AM Best Upgrades Credit Ratings of Kemper Corporation, Its Affiliates and Subsidiaries

AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “a” from “a-” of the property/casualty subsidiaries and affiliated insurance companies of Kemper Corporation (Kemper Corp.) [NYSE: KMPR], collectively referred to as Kemper Property & Casualty Group (Kemper P&C). AM Best also has upgraded the FSR to A (Excellent) from A- (Excellent) and the Long-Term ICRs to “a” from “a-” of Kemper Corp.’s life/health subsidiaries, collectively referred to as Kemper Life & Health Group (Kemper L&H) (Chicago, IL). Concurrently, AM Best has upgraded the Long-Term ICR and the Long-Term Issue Credit Ratings (Long-Term IR) to “bbb” from “bbb-” and upgraded the indicative Long-Term IRs of Kemper Corp., the ultimate parent, headquartered in Chicago, IL. AM Best also has upgraded the Long-Term ICR and Long-Term IR to “bbb” from bbb-” of Infinity Property and Casualty Corporation (Infinity) (headquartered in Birmingham, AL). The outlooks of these Credit Ratings (ratings) have been revised to stable from positive. See below for a detailed listing of all companies and ratings.

The Kemper P&C ratings reflect its balance sheet strength, which AM Best categorizes strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect that Kemper P&C has consistently maintained risk-adjusted capitalization measuring at the strongest level in recent years, even while paying significant shareholder dividends. The group’s loss reserves have generally developed favorably over time. The group has demonstrated an ability to generate organic surplus growth through investment earnings and fee & service revenue, which was enhanced in recent years by profitable underwriting performance. The balance sheet strength is moderated by the payment of shareholder dividends, which have contributed to a decline in policyholders’ surplus over the past five years. The group’s invested assets produce above-average returns, but have a higher risk profile than peers, with above-average allocations to below-investment grade bonds and to limited partnerships and similar instruments. These risks are well-managed, and are supported by the current capital levels.