive Income
0.6 (0.4)— — (0.2)— — 
Purchases72.6 — 1.9 6.8 — 0.5 81.8 
Sales(16.3)— — — — (1.7)(18.0)
Transfers into Level 33.1 1.7 — — — — 4.8 
Transfers out of Level 3(9.7)(1.3)(4.9)— — — (15.9)
Balance, End of Period$227.3 $0.1 $4.1 $6.8 $5.0 $3.4 $246.7 
The transfers into and out of Level 3 were due primarily to changes in the availability of market observable inputs.
31

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements (Continued)
Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the three months ended June 30, 2023 is presented below.
 Fixed MaturitiesEquity Securities
(Dollars in Millions)Corporate
Bonds
and Notes		Redeemable
Preferred
Stocks		Other Mortgage-
and Asset-
backed		Preferred
and 
Common
Stocks		Total
Balance, Beginning of Period$196.1 $6.8 $5.3 $2.0 $210.2 
Total Gains (Losses):
Included in Condensed Consolidated Statements of Income (Loss)
0.1 — — (0.9)(0.8)
Included in Other Comprehensive Loss
0.9 (0.1)(0.1)— 0.7 
Purchases18.5 — — 1.1 19.6 
Sales(28.1)— — — (28.1)
Transfers into Level 3— — — — — 
Transfers out of Level 3(0.1)— — — (0.1)
Balance, End of Period$187.4 $6.7 $5.2 $2.2 $201.5 
The transfers into and out of Level 3 were due to changes in the availability of market observable inputs.
Information by security type pertaining to the changes in the fair value of the Company’s investments classified as Level 3 for the six months ended June 30, 2023 is presented below.
 Fixed MaturitiesEquity Securities
(Dollars in Millions)Corporate
Bonds
and Notes		Redeemable
Preferred
Stocks		Other Mortgage-
and Asset-
backed		Preferred
and 
Common
Stocks		Total
Balance, Beginning of Year$216.0 $6.8 $5.1 $2.1 $230.0 
Total Gains (Losses):
Included in Condensed Consolidated Statements of Income (Loss)
0.5 — — (1.4)(0.9)
Included in Other Comprehensive Income
2.4 (0.1)0.1 — 2.4 
Purchases37.9 — — 1.1 39.0 
Sales(69.3)— — — (69.3)
Transfers into Level 3— — — 0.4 0.4 
Transfers out of Level 3(0.1)— — — (0.1)
Balance, End of Period$187.4 $6.7 $5.2 $2.2 $201.5 
The transfers into and out of Level 3 were due primarily to changes in the availability of market observable inputs.
32

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements (Continued)
The table below shows investments reported at fair value using NAV and their unfunded commitments by asset class as of June 30, 2024 and December 31, 2023.
(Dollars in Millions)June 30, 2024December 31, 2023
Asset ClassFair Value Using NAVUnfunded CommitmentsFair Value Using NAVUnfunded Commitments
Reported as Equity Method Limited Liability Investments:
Mezzanine Debt$126.0 $42.1 $125.4 $43.1 
Real Estate27.2 — 41.9 — 
Senior Debt22.4 36.4 19.0 39.9 
Leveraged Buyout7.9 0.6 8.6 0.6 
Secondary Transactions6.8 1.6 7.9 1.7 
Distressed Debt4.9 — 7.9 — 
Growth Equity0.8 — 1.2 — 
Hedge Fund0.1 — 0.1 — 
Other9.0 0.1 9.7 — 
Total Equity Method Limited Liability Investments205.1 80.8 221.7 85.3 
Reported as Other Equity Interests at Fair Value:
Mezzanine Debt124.1 65.9 124.0 67.0 
Senior Debt25.1 7.7 24.8 10.6 
Leveraged Buyout19.2 9.2 19.0 10.0 
Distressed Debt11.4 13.7 12.4 13.0 
Growth Equity6.6 9.1 6.4 6.5 
Secondary Transactions2.8 3.0 2.8 3.1 
Hedge Funds— — 1.9 — 
Other0.1 0.2 0.1 0.2 
Total Reported as Other Equity Interests at Fair Value189.3 108.8 191.4 110.4 
Reported as Equity Securities at Modified Cost:
Other4.6 — 4.8 — 
Total Reported as Equity Securities at Modified Cost4.6 — 4.8 — 
Total Investments in Limited Liability Companies and Limited Partnerships$399.0 $189.6 $417.9 $195.7 
The fund investments included above (excluding Hedge Funds) are not redeemable, because distributions from the funds will be received when underlying investments of the funds are liquidated. The funds are generally expected to have approximately 10 year lives at their inception, but these lives may be extended at the fund manager’s discretion, typically in one or two-year increments.
The hedge fund investments included above, which are carried at fair value, are generally redeemable subject to the redemption notices period. The majority of the hedge fund investments are redeemable monthly or quarterly.



33

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 8 - Fair Value Measurements (Continued)
The following table includes information related to the Company’s investments in certain private equity funds or hedge funds that calculate a net asset value per share:
Asset ClassInvestment Category Includes
Mezzanine DebtFunds with investments in junior or subordinated debt and potentially minority equity securities issued by private companies.
Senior DebtFunds with investments in senior or first lien debt and potentially minority equity securities typically issued by private companies.
Distressed DebtFunds with debt or minority equity investments that are made opportunistically in companies that are in or near default or under financial strain with potential to have an active role in restructuring company.
Secondary TransactionsFunds that focus on purchasing third party fund interests from investors seeking liquidity within their own portfolio.
Hedge FundFunds that focus primarily on investing in public securities with strategy of generating uncorrelated returns to the public markets.
Leveraged BuyoutFunds with control equity investments in more mature, positive cash flowing, private companies that are typically purchased with the use of financial leverage.
Growth EquityFunds that invest in early or venture stage companies with high growth potential with view towards generating realizations through sale or initial public offering (“IPO”) of company.
Real EstateFunds with investments in multi-family housing properties.
OtherConsists of direct investments of preferred equity or minority common equity investments into private companies structured as limited partnerships or limited liability companies.
Presented below are the carrying values and fair value estimates of financial instruments not carried at fair value.
 June 30, 2024December 31, 2023
(Dollars in Millions)Carrying ValueFair ValueCarrying ValueFair Value
Financial Assets:
Loans to Policyholders $279.8 $279.8 $281.2 $281.2 
Short-term Investments539.1 539.1 520.9 520.9 
Mortgage Loans83.1 83.1 99.8 99.8 
Company-Owned Life Insurance523.3 523.3 513.5 513.5 
Equity Securities at Modified Cost24.8 24.8 32.6 32.6 
Financial Liabilities:
Long-term Debt$1,390.4 $1,246.3 $1,389.2 $1,213.4 
Policyholder Obligations547.0 547.0 557.4 557.4 
Loans to policyholders are carried at unpaid principal balance which approximates fair value and are categorized as Level 3 within the fair value hierarchy. The nature of policy loans is to have a negligible default risk as the loans are fully collateralized by the value of the policy. Policy loans do not have a stated maturity and the balances and accrued interest are repaid either by the policyholder or with proceeds from the policy. Due to the collateralized nature of policy loans and unpredictable timing of payments, the Company believes the carrying value of policy loans approximates fair value. The fair value measurement of Short-term Investments is estimated using inputs that are considered either Level 1 or Level 2 measurements. The Mortgage Loans fair value measurement is considered equal to amortized cost given the short-term nature of the investments. The fair value measurement of Equity Securities at Modified Cost is estimated using inputs that are considered Level 3 measurements. The cash surrender value of Company-Owned Life Insurance approximates fair value and is considered to be a Level 2 investment. The fair value of Long-term Debt is estimated using quoted prices for similar liabilities in markets that are not active. The inputs used in the valuation are considered Level 2 measurements. Policyholder Obligations presented in the preceding table consist of advances from the FHLB of Chicago, and the inputs used in the valuation are considered Level 2 measurements.
34

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 9 - Variable Interest Entities
A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity's operations through voting rights or do not substantively participate in the gains and losses of the entity. The Company consolidates VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity's economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.
Reciprocal Exchange
The Company has formed a management company that acts as attorney-in-fact (“AIF”) for Kemper Reciprocal (the “Reciprocal Exchange” or “Exchange”), an Illinois-domiciled reciprocal insurance exchange. The Exchange principally writes specialty personal automobile policies sold to subscribers of the Exchange. The establishment of Kemper Reciprocal was completed in the third quarter of 2023.
The Company consolidates the Exchange since (1) the AIF manages the business operations of the Exchange and therefore has the power to direct the activities that most significantly impact the economic performance of the Exchange and (2) the Company has provided capital to the Exchange and would absorb any expected losses that could potentially be significant to the Exchange. The Exchange’s anticipated economic performance is the product of its underwriting and investment results. The AIF receives a management fee for the services provided to the Reciprocal Exchange. The management fee revenues are based upon all premiums written or assumed by the Exchange. The AIF determines the management fee rate to be paid by the Exchange. The AIF can charge a management fee of up to 30% of the Exchange’s gross written and assumed premiums.
The assets of the Reciprocal Exchange can be used only to settle the obligations of the Reciprocal Exchange for which creditors and other beneficial owners have no recourse to the Company. The Company has no obligation related to any underwriting and/or investment losses experienced by the Exchange. As of December 31, 2023, the Company had contributed $4.0 million of surplus to the Reciprocal Exchange. During the first six months of 2024, the Company contributed an additional $2.0 million of surplus to the Reciprocal Exchange, resulting in a total contributed surplus of $6.0 million as of June 30, 2024. The effects of the transactions between the Company and the Reciprocal Exchange are eliminated in consolidation to derive consolidated Net Income (Loss). However, the management fee income earned by the AIF is reported in Net Income (Loss) attributable to Kemper Corporation and is included in the basic and diluted earnings per share.
Noncontrolling interest is the portion of equity (net assets) not attributable, directly or indirectly, to a parent. Since the Company has no ownership interest in Kemper Reciprocal, the difference between the carrying value of the Exchange’s assets and liabilities represents noncontrolling interest and any income or loss generated by the net assets of the Exchange is presented as income or loss attributable to noncontrolling interest.
Alternative Energy Partnership
The Company invests in an Alternative Energy Partnership formed to provide sustainable energy projects that are designed to generate a return primarily through the realization of federal tax credits. This entity was formed to invest in newly installed residential solar leases and power purchase agreements. As a result of this investment, the Company has the right to certain investment tax credits and tax depreciation benefits, and to a lesser extent, cash flows generated from the installed solar systems leased to individual consumers.
The Company’s interest in the Alternative Energy Partnership Investment is considered an investment in a VIE. The Company has determined that it is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the economic performance of the entity and therefore is not required to consolidate the VIE. The project sponsor governs the entity and the Company only has consent rights that have been deemed protective in nature and does not participate in key economic decisions of the entity.
The investment is accounted for using the equity method of accounting and included in Alternative Energy Partnership Investments in the Condensed Consolidated Balance Sheets. The Company uses the HLBV equity method to account for earnings and losses. This method provides an earnings allocation that appropriately reflects the substantive economics of the investment. Earnings and losses on the investment are reported in Change in Value of Alternative Energy Partnership Investments and investment tax credits are recognized in Income Tax Benefit on the Condensed Consolidated Statements of Income (Loss).
35

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 9 - Variable Interest Entities (Continued)
The following table presents information regarding activity in the Company’s Alternative Energy Partnership Investments for the three and six months ended June 30, 2024 and 2023.
Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30, 2024Jun 30, 2023Jun 30, 2024Jun 30, 2023
Cash distribution from Investment0.5 0.5 1.0 1.0 
Income on Investments in Alternative Energy Partnership0.6 0.8 1.0 1.5 
Income Tax Credits (Recaptures) Recognized— — — (0.1)
Tax Expense Recognized from Alternative Energy Partnership(0.1)(0.1)(0.2)(0.3)
The following table represents the carrying value of the associated assets and liabilities and the associated maximum loss exposure of the Alternative Energy Partnership Investments as of June 30, 2024 and December 31, 2023.
(Dollars in Millions)Jun 30, 2024Dec 31, 2023
Cash$2.5 $2.7 
Equipment, Net of Depreciation253.2 256.2 
Other Assets8.9 7.5 
Total Unconsolidated Assets264.6 266.4 
Maximum Loss Exposure17.3 17.3 
The Company’s maximum loss exposure in the event that all of the assets in the Alternative Energy Partnership are deemed worthless is $17.3 million, which is the carrying value of the investment at June 30, 2024 and December 31, 2023.
Note 10 - Deferred Policy Acquisition Costs
The following table presents the balances and changes in Deferred Policy Acquisition Costs for the Property and Casualty and Life and Health and business for the six months ended June 30, 2024 and 2023:
June 30, 2024June 30, 2023
Property and CasualtyLife and HealthTotalProperty and CasualtyLife and HealthTotal
Balance, Beginning of Year$164.9 $426.7 $591.6 $231.1 $404.5 $635.6 
 Capitalizations246.9 33.7 280.6 294.6 27.7 322.3 
 Amortization Expense (250.5)(10.5)(261.0)(295.7)(9.7)(305.4)
 Experience Adjustment— (3.2)(3.2)— (6.3)(6.3)
Balance, End of Period$161.3 $446.7 $608.0 $230.0 $416.2 $646.2 
Costs directly associated with the successful acquisition of business, principally commissions and certain premium taxes and policy issuance costs, are deferred. Costs deferred on property and casualty insurance contracts are amortized over the period in which premiums are earned. Costs deferred on traditional life insurance products and other long-duration insurance contracts are amortized on a constant level basis over the expected life of the contracts in accordance with the assumptions used to estimate the liability for future policyholder benefits for nonparticipating traditional and limited-payment contracts. The underlying assumptions for deferred policy acquisition costs and the liability for future policyholder benefits are updated concurrently.
The Company did not make any changes to future assumptions for the six months ended June 30, 2024 and 2023.
36

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 11 - Receivables from Policyholders - Allowance for Expected Credit Losses
The following tables present the balances of Receivables from Policyholders, net of the allowance for expected credit losses, as of June 30, 2024 and 2023, and a rollforward of changes in the allowance for expected credit losses for the three and six months ended June 30, 2024 and 2023.

Three Months Ended June 30, 2024
(Dollars in Millions)SpecialtyLifeTotal SegmentsNon-Core OperationsTotal Allowance for Expected Credit Losses
Balance, Beginning of Period$5.4 $— $5.4 $1.0 $6.4 
Provision for Expected Credit Losses7.5 — 7.5 0.3 7.8 
Write-offs of Uncollectible Receivables from Policyholders(8.6)— (8.6)(0.8)(9.4)
Balance, End of Period$4.3 $— $4.3 $0.5 $4.8 
Receivable Balance, End of Period$947.3 $11.2 $958.5 $29.5 $988.0 
Six Months Ended June 30, 2024
(Dollars in Millions)SpecialtyLifeTotal SegmentsNon-Core OperationsTotal Allowance for Expected Credit Losses
Balance, Beginning of Year$12.9 $— $12.9 $1.0 $13.9 
Provision for Expected Credit Losses13.7 0.1 13.8 0.5 14.3 
Write-offs of Uncollectible Receivables from Policyholders(22.3)(0.1)(22.4)(1.0)(23.4)
Balance, End of Period$4.3 $— $4.3 $0.5 $4.8 
Receivable Balance, End of Period$947.3 $11.2 $958.5 $29.5 $988.0 

Three Months Ended June 30, 2023
(Dollars in Millions)SpecialtyLifeTotal SegmentsNon-Core OperationsTotal Allowance for Expected Credit Losses
Balance, Beginning of Period$10.6 $— $10.6 $0.7 $11.3 
Provision for Expected Credit Losses10.1 — 10.1 0.4 10.5 
Write-offs of Uncollectible Receivables from Policyholders(9.3)— (9.3)(0.5)(9.8)
Balance, End of Period$11.4 $— $11.4 $0.6 $12.0 
Receivable Balance, End of Period$1,137.1 $10.3 $1,147.4 $98.9 $1,246.3 






37

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 11 - Receivables from Policyholders - Allowance for Expected Credit Losses (Continued)
Six Months Ended June 30, 2023
(Dollars in Millions)SpecialtyLifeTotal SegmentsNon-Core OperationsTotal Allowance for Expected Credit Losses
Balance, Beginning of Year$12.3 $— $12.3 $0.8 $13.1 
Provision for Expected Credit Losses20.4 0.3 20.7 0.8 21.5 
Write-offs of Uncollectible Receivables from Policyholders(21.3)(0.3)(21.6)(1.0)(22.6)
Balance, End of Period$11.4 $— $11.4 $0.6 $12.0 
Receivable Balance, End of Period$1,137.1 $10.3 $1,147.4 $98.9 $1,246.3 
38

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 12 - Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss
The tables below display the changes in Accumulated Other Comprehensive Loss by component for the three months ended June 30, 2024 and 2023.
(Dollars in Millions)
Net Unrealized Losses on Fixed Maturities
Net Unrealized Losses on Investments with an Allowance for Credit Losses
Net Unrecognized Postretirement Benefit IncomeGain (Loss) on Cash Flow HedgesChange in Discount Rate on Future Life Policyholder BenefitsTotal
Balance as of March 31, 2024$(617.2)$(1.1)$8.7 $2.5 $272.1 $(335.0)
Other Comprehensive (Loss) Income Before Reclassifications(61.4)(2.3)— (2.8)85.9 19.4 
Amounts Reclassified from Accumulated Other Comprehensive Loss Net of Tax Benefit of $0.3, $0.0, $0.4, $0.0, $0.0 and $0.7
(1.0)(0.3)(0.4)— — (1.7)
Other Comprehensive (Loss) Income Net of Tax Benefit (Expense) of $16.8, $0.4, $0.4, $0.8, $(22.9), and $(4.5)
(62.4)(2.6)(0.4)(2.8)85.9 17.7 
Balance as of June 30, 2024$(679.6)$(3.7)$8.3 $(0.3)$358.0 $(317.3)
(Dollars in Millions)
Net Unrealized Losses on Fixed Maturities
Net Unrealized Losses on Investments with an Allowance for Credit Losses
Net Unrecognized Postretirement Benefit CostsGain on Cash Flow HedgesChange in Discount Rate on Future Life Policyholder BenefitsTotal
Balance as of March 31, 2023$(572.0)$(2.2)$(37.6)$2.7 $154.4 $(454.7)
Other Comprehensive (Loss) Income Before Reclassifications(72.1)— — — 40.0 (32.1)
Amounts Reclassified from Accumulated Other Comprehensive Loss Net of Tax (Expense) Benefit of $(1.8), $0.0,$0.4, $(0.1), $0.0, and $(1.5)
6.5 (0.1)(0.4)— — 6.0 
Other Comprehensive (Loss) Income Net of Tax Benefit (Expense) of $19.4, $0.0, $0.0, $0.0 $(10.6) and $8.8
(65.6)(0.1)(0.4)— 40.0 (26.1)
Balance as of June 30, 2023$(637.6)$(2.3)$(38.0)$2.7 $194.4 $(480.8)
39

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 12 - Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss (Continued)
The tables below display the changes in Accumulated Other Comprehensive Loss by component for the six months ended June 30, 2024 and 2023.
(Dollars in Millions)
Net Unrealized Losses on Fixed Maturities
Net Unrealized Losses on Investments with an Allowance for Credit Losses
Net Unrecognized Postretirement Benefit IncomeGain (Loss) on Cash Flow HedgesChange in Discount Rate on Future Life Policyholder BenefitsTotal
Balance as of January 1, 2024$(530.9)$(2.5)$9.5 $2.5 $160.6 (360.8)
Other Comprehensive (Loss) Income Before Reclassifications(157.5)(0.7)— (2.8)197.4 36.4 
Amounts Reclassified from Accumulated Other Comprehensive Loss Net of Tax (Expense) Benefit of $(2.3), $0.2, $0.5, $0.0, $0.0 and $(1.6)
8.8 (0.5)(1.2)— — 7.1 
Other Comprehensive (Loss) Income Net of Tax Benefit (Expense) of $39.5, $0.5, $0.5, $0.8, $(52.5), and $(11.2)
(148.7)(1.2)(1.2)(2.8)197.4 43.5 
Balance as of June 30, 2024$(679.6)$(3.7)$8.3 $(0.3)$358.0 $(317.3)
(Dollars in Millions)
Net Unrealized (Losses) Gains on Fixed Maturities
Net Unrealized Losses on Investments with an Allowance for Credit Losses
Net Unrecognized Postretirement Benefit CostsGain on Cash Flow HedgesChange in Discount Rate on Future Life Policyholder BenefitsTotal
Balance as of January 1, 2023$(719.4)$(2.2)$(37.2)$2.8 $241.1 $(514.9)
Other Comprehensive Income (Loss) Before Reclassifications75.4 1.4 — — (46.7)30.1 
Amounts Reclassified from Accumulated Other Comprehensive Loss Net of Tax (Expense) Benefit of $(1.8), $0.4, $0.3, $0.0, $0.0 and $(1.1)
6.4 (1.5)(0.8)(0.1)— 4.0 
Other Comprehensive Income (Loss) Net of Tax (Expense) Benefit of $(20.4), $(0.4), $0.0, $0.0, $12.5, and $(8.3)
81.8 (0.1)(0.8)(0.1)(46.7)34.1 
Balance as of June 30, 2023$(637.6)$(2.3)$(38.0)$2.7 $194.4 $(480.8)
Amounts reclassified from Accumulated Other Comprehensive Loss shown above are reported in Net Income (Loss) as follows:
Components of AOCI
Condensed Consolidated Statements of Income (Loss) Line Item Affected by Reclassifications
Net Unrealized Losses on Other Investments and Net Unrealized Losses on Investments with an Allowance for Credit Losses
Net Realized Investment Gains (Losses) and Impairment Losses
Net Unrecognized Postretirement Benefit Income (Costs)Policyholders’ Benefits and Incurred Losses and Loss Adjustment Expenses, Insurance Expenses, and Interest and Other Expenses
Gains on Cash Flow HedgesNet Investment Income and Interest and Other Expenses


40

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 13 - Shareholders’ Equity
Common Stock Repurchases
On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper’s common stock, in addition to $133.3 million remaining under the August 6, 2014 authorization, bringing the remaining share repurchase authorization to approximately $333.3 million. As of June 30, 2024, the remaining share repurchase authorization was $171.6 million under the repurchase program.
During the three and six months ended June 30, 2024 and 2023, Kemper did not repurchase any shares of its common stock.
Employee Stock Purchase Plan
During the three months ended June 30, 2024 and 2023, the Company issued 18,000 and 26,000 shares under the Kemper Employee Stock Purchase Plan (“ESPP”) at a discounted price of $50.43 and $41.02 per share, respectively. Compensation costs charged against income were $0.2 million for the three months ended June 30, 2024 and 2023.
During the six months ended June 30, 2024 and 2023, the Company issued 33,000 and 44,000 shares under the Kemper ESPP, respectively, at an average discounted price of $51.41 and $43.28 per share. Compensation costs charged against income were $0.3 million for the six months ended June 30, 2024 and 2023.
Note 14 - Pension Benefits and Postretirement Benefits Other Than Pensions
The Company previously sponsored a qualified defined benefit pension plan (the “Pension Plan”). Effective January 1, 2006, the Pension Plan was closed to new hires and, effective June 30, 2016, benefit accruals were frozen for substantially all of the participants under the Pension Plan. The Pension Plan has since been fully terminated.
In the third quarter of 2023, all plan liabilities were settled by either a lump sum distribution or assumed by a third-party in exchange for a transfer of assets from the pension plan trust fund. After giving effect to these transactions, the Company recorded a $70.2 million noncash settlement charge ($55.5 million after-tax) for the unamortized net unrecognized postretirement benefit costs related to the settled obligations.
As of December 31, 2023, $16.4 million of assets remained in the pension trust and was included in Other Assets in the accompanying condensed consolidated balance sheet. During the second quarter of 2024, the Company received $2.7 million as post-settlement adjustment which was recorded in Interest and Other Expenses in the accompanying condensed consolidated statement of income (loss). As of June 30, 2024, $18.2 million of net assets remained in the pension trust.
Note 15 - Policyholder Obligations
Policyholder Obligations at June 30, 2024 and December 31, 2023 were as follows:
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
FHLB Funding Agreements$547.0 $557.4 
Universal Life-type Policyholder Account Balances97.4 98.3 
Total$644.4 $655.7 
FHLB Funding Agreements
Kemper’s subsidiary, United Insurance Company of America (“United Insurance”) has entered into funding agreements with the FHLB of Chicago in exchange for cash, which it uses for spread lending purposes. During the six months ended June 30, 2024, United Insurance received advances of $58.9 million from the FHLB of Chicago and made repayments of $69.3 million under the spread lending program.
41

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 15 - Policyholder Obligations (Continued)
When a funding agreement is issued, United Insurance is then required to post collateral in the form of eligible securities including mortgage-backed, government, and agency debt instruments for each of the advances that are entered. The fair value of the collateral pledged must be maintained at certain specified levels above the borrowed amount, which can vary depending on the assets pledged. If the fair value of the collateral declines below these specified levels of the amount borrowed, United Insurance would be required to pledge additional collateral or repay outstanding borrowings. Upon any event of default by United Insurance, the FHLB’s recovery on the collateral is limited to the amount of United Insurance’s liability under the funding agreements to the FHLB of Chicago.
United Insurance’s liability under the funding agreements with the FHLB of Chicago, the amount of collateral pledged under such agreements and FHLB of Chicago common stock owned by United Insurance at June 30, 2024 and December 31, 2023 is presented below.
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Liability under Funding Agreements$547.0 $557.4 
Fair Value of Collateral Pledged696.7 629.3 
FHLB of Chicago Common Stock Owned at Cost16.4 16.6 
Universal Life-type Policyholder Account Balances
The Company’s weighted-average crediting rate for Universal Life-type Policyholder Account Balances was 5.1% as of June 30, 2024 and 2023. Guaranteed minimum benefit amounts in excess of the current account balances for these contracts were $285.0 million and $294.1 million as of June 30, 2024 and December 31, 2023, respectively. The cash surrender value of the Company’s policyholder obligations for these contracts was $97.4 million and $98.2 million as of June 30, 2024 and December 31, 2023, respectively.
42

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 16 - Debt
Amended and Extended Credit Agreement
On March 15, 2022, the Company entered into an amended and extended credit agreement. The amended and extended credit agreement increased the borrowing capacity of the existing unsecured credit agreement to $600.0 million and extended the maturity date to March 15, 2027. Furthermore, the amended and extended credit agreement provides for an accordion feature whereby the Company can increase the revolving credit borrowing capacity by an additional $200.0 million for a total maximum capacity of $800.0 million.
Financial covenants within the agreement limit the Company from accessing the maximum capacity. The amount available as of June 30, 2024 was $458.0 million. There were no outstanding borrowings under the credit agreement at either June 30, 2024 or December 31, 2023.
Long-term Debt
The Company designates debt obligations as either short-term or long-term based on maturity date at issuance. Total amortized cost of Long-term Debt, Current and Non-Current, outstanding at June 30, 2024 and December 31, 2023 was:
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Senior Notes:
Current:
    4.350% Senior Notes due February 15, 2025
$449.8 $— 
Non-Current:
    4.350% Senior Notes due February 15, 2025
— 449.6 
    2.400% Senior Notes due September 30, 2030
397.3 397.0 
    3.800% Senior Notes due February 23, 2032
396.2 396.0 
5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062
147.1 146.6 
Total Long-term Debt Outstanding$1,390.4 $1,389.2 
4.350% Senior Notes Due 2025
Kemper has $450.0 million aggregate principal of 4.350% senior notes due February 15, 2025 (the “2025 Senior Notes”). Kemper initially issued $250.0 million of the notes in February of 2015 and issued an additional $200.0 million of the notes in June of 2017. The additional notes are fungible with the initial notes issued in 2015, and together are treated as part of a single series for all purposes under the indenture governing the 2025 Senior Notes. The 2025 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time at Kemper’s option at specified redemption prices. As of March 31, 2024, the 2025 Senior Notes have been classified as Current due to the notes reaching maturity within 12 months of the financial statement date.
2.400% Senior Notes Due 2030
Kemper has $400.0 million aggregate principal of 2.400% senior notes due September 30, 2030 (the “2030 Senior Notes”). The net proceeds of issuance were $395.8 million, net of discount and transaction costs for an effective yield of 2.52%. The 2030 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time, at Kemper’s option, at specified redemption prices.
3.800% Senior Notes Due 2032
On February 15, 2022, Kemper offered and sold $400.0 million aggregate principal of 3.800% senior notes due February 23, 2032 (the “2032 Senior Notes”). The net proceeds of issuance were $395.1 million, net of discount and transaction costs, for an effective yield of 3.950%. The 2032 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time, at Kemper’s option, at specified redemption prices.
43

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 16 - Debt (Continued)
5.875% Fixed-Rate Reset Junior Subordinated Debentures Due 2062
On March 10, 2022, Kemper issued $150.0 million aggregate principal amount of 5.875% Fixed-Rate Reset Junior Subordinated Debentures due March 15, 2062 (the “2062 Junior Debentures”). The net proceeds from issuance were
$144.7 million, net of discount and transaction costs. The 2062 Junior Debentures will bear interest from and including the date of original issue to, but excluding, March 15, 2027 (the “First Reset Date”) at the fixed rate of 5.875% per annum. The interest rate on the First Reset Date, and subsequent Reset Dates, will be equal to the Five-Year Treasury Rate as of the most recent Reset Date plus 4.140% to be reset on each Reset Date. Interest is due quarterly in arrears beginning on June 15, 2022. The Company has the option to defer interest payments for one or more optional deferral periods of up to five consecutive years, provided that no optional deferral period shall extend beyond March 15, 2062, or any earlier accelerated maturity date arising from an event of default or any earlier redemption of the 2062 Junior Debentures.
The 2062 Junior Debentures are unsecured and may be redeemed in whole or in part on the First Reset Date or any time thereafter, at a redemption price equal to the principal amount of the debentures being redeemed plus any accrued and unpaid interest.
Short-term Debt
Kemper’s subsidiaries, United Insurance, Trinity Universal Insurance Company (“Trinity”) and American Access Casualty Company (“AAC”), are members of the FHLBs of Chicago, Dallas and Chicago, respectively. The Company periodically uses short-term FHLB borrowings for cash management and risk management purposes, in addition to long-term FHLB borrowings for the spread lending program. There were no short-term debt advances from the FHLBs of Chicago or Dallas outstanding at June 30, 2024 or December 31, 2023. For information on United Insurance’s funding agreement with the FHLB of Chicago in connection with the spread lending program, see Note 15, “Policyholder Obligations,” to the Condensed Consolidated Financial Statements.
Interest Expense and Interest Paid
Interest Expense, including facility fees, accretion of discount, amortization of premium and amortization of issuance costs, was $13.9 million and $27.9 million for the three and six months ended June 30, 2024, respectively. Interest paid, including facility fees, was $7.3 million and $27.3 million for the three and six months ended June 30, 2024, respectively. Interest Expense, including facility fees, accretion of discount and amortization of issuance costs, was $14.0 million and $28.1 million for the three and six months ended June 30, 2023. Interest paid, including facility fees, was $2.5 million and $27.3 million for the three and six months ended June 30, 2023.
Note 17 - Leases
The Company leases certain office space under non-cancelable operating leases, with initial terms typically ranging from one to fifteen years, along with options that permit renewals for additional periods. The Company also leases certain vehicles and equipment under non-cancelable operating leases, with initial terms typically ranging from one to five years. Minimum rent is expensed on a straight-line basis over the term of the lease.
The following table presents operating lease right-of-use assets and lease liabilities.
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Operating Lease Right-of-Use Assets$38.6 $38.4 
Operating Lease Liabilities58.7 62.3 
44

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 17 - Leases (Continued)
Lease expenses are primarily included in insurance expenses in the Condensed Consolidated Statements of Income (Loss). Additional information regarding the Company’s operating leases is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Lease Cost:
Operating Lease Cost$3.8 $3.8 $7.7 $7.9 
Variable Lease Cost1.2 2.1 2.3 2.2 
Short-Term Lease Cost1
0.2 0.8 0.2 0.8 
Total Lease Cost$5.2 $6.7 $10.2 $10.9 
1 Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets.
Other Information on Operating Leases
Significant judgments and assumptions for determining lease asset and liability at June 30, 2024 and 2023 are presented below.
Six Months Ended
Jun 30,
2024		Jun 30,
2023
Weighted-average Remaining Lease Term - Operating Leases5.4 years5.6 years
Weighted-average Discount Rate - Operating Leases4.4 %3.7 %
Most of the Company’s leases do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine its lease payments’ present value.
Future minimum lease payments under operating leases at June 30, 2024 are presented below.
(Dollars in Millions)June 30, 2024
Remainder of 2024
$10.4 
202517.1 
20269.6 
20278.1 
20285.4 
2029 and Thereafter15.8 
Total Future Payments$66.4 
Less: Discount7.7 
Present Value of Minimum Lease Payments$58.7 
As of June 30, 2024 and December 31, 2023, the Company did not have any finance leases.
Note 18 - Income Taxes
The statute of limitations related to Kemper and its eligible subsidiaries’ consolidated Federal income tax returns is closed for all tax years up to and including 2011 as well as 2018 and 2019. As a result of the Company filing amended federal income tax returns, tax years 2012 and 2013 are under limited examination with respect to carryback adjustments associated with the amended returns. Tax years 2020 and 2022 are currently under examination. The statute of limitations related to tax years 2014, 2015, 2016 and 2017 has been extended to December 31, 2024. Tax years 2020, 2021 and 2022 are subject to a statute of three years from the extended due dates of October 15, 2021, 2022 and 2023, respectively.
The expiration of the statute of limitations related to the various state income tax returns that Kemper and its subsidiaries file varies by state.

45

KEMPER CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 18 - Income Taxes (Continued)
The interim period tax expense or benefit is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year. For the three months ended June 30, 2024 the income tax expense attributable to Kemper Corporation was $17.7 million, or 19.0% of income before income taxes, compared to an income tax benefit of $18.8 million, or 16.2% of loss before income taxes for the three months ended June 30, 2023. For the six months ended June 30, 2024 the income tax expense attributable to Kemper Corporation was $34.5 million, or 19.0% of income before income taxes, compared to an income tax benefit of $42.6 million, or 19.4% of loss before income taxes for the six months ended June 30, 2023.
There were no Unrecognized Tax Benefits at June 30, 2024, or December 31, 2023. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in Income Tax (Expense) Benefit. There were no liabilities for accrued interest and penalties for the six months ended June 30, 2024 and 2023.
For the six months ended June 30, 2024 and 2023, federal income tax refunds received, net of income taxes paid, were $5.6 million and $114.6 million, respectively.
For the six months ended June 30, 2024 and 2023, state income taxes paid, net of refunds received, were $0.5 million and $0.1 million, respectively. No foreign income taxes were paid or refunded for the six months ended June 30, 2024 and June 30, 2023, respectively.
Note 19 - Commitments and Contingencies
In the ordinary course of its businesses, the Company is involved in legal proceedings including lawsuits, arbitration, regulatory examinations, audits and inquiries. Based on currently available information, the Company does not believe that it is reasonably possible that any of its pending legal proceedings will have a material effect on the Company’s Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements.
46

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Non-GAAP Financial Measures
In this report, the Company presents certain measures of its performance on a consolidated and segment basis that are not calculated in accordance with GAAP. We believe that these non-GAAP financial measures enhance the understanding for the Company and our investors of our performance by highlighting the results of operations and the underlying profitability drivers of our business. Segment-specific financial measures are calculated using only the portion of consolidated results attributable to that specific segment.
Adjusted Consolidated Net Operating Income (Loss)
The Company believes that the non-GAAP financial measure of Adjusted Consolidated Net Operating Income (Loss) provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. The most directly comparable GAAP financial measure is Net Income (Loss) attributable to Kemper Corporation.
Adjusted Consolidated Net Operating Income (Loss) is an after-tax, non-GAAP financial measure and is computed by excluding from Net Income (Loss) attributable to Kemper Corporation the after-tax impact of
(i) Change in Fair Value of Equity and Convertible Securities;
(ii) Net Realized Investment Gains (Losses);
(iii) Impairment Losses;
(iv) Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs;
(v) Debt Extinguishment, Pension Settlement and Other Charges;
(vi) Goodwill Impairment Charges;
(vii) Non-Core Operations; and
(viii) Significant non-recurring or infrequent items that may not be indicative of ongoing operations
Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. The most directly comparable GAAP financial measure is Net Income (Loss) attributable to Kemper Corporation. There were no applicable significant non-recurring items that the Company excluded from the calculation of Adjusted Consolidated Net Operating Income (Loss) for the three and six months ended June 30, 2024 or 2023.
Change in Fair Value of Equity and Convertible Securities, Net Realized Investment Gains (Losses) and Impairment Losses related to investments included in the Company’s results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the Company’s investments, the timing of which is unrelated to the insurance underwriting process. Acquisition and Disposition Related Transaction Costs, Integration Costs, and Restructuring and Other Costs may vary significantly between periods and are generally driven by the timing of acquisitions and business decisions which are unrelated to the insurance underwriting process. Debt Extinguishment, Pension Settlement and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by the Company’s financing and refinancing decisions and capital needs, as well as external economic developments such as debt market conditions, the timing of which is unrelated to the insurance underwriting process; (ii) settlement of pension plan obligations which are business decisions made by the Company, the timing of which is unrelated to the underwriting process; and (iii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Goodwill Impairment Charges are excluded because they are infrequent and non-recurring charges. Non-Core Operations includes the results of our Preferred Insurance business which we expect to fully exit. These results are excluded because they are irrelevant to our ongoing operations and do not qualify for Discontinued Operations under GAAP. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.
47

Non-GAAP Financial Measures (Continued)
Underlying Losses and Loss Adjustment Expenses (“LAE”) and Underlying Combined Ratio
The following discussion uses the non-GAAP financial measures of (i) Underlying Losses and LAE and (ii) Underlying Combined Ratio. Underlying Losses and LAE (also referred to in the discussion as “Current Year Non-catastrophe Losses and LAE”) exclude the impact of catastrophe losses and loss and LAE reserve development from prior years from the Company’s Incurred Losses and LAE, which is the most directly comparable GAAP financial measure.
The Underlying Combined Ratio is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding Total Incurred Losses and LAE Ratio, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio.
The Company believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in the Company’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause the Company’s loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on incurred losses and LAE and the Combined Ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of the Company’s insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance.
The preceding non-GAAP financial measures should not be considered a substitute for the comparable GAAP financial measures, as they do not fully recognize the overall profitability of the Company’s businesses.
Summary of Results
Net Income Attributable to Kemper Corporation was $75.4 million ($1.17 per unrestricted common share) for the three months ended June 30, 2024, compared to Net Loss Attributable to Kemper Corporation of $97.1 million ($(1.52) per unrestricted common share) for the same period in 2023.
Net Income attributable to Kemper Corporation was $146.7 million ($2.28 per unrestricted common share) for the six months ended June 30, 2024, compared to Net Loss attributable to Kemper Corporation of $177.2 million ($(2.77) per unrestricted common share) for the same period in 2023.
48

Summary of Results (Continued)
A reconciliation of Net Income (Loss) attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income (Loss) (a non-GAAP financial measure) for the three and six months ended June 30, 2024 and 2023 is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		ChangeJun 30,
2024		Jun 30,
2023		Change
Net Income (Loss) attributable to Kemper Corporation
75.4 (97.1)172.5 146.7 (177.2)323.9 
Less:
Change in Fair Value of Equity and Convertible Securities(1.0)1.9 (2.9)1.7 3.2 (1.5)
Net Realized Investment Gains (Losses)1.2 (12.5)13.7 6.4 (7.4)13.8 
Impairment Losses(0.1)(0.8)0.7 (1.3)0.9 (2.2)
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs(5.1)(23.3)18.2 (15.2)(46.3)31.1 
Debt Extinguishment, Pension Settlement, and Other Charges2.1 — 2.1 2.1 — 2.1 
Goodwill Impairment Charge— (45.5)45.5 — (45.5)45.5 
Non-Core Operations(13.4)(2.7)(10.7)(8.4)(12.2)3.8 
Adjusted Consolidated Net Operating Income (Loss)$91.7 $(14.2)$105.9 $161.4 $(69.9)$231.3 
Components of Adjusted Consolidated Net Operating Income (Loss):
Segment Adjusted Net Operating Income (Loss):
Specialty Property & Casualty Insurance$102.3 $(10.8)$113.1 $171.5 $(69.2)$240.7 
Life Insurance(0.2)8.9 (9.1)11.7 22.1 (10.4)
Total Segment Adjusted Net Operating Income (Loss)
102.1 (1.9)104.0 183.2 (47.1)230.3 
Corporate and Other Adjusted Net Operating Loss(11.4)(12.3)0.9 (23.9)(22.8)(1.1)
Less: Net Loss attributable to Noncontrolling Interest(1.0)— (1.0)(2.1)— (2.1)
Adjusted Consolidated Net Operating Income (Loss)$91.7 $(14.2)$105.9 $161.4 $(69.9)$231.3 
Net Income (Loss) attributable to Kemper Corporation
Net Income (Loss) attributable to Kemper Corporation increased by $172.5 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to higher Adjusted Consolidated Net Operating Income, lower goodwill impairment charges and lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs from the completion of certain strategic initiatives and lower costs in connection with the 2023 cost structure optimization initiatives.
Adjusted Consolidated Net Operating Income (Loss) increased by $105.9 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to an improvement in the Specialty Property & Casualty Insurance segment profitability driven by higher average earned premiums per exposure and lower underlying claim frequency. This was partially offset by a decrease in results from our Life Insurance segment driven by a reduction in net investment income due to an investment valuation adjustment of one real estate investment in our alternative investment portfolio.
The loss from Non-Core Operations increased by $10.7 million for the three months ended June 30, 2024 compared to the same period in 2023 primarily due to an increase in the underlying combined ratio driven by increased claims severity, higher prior year development and increased catastrophe losses. These were partially offset by an increase in average earned premium as a result of rate increases.
Corporate and Other Adjusted Net Operating Loss decreased by $0.9 million for the three months ended June 30, 2024 compared to the same period in 2023, due primarily to increased investment income.
Net Income (Loss) attributable to Kemper Corporation increased by $323.9 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to higher Adjusted Consolidated Net Operating Income, lower goodwill impairment charges and lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs
49

Summary of Results (Continued)
from the completion of certain strategic initiatives and lower costs in connection with the 2023 cost structure optimization initiatives.
Adjusted Consolidated Net Operating Income (Loss) increased by $231.3 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to an improvement in the Specialty Property & Casualty Insurance segment profitability driven by higher average earned premiums per exposure and lower underlying claim frequency. This was partially offset by a decrease in results from our Life Insurance segment driven by a reduction in net investment income due to an investment valuation adjustment of one real estate investment in our alternative investment portfolio.
The loss from Non-Core Operations decreased by $3.8 million for the six months ended June 30, 2024 compared to the same period in 2023 primarily due to a reduction of business during the runoff period.

Corporate and Other Adjusted Net Operating Loss increased by $1.1 million for the six months ended June 30, 2024 compared to the same period in 2023, due primarily to increased overhead expenses, partially offset by increased investment income.
Revenues
Total Revenues decreased by $132.9 million to $1,129.9 million for the three months ended June 30, 2024, compared to $1,262.8 million for the same period in 2023. The decrease was primarily driven by a reduction in earned premiums.
Earned Premiums decreased by $133.2 million to $1,033.7 million for the three months ended June 30, 2024 compared to $1,166.9 for the same period in 2023, primarily driven by a $69.7 million decrease from the Specialty Property & Casualty Insurance segment due to lower new business volumes resulting from targeted actions to improve profitability, partially offset by higher average earned premium per exposure resulting from rate increases. The decrease was also due to $62.1 million in lower premiums from our Preferred Insurance business, reported as Non-Core Operations, due primarily to lower volumes resulting from the decision to exit and run-off the business in the third quarter of 2023 as well as ongoing profit improvement actions.
Net Investment Income decreased by $13.3 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to lower rate earned on Equity Method securities and lower amount of other income, partially offset by higher rate earned and amount of Short-term Investments.
Total Revenues decreased by $284.7 million to $2,272.9 million for the six months ended June 30, 2024, compared to $2,557.6 million for the same period in 2023. The decrease was primarily driven by a reduction in earned premiums.
Earned Premiums decreased by $282.2 million to $2,065.6 million for the six months ended June 30, 2024 compared to $2,347.8 for the same period in 2023, primarily driven by a $173.9 million decrease from the Specialty Property & Casualty Insurance segment due to lower new business volumes resulting from targeted actions to improve profitability, partially offset by higher average earned premium per exposure resulting from rate increases and higher policy retention. The decrease was also due to $104.9 million in lower premiums from our Preferred Insurance business, reported as Non-Core Operations, due primarily to lower volumes resulting from the decision to exit and run-off the business in the third quarter of 2023 as well as ongoing profit improvement actions.
Net Investment Income decreased by $14.7 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to lower rate earned on Equity Method securities and lower amount of other income, offset some by higher rate earned and amount of Short-term Investments.
50

Specialty Property & Casualty Insurance
Selected financial information for the Specialty Property & Casualty Insurance segment is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Net Premiums Written$933.9 $830.6 $1,798.5 $1,852.7 
Earned Premiums$862.6 $932.3 $1,702.6 $1,876.5 
Net Investment Income46.6 44.5 87.7 83.0 
Change in Value of Alternative Energy Partnership Investments0.3 0.4 0.6 0.8 
Other Income1.3 0.7 2.4 1.6 
Total Revenues910.8 977.9 1,793.3 1,961.9 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE592.8 763.9 1,201.8 1,589.3 
Catastrophe Losses and LAE10.3 17.4 14.4 25.8 
Prior Years:
Non-catastrophe Losses and LAE(0.8)25.0 4.5 56.6 
Catastrophe Losses and LAE(0.1)(0.9)0.6 (1.4)
Total Incurred Losses and LAE602.2 805.4 1,221.3 1,670.3 
Insurance Expenses180.7 187.5 357.6 381.3 
Segment Adjusted Operating Income (Loss)
127.9 (15.0)214.4 (89.7)
Income Tax (Expense) Benefit(25.6)4.2 (42.9)20.5 
Total Segment Adjusted Net Operating Income (Loss)$102.3 $(10.8)$171.5 $(69.2)
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio68.7 %81.9 %70.6 %84.7 %
Current Year Catastrophe Losses and LAE Ratio1.2 1.9 0.8 1.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.1)2.7 0.3 3.0 
Prior Years Catastrophe Losses and LAE Ratio— (0.1)— (0.1)
Total Incurred Loss and LAE Ratio69.8 86.4 71.7 89.0 
Insurance Expense Ratio20.9 20.1 21.0 20.3 
Combined Ratio90.7 %106.5 %92.7 %109.3 %
Underlying Combined Ratio
Current Year Non-catastrophe Losses and LAE Ratio68.7 %81.9 %70.6 %84.7 %
Insurance Expense Ratio20.9 20.1 21.0 20.3 
Underlying Combined Ratio89.6 %102.0 %91.6 %105.0 %
Non-GAAP Measure Reconciliation
Combined Ratio90.7 %106.5 %92.7 %109.3 %
Less:
Current Year Catastrophe Losses and LAE Ratio1.2 1.9 0.8 1.4 
Prior Years Non-catastrophe Losses and LAE Ratio(0.1)2.7 0.3 3.0 
Prior Years Catastrophe Losses and LAE Ratio— (0.1)— (0.1)
Underlying Combined Ratio89.6 %102.0 %91.6 %105.0 %
    
51

Specialty Property & Casualty Insurance (Continued)
Insurance Reserves
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Insurance Reserves:
Personal Automobile$1,597.1 $1,711.9 
Commercial Automobile640.5 596.8 
Total Insurance Reserves$2,237.6 $2,308.7 
Insurance Reserves:
Loss and Allocated LAE Reserves:
Case and Allocated LAE$952.8 $999.9 
Incurred But Not Reported1,113.1 1,132.8 
Total Loss and LAE Reserves2,065.9 2,132.7 
Unallocated LAE Reserves171.7 176.0 
Total Insurance Reserves$2,237.6 $2,308.7 
See MD&A, “Critical Accounting Estimates,” of the 2023 Annual Report for additional information pertaining to the Company’s process of estimating property and casualty insurance reserves for losses and LAE, development of property and casualty insurance losses and LAE from prior accident years, also referred to as “reserve development” in the discussion of segment results, estimated variability of property and casualty insurance reserves for losses and LAE, and a discussion of some of the variables that may impact development of property and casualty insurance losses and LAE and the estimated variability of property and casualty insurance reserves for losses and LAE.
Overall
Three Months Ended June 30, 2024 Compared to the Same Period in 2023
The Specialty Property & Casualty Insurance segment reported a Total Segment Adjusted Net Operating Income of $102.3 million for the three months ended June 30, 2024, compared to Total Segment Adjusted Net Operating Loss of $10.8 million for the same period in 2023. Segment adjusted net operating results increased by $113.1 million that included a $96.1 million and $17.0 million increase from personal automobile and commercial vehicle insurance, respectively, due primarily to higher average earned premiums per exposure resulting from rate increases and lower underlying claim frequency.
Earned Premiums in the Specialty Property & Casualty Insurance segment decreased by $69.7 million for the three months ended June 30, 2024, compared to the same period in 2023, due to lower new business volumes resulting from targeted actions to improve profitability, partially offset by higher average earned premium per exposure resulting from rate increases.
Net Investment Income in the Specialty Property & Casualty Insurance segment increased by $2.1 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to higher rate earned on Equity Securities partially offset by lower rate earned on Equity Method securities and lower other income.
Incurred Loss and LAE were $602.2 million or 69.8% of earned premiums for the three months ended June 30, 2024 compared to $805.4 million or 86.4% of earned premiums, for the same period in 2023. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio and a favorable change in prior year development compared to adverse prior year development in the same period in 2023, and lower catastrophe losses. Underlying losses and LAE as a percentage of earned premiums were 68.7% for the three months ended June 30, 2024, an improvement of 13.2 percentage points, compared to the same period in 2023 driven by higher average earned premium per exposure (23.2% increase year over year) resulting from rate increases and lower underlying claims frequency, partially offset by higher claims average severity trends from elevated environmental and social inflation. Underlying losses and LAE exclude the impact of catastrophes and prior year loss and LAE reserve development. Favorable prior year loss and LAE reserve development (including catastrophe reserve development) was $0.9 million for the three months ended June 30, 2024, compared to adverse development of $24.1 million for the same period in 2023 an improvement of $25.0 million due primarily to stabilization in loss patterns. Catastrophe losses and LAE (excluding reserve development) were $10.3 million for the three months ended

52

Specialty Property & Casualty Insurance (Continued)
June 30, 2024 compared to $17.4 million for the same period in 2023, an improvement of $7.1 million due to lower average severity per catastrophe event.

Insurance Expenses were $180.7 million, or 20.9% of earned premiums, for the three months ended June 30, 2024, compared to $187.5 million, or 20.1% of earned premiums for the same period in 2023. Insurance Expenses decreased $6.8 million due to lower new business volumes and ongoing expense actions. As a percentage of earned premiums, Insurance Expenses increased 0.8% as earned premium decreases outpaced expense decreases.
The Specialty Property & Casualty Insurance segment’s three months ended June 30, 2024 effective tax rate was 20.1% compared to 26.9% for the same period in 2023. The effective income tax rate for the second quarters of 2024 and 2023 differs from the federal statutory income tax rate due primarily to investments in Company-Owned Life Insurance, tax-exempt investment income and dividends received deductions.
Six Months Ended June 30, 2024 Compared to the Same Period in 2023
The Specialty Property & Casualty Insurance segment reported a Total Segment Adjusted Net Operating Income of $171.5 million for the six months ended June 30, 2024, compared to Total Segment Adjusted Net Operating Loss of $69.2 million for the same period in 2023. Segment adjusted net operating results improved by $240.7 million that included a $201.1 million and $39.6 million increase from personal automobile and commercial vehicle insurance, respectively, due primarily to higher average earned premiums per exposure resulting from rate increases and lower underlying claim frequency.
Earned Premiums in the Specialty Property & Casualty Insurance segment decreased by $173.9 million for the six months ended June 30, 2024, compared to the same period in 2023, due to lower new business volumes resulting from targeted actions to improve profitability, partially offset by higher average earned premium per exposure resulting from rate increases and higher policy retention.
Net Investment Income in the Specialty Property & Casualty Insurance segment increased by $4.7 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to higher rates earned on Short-term Investments and Equity Securities and partially offset by lower rate earned on Equity Method securities and lower amount of other income.
Incurred Loss and LAE were $1,221.3 million or 71.7% of earned premiums for the six months ended June 30, 2024 compared to $1,670.3 million or 89.0% of earned premiums, for the same period in 2023. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio, lower adverse prior year development, and lower catastrophe losses. Underlying losses and LAE as a percentage of earned premiums were 70.6% for the six months ended June 30, 2024, an improvement of 14.1 percentage points, compared to the same period in 2023 driven by higher average earned premium per exposure (24.0% increase year over year) resulting from rate increases and lower underlying claims frequency, partially offset by higher claims average severity trends from elevated environmental and social inflation. Underlying losses and LAE exclude the impact of catastrophes and loss and LAE reserve development. Adverse loss and LAE reserve development (including catastrophe reserve development) was $5.1 million for the six months ended June 30, 2024, compared to adverse development of $55.2 million for the same period in 2023 an improvement of $50.1 million due primarily to normalization in loss patterns. Catastrophe losses and LAE (excluding reserve development) were $14.4 million for the six months ended June 30, 2024 compared to $25.8 million for the same period in 2023, an improvement of $11.4 million due to lower average severity per catastrophe event.

Insurance Expenses were $357.6 million, or 21.0% of earned premiums, for the six months ended June 30, 2024, compared to $381.3 million, or 20.3% of earned premiums for the same period in 2023. Insurance Expenses decreased $23.7 million due to lower new business volumes and ongoing expense actions. As a percentage of earned premiums, Insurance Expenses increased 0.7% as earned premium decreases outpaced expense decreases.
The Specialty Property & Casualty Insurance segment’s six months ended June 30, 2024 effective tax rate was 20.0% compared to 22.7% for the same period in 2023. The effective income tax rate for the six months ended June 30, 2024 and 2023 differs from the federal statutory income tax rate due primarily to investments in Company-Owned Life Insurance, tax-exempt investment income and dividends received deductions.
53

Specialty Property & Casualty Insurance (Continued)
Specialty Personal Automobile Insurance
Selected financial information for the specialty personal automobile insurance product line is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Net Premiums Written$739.5 $687.4 $1,412.0 $1,529.8 
Earned Premiums$691.5 $766.6 $1,366.8 $1,554.5 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE$471.6 $638.7 $957.3 $1,336.3 
Catastrophe Losses and LAE7.9 15.0 11.4 22.7 
Prior Years:
Non-catastrophe Losses and LAE0.6 18.0 7.1 41.4 
Catastrophe Losses and LAE— (0.9)0.6 (1.4)
Total Incurred Losses and LAE$480.1 $670.8 $976.4 $1,399.0 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio68.2 %83.3 %70.1 %85.9 %
Current Year Catastrophe Losses and LAE Ratio1.1 2.0 0.8 1.5 
Prior Years Non-catastrophe Losses and LAE Ratio0.1 2.3 0.5 2.7 
Prior Years Catastrophe Losses and LAE Ratio— (0.1)— (0.1)
Total Incurred Loss and LAE Ratio69.4 87.5 71.4 90.0 
Insurance Expense Ratio21.4 20.5 21.5 20.5 
Combined Ratio90.8 %108.0 %92.9 %110.5 %
Underlying Combined Ratio
Current Year Non-catastrophe Losses and LAE Ratio68.2 %83.3 %70.1 %85.9 %
Insurance Expense Ratio21.4 20.5 21.5 20.5 
Underlying Combined Ratio89.6 %103.8 %91.6 %106.4 %
Non-GAAP Measure Reconciliation
Combined Ratio90.8 %108.0 %92.9 %110.5 %
Less:
Current Year Catastrophe Losses and LAE Ratio1.1 2.0 0.8 1.5 
Prior Years Non-catastrophe Losses and LAE Ratio0.1 2.3 0.5 2.7 
Prior Years Catastrophe Losses and LAE Ratio— (0.1)— (0.1)
Underlying Combined Ratio89.6 %103.8 %91.6 %106.4 %
Three Months Ended June 30, 2024 Compared to the Same Period in 2023
Earned Premiums in personal automobile insurance decreased by $75.1 million for the three months ended June 30, 2024, compared to the same period in 2023, due to lower new business volumes driven by targeted underwriting actions to improve profitability, partially offset by higher average earned premium per exposure resulting from rate increases and higher policy retention. Incurred losses and LAE were $480.1 million, or 69.4% of earned premiums for the three months ended June 30, 2024, compared to $670.8 million, or 87.5% of earned premiums, for the same period in 2023. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio, lower adverse prior year development, and lower catastrophe losses. Underlying losses and LAE as a percentage of related earned premiums were 68.2% for the three months ended June 30, 2024, compared to 83.3% for the same period in 2023, an improvement of 15.1 percentage points driven by higher average earned premiums per exposure resulting from rate increases and a lower frequency of claims, partially offset by higher claims average severity trends from elevated environmental and social inflation. Prior year adverse loss and LAE reserve development was $0.6 million for the three months ended June 30, 2024,
54

Specialty Property & Casualty Insurance (Continued)
compared to adverse development of $17.1 million for the same period in 2023, an improvement of $16.5 million due primarily to stabilization of loss patterns. Catastrophe losses and LAE (excluding reserve development) were $7.9 million for the three months ended June 30, 2024, compared to $15.0 million for the same period in 2023, an improvement of $7.1 million mainly due to lower average severity per catastrophe event.

Six Months Ended June 30, 2024 Compared to the Same Period in 2023
Earned Premiums on personal automobile insurance decreased by $187.7 million for the six months ended June 30, 2024, compared to the same period in 2023, due to lower new business volumes driven by targeted underwriting actions to improve profitability, partially offset by higher average earned premium per exposure resulting from rate increases and higher policy retention. Incurred losses and LAE were $976.4 million, or 71.4% of earned premiums for the six months ended June 30, 2024, compared to $1,399.0 million, or 90.0% of earned premiums, for the same period in 2023. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio, lower adverse prior year development, and lower catastrophe losses. Underlying losses and LAE as a percentage of related earned premiums were 70.1% for the six months ended June 30, 2024, compared to 85.9% for the same period in 2023, an improvement of 15.8 percentage points driven by higher average earned premiums per exposure resulting from rate increases and a lower frequency of claims, partially offset by higher claims average severity trends from elevated environmental and social inflation. Adverse loss and LAE reserve development was $7.7 million for the six months ended June 30, 2024, compared to adverse development of $40.0 million for the same period in 2023, an improvement of $32.3 million due primarily to stabilization of loss patterns. Catastrophe losses and LAE (excluding reserve development) were $11.4 million for the six months ended June 30, 2024, compared to $22.7 million for the same period in 2023, an improvement of $11.3 million mainly due to lower average severity per catastrophe event.
55

Specialty Property & Casualty Insurance (Continued)
Commercial Automobile Insurance
Selected financial information for the commercial automobile insurance product line is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Net Premiums Written$194.4 $143.2 $386.5 $322.9 
Earned Premiums$171.1 $165.7 $335.8 $322.0 
Incurred Losses and LAE related to:
Current Year:
Non-catastrophe Losses and LAE$121.2 $125.2 $244.5 $253.0 
Catastrophe Losses and LAE2.4 2.4 3.0 3.1 
Prior Years:
Non-catastrophe Losses and LAE(1.4)7.0 (2.6)15.2 
Catastrophe Losses and LAE(0.1)— — — 
Total Incurred Losses and LAE$122.1 $134.6 $244.9 $271.3 
Ratios Based On Earned Premiums
Current Year Non-catastrophe Losses and LAE Ratio70.9 %75.6 %72.8 %78.6 %
Current Year Catastrophe Losses and LAE Ratio1.4 1.4 0.9 1.0 
Prior Years Non-catastrophe Losses and LAE Ratio(0.8)4.2 (0.8)4.7 
Prior Years Catastrophe Losses and LAE Ratio(0.1)— — — 
Total Incurred Loss and LAE Ratio71.4 81.2 72.9 84.3 
Insurance Expense Ratio19.1 18.3 19.1 19.3 
Combined Ratio90.5 %99.5 %92.0 %103.6 %
Underlying Combined Ratio
Current Year Non-catastrophe Losses and LAE Ratio70.9 %75.6 %72.8 %78.6 %
Insurance Expense Ratio19.1 18.3 19.1 19.3 
Underlying Combined Ratio90.0 %93.9 %91.9 %97.9 %
Non-GAAP Measure Reconciliation
Combined Ratio90.5 %99.5 %92.0 %103.6 %
Less:
Current Year Catastrophe Losses and LAE Ratio1.4 1.4 0.9 1.0 
Prior Years Non-catastrophe Losses and LAE Ratio(0.8)4.2 (0.8)4.7 
Prior Years Catastrophe Losses and LAE Ratio(0.1)— — — 
Underlying Combined Ratio90.0 %93.9 %91.9 %97.9 %
Three Months Ended June 30, 2024 Compared to the Same Period in 2023
Earned Premiums in commercial automobile insurance increased by $5.4 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to higher average earned premium per exposure resulting from rate increases and targeted mix shifts. Incurred losses and LAE were $122.1 million, or 71.4% of earned premiums in 2024, compared to $134.6 million, or 81.2% of earned premiums in 2023. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss ratio and favorable prior year development. Underlying losses and LAE as a percentage of earned premiums were 70.9% in the three months ended June 30, 2024, compared to 75.6% during the same time period in 2023, an improvement of 4.7 percentage points due primarily to higher average earned premiums per exposure resulting from rate increases and mix shifts and a lower frequency of claims, partially offset by higher claims average severity trends from elevated environmental inflation and mix shifts. Favorable loss and LAE reserve development was $1.5 million for the three months ended June 30, 2024, compared to adverse development of $7.0 million for the same period in 2023, an improvement of $8.5 million due primarily to stabilization of loss patterns.
56

Specialty Property & Casualty Insurance (Continued)
Six Months Ended June 30, 2024 Compared to the Same Period in 2023
Earned Premiums in commercial automobile insurance increased by $13.8 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to higher average earned premium per exposure resulting from rate increases and targeted mix shifts. Incurred losses and LAE were $244.9 million, or 72.9% of earned premiums in 2024, compared to $271.3 million, or 84.3% of earned premiums in 2023. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss ratio and favorable prior year development. Underlying losses and LAE as a percentage of earned premiums were 72.8% for the six months ended June 30, 2024, compared to 78.6% during the same time period in 2023, an improvement of 5.8 percentage points due primarily to higher average earned premiums per exposure resulting from rate increases and mix shifts and a lower frequency of claims, partially offset by higher claims average severity trends from elevated environmental inflation and mix shifts. Favorable loss and LAE reserve development was $2.6 million for the six months ended June 30, 2024, compared to adverse development of $15.2 million for the same period in 2023, an improvement of $17.8 million due primarily to stabilization of loss patterns.
57

Life Insurance
Selected financial information for the Life Insurance segment is presented below.
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Earned Premiums (Changes in Deferred Profit Liability for the Three Months Ended: 2024 - $16.7; 2023 - $16.5 and
Six Months Ended: 2024 - $36.4; 2023 - $35.7)
$100.8 $102.2 $198.1 $201.5 
Net Investment Income30.5 47.1 74.8 96.9 
Change in Value of Alternative Energy Partnership Investments0.1 0.2 0.2 0.4 
Other Income (Loss)0.1 0.1 0.3 (0.3)
Total Revenues131.5 149.6 273.4 298.5 
Policyholders’ Benefits and Incurred Losses and LAE (Changes in Liability for Future Policyholder Benefits for the Three Months Ended: 2024 - $1.6; 2023 - $0.6 and
Six Months Ended: 2024 - $7.6; 2023 - $2.5)
63.9 68.3 126.9 138.2 
Insurance Expenses69.0 71.2 133.9 135.4 
Segment Adjusted Operating (Loss) Income(1.4)10.1 12.6 24.9 
Income Tax Benefit (Expense)1.2 (1.2)(0.9)(2.8)
Total Segment Adjusted Net Operating (Loss) Income$(0.2)$8.9 $11.7 $22.1 
INSURANCE RESERVES
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Insurance Reserves:
Future Policyholder Benefits$3,155.3 $3,375.6 
Incurred Losses and LAE Reserves:
Life42.1 42.1 
Accident and Health4.6 4.7 
Property2.6 2.9 
Total Incurred Losses and LAE Reserves49.3 49.7 
Total Insurance Reserves$3,204.6 $3,425.3 
Overall
Three Months Ended June 30, 2024 Compared to the Same Period in 2023
The Life Insurance segment reported Total Segment Adjusted Net Operating Loss of $0.2 million for the three months ended June 30, 2024, compared to Net Operating Income of $8.9 million for the same period in 2023. The decrease in segment net operating results was primarily due to a reduction in net investment income that included an $11.9 million after-tax loss from an investment valuation adjustment of a real estate investment in our alternative investment portfolio.
Earned Premiums decreased $1.4 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to lower volume on property insurance.
Net investment income decreased by $16.6 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to performance of Equity Method securities that included a $15.1 million pre-tax loss from an investment valuation adjustment of a real estate investment in our alternative investment portfolio, and lower levels of Fixed Income Securities.
Policyholders’ Benefits and Incurred Losses and LAE decreased by $4.4 million for the three months ended June 30, 2024, compared to the same period in 2023, due to lower Policyholders’ Benefits in accident and health products and, to a lesser extent, changes in mortality experience in life insurance products.
58

Life Insurance (Continued)
The Life Insurance segment’s three months ended June 30, 2024 effective income tax rate was 85.0% compared to 10.7% for the same period in 2023. The effective income tax rate for the second quarter of 2024 and 2023 differs from the federal statutory income tax rate due primarily to investments in Company-Owned Life Insurance, tax-exempt investment income and dividends received deductions. The change in the effective tax rate from the three months ended of June 30, 2023 is due primarily to a consistent level of tax preferred investment income on lower segment operating results.
Six Months Ended June 30, 2024 Compared to the Same Period in 2023
The Life Insurance segment reported Total Segment Adjusted Net Operating Income of $11.7 million for the six months ended June 30, 2024, compared to $22.1 million for the same period in 2023. The decrease in segment net operating results was primarily due to a reduction in net investment income, partially offset by changes in mortality experience from life insurance products.
Earned Premiums decreased $3.4 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to lower volume on life insurance.
Net investment income decreased by $22.1 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to performance of Equity Method securities and lower amounts of Fixed Income Securities.
Policyholders’ Benefits and Incurred Losses and LAE decreased by $11.3 million for the six months ended June 30, 2024, compared to the same period in 2023, due to changes in mortality experience in life insurance products and lower Policyholders’ Benefits in accident and health products.
The Life Insurance segment’s six months ended June 30, 2024 effective income tax rate was 7.6% compared to 11.3% for the same period in 2023. The effective income tax rate for the second quarters of 2024 and 2023 differs from the federal statutory income tax rate due primarily to investments in Company-Owned Life Insurance, tax-exempt investment income and dividends received deductions. The decrease in the effective tax rate from the six months ended of June 30, 2023 is due primarily to an increased benefit from tax preferred investment income.

















59

Investment Results
Net Investment Income
Net Investment Income for the three and six months ended June 30, 2024 and 2023 is presented below:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Investment Income:
Interest on Fixed Income Securities1,2
$80.2 $79.6 $160.0 $161.1 
Dividends on Equity Securities Excluding Alternative Investments0.9 1.2 3.7 2.2 
Alternative Investments:
Equity Method Limited Liability Investments(14.7)2.8 (16.8)3.9 
Limited Liability Investments Included in Equity Securities6.2 6.3 9.6 8.9 
Total Alternative Investments(8.5)9.1 (7.2)12.8 
Short-term Investments7.3 3.6 14.6 5.9 
Loans to Policyholders5.1 5.1 10.3 10.5 
Real Estate2.2 1.9 4.5 4.3 
Company-Owned Life Insurance
8.9 7.4 16.0 16.2 
Other2.6 5.3 5.1 8.3 
Total Investment Income98.7 113.2 207.0 221.3 
Investment Expenses:
Real Estate2.1 2.2 4.3 4.3 
Other Investment Expenses1,2
3.6 4.7 9.3 8.9 
Total Investment Expenses5.7 6.9 13.6 13.2 
Net Investment Income$93.0 $106.3 $193.4 $208.1 
1In the first quarter of 2024, the Company changed its presentation of the details of investment performance to report interest expense incurred on Federal Home Loan Bank ("FHLB") borrowings as an offset to interest on fixed income securities since FHLB borrowings are used for spread lending purposes. The interest expense incurred on FHLB borrowings was previously reported within Other Investment Expenses. The prior period amounts presented above have been updated to reflect this change in presentation.
2Reduced by interest expense incurred on FHLB borrowings used for spread lending purposes of $5.4 million and $7.5 million for the three months ended June 30, 2024 and 2023, respectively, and $10.6 million and $12.2 million for the six months ended June 30, 2024 and 2023, respectively.
Net Investment Income was $93.0 million and $106.3 million for the three months ended June 30, 2024 and 2023, respectively. Net Investment Income decreased by $13.3 million in 2024 based on lower earnings from alternative investments, which included a $15.1 million loss from an investment valuation adjustment of one real estate investment in our alternative investment portfolio.
Net Investment Income was $193.4 million and $208.1 million for the six months ended June 30, 2024 and 2023, respectively. Net Investment Income decreased by $14.7 million in 2024 based on lower earnings from alternative investments.
Income and distributions on alternative investments can fluctuate significantly between periods as they are influenced by operating performance of the underlying investments, changes in market or economic conditions or the timing of asset sales.
60

Investment Results (Continued)
Total Comprehensive Investment (Losses) Gains
The components of Total Comprehensive Investment (Losses) Gains for the three and six months ended June 30, 2024 and 2023 are presented below:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Recognized in Condensed Consolidated Statements of Income (Loss):
Change in Fair Value of Equity and Convertible Securities$(1.2)$2.4 $2.2 $4.1 
Gains on Sales3.7 0.5 20.6 1.8 
Losses on Sales(2.2)(6.2)(4.6)(9.5)
(Losses) Gains on Hedging Activity— (8.7)(7.9)(0.3)
Impairment Losses(0.2)— (1.6)2.1 
Net Gains (Losses) Recognized in Condensed Consolidated Statements of Income (Loss)
0.1 (12.0)8.7 (1.8)
Recognized in Other Comprehensive Income (Loss)(85.7)(75.9)(192.4)103.9 
Total Comprehensive Investment (Losses) Gains$(85.6)$(87.9)$(183.7)$102.1 
Total Comprehensive Investment Losses were $85.6 million for the three months ended June 30, 2024, compared to Total Comprehensive Investment Losses of $87.9 million for the three months ended June 30, 2023.
Total Comprehensive Investment Losses were $183.7 million for the six months ended June 30, 2024, compared to Total Comprehensive Investment Gains of $102.1 million for the six months ended June 30, 2023. The decrease of $285.8 million in comprehensive investment results was primarily due to an increase in the Company’s unrealized loss position on the fixed income securities portfolio in the first half of 2024 as compared to a decrease in the Company's unrealized loss position on the fixed income securities portfolio in the first half of 2023, driven by changes in interest rates.
Change in Fair Value of Equity and Convertible Securities
The components of Change in Fair Value of Equity and Convertible Securities for the three and six months ended June 30, 2024 and 2023 are presented below:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Preferred Stocks$0.2 $0.2 $0.4 $0.3 
Common Stocks1.5 0.3 1.6 (0.2)
Other Equity Interests:
Exchange Traded Funds— 0.3 — 0.4 
Limited Liability Companies and Limited Partnerships(2.9)0.9 0.2 2.6 
Total Other Equity Interests(2.9)1.2 0.2 3.0 
Change in Fair Value of Equity Securities(1.2)1.7 2.2 3.1 
Change in Fair Value of Convertible Securities— 0.7 — 1.0 
Change in Fair Value of Equity and Convertible Securities$(1.2)$2.4 $2.2 $4.1 
61

Investment Results (Continued)
Net Realized Gains (Losses) on Sales of Investments
The components of Net Realized Investment Gains (Losses) for the three and six months ended June 30, 2024 and 2023 are presented below:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Fixed Maturities:
Gains on Sales$2.2 $0.4 $15.0 $1.5 
Losses on Sales(0.3)(6.0)(2.6)(9.3)
Gains (Losses) on Hedging Activity— (8.7)(7.9)(0.3)
Equity Securities:
Gains on Sales— 0.1 4.1 0.1 
Losses on Sales— (0.1)(0.1)(0.1)
Other:
Gains on Sales1.5 — 1.5 0.2 
Losses on Sales(1.9)(0.1)(1.9)(0.1)
Net Realized Investment Gains (Losses)
$1.5 $(14.4)$8.1 $(8.0)
Gross Gains on Sales$3.7 $0.5 $20.6 $1.8 
Gross Losses on Sales(2.2)(6.2)(4.6)(9.5)
Gains (Losses) on Hedging Activity— (8.7)(7.9)(0.3)
Net Realized Investment Gains (Losses)
$1.5 $(14.4)$8.1 $(8.0)
Fixed Maturities
Net realized gains and losses on sales of fixed maturities for the three months ended June 30, 2024 and 2023 primarily relate to normal portfolio management. The net realized gains and losses on hedging activity for the three months ended June 30, 2024 and 2023 are related to treasury futures that did not qualify for hedge accounting treatment.
Net realized gains and losses on sales of fixed maturities for the six months ended June 30, 2024 and 2023 primarily relate to normal portfolio management. The net realized gains and losses on hedging activity for the six months ended June 30, 2024 and 2023 are related to treasury futures that did not qualify for hedge accounting treatment.
Impairment Losses
The Company regularly reviews its investment portfolio to determine whether a decline in the fair value of an investment has occurred from credit or other, non-credit related factors. If the decline in fair value is due to credit factors and the Company does not expect to receive cash flows sufficient to support the entire amortized cost basis, the credit loss is reported in the Condensed Consolidated Statements of Income (Loss) in the period that the declines are evaluated. Conversely, an increase in the fair value or disposal of an investment with a previously established credit allowance will result in the reversal of impairment losses reported in the Condensed Consolidated Statements of Income (Loss) in the period.
62

Investment Results (Continued)
The components of Impairment Losses in the Condensed Consolidated Statements of Income (Loss) for the three and six months ended June 30, 2024 and 2023 were:
 Three Months EndedSix Months Ended
Jun 30, 2024Jun 30, 2023Jun 30, 2024Jun 30, 2023
(Dollars in Millions)AmountNumber of IssuersAmountNumber of IssuersAmountNumber of Issuers
Amount2
Number of Issuers
Fixed Maturities$0.2 14 $— 12 $(0.8)15 $2.1 18 
Equity Securities at Modified Cost— — — — (0.4)1 — — 
Real Estate(0.1)1 — — (0.1)1 — — 
Securities Receivable— — (0.8)1 — — (0.8)1 
Mortgage Loans— — (0.1)2 — — (0.1)2 
Other(0.2)8 — — (0.3)8 — — 
Impairment Losses1
$(0.1)$(0.9)$(1.6)$1.2 
1 Includes losses from intent-to-sell securities and direct write-down securities of $0.2 million and $1.7 million for the three and six months ended June 30, 2024, respectively, and $0.3 million and $0.4 million for the three and six months ended June 30, 2023, respectively.
2This amount was primarily related to a reversal on a previously impaired security.
Investment Quality and Concentrations
The Company’s fixed maturity investment portfolio is comprised primarily of high-grade corporate, municipal and agency bonds. At June 30, 2024, approximately 95.4% of the Company’s fixed maturity investment portfolio was rated investment-grade, which the Company defines as a security issued by a high quality obligor with at least a relatively stable credit profile and where it is highly likely that all contractual payments of principal and interest will timely occur and carry a rating from the National Association of Insurance Commissioners (“NAIC”) of 1 or 2. Securities with a rating of 1 or 2 from the NAIC typically are rated by one or more Nationally Recognized Statistical Rating Organizations and either have a rating of AAA, AA, A or BBB from Standard & Poor’s (“S&P”); a rating of Aaa, Aa, A or Baa from Moody’s Investors Service (“Moody’s”); or a rating of AAA, AA, A or BBB from Fitch Ratings.
The following table summarizes the credit quality of the Company’s fixed maturity investment portfolio at June 30, 2024 and December 31, 2023:
(Dollars in Millions)Jun 30, 2024Dec 31, 2023
NAIC
Rating		RatingAmortized CostFair ValuePercentage of TotalAmortized CostFair ValuePercentage of Total
1AAA, AA, A$5,405.2 $4,749.4 71.2 %$5,471.8 $4,962.0 72.1 %
2BBB1,814.1 1,616.3 24.2 1,803.7 1,657.3 24.1 
3-4BB, B261.8 246.8 3.7 227.1 204.4 3.0 
5-6CCC or Lower65.7 62.2 0.9 63.2 58.2 0.8 
Total Investments in Fixed Maturities$7,546.8 $6,674.7 100.0 %$7,565.8 $6,881.9 100.0 %
Gross unrealized losses on the Company’s investments in below-investment-grade fixed maturities were $17.6 million and $25.5 million at June 30, 2024 and December 31, 2023, respectively.
63

Investment Quality and Concentrations (Continued)
The following table summarizes the fair value of the Company’s investments in governmental fixed maturities at June 30, 2024 and December 31, 2023:
Jun 30, 2024Dec 31, 2023
(Dollars in Millions)Fair ValuePercentage
of Total
Investments		Fair ValuePercentage
of Total
Investments
U.S. Government and Government Agencies and Authorities$475.5 5.5 %$511.5 5.7 %
States and Political Subdivisions:
Revenue Bonds1,188.0 13.7 1,235.2 13.9 
States91.2 1.1 99.8 1.1 
Political Subdivisions60.5 0.7 66.9 0.8 
Foreign Governments4.6 0.1 3.8 — 
Total Investments in Governmental Fixed Maturities$1,819.8 21.1 %$1,917.2 21.5 %
The following table summarizes the fair value of the Company’s investments in non-governmental fixed maturities by industry at June 30, 2024 and December 31, 2023.
Jun 30, 2024Dec 31, 2023
(Dollars in Millions)Fair ValuePercentage
of Total
Investments		Fair ValuePercentage
of Total
Investments
Finance, Insurance and Real Estate$2,053.2 23.7 %$2,070.5 23.3 %
Manufacturing1,029.8 11.9 1,077.6 12.1 
Transportation, Communication and Utilities808.1 9.3 807.3 9.1 
Services614.0 7.1 639.4 7.2 
Mining156.8 1.8 174.3 2.0 
Retail Trade132.2 1.5 156.0 1.8 
Construction11.9 0.1 4.4 — 
Other48.9 0.6 35.2 0.4 
Total Investments in Non-governmental Fixed Maturities$4,854.9 56.0 %$4,964.7 55.9 %
The following table summarizes the fair value of the Company’s investments in non-governmental fixed maturities by range of amounts invested at June 30, 2024.
(Dollars in Millions)Number of IssuersAggregate Fair Value
Below $5697 $1,412.4 
$5 -$10195 1,415.9 
$10 - $20101 1,358.2 
$20 - $3020 459.7 
Greater Than $306 208.7 
Total1,019 $4,854.9 
The Company’s short-term investments primarily consist of money market funds and short-term bonds. At June 30, 2024, the Company had $159.9 million invested in money market funds, which primarily invest in U.S. Treasury securities and $379.1 million invested in U.S. Treasury bills and short-term bonds.
64

Investment Quality and Concentrations (Continued)
The following table summarizes the fair value of the Company’s ten largest investment exposures in a single issuer, excluding investments in U.S. Government and Government Agencies and Authorities and Short-term Investment, at June 30, 2024:
(Dollars in Millions)Fair
Value		Percentage
of Total
Investments
Fixed Maturities:
States including their Political Subdivisions:
California $137.4 1.6 %
Texas110.4 1.3 
Michigan84.3 1.0 
New York74.9 0.9 
Georgia71.0 0.8 
Louisiana 59.2 0.7 
Pennsylvania57.2 0.7 
Florida55.1 0.6 
Colorado44.5 0.5 
Missouri38.5 0.4 
Total$732.5 8.5 %
65

Investments in Limited Liability Companies and Limited Partnerships
The Company owns investments in various limited liability investment companies and limited partnerships that primarily invest in mezzanine debt, distressed debt, real estate and senior debt. The Company’s investments in these limited liability investment companies and limited partnerships are reported either as Equity Method Limited Liability Investments, Other Equity Interests and included in Equity Securities at Fair Value, or Equity Securities at Modified Cost, depending on the accounting method used to report the investment. Additional information pertaining to these investments at June 30, 2024 and December 31, 2023 is presented below.
(Dollars in Millions)Unfunded
Commitment		Reported Value
Asset ClassJun 30,
2024		Jun 30,
2024		Dec 31,
2023
Reported as Equity Method Limited Liability Investments:
Mezzanine Debt$42.1 $126.0 $125.4 
Senior Debt36.4 22.4 19.0 
Secondary Transactions1.6 6.8 7.9 
Leveraged Buyout0.6 7.9 8.6 
Real Estate— 27.2 41.9 
Distressed Debt— 4.9 7.9 
Growth Equity— 0.8 1.2 
Hedge Fund— 0.1 0.1 
Other0.1 9.0 9.7 
Total Equity Method Limited Liability Investments80.8 205.1 221.7 
Alternative Energy Partnership Investments— 17.3 17.3 
Reported as Other Equity Interests at Fair Value:
Mezzanine Debt65.9 124.1 124.0 
Distressed Debt13.7 11.4 12.4 
Leveraged Buyout9.2 19.2 19.0 
Growth Equity9.1 6.6 6.4 
Senior Debt7.7 25.1 24.8 
Secondary Transactions3.0 2.8 2.8 
Hedge Funds— — 1.9 
Other0.2 0.1 0.1 
Total Reported as Other Equity Interests at Fair Value108.8 189.3 191.4 
Reported as Equity Securities at Modified Cost:
Other— 4.6 4.8 
Total Reported as Equity Securities at Modified Cost— 4.6 4.8 
Total Investments in Limited Liability Companies and Limited Partnerships$189.6 $416.3 $435.2 
The Company expects that it will be required to fund its commitments over the next several years. The Company expects that the proceeds from distributions from these investments will be the primary source of funding of such commitments.
66

Insurance, Interest, and Other Expenses
Expenses for the three and six months ended June 30, 2024 and 2023 were:
 Three Months EndedSix Months Ended
(Dollars in Millions)Jun 30,
2024		Jun 30,
2023		Jun 30,
2024		Jun 30,
2023
Insurance Expenses:
Commissions$152.0 $165.3 $291.9 $332.2 
General Expenses84.6 74.5 169.9 168.7 
Taxes, Licenses and Fees19.6 20.5 38.7 44.1 
Total Costs Incurred256.2 260.3 500.5 545.0 
Net Policy Acquisition Costs (Deferred) Amortized(12.5)5.3 (16.6)(10.6)
Amortization of Value of Business Acquired (“VOBA”)0.6 0.5 1.1 1.0 
Insurance Expenses244.3 266.1 485.0 535.4 
Interest and Other Expenses:
Interest Expense13.9 14.0 27.9 28.1 
Other Expenses:
Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs6.5 29.5 19.3 58.6 
Pension Settlement(2.7)— (2.7)— 
Other31.6 34.8 64.5 69.0 
Other Expenses35.4 64.3 81.1 127.6 
Interest and Other Expenses49.3 78.3 109.0 155.7 
Goodwill Impairment— 49.6 — 49.6 
Total Expenses$293.6 $394.0 $594.0 $740.7 
Insurance Expenses
Insurance Expenses were $244.3 million for the three months ended June 30, 2024, compared to $266.1 million for the same period in 2023. Insurance Expenses decreased by $21.8 million in 2024 due primarily to lower policies in force.
Insurance Expenses were $485.0 million for the six months ended June 30, 2024, compared to $535.4 million for the same period in 2023. Insurance Expenses decreased by $50.4 million in 2024 due primarily to lower policies in force.
Other Expenses
Other expenses decreased by $28.9 million for the three months ended June 30, 2024, compared to the same period in 2023, due primarily to lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs from the completion of certain strategic initiatives and lower costs in connection with the 2023 cost structure optimization initiatives. These expenses for the three months ended June 30, 2024 included $9.2 million of integration expenses due to continued investments in information technology, partially offset by a $5.1 million gain on the sale of a company owned and occupied property. These expenses for the three months ended June 30, 2023 included $12.3 million of integration expenses due to continued investments in information technology, $16.0 million of real estate exit costs resulting from impairments on operating leases and real estate owned.
Other expenses decreased by $46.5 million for the six months ended June 30, 2024, compared to the same period in 2023, due primarily to lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs from the completion of certain strategic initiatives and lower costs in connection with the 2023 cost structure optimization initiatives. These expenses for the six months ended June 30, 2024 included $21.3 million of integration expenses due to continued investments in information technology, partially offset by a $5.1 million gain on the sale of a company owned and occupied property. These expenses for the six months ended June 30, 2023 included $31.8 million of integration expenses due to continued investments in information technology, $19.2 million of real estate exit costs resulting from impairments on operating leases and real estate owned and $1.8 million of accrued severance.


67

Insurance, Interest, and Other Expenses (Continued)
Goodwill Impairment
Goodwill Impairment for the three and six months ended June 30, 2023 was due to the impairment of goodwill related to the decision to exit the Preferred Property & Casualty Insurance segment in the third quarter of 2023.
Income Taxes
The federal corporate statutory income tax rate was 21% for the six months ended June 30, 2024 and June 30, 2023. The Company’s effective income tax rate, which was 19.0% and 19.4% for the six months ended June 30, 2024 and 2023, respectively, differs from the federal corporate income tax rate due primarily to (1) the effects of tax-exempt investment income, (2) nontaxable income associated with the change in cash surrender value on Company-Owned Life Insurance, (3) Alternative Energy Partnership Investment and general business tax credits, (4) a permanent difference between the amount of long-term equity-based compensation expense recognized under GAAP and the amount deductible in the computation of Federal taxable income, (5) a permanent difference associated with nondeductible executive compensation, (6) impact of deferred taxes in foreign jurisdictions, and (7) a change in valuation allowance.
On December 27, 2023, legislation implementing a corporate income tax (“CIT”) in Bermuda was enacted into law. The CIT imposes a 15% income tax that applies to Bermuda businesses which are part of multinational enterprise groups with annual revenue of €750 million or more and will be effective for fiscal years beginning on or after January 1, 2025, with a five-year deferred effective date for certain groups with a limited international footprint. The Company will continue to monitor guidance as it is released from the Government of Bermuda.
The Inflation Reduction Act (the "Law") was signed into law on August 16, 2022 and became generally effective on January 1, 2023. Included in the provisions of the Law are various changes to the tax code, including the establishment of a Corporate Alternative Minimum Tax (“CAMT”). The Company, at this time, is not subject to the CAMT.
Tax-exempt investment income and dividends received deductions were $2.4 million for the three months ended June 30, 2024, compared to $5.5 million for the same period in 2023. Tax-exempt investment income and dividends received deductions were $8.2 million for the six months ended June 30, 2024, compared to $13.2 million for the same period in 2023.
The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $9.0 million for the three months ended June 30, 2024, compared to $7.3 million for the same period in 2023. The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $16.1 million for the six months ended June 30, 2024, compared to $16.2 million for the same period in 2023.
The Company realized investment tax credits and other federal income tax credits of $0.3 million for the three months ended June 30, 2024. The Company did not realize or recapture any investment tax credits or other federal income tax credits for the same period in 2023. The Company realized investment tax credits and other federal income tax credits of $0.6 million for the six months ended June 30, 2024, compared to recaptured investment tax credits and other federal income tax credits of $0.1 million for the same period in 2023.
The amount of expense recognized for long-term equity-based compensation expense under GAAP was $0.8 million lower than the amount that would be deductible under the IRC for the three months ended June 30, 2024, compared to $0.5 million higher for the same period in 2023. The amount of expense recognized for long-term equity-based compensation expense under GAAP was $1.5 million lower than the amount that would be deductible under the IRC for the six months ended June 30, 2024, compared to $0.5 million higher for the same period in 2023.
The amount of nondeductible executive compensation was $4.2 million for the three months ended June 30, 2024, compared to $2.3 million for the same period in 2023. The amount of nondeductible executive compensation was $8.4 million for the six months ended June 30, 2024, compared to $7.2 million for the same period in 2023.
There was no impairment of non-tax deductible goodwill for the three and six months ended June 30, 2024. The total impairment of non-tax deductible goodwill was $30.0 million for three and six months ended June 30, 2023.
As a result of recently enacted tax legislation in foreign jurisdictions in which the Company operates, a tax benefit of $10.9 million and $23.7 million was recorded for the three and six months ended June 30, 2024, respectively. No tax expense or benefit was recorded for the same periods in 2023.
68

Income Taxes (Continued)
The Company recorded an increase in valuation allowance of $10.9 million and $23.7 million for the three and six months ended June 30, 2024, respectively, for those foreign deferred tax assets it determined were not more-likely-than-not to be realized. No valuation allowance was recorded for the same periods in 2023.
Recently Issued Accounting Pronouncements
The Company has adopted all recently issued accounting pronouncements with effective dates prior to June 30, 2024.
There were no adoptions of such accounting pronouncements during the six months ended June 30, 2024 that had a material impact on the Company’s Condensed Consolidated Financial Statements.
Liquidity and Capital Resources
Amended and Extended Credit Agreement
On March 15, 2022, the Company entered into an amended and extended credit agreement. The amended and extended credit agreement increased the borrowing capacity of the existing unsecured credit agreement to $600.0 million and extended the maturity date to March 15, 2027. Furthermore, the amended and extended credit agreement provides for an accordion feature whereby the Company can increase the revolving credit borrowing capacity by an additional $200.0 million for a total of maximum capacity of $800.0 million. Financial covenants within the agreement limit the Company from accessing the maximum capacity. The amount available as of June 30, 2024 was $458.0 million. There were no outstanding borrowings under the credit agreement on either June 30, 2024 or December 31, 2023.
Long-term Debt
The Company designates debt obligations as either short-term or long-term based on maturity date at issuance. Total amortized cost of Long-term Debt, Current and Non-Current, outstanding on June 30, 2024 and December 31, 2023 was:
(Dollars in Millions)Jun 30,
2024		Dec 31,
2023
Senior Notes:
Current:
4.350% Senior Notes due February 15, 2025
$449.8 $— 
Non-Current:
4.350% Senior Notes due February 15, 2025
— 449.6 
2.400% Senior Notes due September 30, 2030
397.3 397.0 
3.800% Senior Notes due February 23, 2032
396.2 396.0 
5.875% Fixed-Rate Reset Junior Subordinated Debentures due 2062
147.1 146.6 
Total Long-term Debt Outstanding$1,390.4 $1,389.2 
See Note 16, “Debt,” to the Condensed Consolidated Financial Statements for more information regarding the Company’s long-term debt.
Federal Home Loan Bank Agreements
Kemper’s subsidiaries, United Insurance Company of America (“United Insurance”), Trinity Universal Insurance Company (“Trinity”), and AAC are members of the Federal Home Loan Banks (“FHLBs”) of Chicago, Dallas and Chicago, respectively. AAC became a member of the FHLB of Chicago in May 2022. United Insurance and Trinity became members of the FHLBs of Chicago and Dallas, respectively, in 2013. Under their memberships, United Insurance, Trinity and AAC may borrow through the advance program of their respective FHLB. The Company’s investments in FHLB common stock are reported at cost and included in Other Investments. The carrying value of FHLB of Chicago common stock was $16.4 million and $16.6 million at June 30, 2024 and December 31, 2023, respectively. The carrying value of FHLB of Dallas common stock was $3.7 million and $3.6 million at June 30, 2024 and December 31, 2023, respectively. The Company periodically uses short-term FHLB borrowings for a combination of cash management and risk management purposes, in addition to long-term FHLB borrowings for spread lending purposes.
69

Liquidity and Capital Resources (Continued)
During the first six months of 2024, United Insurance received advances of $58.9 million from the FHLB of Chicago and made repayments of $69.3 million. United Insurance had outstanding advances from the FHLB of Chicago totaling $547.0 million at June 30, 2024. These advances were made in connection with the Company’s spread lending program. The proceeds related to these advances were used to purchase fixed maturity securities to earn incremental net investment income.
For these advances, United Insurance held pledged securities in a custodial account with the FHLB of Chicago with a fair value of $696.7 million at June 30, 2024. The fair value of the collateral pledged must be maintained at certain specified levels above the borrowed amount, which can vary depending on the assets pledged. If the fair value of the collateral declines below these specified levels of the amount borrowed, United Insurance would be required to pledge additional collateral or repay outstanding borrowings. See Note 15, “Policyholder Obligations,” to the Condensed Consolidated Financial Statements for additional information about the United Insurance advances and related funding agreements.
Common Stock Repurchases
On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.3 million remaining under the previous authorization. The Company did not repurchase any of its common stock for the three and six months ended June 30, 2024 or 2023, respectively. As of June 30, 2024, the remaining share repurchase authorization was $171.6 million under the repurchase program. The amount and timing of any future share repurchases under the authorization will depend on various factors, including market conditions, the Company’s financial condition, results of operations, available liquidity, particular circumstances and other considerations.
Dividends to Shareholders
Kemper paid a quarterly dividend of $0.31 per common share in the second quarter of 2024. Dividends and dividend equivalents paid were $39.8 million for the six months ended June 30, 2024.
Subsidiary Dividends
Various insurance laws restrict the ability of Kemper’s insurance subsidiaries to pay dividends without regulatory approval. Such insurance laws applicable to the Company’s US based insurance subsidiaries generally restrict the amount of dividends paid in an annual period to the greater of statutory net income from the previous year or 10% of statutory capital and surplus. Kemper’s insurance subsidiaries did not pay any dividends to Kemper during the first six months of 2024. Kemper’s US based insurance subsidiaries capacity to pay without prior regulatory approval is estimated to be zero as of the filing date.
Sources and Uses of Funds
The Company directly held cash and investments totaling $376.5 million at June 30, 2024, compared to $464.5 million at December 31, 2023.
The primary sources of funds available for repayment of Kemper’s indebtedness, repurchases of common stock, future shareholder dividend payments, and the payment of interest on Kemper’s senior notes, include cash and investments directly held by Kemper, receipt of dividends from Kemper’s insurance subsidiaries and borrowings under the credit agreement and from subsidiaries.
The primary sources of funds for Kemper’s insurance subsidiaries are premiums, investment income, proceeds from the sales and maturity of investments, advances from the FHLBs of Chicago and Dallas, and capital contributions from Kemper. The primary uses of funds are the payment of policyholder benefits under life insurance contracts, claims under property and casualty insurance contracts and accident and health insurance contracts, the payment of commissions and general expenses, the purchase of investments and repayments of advances from the FHLBs of Chicago and Dallas.
Generally, there is a time lag between when premiums are collected and when policyholder benefits and insurance claims are paid. During periods of growth, property and casualty insurance companies typically experience positive operating cash flows and can invest a portion of their operating cash flows to fund future policyholder benefits and claims. During periods in which premium revenues decline, insurance companies may experience negative cash flows from operations and may need to sell investments to fund payments to policyholders and claimants. In addition, if the Company’s property and casualty insurance subsidiaries experience several significant catastrophic events over a relatively short period of time, investments may be sold to fund payments, which could result in investment gains or losses. Management believes that its property and casualty insurance subsidiaries maintain adequate levels of liquidity in the event that they were to experience several future catastrophic events over a relatively short period of time.
70

Liquidity and Capital Resources (Continued)
Information about the Company’s cash flows for six months ended June 30, 2024 and 2023 is presented below.
(Dollars in Millions)Jun 30, 2024Jun 30, 2023
Net Cash Provided by (Used in) Operating Activities$65.9 $(65.9)
Net Cash Provided by (Used in) Investing Activities32.6 (35.1)
Net Cash Used in Financing Activities(55.2)(37.8)
Cash available for investment activities is dependent on cash flow from Operating Activities and Financing Activities and the level of cash the Company elects to maintain.
Net Cash Provided by (Used in) Operating Activities
Net cash provided by Operating Activities was $65.9 million for the six months ended June 30, 2024, compared to net cash used of $65.9 million for the same period in 2023. The increase in cash provided by Operating Activities was primarily driven by increased net income as a result of rate increases, lower paid claims due to lower frequency, and timing of payments within our Property and Casualty operations. Additionally, cash from operations for 2023 included a $124.7 million federal income tax refund received.
Net Cash Provided by (Used in) Investing Activities
Net cash provided by Investing Activities for the six months ended June 30, 2024 was $32.6 million, compared to net cash used of $35.1 million for the same period in 2023. The increase in cash provided by Investing Activities for the six months ended June 30, 2024 was primarily driven by the ongoing management of our investment portfolio that was impacted by timing of claim payments and premium collections from our Property and Casualty operations. Additionally, cash provided by investing activities included $12.3 million of cash proceeds received from the sale of company owned and occupied property.
Net Cash Used in Financing Activities
Net cash used in Financing Activities for the six months ended June 30, 2024 was $55.2 million, compared to net cash used of $37.8 million for the same period in 2023, an increase in cash used of $17.4 million. This was primarily due to a reduction of the Company’s borrowing arrangement with the FHLB used for spread lending purposes.
Critical Accounting Estimates
Kemper’s subsidiaries conduct their operations in two industries: property and casualty insurance and life insurance. Accordingly, the Company is subject to several industry-specific accounting principles under GAAP. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The process of estimation is inherently uncertain. Accordingly, actual results could ultimately differ materially from the estimated amounts reported in a company’s financial statements. Different assumptions are likely to result in different estimates of reported amounts.
The Company’s critical accounting policies most sensitive to estimates include the valuation of investments, the valuation of life insurance reserves, the valuation of reserves for property and casualty insurance incurred losses and LAE, the assessment of recoverability of goodwill, and the recoverability of deferred tax assets. The Company’s critical accounting policies are described in the MD&A included in the 2023 Annual Report. There have been no material changes to the information disclosed in the 2023 Annual Report with respect to these critical accounting estimates and the Company’s significant accounting policies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the Company’s disclosures about market risk in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk of Part II of the 2023 Annual Report. Accordingly, no disclosures about market risk have been made in Item 3 of this Form 10-Q.
71

Item 4. Controls and Procedures
(a)    Evaluation of disclosure controls and procedures.
The Company’s management, with the participation of Kemper’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on such evaluation, Kemper’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by Kemper in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC’s rules and forms, and accumulated and communicated to the Company’s management, including Kemper’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b)    Changes in internal control over financial reporting.
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II - OTHER INFORMATION
Items not listed here have been omitted because they are inapplicable or the answer is negative.
Item 1. Legal Proceedings
Information concerning pending legal proceedings is incorporated herein by reference to Note 19, “Commitments and Contingencies,” to the Condensed Consolidated Financial Statements in Part I of this Form 10-Q.
Item 1A. Risk Factors
For a discussion of the Company’s significant risk factors, see Item 1A. of Part I of the 2023 Annual Report. Readers are also advised to consider other factors not presently known by, or considered material to, the Company that could materially affect the Company’s business, financial condition and results of operations, along with other information disclosed in the 2023 Annual Report and this Quarterly Report on Form 10-Q, including the factors set forth under the caption “Caution Regarding Forward-Looking Statements” beginning on page 1 of the 2023 Annual Report and on page 1 of this Quarterly Report on Form 10-Q, and to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.3 million remaining under the August 6, 2014 authorization, bringing the remaining share repurchase authorization to approximately $333.3 million. As of December 31, 2023, the remaining share repurchase authorization was $171.6 million under the repurchase program. During the quarter ended June 30, 2024, Kemper did not repurchase any shares. As of June 30, 2024, the remaining share repurchase authorization was $171.6 million under the repurchase program.
All purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Securities Trading Plans of Executive Officers and Directors
The Company’s Insider Trading Policy permits executive officers and directors to enter into trading plans designed to comply with Rule 10b5-1 under the Exchange Act. During the three months ended June 30, 2024, none of the Company’s executive officers or directors adopted, modified or terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
72

Item 6. Exhibits
The Exhibit Index that follows has been filed as part of this report. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K.
Exhibit Index
The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers followed by an asterisk (*) indicate exhibits that are management contracts or compensatory plans or arrangements.
Incorporated by Reference
Exhibit NumberExhibit DescriptionFormFile NumberExhibitFiling DateFiled or Furnished Herewith
10.1

X
31.1X
31.2X
32.1X
32.2X
101.1XBRL Instance DocumentX
101.2XBRL Taxonomy Extension Schema DocumentX
101.3XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.4XBRL Taxonomy Extension Label Linkbase DocumentX
101.5XBRL Taxonomy Extension Presentation Linkbase DocumentX
101.6XBRL Taxonomy Extension Definition Linkbase DocumentX
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)X
73

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Kemper Corporation
Date:August 5, 2024/s/    JOSEPH P. LACHER, JR.
Joseph P. Lacher, Jr.
President and Chief Executive Officer
(Principal Executive Officer)
Date:August 5, 2024/s/    BRADLEY T. CAMDEN
Bradley T. Camden
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:August 5, 2024/s/    JAMES A. ALEXANDER
James A. Alexander
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
74





[Date]

[Executive]
Kemper Corporation
200 E. Randolph Street, Suite 3300
Chicago, IL 60601

Dear [Executive]:

Kemper Corporation (“Company”) considers you to be a valued employee of the “Employer” (as defined below). In recognition of the value of your continued services to the Employer, the Company’s shareholders and other relevant constituencies, the Company proposes the following agreement (“Agreement”) to provide you with certain severance payments and benefits if your employment terminates in connection with a “Change in Control” (as defined below) under specified circumstances.

ARTICLE I

DEFINITIONS

I.1     Definitions

Whenever used in this Agreement, the following capitalized terms shall have the meanings set forth in this Section, certain other capitalized terms being defined elsewhere in this Agreement:

(a)    “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(b)    “Annual Bonus” shall mean the higher of (i) the amount paid to you as your annual bonus (including any amount paid pursuant to a short-term incentive plan (or equivalent plan) maintained by the Company) for the prior calendar year, or, if greater, the calendar year prior to the Change in Control, (ii) your “target” annual bonus under the applicable short-term incentive plan (or equivalent plan) maintained by the Company then in effect for the prior calendar year, or, if greater, the calendar year prior to the Change in Control, or (iii) your projected annual bonus under the applicable short-term incentive plan (or equivalent plan) maintained by the Company for the year in which the Change in Control occurs, based on a projected level of performance as of the date immediately prior to the Change in Control, as determined by the Board of Directors or a committee thereof immediately prior to the Change in Control.

(c)    “Annualized Compensation” shall mean your rate of annual base salary as
in effect immediately prior to your Qualifying Termination, without regard to any
decrease in such salary which would give rise to Good Reason plus an amount


equal to your “Annual Bonus.”

(d)    “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 promulgated under the Exchange Act.

(e)    “Board of Directors” shall mean the Board of Directors of the Company, or any successor thereto.

(f)    A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(i)    any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from
the Company or any of its Subsidiaries or Affiliates) representing 25% or
more of the combined voting power of the Company’s then outstanding
securities, excluding any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (A) of paragraph (iii)
below; or

(ii)    the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
date hereof, constitute the Board of Directors and any new director (other
than a director whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of directors of
the Company) whose appointment or election by the Board of Directors or
nomination for election by the Company’s shareholders was approved or
recommended by a vote of at least two-thirds of the directors then still in
office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or

(iii)    there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other
corporation, other than (A) a merger or consolidation which results in the
directors of the Company immediately prior to such merger or
consolidation continuing to constitute at least a majority of the board of
directors of the Company, the surviving entity or any parent thereof or (B)
a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such Person any
securities acquired directly from the Company or any of its Subsidiaries or
Affiliates) representing 25% or more of the combined voting power of the
Company’s then outstanding securities; or

(iv)    the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an


agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition
by the Company of all or substantially all of the Company’s assets
immediately following which the individuals who comprise the Board of
Directors immediately prior thereto constitute at least a majority of the
board of directors of the entity to which such assets are sold or disposed or
any parent thereof.
    
(g)    “Code” shall mean the Internal Revenue Code of 1986, as amended.

(h)    “Company” shall mean Kemper Corporation, a Delaware corporation, and
any successor as provided in Article IV.

(i)    “Confidential Information” shall mean any and all confidential
information, including without limitation any negotiations or agreements between
the Company or its Affiliates and third parties, business and marketing plans and
related materials, training materials, financial information, plans, executive
summaries, capitalization tables, budgets, and unpublished financial statements;
costs, prices, and licenses; employee, customer, supplier, shareholder, partner or
investor lists and/or data, products, technology, know-how, business processes
and business data, inventions, designs, patents, trademarks, copyrights, trade
secrets and business models; notes, sketches, flow charts, formulas, blueprints,
and elements thereof; databases, compilations, and other intellectual property,
whether written or otherwise, shall be deemed “Confidential Information. Some
or all of the Confidential Information may also be entitled to protection as a “trade
secret” under applicable state or federal law.

(j)    “Disability” shall mean a physical or mental condition entitling you to
benefits under the applicable long-term disability plan of the Company or any of
its Subsidiaries or Affiliates, or if no such plan exists, causing you to be unable to
substantially perform your duties with the Employer for at least 6 months in any
12-month period.

(k)    “Employer” shall mean the Company or any Subsidiary or Affiliate of the
Company by which you are employed.

(l)    “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended.

(m)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n)    “Good Reason” shall mean the occurrence after any Change in Control, or prior to a Change in Control under the circumstances described in clause (ii) of the first sentence of the final paragraph of Section 2.1 hereof (treating all references to a “Change in Control” in paragraphs (i) through (iii) below as references to a “Potential Change in Control”), of any one or more of the following events without your express written consent:



(i)    a reduction in your base salary as in effect immediately prior to the
Change in Control, or a material reduction in the compensation and benefit
plans, arrangements, policies and procedures, taken as a whole, provided
to you from those, taken as a whole, provided to you immediately prior to
the Change in Control;

(ii)    a material reduction in your job authority and responsibility as in
effect immediately prior to the Change in Control;

(iii)    the Employer requires you to change the location of your job or
office, so that you will be based at a location more than thirty miles from
the location of your job or office immediately prior to the Change in
Control;

(iv)    a successor company fails or refuses to assume the Company’s
obligations under this Agreement, as required by Article IV hereof; or

(v)    any purported termination of your employment which is not
effected pursuant to the terms of Section 7.5 hereof.

Notwithstanding any of the foregoing to the contrary, a termination by you
shall not constitute termination for Good Reason unless you shall first
have delivered to the Employer written notice setting forth with specificity
the occurrence deemed to give rise to a right to terminate for Good Reason
(which notice must be given no later than ninety (90) days after the
occurrence of such event), and the Employer failed to take appropriate
corrective action with regard to such occurrence claimed to
constitute Good Reason for your resignation within thirty (30) days
following your notification of such occurrence.

(o)    “Just Cause” shall mean, with respect to a termination of your employment with the Employer, (i) your engagement in egregious misconduct involving serious moral turpitude to the extent that, in the reasonable judgment of the Company, your credibility and reputation no longer conform to the standard of the Company’s executives, (ii) your egregious violation of a material provision of the Company’s Code of Business Conduct and Ethics, or (iii) your conviction or entry of a plea of guilty or “nolo contenere” for the commission of a felony.

(p)    “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Subsidiaries or Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries or Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, (v) any individual, entity or group whose ownership of securities of the Company is reported on Schedule 13G pursuant to Rule 13d-1 promulgated under the


Exchange Act (but only for so long as such ownership is so reported) or (vi) Singleton Group LLC or any successor in interest to such entity.

(q)    A “Potential Change in Control” shall be deemed to occur in the event that (a) the Company enters into an agreement, the consummation of which would result in a Change in Control, (b) the Company or any Person publicly announces an intention to take or to consider taking action which, if consummated, would constitute a Change in Control, (c) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or any of its Subsidiaries or Affiliates) or (d) the Board of Directors adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(r)    “Qualifying Termination” shall mean a termination of employment pursuant to Section 2.1 entitling you to a Severance Payment pursuant to the terms of this Agreement.

(s)    “Separation from Service” shall mean a separation from service as defined in Code section 409A and the applicable regulations thereunder, without giving effect to any elective provisions that may be available under such definition except that in determining whether there is a separation from service with the employer, the employer shall be determined as follows:

(i)    In applying Code section 1563(a)(1), (2) and (3) for purposes of
determining a controlled group of corporations under Code section 414(b),
the phrase “at least 50 percent” shall be used instead of “at least 80
percent” each place it appears in Code section 1563(a)(1), (2) and (3); and

(ii)    In applying Treas. Reg. section 1.414(c)-2 for purposes of
determining trades or businesses (whether or not incorporated) that are
under common control for purposes of Code section 414(c), “at least 50
percent” is used instead of “at least 80 percent” each place it appears in
Treas. Reg. section 1.414(c)-2.


(t)    “Severance Payment” shall mean the payment described in Section 2.2.

(u)    “Subsidiary” shall mean any entity at least 50% of the voting securities of which are Beneficially Owned by the Company.








ARTICLE II

SEVERANCE PAYMENTS

II.1     Right to Severance Payment

You shall be entitled to receive a Severance Payment from the Company in the amount provided in Section 2.2 if the following circumstances apply:

(a)    (i) there has been a Change in Control, (ii) you are an active employee at the time
of the Change in Control, and (iii) within two years from and including the date of the
Change in Control, your employment is terminated by the Employer for any reason (other
than Just Cause or your death or Disability), or you terminate your employment for Good
Reason;

(b)    you execute a separate release agreement, in substantially the form attached as
Exhibit 1 hereto (“Release Agreement”), subject to applicable law in effect at the time of
execution, in accordance with the terms and timing set forth therein; and

(c)    you abide by the following restrictive covenant obligations:

(i)    Non-Disclosure Obligation: In order to facilitate your exposure and access to Confidential Information for purposes of carrying out your job duties on behalf of the Company and the Employer, you agree to treat and hold the Confidential Information in the strictest confidence. You further agree that, without the Company’s prior written consent, or as required by law, you will not provide copies of or otherwise disclose the Confidential Information to any person including, but not limited to, the media, any corporation, partnership, group, individual or other entity, except as required to carry out your job duties on behalf of the Company and the Employer. You further agree not to exploit or make use, directly or indirectly, of such Confidential Information without the express written consent of the Company, except to carry out your job duties on behalf of the Company and the Employer. You understand that this obligation survives beyond the termination of your employment.

(ii)    No Rights To Confidential Information: It is understood and
agreed that the disclosure of the Confidential Information by the Company and the Employer shall not grant you any express, implied or other license or rights to the Confidential Information, patents or trade secrets of the Company or any of its Affiliates, whether or not patentable, nor shall it constitute or be deemed to create a partnership, joint venture or other undertaking. Further, you agree not to remove or otherwise alter any of the trademarks or service marks, serial


numbers, logos, copyrights, notices or other proprietary notices or indicia, if any, fixed or attached to Confidential Information or any part thereof. You shall not reverse-engineer, decompile, attempt to derive independently, or disassemble any and all Confidential Information and technology disclosed during your employment and shall not remove, overprint or deface any notice of confidentiality, copyright, trademark, logo, legend or other notices of ownership or confidentiality from any originals or copies of Confidential Information.

(iii)    Return of Confidential Information: Upon the request of the Company at any time, you will cease using and return to the Company (or, to the extent agreed to in writing by the Company, delete) the Confidential Information and all copies, summaries and extracts thereof (including without limitation any notes, memoranda, notebooks, drawings, records, reports, files, documented source and object codes and other documents and all copies or reproductions of such materials) in your possession or under your control, whether prepared by you or others.

(iv)    Proprietary Rights and Assignment Agreement: You hereby confirm that: (i) you do not have any proprietary rights, including, without limitation, copyright or other right, relating to any idea, product or any other development of the Company or its Affiliates, and that all such respective rights belong exclusively to the Company and its Affiliates, and (ii) that all rights, title and interest in and to development and/or products, including, but not limited to, trade secrets, Confidential Information, know-how, patents and other rights in connection therewith developed by you or obtained by you from, for or on behalf of the Company or its Affiliates, or with the contribution of your efforts and created during the term of your relationship with the Company and its Affiliates, are hereby assigned to the Company, and shall be the sole and exclusive property of the Company and/or its applicable Affiliates. You shall execute all documents necessary to assign any patents to the Company and otherwise transfer such proprietary rights to the Company.

(v)    Non-Disparagement: You agree not to make statements to clients,
suppliers or other business partners of the parties released pursuant to the Release Agreement (“Released Parties”) or to other members of the public that are in any way disparaging or negative towards the Released Parties or their products and services.

(vi)    Injunctive Relief: Finally, you acknowledge that money damages would not be a sufficient remedy for any breach of the terms of Sections 2.1(b) or (c) and that the Company and its applicable Affiliates shall be entitled to injunctive relief, specific performance and/or any other appropriate equitable remedy, in addition to any other available legal remedies for any such breach, enforceable in a court of law.

(d)    Nothing in this Agreement (including but not limited to the contemplated release of claims, promise not to sue, acknowledgements, confidentiality, cooperation, non- disparagement, and return of property provisions in Section 2.1


of this Agreement and/or in Exhibit 1): (i) limits or affects your right to challenge the validity of this Release under the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act of 1990; (ii) prevents you from filing a charge or complaint with, providing documents or other information to, or participating in an investigation or proceeding conducted by, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Securities and Exchange Commission, or any other federal, state or local government agency; (iii) prevents you from exercising your rights under Section 7 of the National Labor Relations Act to engage in protected, concerted activity with other employees; or (iv) limits or affects any right you may have to receive a payment from a government agency (and not the Company) for information provided to such agency.

(e)    Notwithstanding your confidentiality and non-disclosure obligations under this Agreement or otherwise, as provided in the Federal Defend Trade Secret Act, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or to your attorney in connection with a lawsuit for retaliation for reporting a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public.

In addition, if prior to a Change in Control (i) your employment is terminated by the Employer for any reason (other than Just Cause or your death or Disability) or (ii) you terminate your employment following the occurrence of any event that would give rise to Good Reason, and you reasonably demonstrate that such termination or event giving rise to Good Reason, as the case may be, (a) occurred at the request of a Person who has indicated an intention or taken steps reasonably calculated to effect a Change in Control or (b) otherwise occurred in connection with, or in anticipation of, a Change in Control (whether or not a Change in Control actually occurs), then for all purposes of this Agreement the termination of your employment shall be deemed to have occurred immediately following a Change in Control. There shall be an irrebuttable presumption that (i) if your employment is terminated by the Employer for any reason (other than Just Cause or your death or Disability) within ninety (90) calendar days prior to the date of a Change in Control, or (ii) if you terminate your employment following the occurrence of an event that would give rise to Good Reason, which occurs within ninety (90) calendar days prior to the date of a Change in Control, your termination shall be deemed to be a Qualifying Termination. For purposes of subclause (a)(ii) above, to the extent permitted by Section 409A of the Code, you will still be considered to be an active employee if you are on sick leave, military leave or any other leave of absence approved by the Employer.

II.2     Amount of Severance Payment

(a)    If you become entitled to a Severance Payment under this Agreement, the
Company shall pay to you a lump sum payment equal to {ALTERNATIVES: [two (2)]
[three (3)]} times one year’s Annualized Compensation, plus an amount equal to your
Annual Bonus, divided by 12, and multiplied by the number of whole months during the


relevant bonus year in which you were employed for at least one day.

(b)    In the event that you become entitled to a Severance Payment under this
Agreement, such Severance Payment shall be in lieu of payments and benefits under any
other severance plan or arrangement, including, without limitation, the Kemper
Corporation Employee General Severance Pay Plan (the “Severance Plan”).


II.3     Limitation on Payments

(a)    Notwithstanding any other provisions of this Agreement, in the event that any
payment or benefit received or to be received by you (including any payment or benefit
received in connection with a Change in Control or the termination of your employment,
whether pursuant to the terms of this Agreement or any other plan, arrangement or
agreement) (all such payments and benefits, including the payments and benefits under
Sections 2.2 and 2.6 of this Agreement, being hereinafter referred to as “Total
Payments”) would be subject (in whole or part), to the excise tax imposed under Section
4999 of the Code (“Excise Tax”), then, after taking into account any reduction in the
Total Payments provided by reason of Section 280G of the Code in such other plan,
arrangement or agreement, the cash severance payments shall first be reduced, and the
noncash severance payments shall thereafter be reduced, to the extent necessary so that
no portion of the Total Payments is subject to the Excise Tax but only if the net amount
of such Total Payments, as so reduced (and after subtracting the net amount of federal,
state and local income taxes on such reduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions attributable to
such reduced Total Payments) is greater than or equal to the net amount of such Total
Payments without such reduction (but after subtracting the net amount of federal, state
and local income taxes on such Total Payments and the amount of Excise Tax to which
you would be subject in respect of such unreduced Total Payments and after taking into
account the phase out of itemized deductions and personal exemptions attributable to
such unreduced Total Payments). The Total Payments shall be reduced by the Employer
in its reasonable discretion in the following order: (A) reduction of any cash payment,
excluding any cash payment with respect to the acceleration of equity awards, that is
otherwise payable to you that is exempt from Section 409A of the Code, (B) reduction of
any other payments or benefits otherwise payable to you on a pro-rata basis or such other
manner that complies with Section 409A of the Code and (C) reduction of any payment
with respect to the acceleration of equity awards that is otherwise payable to you that is
exempt from Section 409A of the Code.

(b)    For purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or
enjoyment of which you shall have waived at such time and in such manner as not to
constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken
into account, (ii) no portion of the Total Payments shall be taken into account which, in
the written opinion of independent auditors of nationally recognized standing
(“Independent Advisors”) selected by the Company prior to a Change in Control, does
not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the
Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the


Excise Tax, no portion of such Total Payments shall be taken into account which, in the
opinion of Independent Advisors, constitutes reasonable compensation for services
actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of
the Base Amount (as defined in Section 280G(b)(3) of the Code) allocable to such
reasonable compensation, and (iii) the value of any non cash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the
Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code.

II.4     No Duty of Mitigation

The Company acknowledges that it would be very difficult and generally impracticable to determine your ability to, or extent to which you may, mitigate any damages or injuries you may incur by reason of the Change in Control. The Company has taken this into account in entering into this Agreement and, accordingly, the Company acknowledges and agrees that you shall have no duty to mitigate any such damages and that you shall be entitled to receive your entire Severance Payment regardless of any income which you may receive from other sources following your termination after any Change in Control.

II.5     Time of Severance Payment


The Severance Payment to which you are entitled shall be paid to you, in cash and in full,

{ ALTERNATIVES:

FOR EXECUTIVES WITH SEVERANCE AGREEMENTS AS OF JUNE 30, 2016 (“GROUP A”):

[on or as soon as practicable following the first day of the seventh month following your Separation from Service,]

FOR EXECUTIVES FIRST RECEIVING SEVERANCE AGREEMENTS AFTER JULY 1, 2016 (“GROUP B”):
[within the sixty-day period following your Separation from Service,] }

provided that the Release Agreement has been executed and returned to the Employer and any applicable revocation period has expired. If you should die before all amounts payable to you have been paid, such unpaid amounts shall be paid to your beneficiary under this Agreement or, if you have not designated such a beneficiary in writing to the Company, to the personal representative(s) of your estate as soon as possible following your death (and without regard to the timing set out in the first sentence of this Section 2.5).


II.6    Life and Health Insurance Coverage

If you are entitled to receive a Severance Payment under Section 2.1, the Company shall also provide you with the following additional benefits:



(a)    Life insurance coverage for you and your dependents, for a period of
{ ALTERNATIVES: [two (2)] [three (3)]} years following your termination of
employment, having a face amount at least equal to the greater of (i) the amount in effect
for you (in your case) and/or your dependents (in the case of your dependents)
immediately prior to the Change in Control, or (ii) the amount in effect for you (in your
case) and/or your dependents (in the case of your dependents) immediately prior to the
Date of Termination, such coverage to be provided under the same plan or plans under
which you (in your case) or your dependents (in the case of your dependents) were
covered immediately prior to the Change in Control (or Date of Termination, as
applicable) or substantially similar plan(s) established by the Company or any of its
Subsidiaries or Affiliates thereafter, and at no greater cost (“Active Employee Cost”) to
you (in your case) or your dependents (in the case of your dependents) than was imposed
pursuant to the plan(s) under which you (in your case) and/or your dependents (in the
case of your dependents) were covered immediately prior to the Change in Control (or
Date of Termination, as applicable), provided, however, that until the first day of the
seventh month following your Separation from Service, you shall pay the entire cost of
such coverage and shall be reimbursed by the Company for the difference between such
payments and the Active Employee Cost on or as soon as possible following the first day
of the seventh month following your Separation from Service. {ADDITIONAL
WORDING ONLY FOR GROUP B: Notwithstanding the foregoing, the requirement to
pay the cost of life insurance, followed by reimbursement by the Company on the first
day of the seventh month following your Separation from Service, shall only be
applicable to the extent the Company determines that the provision of a taxable benefit
under this Section 2.6(a) during the first six months following your Separation from
Service is not exempt from Code Section 409A by reason of the application of the
short-term deferral exemption and/or the separation pay plan exemption, found in
Treasury Regulation Section 1.409A-1(b)(4) and -1(b)(9)(iii), respectively.]}

(b)    You have the right to continue your health insurance coverage (including any
dental coverage) for you and your dependents under the same plan or plans under which
you were covered immediately prior to your termination of employment, upon your
payment of the applicable premium (as defined by Code section 4980B(f)(4)) for such
coverage (such continuation of health insurance coverage is referred to herein as
“COBRA Coverage”). The Company shall pay you, in accordance with the timing
specified in Section 2.5, as an addition to the lump sum payment called for under Section
2.2, an amount equal to the excess of (A) the amount payable as a monthly premium for
COBRA Coverage (assuming you were to elect COBRA Coverage) over (B) the monthly
amount paid by an active employee for the same coverage (both determined as of the date
of your termination of employment), multiplied by {ALTERNATIVES: [twenty-four
(24). ] [thirty-six (36).]} This payment represents generally the amount of the Company’s
subsidy of employee group health for you while employed (as a component of your total,
regular compensation), but the payment is an additional, taxable separation pay benefit,
and is not linked to or conditioned on your election of COBRA continuation coverage.

II.7    Outplacement Services

If you are entitled to receive a Severance Payment under Section 2.1, the Company shall


also provide you with a full range of outplacement services provided for up to fifty-two
(52) weeks by a reputable organization chosen by the Company. These outplacement
services will be paid for by the Company.

II.8    Withholding of Taxes

The Company or your Employer may withhold from any amounts payable under this Agreement all federal, state, city or other taxes required by applicable law to be withheld.

II.9    No Setoff

The Company’s obligation to make Severance Payments to you pursuant to this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, but not limited to, any setoff, counterclaim, recoupment, defense or other right which the Company or any of its Subsidiaries or Affiliates may have against you or others.

II.10    Benefits Under Other Plans

The benefits that you may be entitled to receive pursuant to Sections 2.6 and 2.7 of this Agreement are not intended to be duplicative of any similar benefits to which you may be entitled from the Company or any of its Subsidiaries or Affiliates under any other severance plan, agreement, policy or program maintained by the Company or any of its Subsidiaries or Affiliates. Accordingly, the benefits to which you are entitled under Sections 2.6 and 2.7 shall be reduced to take account of any other similar benefits to which you are entitled from the Company or any of its Subsidiaries or Affiliates.


ARTICLE III

OTHER RIGHTS AND BENEFITS NOT AFFECTED

III.1     Other Benefits

This Agreement does not provide a pension for you nor shall any payment hereunder be characterized as deferred compensation. Except as set forth in Sections 2.2(b) and 2.10, neither the provisions of this Agreement nor the Severance Payment and other amounts and benefits provided for hereunder shall reduce any amounts otherwise payable, or in any way diminish your rights as an employee, whether existing now or hereafter, under any benefit, incentive, retirement, equity-based award, stock purchase plan or any employment agreement or other plan or arrangement not related to severance. Any such other amounts or benefits payable shall be included, as necessary, for making any of the calculations required under Section 2.3.

III.2     Employment Status

This Agreement does not constitute a contract of employment or impose on you any obligation to remain in the employ of the Employer, nor does it impose on the Company or any of its Subsidiaries or Affiliates any obligation to retain you in your present or any other position, or to change the status of your employment as an employee at will. Nothing in this Agreement shall


in any way require the Company or any of its Subsidiaries or Affiliates to provide you with any severance benefits prior to a Change in Control (except that the foregoing shall not modify the second and third sentences of Section 2.1), nor shall this Agreement ever be construed in any way as establishing any policies or requirements of the Company or any of its Subsidiaries or Affiliates for the termination of your employment or the payment of severance benefits to you if your employment terminates prior to a Change in Control, nor shall anything in this Agreement in any way affect the right of the Company or any of its Subsidiaries or Affiliates in its absolute discretion to change prior to a Change in Control one or more benefit plans, including but not limited to pension plans, dental plans, health care plans, savings plans, bonus plans, vacation pay plans, disability plans, and the like.


ARTICLE IV

SUCCESSOR TO COMPANY

The Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, expressly and unconditionally to assume and agree to perform the Company’s obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place. In such event, the term “Company,” as used in this Agreement, shall mean the Company as herein before defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of this Agreement.


ARTICLE V

LEGAL FEES AND EXPENSES


The Company shall pay as they become due {ADDITIONAL WORDING ONLY FOR GROUP A: [,but no sooner than the first day of the seventh month following your Separation from Service,]} all legal fees, costs of arbitration and other expenses incurred in good faith by you as a result of the Company’s refusal or failure to make the Severance Payment and/or other amounts and benefits to which you become entitled under this Agreement, as a result of the Company’s contesting the validity, enforceability or interpretation of this Agreement or of your right to benefits hereunder. A determination as to whether or not you have acted in good faith shall be determined by the arbitrator based on the facts and circumstances presented in the arbitration.


ARTICLE VI

ARBITRATION

In lieu of litigation, any dispute or controversy arising under or in connection with this Agreement not otherwise resolved through the claims procedure set forth in Section 7.12 shall be settled by arbitration, consistent with the arbitration agreement currently in effect by separate


agreement with you and the Employer, as that may be modified from time to time. In the event such arbitration agreement is determined to be inapplicable or unenforceable hereunder or if no such arbitration agreement is then in effect, you agree to arbitrate any dispute related to this Agreement, that this Agreement provides sufficient consideration for that obligation, and that the following terms and conditions shall apply to any such arbitration hereunder: The arbitration shall be conducted before a panel of three arbitrators sitting in a location selected by you within fifty (50) miles from the location of your job with the Employer immediately prior to the Change in Control (determined without regard to any relocation thereof which would give rise to Good Reason), in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the award of the arbitrator in any court having jurisdiction. All expenses of such arbitration, including the fees and expenses of your counsel, shall be borne, and paid as incurred, by the Company, {ADDITIONAL WORDING ONLY FOR GROUP A: [but not earlier than the first day of the seventh month following your Separation from Service,]} provided that the Company shall only be required to pay your fees and expenses if they are incurred in good faith. You shall be conclusively presumed to have acted in good faith unless and until the arbitrator makes a final determination to the contrary. Notwithstanding any provision of this Agreement to the contrary, you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. Nothing in this Article VI limits the Company’s rights to enforce the terms and conditions of the covenant obligations set forth in Section 2.1(b) and (c) in a court of law.



ARTICLE VII

MISCELLANEOUS

VII.1     Applicable Law

To the extent not preempted by the laws of the United States and in the interest of interpreting this Agreement in a uniform manner with other similar agreements being entered into by the Company with other of its and its Subsidiaries’ and Affiliates’ employees regardless of the jurisdiction in which you are employed or any other factor, the laws of the State of Illinois shall be the controlling law in all matters relating to this Agreement, regardless of the choice-of-law rules of the State of Illinois or any other jurisdiction.

VII.2     Construction

No term or provision of this Agreement shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this Agreement and any present or future statute, law, ordinance, or regulation contrary to which the parties have no legal right to contract, the latter shall prevail, but in such event the affected provision of this Agreement shall be curtailed and limited only to the extent necessary to bring such provision within the requirements of the law.

VII.3     Severability



If a provision of this Agreement shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Agreement and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

VII.4     Headings

The Section headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit, or extend or interpret the scope of this Agreement or of any particular Section.
VII.5     Termination Procedures

(a)    Notice of Termination. After a Change in Control and during the Term, any
purported termination of your employment (other than by reason of death) shall be
communicated by a written Notice of Termination from the Employer to you or by you to
the Employer in accordance with Section 7.10 hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of your employment under
the provision so indicated. Further, a Notice of Termination for Just Cause is required to
include a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board of Directors at a meeting of
such Board of Directors which was called and held for the purpose of considering such
termination (after reasonable notice to you and an opportunity for you, together with your
counsel, to be heard before such board of directors) finding that, in the good faith opinion
of such Board of Directors, you were guilty of conduct set forth in clause (i) or (ii) of the
definition of Just Cause herein, and specifying the particulars thereof in detail.

(b)    Date of Termination. “Date of Termination,” with respect to any purported
termination of your employment after a Change in Control and during the Term, shall
mean (i) if your employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to the full-time
performance of your duties during such thirty (30) day period), and (ii) if your
employment is terminated for any other reason, the date specified in the Notice of
Termination (which, in the case of a termination by the Company, shall not be less than
thirty (30) days (except in the case of a termination for Just Cause) and, in the case of a
termination by you, shall not be less than fifteen (15) days nor more than sixty (60) days,
respectively, from the date such Notice of Termination is given).

VII.6     Assignability

Neither this Agreement nor any right or interest therein shall be assignable or transferable (whether by pledge, grant of a security interest, or otherwise) by you, your beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns, and you and shall be enforceable by them and your legal personal representatives.

VII.7     Entire Agreement



This Agreement constitutes the entire agreement between the Company and you regarding the subject matter hereof and supersedes all prior agreements, if any, understandings and arrangements, written or oral, between the Company and you with respect to the subject matter hereof.

VII.8     Term

The term of this Agreement (“Term”) shall commence on the date set forth on page one and shall continue in effect through December 31 of this year; provided, however, that commencing on each January 1 thereafter, the Term shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or you shall have given notice not to extend the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change in Control occurred. If you become entitled to Severance Payments hereunder, this Agreement shall continue and be effective until you (or the person(s) specified in Section 2.5) shall have received in full all Severance Payments and other benefits to which you are entitled under this Agreement, at which time this Agreement shall terminate for all purposes.

VII.9     Amendment

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and the Company. No waiver by the Company or you at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreement or representations, written or oral, express or implied, with respect to the subject matter hereof, have been made by either party which are not expressly set forth in this Agreement.

VII.10     Notices

For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given upon delivery when personally delivered or sent by a recognized overnight courier service in writing, addressed to the respective addresses last given by each party to the other, provided that all notices to the Company or the Employer shall be directed to the attention of the Board of Directors with a copy to the General Counsel of the Company. No objection to the method of delivery may be made if the written notice or other communication is actually received.

VII.11     Administration

The Company has entered into agreements similar to this Agreement herein with other employees of the Company and its Subsidiaries and Affiliates. These agreements, taken together, constitute a welfare benefit plan within the meaning of Section 3(1) of ERISA. The Administrator of such plan, within the meaning of Section 3(16) of ERISA, and the Named Fiduciary thereof, within the meaning of Section 402 of ERISA, is the Company.



VII.12 Claims

If you believe you are entitled to a benefit under this Agreement, you may make a claim for such benefit by filing with the Company a written statement setting forth the amount and type of payment so claimed. The statement shall also set forth the facts supporting the claim. The claim may be filed by mailing or delivering it to the Secretary of the Company. Within ninety (90) calendar days after receipt of such a claim, the Company shall notify you in writing of its action on such claim and if such claim is not allowed in full, shall state the following in a manner calculated to be understood by you:
(a)    The specific reason or reasons for the denial;

(b)    Specific reference to pertinent provisions of this Agreement on which the denial is
based;

(c)    A description of any additional material or information necessary for you to be
entitled to the benefits that have been denied and an explanation of why such material or
information is necessary; and

(d)    An explanation of this Agreement’s claim review procedure.

If you disagree with the action taken by the Company, you or your duly authorized representative may apply to the Company for a review of such action. Such application shall be made within sixty (60) calendar days after receipt by you of the notice of the Company’s action on your claim. The application for review shall be filed in the same manner as the claim for benefits. In connection with such review, you may inspect any documents or records pertinent to the matter and may submit issues and comments in writing to the Company. A decision by the Company shall be communicated to you within sixty (60) calendar days after receipt of the application (unless special circumstances require an extension of time, but in no event more than one hundred and twenty (120) days after such receipt). The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by you, and specific references to the pertinent provisions of this Agreement on which the decision is based.

VII.13 Individual Severance Agreement

This Agreement constitutes an individual severance agreement for purposes of the Severance Plan. Accordingly, you will not be eligible to receive any severance payments or other benefits under the Severance Plan if you are entitled to benefits under this Agreement.

{ALTERNATIVES:
FOR GROUP A:
VII.14 [409A Compliance

(a)    This Agreement shall be interpreted and administered in a manner so that all
amounts and/or benefits payable or provided hereunder shall be paid or provided in a
manner that is compliant with Code section 409A, including, specifically, the
requirement to delay certain payments to you during the first six months following your
Separation from Service, and to pay all amounts at a fixed time or on a fixed or


permissible schedule in relationship to the date of your Separation from Service.

(b)    Notwithstanding anything in this Agreement to the contrary, to the extent that the
requirements of Code section 409A apply to any amount or benefit that would otherwise
be payable or distributable hereunder by reason of your termination of employment, such
amount or benefit will not be payable or distributable to you by reason of such
circumstance unless the circumstances giving rise to such termination of employment
constitute a Separation from Service.

(c)    Notwithstanding anything in this Agreement to the contrary, if any amount or
benefit is nonqualified deferred compensation for purposes of Code section 409A that
would otherwise be payable or distributable under this Agreement by reason of your
Separation from Service, then, subject to any permissible acceleration of payment by the
Company under Treas. Reg. section 1.409A-3(j)(4)(ii) (domestic relations order),
(j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(i)    If the payment or distribution is payable in a lump sum, your right to
receive payment or distribution of such non-exempt deferred compensation will
be delayed until the earlier of your death or the first day of the seventh month
following your Separation from Service; and

(ii) If the payment or distribution is payable over time, the amount of such non-
exempt deferred compensation that would otherwise be payable during the six-
month period immediately following your Separation from Service will be
accumulated and your right to receive payment or distribution of such
accumulated amount will be delayed until the earlier of your death or the first day
of the seventh month following your Separation from Service, whereupon the
accumulated amount will be paid or distributed to you on such date and the
normal payment or distribution schedule for any remaining payments or
distributions will resume.

(d)    With regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits that are not exempt from Code section 409A, (i) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or exchange for
another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits, provided during any of your taxable years shall not affect the expenses eligible
for reimbursement, or in-kind benefits to be provided, in any of your other taxable years,
provided that the foregoing clause (ii) shall not be violated with regard to expenses
reimbursed under any arrangement covered by Code section 105(b) solely because such
arrangement provides for a limit on the amount of expenses that may be reimbursed over
some or all of the period the arrangement is in effect, and (iii) such payments shall be
made on or before the last day of your taxable year following the taxable year in which
the expenses was incurred.]

FOR GROUP B:
[409A Exemption

(a)    All cash payments and all taxable benefits provided for under this Agreement are


intended to be exempt from Code section 409A by reason of the short-term deferral
exemption and/or the separation pay plan exemption, found in Treasury Regulation
Section 1.409A-1(b)(4) and -1(b)(9)(iii), respectively, and shall be interpreted and
administered to the maximum extent permissible so as to comply in all regards with the
aforementioned exemptions.

(b)    In the event any portion of the cash payments and/or taxable benefits provided for
under this Agreement are determined to be outside the scope of the regulatory exemptions
referred to in the preceding paragraph, such payments and benefits shall be paid or
provided following the time or schedule measured by reference to your Separation from
Service, and shall not be paid or provided during the first six months following your
Separation from Service (with payments otherwise payable during such period to be paid
on the first day of the seventh month following your Separation from Service).]}

If this Agreement is acceptable to you, please sign the enclosed copy of this Agreement in the space provided below and return it to me.



Sincerely,



______________________________
Joseph P. Lacher, Jr.
Chief Executive Officer





ACCEPTED AND AGREED TO:



By: ________________________________
[Executive]























EXHIBIT 1

General Release Agreement

This General Release Agreement (“Release Agreement”) is made between [NAME] (“Employee”) and [EMPLOYER NAME AT TIME OF SIGNATURE], for itself and on behalf of all of its affiliates (collectively, “Employer”), on the date last written below.

BACKGROUND

Employee is party to a letter agreement providing for severance and other benefits in connection with a change in control of Kemper Corporation, dated [DATE] (“Severance Agreement”), which provides that certain benefits will be provided subject to certain terms and conditions, including the execution of this General Release Agreement.
TERMS AND CONDITIONS

In consideration of their mutual promises and undertakings described in the Severance Agreement (incorporated herein by reference) and those described below, Employee and Employer agree as follows:
1. Employment Responsibilities End. Employee’s employment by Employer {ALTERNATIVES: [shall end] [ended]} at the close of business on [DATE] (“Termination Date”). Employee no longer will be authorized to transact business or incur any expenses, obligations and liabilities on behalf of the Employer after the Termination Date. Employee agrees not to seek reinstatement, future employment, or other working relationship with the Employer or any of its affiliates. Employee acknowledges and represents: (a) Employee has reported to the Employer any and all work-related injuries incurred during employment; (b) the Employer properly provided any leave of absence because of Employee’s or a family member’s health condition and Employee has not been subjected to any improper treatment, conduct or actions due to a request for or taking such leave; and (c) Employee had the opportunity to provide the Employer with written notice of any and all concerns regarding suspected ethical and compliance issues or violations on the part of the Employer or any Released Party (as defined below), and to report to the Employer any complaints, claims, or actions filed against the Employer or any Released Party, subject to the provisions of the second and third paragraphs of Section 4 below.



Employee further agrees that Employee has been paid all wages, benefits, and other compensation owed to Employee by Employer through the Termination Date, subject to the obligation of Employer for the payment of salary at Employee’s current base rate through the Termination Date and all paid time off (PTO), if any, that will be accrued but unpaid on the Termination Date. Any such accrued and unpaid PTO will be paid to Employee no later than the next regularly scheduled payday after the Termination Date. Employee agrees that Employee is not entitled to any additional or future compensation or benefits other than compensation and benefits provided under the Severance Agreement and/or compensation and benefits, if any, arising under the retirement, welfare benefits, bonus and equity compensation plans of Kemper Corporation to which Employee may be entitled by virtue of Employee’s employment with Employer, subject in all cases to the terms and conditions of the plans and agreements governing such compensation and benefits. Without limitation to the above, Employee acknowledges and agrees that Employee is not entitled to any severance pay pursuant to the Severance Plan.

2. Unemployment Claims. Employer expressly agrees that the release language in Section 4 below shall not prevent Employee from applying for unemployment benefits to which Employee may be entitled under applicable law.

3. Confidentiality and Return of Property.
(a) Employee acknowledges that the covenant obligations in paragraph 2.1 (b) and (c) of the Severance Agreement survive his or her discharge and remain in full force and effect.
(b) Employee agrees to return to Employer all Employer credit cards, identification cards, access cards and keys to Employer’s properties or facilities that Employee may have in her possession. Employee shall return any and all Employer confidential files and all Employer confidential and proprietary information that Employee may have in his or her possession. Employee shall also return any and all of Employer’s property, including but not limited to, computer equipment, peripherals, printers, and company vehicles.

4. Consideration to Employer - Release of Claims and Agreement Not to Sue. Except as stated below, Employee hereby forever releases, discharges and holds harmless Employer and its respective parent company, subsidiaries, affiliates, predecessors, successors and assigns, and their officers, directors, shareholders, principals, employees, insurers, and agents (“the Released Parties”) from any claim or cause of action whatsoever which Employee either has or may have against Employer resulting from or arising out of or related to Employee’s employment by Employer, or the termination of that employment, including any claims or causes of action Employee has or may have pursuant to the Age Discrimination in Employment Act (“ADEA”); the Older Workers Benefit Protection Act of 1990 (“OWBPA”); Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991; the Americans with Disabilities Act; the Rehabilitation Act of 1973; the Family and Medical Leave Act of 1993; the Illinois Human Rights Act; the Employer Retirement Income Security Act of 1974; and any other law or regulation of any local, state or federal jurisdiction.
This release does not apply to any claims or rights that may arise after the date that Employee signs this Release Agreement, or relate to the consideration for this Release Agreement, vested rights under the Employer’s employee benefit plans as applicable on the date


Employee signs this Release Agreement, or any claims that the controlling law clearly states may not be released by private agreement. Furthermore, this release does not waive any rights Employee might have to indemnification as a corporate officer pursuant to Kemper Corporation’s certificate of incorporation and bylaws, applicable benefit plan documents, or by applicable statutory or common law.

Nothing in this Release Agreement (including but not limited to the release of claims, promise not to sue, Employee acknowledgements, confidentiality, cooperation, non-disparagement, and return of property provisions): (a) limits or affects Employee’s right to challenge the validity of this release under the ADEA or the OWBPA; (b) prevents Employee from filing a charge or complaint with, providing documents or other information to, or participating in an investigation or proceeding conducted by, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Securities and Exchange Commission or any other federal, state or local government agency; or (c) prevents Employee from exercising his or her rights under Section 7 of the National Labor Relations Act to engage in protected, concerted activity with other employees, although by signing this Release Agreement Employee is waiving his or her right to recover any individual relief (including any backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by or on behalf of Employee, except for any right Employee may have to receive a payment from a government agency (and not the Employer) for information provided to such agency, or other waiver prohibited by applicable law.

Other than an arbitration action for breach of this Release Agreement, Employee expressly acknowledges that if Employee files any claim or lawsuit in a court or arbitration proceeding regarding any matter described in this Release Agreement, Employer may be entitled to recover from Employee some or all money paid under this Release Agreement, and if Employer prevails, Employee agrees to pay attorneys’ fees and costs incurred in defending against such action, to the extent permitted by law.

Notwithstanding Employee’s confidentiality and non-disclosure obligations under this Release Agreement or otherwise, as provided in the Federal Defend Trade Secret Act, Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or to Employee’s attorney in connection with a lawsuit for retaliation for reporting a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public.

5. No Admission of Liability. Nothing in this Release Agreement shall be construed to be an admission of liability by Employer and its respective parent company, subsidiaries, affiliates, predecessors, successors and assigns, and their officers, directors, shareholders, principals, employees, insurers, and agents for any alleged violation of any of Employee’s statutory rights or any common law duty imposed upon Employer.

6. Adequate Consideration. Employee agrees that the consideration provided for in the Severance Agreement is above and beyond any amounts already owed to Employee and is adequate consideration for all promises and releases contained in this Release Agreement.



7. Non-waiver. The waiver by either party of a breach of any provision of this Release Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision of this Release Agreement.

8. Notices. Any notices required or permitted to be given under this Release Agreement shall be deemed to have been duly given upon delivery when personally delivered or sent by a recognized overnight courier service in writing to Employee’s residence as last shown on Employer’s employment records, in the case of Employee, or to [EMPLOYER NAME AND CONTACT TITLE AND ADDRESS AT TIME OF SIGNATURE], in the case of Employer.

9. Successors and Assigns. Except as otherwise provided in specific provisions above, this Release Agreement shall be binding upon and inure to the benefit of Employee, Employee’s spouse, Employee’s heirs, executors, administrators, designated beneficiaries and upon anyone claiming under Employee or Employee’s spouse, and shall be binding upon and inure to the benefit of Employer and its successors and assigns. Employee warrants and represents that, except as provided herein, no right, claim, cause of action or demand, or any part thereof, which Employee may have arising out of or in any way related to Employee’s employment with Employer, has been or will be assigned, granted or transferred in any way to any other person, entity, firm or corporation, in any manner, including by subrogation or by operation of marital property rights.

10. Severability. If a court or other body of competent jurisdiction should determine that any term or provision of this Release Agreement is invalid or unenforceable, such term or provision shall be reformed rather than voided, if possible, in accordance with the purposes stated in this Release Agreement and with applicable law, and all other terms and provisions of this Release Agreement shall be deemed valid and enforceable to the extent possible.

11. Oral Agreements; Applicable Law. The parties acknowledge that there are no oral agreements or understandings that conflict with, modify, supplement or supersede the terms and conditions of this Release Agreement. This Release Agreement shall be construed under the laws of the State of Illinois applicable to contracts entered into and to be performed in the State of Illinois.

12. Representations and Warranties. By signing below, the Employee represents and warrants that Employee has been advised in writing to consult with an attorney before signing this Release Agreement, and Employee has had the opportunity to do so if desired. Employee acknowledges that this Release Agreement has been delivered to Employee on [DATE] and understands that Employee has up to twenty-one (21) days following such date to sign and return this Release Agreement to Employer. Employee agrees that any changes made to this Release Agreement do not restart the running of the 21-day period.

The Employee further acknowledges and understands that some portions of the payments and/or benefits described in the Severance Agreement and this Release Agreement, are the consideration to the Employee for waiving rights under the ADEA referenced in Section 4 and for Employee’s obligations described in Section 3.



Finally, Employee understands that Employee has the right within seven (7) days of the signing of this Release Agreement to revoke Employee’s waiver of rights to claim damages under the ADEA. If Employee does revoke that waiver within the seven (7) day period, the Release Agreement shall be null and void.

Any such revocation must be in writing and in delivered to Employer in compliance with the notice provisions of Section 8 no later than the seventh day after execution of this Release Agreement.

13. Employee Cooperation and Assistance. Employee agrees to cooperate fully with Employer in the defense or prosecution of any lawsuits, arbitrations, or any other types of proceedings, and in the preparation of any response to any examination or investigation by any government entity or agency, and with respect to any other claims or matters (all such lawsuits, arbitrations, proceedings, examinations, investigation, claims and matters being collectively referred to as “Proceedings”), arising out of or in any way related to the policies, practices, or conduct of Employer and its affiliates during the time Employee was employed by Employer, and shall testify fully and truthfully in connection therewith. In addition, Employee agrees that, upon reasonable notice, Employee will participate in such informal interviews by counsel for Employer as may be reasonably necessary to ascertain Employee’s knowledge concerning the facts relating to any such Proceedings, and to cooperate with such counsel in providing testimony whether through deposition or affidavit in any such Proceeding.

Employee agrees to immediately notify Employer if he or she is served with legal process to compel her to disclose any information related to either his or her employment with Employer or information regarding one or more of its affiliates, unless prohibited by law. Employee further agrees to immediately notify Employer if he or she is contacted regarding any legal claim or legal matter related to her employment with Employer, unless prohibited by applicable law.

Caution: This Release Agreement includes a release of certain specified rights. Employer hereby advises Employee to read it and to consult with an attorney prior to signing it.


TO EVIDENCE THEIR AGREEMENT, the parties have executed this document as of the date last written below.

[EMPLOYEE NAME] [EMPLOYER NAME AT TIME OF EXECUTION]


By:
[OFFICER NAME]



Dated: Dated:















ATTACHMENT A

Seven Day Right to Revocation

Acknowledgment Form

I, [EMPLOYEE NAME], hereby acknowledge that [EMPLOYER NAME AT TIME OF EXECUTION] tendered a General Release Agreement offer which I voluntarily agreed to accept on___________, 20___ a date at least seven days prior to today’s date.

I certify that seven calendar days have elapsed since my voluntary acceptance of this above-referenced offer (i.e. seven days have elapsed since the above date), and that I have voluntarily chosen not to revoke my acceptance of the above-referenced General Release Agreement.

Signed this ___ day of ________________, 20__


Employee Signature


Exhibit 31.1
CERTIFICATIONS
I, Joseph P. Lacher, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Kemper Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 

Date: August 5, 2024
/s/    JOSEPH P. LACHER, JR.
Joseph P. Lacher, Jr.
President and Chief Executive Officer

Exhibit 31.2
CERTIFICATIONS
I, Bradley T. Camden, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Kemper Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 

Date: August 5, 2024
/s/    BRADLEY T. CAMDEN
Bradley T. Camden
Executive Vice President and Chief Financial Officer


Exhibit 32.1
Certification of CEO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Kemper Corporation (the “Company”) for the quarterly period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Joseph P. Lacher, Jr., as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/    JOSEPH P. LACHER, JR.
Name: Joseph P. Lacher, Jr.
Title: President and Chief Executive Officer
Date: August 5, 2024

Exhibit 32.2
Certification of CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Kemper Corporation (the “Company”) for the quarterly period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Bradley T. Camden, as Executive Vice President and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/    BRADLEY T. CAMDEN
Name: Bradley T. Camden
Title: Executive Vice President and Chief Financial Officer
Date: August 5, 2024