Kemper Corporation (NYSE:KMPR) Q4 2022 Earnings Call Transcript

Joseph Lacher: I’m going to answer it in sort of 2 ways, and then I’ll let Matt offer some comments, too. That’s not making us rethink our strategy because you haven’t outlined our entire set of tactics at this point. We filed for that 6.9% that was approved, some time ago. We have since filed for additional rate in those programs, and that’s at roughly 30 points. . It will show up on the state side and I think at roughly a 37% because it combines the 2 and the state is actively working those with us. So we’re aware of what’s going on in the marketplace. We’re aware of what’s moving. And we’re several months past that being filed and working. So it’s not new. I’ll let Matt comment on sort of where we are.

Matthew Hunton: So this is Matt. Just a couple of quick thoughts on our ongoing conversations with the California Department of Insurance. So we have a great relationship with them. We have a good conversation flow back and forth. As we navigate through the filings, one thought I would add is we file generally what our experience supports, and we’re confident in the data, right, as we submit that to the California Department. And as we go back and forth, we’ll work it as expeditiously as possible. But our expectation is that the current filings that we have, we’ll work them through the filing. Hopefully, we’ll get them through and effective sometime in the near future.

Joseph Lacher: Especially to this point have been productive and active. They’re not sitting dormant and they’re not moving. And I would maybe just make the general comment that the larger filing you referenced gives us — gives us confidence as an industry, I think, that things are moving.

Operator: Our next question is from Paul Newsome with Piper Sandler.

Jon Newsome: I was wondering if you could talk a little bit about auto claim frequency. And I would imagine, please correct me if I’m wrong, that a lot of your non-rate effects would — had a beneficial effect on that frequency, and I’m just wondering if there’s any way that you can think about or you can tease out how the frequency you’re seeing might vary depending upon — if you sort of adjust for all of the pretty significant non-rate actions that you’re taking?

Joseph Lacher: Yes, Matt, maybe you start taking a shot at specialty auto. I think that’s the biggest place, Paul, on that. And Duane, you can you add some color to it.

Matthew Hunton: Yes. So just quick comments on frequency. As a function of our underwriting actions and our pricing actions in the marketplace on a year-over-year basis, on the PPA side, we’re seeing sort of pretty significant negative frequencies come-through. They’re as expected in the negative sort of 10% range. On the Commercial Vehicle side, we’re seeing a slight elevation, but that’s also a function of our mix that we’re pushing through. So it’s a plus 2 plus , plus 3 in that range on the frequency side as we shift towards a more preferred segment on the commercial space. And so again, generally in line with our expectations and nothing is out of pattern for us.

James McKinney: And I think, Paul, when we think about the story, I know at one point in time, you had a question in terms of — from an underwriting perspective, I think the key element of what we take away from this is we continue to see frequency down from the prepandemic levels that we had. And certainly, it returned in certain pockets or came up, but as a whole, frequency down the real outcome that’s come through our financial statements is the severity factors that we’ve referenced before. And again, we’re working our way through that. I think the positive thing is the environment, at least at this point in time. While there’s still increasing trend, it is moderating and returning more to normalized levels. And the early kind of visibility that we might have to where those trends are going, continue to kind of pace in that direction.