Kemper Exiting Preferred Lines, Refocuses on Specialty Insurance

Kemper Corporation announced it will wind down its preferred personal insurance business to concentrate more resources on its specialty auto and life insurance units. The Illinois-based insurer said it will immediately begin non-renewing and canceling all policies issued under its Kemper Personal Insurance brand.

The preferred home and auto policies represent about $500 million in annual premiums written across eight underwriting companies. Kemper put the business under strategic review last November to evaluate its options.

“The decision to exit the business was made after thoughtful evaluation of our options and considered the most effective and efficient way to support our stakeholders,” said Kemper CEO Joseph P. Lacher Jr.

Shutting down the preferred personal lines allows Kemper to free up capital and increase support for its core operations in specialty auto insurance and life insurance. Kemper Auto focuses on non-standard auto customers, while its life insurance business offers products for high-net-worth individuals.

The exit comes after Kemper took a $45.5 million goodwill impairment charge related to the preferred business in Q4 2022. That non-cash charge reflected reduced expectations for future earnings power.

Winding down the preferred policies will have no impact on Kemper’s specialty auto unit or its life insurance division. Only the Kemper Personal Insurance branded offerings are being discontinued.

The move represents a strategic shift for Kemper to narrow its focus on specialty commercial lines and life insurance products. Shedding the preferred book should improve its risk profile and operating leverage. Kemper will work to ensure an orderly exit that complies with all state regulations on notification and transition timelines.