KEMPER (KMPR) risk factors, FY2025 10-K

Risks Relating to Estimating Property and Casualty Insurance Losses and Loss Adjustment Expenses and Catastrophes

1. 01Estimating losses and LAE for determining property and casualty insurance reserves is inherently uncertain, and the Company’s results of operations may be materially impacted if the Company’s insurance reserves are insufficient
2. 02If the Company is unable to charge competitive yet profitable rates to its customers, the Company’s business, results of operations and financial condition could be materially and adversely affected
3. 03Catastrophe losses could materially and adversely affect the Company’s results of operations, liquidity and/or financial condition
4. 04Changes in the availability and cost of catastrophe reinsurance and in the ability of reinsurers to meet their obligations could result in Kemper’s insurance subsidiaries retaining more risk and could adversely and materially affect the Company’s results of operations, financial condition and/or liquidity
5. 05The extent to which Kemper’s insurance subsidiaries can manage their catastrophe exposure through underwriting strategies may be limited by law or regulatory action and could adversely and materially affect the Company’s results of operations, financial condition and/or liquidity

Risks Relating to Estimating Life Insurance Reserves

1. 06Estimating future policyholder benefits for determining life insurance reserves is inherently uncertain, and the Company’s results of operations may be materially impacted if the Company’s Life Insurance Reserves are insufficient

Risks Relating to Competition

1. 07A downgrade in the ratings of Kemper or its insurance subsidiaries below A- could materially and adversely affect the Company
2. 08The insurance industry is highly competitive, making it difficult to grow profitability within the expectations of investors30% rewritten
3. 09The inability to compete effectively in any of the Company’s insurance businesses could materially reduce the Company’s customer base and revenues and could materially and adversely affect the future results and financial condition of the Company

Risks Relating to Legal and Regulatory Environment

1. 10Kemper’s insurance subsidiaries are subject to significant regulation, and the evolving legal and regulatory landscape in which they operate could result in increased operating costs, reduced profitability and limited growth
2. 11Kemper has a significant concentration of personal automobile insurance business in California and Florida, and the regulatory, legal, competitive, or economic conditions in these states (as well as negative developments in any of these conditions) may adversely affect the Company’s profitability54% rewritten
3. 12Legal and regulatory proceedings are unpredictable and could produce one or more unexpected outcomes that could materially and adversely affect the Company’s financial results for any given period
4. 13Changes in the availability of insurance coverage or in the ability of insurers to meet their obligations could result in the Company being exposed to significant losses28% rewritten
5. 14The Company could be adversely affected by future changes in U.S. Federal or Bermuda income tax laws
6. 15If our controls designed to ensure compliance with guidelines, policies and legal and regulatory standards are not effective, the Company could be adversely affected

Risks Relating to Security of Personal Data, Availability of Critical Systems, and Technology Initiatives

1. 16Failure to protect against cyber attacks or other exposures that compromise data, including personal data, held by the Company could result in business interruption, legal and consulting fees, regulatory penalties, litigation, lost business, reputational harm, and other liabilities and expenses
2. 17Kemper’s business operations rely on third parties, which are inherently prone to technology and cybersecurity risks outside of our direct control
3. 18Cybersecurity events, business interruptions or other exposures may cause potential deterioration in Kemper’s reputation with an adverse impact on the Company’s financial condition or results of operations
4. 19Failure to maintain the availability of critical systems could result in business interruption, lost business, reputational harm, penalties and other costs
5. 20If Kemper is unable to send or accept electronic payments, our business and financial results could be adversely affected
6. 21Technology initiatives could present significant economic and competitive challenges to the Company. Failure to complete and implement such initiatives in a timely manner could result in the loss of business and incurrence of internal use software development costs that may not be recoverable

Risks Relating to Investments

1. 22The Company’s investment portfolio is exposed to a variety of risks that may negatively impact net investment income, the change in fair value of equity and convertible securities and cause realized and unrealized losses
2. 23The Company maintains a diversified investment portfolio that is exposed to significant financial and capital market risks, including interest rate (risk-free and spread), equity price, and liquidity, as well as risks from changes in tax laws and regulations and other risks from changes in general economic conditions
3. 24The determination of the fair values of the Company’s investments and whether a decline in the fair value of an investment is other-than-temporary are based on management’s judgment and may prove to be materially different than the actual economic outcome37% rewritten
4. 25judgment in measuring fair value. The assumptions used by management to measure fair values could turn out to be different than the actual amounts that may be realized in an orderly transaction with a willing market participantNew

Risks Relating to Servicing Debt, Paying Dividends and/or Funding Targeted Transactions

1. 26The ability of Kemper to service its debt, pay dividends to its shareholders and/or fund targeted transactions may be materially impacted by lack of timely and/or sufficient dividends received from its subsidiaries
2. 27The expected benefits and synergies from mergers, acquisitions, divestitures, and/or other strategic initiatives may not be realized to the extent anticipated or within the anticipated time frames

Risks Relating to General Economic and Market Factors

1. 28Changes in the global economy and capital markets could adversely impact the Company’s results of operations and financial condition
2. 29The Company’s recognized value of goodwill could become impaired which would adversely impact the Company’s results of operations and financial conditionNew
3. 30The Company’s deferred tax assets could become impaired which would adversely impact the Company’s results of operations and financial condition