Kemper Corporation faced a tough end to 2025, reporting a net loss of $8 million for the fourth quarter. The Chicago-based insurer missed expectations by a large margin, as it struggled with higher claim costs and changes in leadership. The loss translated to 13 cents per share, contrasting sharply with analysts’ hopes for a profit.
Analysts had expected the company to earn 90 cents per share, but Kemper’s adjusted earnings came in at only 25 cents. Revenue also fell short, coming in at $1.13 billion versus forecasts of $1.19 billion. Following the news, Kemper’s stock dropped nearly 5%, closing at $36.65.
This poor performance stands in stark contrast to the same period last year, when the company posted a net income of $97.4 million, or $1.51 per share. The change highlights some serious challenges Kemper is currently facing.
Interim CEO Tom Evans, who stepped in after former CEO Joseph Lacher left in October 2025, admitted on the earnings call that the results were disappointing. He emphasized the company’s efforts to address these issues through better pricing, claims handling, and reducing expenses.
One big factor was rising claim severity, particularly for bodily injuries in California. Another hit came from Florida, where Kemper had to issue a $35 million refund due to state rules that require insurers to return excess profits to policyholders if they exceed certain thresholds. This refund contributed to a $55.4 million drop in total revenue. Florida’s 2023 tort-reform laws have made refunds like this more common, and state Insurance Commissioner Michael Yaworsky hinted that other insurers might face similar requirements soon.
The Specialty Property & Casualty segment also saw a sharp decline in operating income, falling from $101.2 million last year to just $2.6 million. This was accompanied by a jump in the combined ratio, a key measure of underwriting profitability, from 91.4% to 110%. The Life Insurance segment wasn’t spared either, with income dropping due to worse-than-expected mortality experience.
To turn things around, Kemper is focusing on cutting costs and improving operations. The company recorded $15.5 million in restructuring charges but has already locked in about $33 million in annual savings. They’re also trying out new technology to reduce legal costs by cutting down on attorney involvement.
Kemper is testing a new personal auto insurance product in Arizona and Oregon that looks promising. Early signs suggest it makes the company much more competitive, and talks are underway to roll it out in Florida and Texas soon.
Despite the challenges, Kemper’s book value per share increased 5% compared to last year, reaching $45.71. The company also finished 2025 with over $1 billion in liquidity, giving it some financial cushion as it works through these difficulties.