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

And so I think you’re actually at a really normalized kind of environment from a frequency perspective. And so differences from a frequency perspective, from there — our underwriting actions and other things that we’ve done both from a mix perspective and a segmentation perspective to continue to enhance the potential outcomes that we have and refine the book. And so I think the way to think about this is that this is us moving forward, we think that we’re going to continue to build off of these elements. We’re always looking to enhance those and that might be the way to kind of think about where at least we’re at and how we’re thinking about them.

Andrew Kligerman: And gas prices, the element there? Anything to add about that?

Joseph Lacher: Look, the gas prices are there. I think what Jim was trying to say, and I’ll echo it, you had a big, big movement of frequency down relative to the pandemic lockdowns. Then you had a big year-over-year relative moving of frequency up as people start going out. Then depending on your book, you continue to sort of gradually see that get back to a prepandemic level. . We never, in our book, saw as much of a drop as many folks saw with our Specialty Auto focus. And we popped back up to prepandemic levels earlier. We have continued for several quarters to report that our frequency is below our prepandemic level and has been declining. I think what you would see from a pattern is that most folks have been saying that theirs was going up a little bit as they were returning to that prepandemic level, so they’ve been directionally different.

We’re a little bit — again, that pattern was not exactly the same for us because of the Specialty Auto nature of our book and the geographic concentrations, but we’re watching those big issues. Yes, if you’re looking at elevated gas prices from 1 quarter to the next or 1 year to year, they can have some impact. I think the other forces at play of the pandemic shutdown and reopening and the underwriting pieces are bigger. If we’re matching from today, say, for the next 9 months, we might see that elevated gas prices for a longer period of time and the inflationary offset and pressure on disposable income might cause people to drive less, but I would be watching — that if I were you, I would be watching miles driven because if miles driven are flat, it’s not like because gas prices are higher, people are driving safer.

If they’re still driving the car miles driven, you’re still going to see losses. I think that would be a good thing to match if you’re trying to use that as a proxy is track gas prices and track miles driven, and that will give you a forward thought process. When you get to an individual company, you’re going to find different issues that may be a function of their underwriting or geographic mix? Does that help?

Andrew Kligerman: Yes, very helpful.

Operator: There are no further questions. So I’ll pass the call back over to the management team for closing remarks.