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Form 8-K KEMPER Corp For: Sep 20

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September 21, 2016 6:19 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 20, 2016
Kemper Corporation
(Exact name of registrant as specified in its charter)
 
Commission File Number: 001-18298
 
 
 
 
DE
 
95-4255452
(State or other jurisdiction
of incorporation)
 
(IRS Employer
Identification No.)
One East Wacker Drive, Chicago, IL 60601
(Address of principal executive offices, including zip code)
312-661-4600
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2.below):

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Section 7. – Regulation FD
Item 7.01. Regulation FD Disclosure.
Exhibit 99.1 is a set of slides to be presented during a conference call being hosted by Kemper Corporation (“Kemper”) to share its strategic update for investors. The conference call will be held on Wednesday, September 21, 2016 at 3:00 p.m. Eastern (2:00 p.m. Central) and will be accessible by telephone at 866.393.1565 or via webcast on Kemper’s website. To listen via webcast, register online at the investor section on kemper.com at least 15 minutes prior to the webcast to install any necessary software and to download the presentation materials.
The information contained in this report is furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, or incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as expressly stated in such filing.
This report may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events, and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.
Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this report. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict, and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those listed in periodic reports filed by Kemper with the Securities Exchange Commission (the “SEC”). No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this report. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.
Section 9. – Financial Statements and Exhibits
Item 9.01.     Financial Statements and Exhibits.
(d) Exhibits
99.1    Presentation materials for Kemper’s Strategic Update for Investors call on September 21, 2016.



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
Kemper Corporation
 
 
 
Date:
September 21, 2016
 
 
/s/ Richard Roeske
 
 
 
 
Richard Roeske
 
 
 
 
Vice President and Chief Accounting Officer





Exhibit Index
99.1

 
Presentation materials for Kemper’s Strategic Update for Investors call on September 21, 2016.




Strategic Update for Investors September 21, 2016

 
2 Strategic Update for Investors – September 21, 2016 Caution Regarding Forward-looking Statements This presentation may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events, and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts. Any or all forward-looking statements may turn out to be wrong, and, accordingly, Kemper cautions readers not to place undue reliance on such statements. Kemper bases these statements on current expectations and the current economic environment as of the date of this presentation. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance; actual results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties that may be important in determining the company’s actual future results and financial condition. Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this presentation. Kemper advises the reader to consult any further disclosures Kemper makes on related subjects in its filings with the SEC. This presentation contains non-GAAP financial measures that the company believes are meaningful to investors. Non-GAAP financial measures are defined and reconciled to the most comparable GAAP financial measure at the end of this report. Data in this presentation is as of and for the period ending June 30, 2016 unless otherwise stated

 
3 Strategic Update for Investors – September 21, 2016 Strategy Outline • Current State • Resetting the Table – Strategic focus – Senior executive team – Our businesses • Our Path Forward • Progress Made in 2016 • The Case for Kemper

 
4 Strategic Update for Investors – September 21, 2016 Baseline: Year End 2015 • Unclear strategic framework & focus – Limited external focus – Constrained analytical curiosity • Financial underperformance – Low earnings & ROE – Declining revenue – Heavy expense base • Significant “deferred maintenance” – Aging IT infrastructure – Dated processes • Culture of complacency – Diffusion of accountability – Collaboration impeded 1 See Non-GAAP Financial Measures in Appendix 2 Source: SNL Financial Average Normalized Earnings from 2011-20151 Price to Book Value versus ROE-20152 G ro w th Legacy Non- Standard Auto Alliance United Preferred Home and Auto Life & Health Bubble sized with avg. of Earned Premium from 2011-2015 (AU last 12 months) Normalized Earnings -20% -10% 0% 10% 20% 30% 25 75 A vg. P rice t o B o o k V al u e - 2 0 1 5 ALL CINF HIG HMN KMPR MCY NGHC PGR SIGI STFC THG TRV 50% 150% 250% 0% 5% 10% 15% 20% 2015 Return on Equity

 
5 Strategic Update for Investors – September 21, 2016 Current State Strong capital position • More than $200MM of excess capital • Steady capital creation from life businesses Distinguished brand • Recognized in market • Positive impression yet undefined Flexible regulatory foundation • Broadly licensed (multiple products) in 50 states Broad business portfolio • Diversified product platforms • Non-correlated risks • Leverageable growth opportunities Strong Investments function • Outperform similarly sized peers Proven senior executive team • Broad experience • Track record of results Poor execution Limited strategic focus • Overall and within specific businesses Culture of complacency Financial underperformance • Declining revenues • Heavy expense base Weak technology infrastructure • Aging platforms • Dated and slow processes to update and maintain • Lack of agility Tangible Strengths Tremendous unrealized potential Fixable Weaknesses

 
Resetting the Table

 
7 Strategic Update for Investors – September 21, 2016 Strategic Focus • Focus on consumer-related businesses with niche opportunities that: – Target underserved markets – Have limited, weak or unfocused competition – Require unique expertise (underwriting, claim, distribution, other) • Build and leverage key core capabilities: – Nimble—ability to take advantage of opportunities quickly – Execution excellence – Disciplined underwriting and risk management – Business intelligence and analytics expertise – Efficient expense structure – Optimal technology utilization • Create value organically and through M&A • Produce high single-digit/low double-digit ROE and grow BVPS consistently Utilize scale and nimbleness as advantage

 
8 Strategic Update for Investors – September 21, 2016 Senior Executive Team Experienced leadership team with proven history of delivering results Joe Lacher President and Chief Executive Officer • 20+ years of insurance industry experience • Joined Kemper in 2015; Track record of turning around under- performing businesses to realize their full potential • Previous experience: Allstate, Travelers John Boschelli Chief Investment Officer • 25+ years of insurance industry experience; Rejoined Kemper in 1997 • Held various investment, finance and accounting positions Charles Brooks Chief Information Officer • 25+ years of IT and operations experience; Joined Kemper in 2016 • Previous experience: ACE Group, Travelers and Accenture Chip Dufala President, Property & Casualty • 20+ years of insurance industry experience; Joined Kemper in 2016 • Previous experience: Senior sales and operational roles at Erie Ins. Tom Evans Secretary & General Counsel • 30+ years of legal experience, majority in the insurance industry • Joined Kemper in 1992; served in various legal roles Mark Green President, Life & Health • 25+ years of insurance industry experience; Joined Kemper in 2016 • Previous experience: Allstate, AIX Group, Wells Fargo Ins., Chubb Jim McKinney Chief Financial Officer • 14+ years of finance experience; Joining Kemper in November • Previous experience: Banc of California, AerCap, RBS Citizens, KPMG Christine Mullins Chief Human Resources Officer • 25+ years of human resources experience; Joining Kemper in October • Previous experience: CEO.works, Zurich, Motorola

 
9 Strategic Update for Investors – September 21, 2016 Life & Health Our Results Market & consumer focus • Modest income consumers • Simple “final expense” type life product • Limited, diffused, smaller competition • Consistently profitable segment Keys to success • Efficient and consistent pricing, underwriting and claim functions • Strong and cost-conscious distribution Priorities • Finalize the replacement of policy administration system • Expand current distribution model; evaluate new distribution sources • Move beyond DMF issue Life Insurance Market & consumer focus • Indemnity medical supplemental products • Rural and dissatisfied ACA consumers • Limited larger or sophisticated players Keys to success • Being opportunistic and nimble when addressing market gaps • Efficient distribution of product Priorities • Evaluate new products to take advantage of market disruption • Higher-yielding distribution capabilities Health Insurance 1 See Non-GAAP Financial Measures in Appendix ² 2015 normalized for deferred premium adjustment 0 50 100 2011 2012 2013 2014 2015 1H16 Normalized Earnings¹ (10)% (5)% 0% 5% 2011 2012 2013 2014 2015 1H16 Growth Rate² ($MM)

 
10 Strategic Update for Investors – September 21, 2016 Property & Casualty Market & consumer focus • Regional independent agency player • Main Street consumer focus • Historically leveraged package product strength Keys to success • Product/pricing sophistication • Claims effectiveness • Ease of doing business Priorities • Finish program to replace policy administration and agency interface systems • Overhaul claim capabilities • Expand homeowners capability • Lead with homeowners strength; deliver auto at parity • Intensify business intelligence and analytics competency 1 Includes Preferred Personal Automobile, Homeowners and Other Personal Lines Insurance 2 See Non-GAAP Financial Measures in Appendix Preferred Personal Lines1 Our Results 80% 95% 110% 2011 2012 2013 2014 2015 1H16 Normalized Combined Ratio² (15)% (10)% (5)% 0% 2011 2012 2013 2014 2015 1H16 Written Premium Growth Rate

 
11 Strategic Update for Investors – September 21, 2016 75% 95% 115% 2011 2012 2013 2014 2015⁴ 1H16 Property & Casualty Market & consumer focus • Major competition is smaller/regional carriers; limited and often ineffective results from large carriers • Specialized expertise is essential Keys to success • Relentless nimble execution of fundamental pricing, underwriting and claim capabilities • Avoid linking preferred and non-standard processes • Enhanced sophistication of fundamentals Priorities • Refocused and dedicated claim, pricing and underwriting resources • Claim staffing and specialization • Alliance United profit restoration Non-standard Auto1 1 Also includes Commercial Automobile Insurance 2 Alliance United was acquired April 30, 2015 3 See Non-GAAP Financial Measures in Appendix 4 2015 Alliance United Combined Ratio for post acquisition period only (May-Dec 2015) Normalized Combined Ratio2,3 AU—pre acquisition AU—post acquisition Legacy Non-standard Auto Our Results 0% 30% 60% 2011 2012 2013 2014 2015 1H16 AU—Written Premium Growth Rate (10)% 0% 10% 2011 2012 2013 2014 2015 1H16 Legacy NSA—Written Premium Growth Rate

 
12 Strategic Update for Investors – September 21, 2016 Investments Goal Balance risk and return to maximize investment portfolio’s after-tax yield and total return Approach to Investment Management • Take advantage of multi-line businesses allowing for greater optimization and asset diversification • Collaborate within the group and among our internal and external partners • Combine top-down and bottom-up analyses with an emphasis on risk management • Encourage proactive and innovative problem-solving • Adapt quickly to the constantly evolving investment landscape • Execute strategy opportunistically and efficiently using our size to our advantage Track Record Returns (yields & total return) have been strong relative to the industry while maintaining a similar risk profile 4,542 542 365 295 532 441 2Q16 Investment Portfolio Total Investments: $6,717MM 3,033 1,647 294 110 2Q16 Fixed Maturity Portfolio Total Fixed Maturities: $5,084MM Other1 Alternative Inv.2 Equities3 Non-Inv. Grade FM Inv. Grade FM Short-term Other Muni’s Corporate Bonds & Notes US Gov’t & Agencies ($MM) ($MM) 1 Includes $291MM of policyholder loans, $145MM of Real Estate and $5MM of other investments 2 Includes $134MM of Fair Value Option Investments, $183MM of Equity Method Limited Liability Investments and $215MM of Other Equity Interests at Fair Value 3 Excludes $215MM of Other Equity Interests at Fair Value

 
13 Strategic Update for Investors – September 21, 2016 Path Forward to Unlock Embedded Value W or k / E ff or t • Assemble top quality leadership team • Resolve DMF/UCP issue • Refocus & strengthen Non-standard Auto competency • Restore Alliance United profitability Broader • Reinvigorate culture • Focus on relentlessly delivering execution excellence • Expand and fully leverage business intelligence & analytics capabilities Phase 1—Key Elements: Grow Build & Leverage, Rebuild Phase 1 Phase 2 Phase 3 Incubate • Redesign P&C claim service delivery model • Complete IT re-platforming in P&C and Life • Reset expense base & ongoing expense management Specific

 
14 Strategic Update for Investors – September 21, 2016 Life Insurance Claims—DMF/Unclaimed Property Issue • Some insurers used Social Security Death Master File (DMF) to halt annuities but failed to see if person also had life policy—had notice of death but did not pay claim • Kemper was not one of those companies • Officials imposed penalties and reforms on the offending companies • Consensus among states on proper DMF use for non-offending companies never materialized • Social Security Administration admits DMF is flawed—urges data verification • Some officials took simplistic approaches to a complex issue in new laws and regulations Background • Kemper voluntarily implementing a process to use DMF and other databases to identify and investigate instances where beneficiary may have failed to file claim • Good customer service suggests reasonable use of DMF even if solid legal arguments support other viewpoint • Process will result in estimated after-tax charge of $50 million in 3Q16 Kemper’s Go-Forward Approach

 
15 Strategic Update for Investors – September 21, 2016 Restore Alliance United Profitability Corrective actions visible—several pricing cycles to complete Increase rates • Millennium program 6.9% effective 4/1/16 • Gold program 6.9% effective 10/1/16 • Additional Millennium 6.9% filing pending CA DOI approval • Additional Gold 6.9% filing to be submitted in next 30 days Tighter underwriting • Mileage band tightening • Targeted agency management restrictions • Focused restrictions around other variables Manage growth Enhance claim capabilities • Staffing approaching targeted levels • Manage growth in pending claims; inventory reduction beginning 4Q16 Our Results AU Claims Pending & Staffing AU New Business Production Ne w Bu si n ess P o lic ie s (1 0 0 0 s) 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16E 4Q16E Pending Features FTEs Estimated Staffing Need - 20 40 60 80 100 120 300 350 400 450 500 550 600 650 700 20 25 30 35 40 45 50 55 60 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16E 4Q16E FT Es Pe n d in g F e at u re s (1000 s)

 
16 Strategic Update for Investors – September 21, 2016 P&C Claims Effectiveness Re-building service delivery model with strong focus on key metrics and initiatives: • Reducing claims cycle time • More fully leveraging Guidewire Claim Center capabilities for more efficient processes and better analytic data • Improving workflows to enhance customer experience and better leverage internal staff • Further dedicating staff with specialized skills; modernize claims handling practices • Improving span of control • Optimizing use of direct repair shops, independent adjusters and internal claims handlers Expected savings of $85 million Primary ways to lower loss & LAE costs: 1. Improve expense efficiency 2. Modernizing processes – reduce “leakage” and improving customer service Loss Adjustment Expense Loss & LA E 1 2 Today Impact of Improving Claim Effectiveness

 
17 Strategic Update for Investors – September 21, 2016 Property & Casualty—Key Technology Investments • Multi-year effort to upgrade key components of core legacy systems • Enterprise claims system upgrade completed—in process of being fully leveraged • Finished 2 of 4 development phases of new Preferred platform • Initial phase of new Non-standard Auto platform under development • Remaining components of core systems architecture are currently adequate • New platforms will: – Enable more sophisticated products – Reduce operational costs – Be scalable for organic/inorganic growth Policy Administration Sales CRM Data Warehouse Billing Rating Claims P Scope of current project AgencyPort Guidewire Enhancing current Agency Front End Policyholder Experience P Complete P&C Technology Framework

 
18 Strategic Update for Investors – September 21, 2016 Expense Management Goal: Reduce expenses $50MM - $65MM by YE18 Competitively priced products require further expense discipline Expenses1 Initiatives: • Increase utilization of shared services & outsourcing • Increase automation and consolidate activities • Improved vendor management • Increased span of control 2016-2017 Actions Realization of Net Expense Savings $20MM Actions already taken $20MM - $25MM Savings to be realized by YE17 $10MM - $20MM Savings to be realized by YE18 $50MM - $65MM Savings 1 Includes General Expenses and Interest and Other 420 405 50 355 505 490 50 440 350 300 235-250 50-65 0 200 400 2015 1H16 Annualized Initiatives Pro Forma Expenses Savings($MM)

 
19 Strategic Update for Investors – September 21, 2016 Capital Deployment Priorities 1. Fund profitable organic growth—improve margins in all lines 2. Strategic acquisitions: • Bolt-on Non-standard Auto and Preferred opportunities • Leverage scale in Life operations • Other niche specialized businesses 3. Return capital to shareholders: • Maintain competitive dividends • Repurchase shares

 
20 Strategic Update for Investors – September 21, 2016 Significant Progress Made During 2016 • Senior leadership team established • Life & Health – DMF/UCP resolution defined and being executed – IT system upgrade reset and on track • Preferred Personal Lines – New business production and retention stabilized – IT system re-platforming on track • Redesign of P&C Claim service delivery model initiated • Alliance United – 1st round of rate increases implemented; 2nd round in process – Claim staffing approaching target level – Claim pending file growth slowed; reductions beginning in 4Q16 – New business growth tempered • Expense base reset underway; actions to-date improve FY17 run rate by $20 million pre-tax

 
21 Strategic Update for Investors – September 21, 2016 The Case for Kemper • Superior platform to leverage – Distinguished brand – Strong capital position – Diversified business portfolio – Strong investment function – Proven executive team • Fixable weaknesses—significant actions underway – Issues largely self-inflicted/deferred maintenance • Rehabilitating critical areas for long-term success • Positioning for organic and inorganic growth across a range of niche businesses Return on Equity1 5.0 9.0 Current state2 Reduced loss & LAE costs Reduced expenses Pro forma ROE 2019 3.5% 2.5% 1.5- 2.0% 7.5- 8.0% 4+ points of ROE improvement with near term execution focus 1 Assumes a consistent interest rate environment 2 Based on annualization of normalized earnings for 1H16

 
22 Strategic Update for Investors – September 21, 2016

 
Appendix

 
24 Strategic Update for Investors – September 21, 2016 Non-GAAP Financial Measures Normalized Earnings is an after-tax, non-GAAP financial measure that is most directly comparable to the GAAP financial measure of Segment or Product Line Net Operating Income. For the company’s Life & Health business, Normalized Earnings is calculated by 1) normalizing catastrophe losses and LAE by removing the GAAP-reported amounts (including development) and including the Company’s planned load for catastrophe losses and LAE, 2) excluding investment income in 2014 from one company that had sold substantially all of its operations and 3) excluding an adjustment recorded in 2015 to correct deferred premium reserves on certain limited pay life insurance policies. For the company’s Preferred Personal Lines and Legacy Non-standard Auto businesses, Normalized Earnings is computed by normalizing catastrophe losses and LAE by removing the GAAP-reported amounts (including development) and including the Company’s planned load for catastrophe losses and LAE. No adjustments were necessary to compute Normalized Earnings for the Alliance United business. The Preferred Personal Lines business consists of Preferred Personal Automobile Insurance, Homeowners Insurance and Other Personal Insurance product lines. The Legacy Non-standard Auto business consists of Non- standard Personal Automobile Insurance, excluding Alliance United, and Commercial Automobile Insurance product lines. Six Months Ended (Dollars in Millions) 2011 2012 2013 2014 2015 1H 2016 Life & Health Net Operating Income 98.9$ 90.8$ 89.3$ 91.8$ 71.7$ 36.7$ Adjustments, After-tax: Normalize Catastrophe Losses and LAE: Rem ve: Catastrophe Losses and LAE I l i g Development, as Reported 4.9 4.0 1.0 2.0 2.5 2.1 A : Catastrophe Losses and LAE at Pla ned Load (3.6) (2.7) (2.3) (1.8) (1.8) (0.1) Remove: Special Dividend From One Investment - - - (13.9) - - Remove: Deferred Premium Reserve Adjustment - - - - 4.9 - Total Adjustments, After-tax 1.3 1.3 (1.3) (13.7) 5.6 2.0 Normalized Earnings 100.2$ 92.1$ 88.0$ 78.1$ 77.3$ 38.7$ Year Ended December 31,

 
25 Strategic Update for Investors – September 21, 2016 Non-GAAP Financial Measures Normalized Earnings (continued) Six Months Ended (Dollars in Millions) 2011 2012 2013 2014 2015 1H 2016 Preferred Personal Lines Net Operating Income (Loss) (45.1)$ (12.1)$ 90.4$ 57.3$ 55.2$ (6.2)$ Adjustments, After-Tax: Normalize Catastrophe Losses and LAE: Remove: Catastrophe Losses and LAE Including Development, as Reported 94.8 69.7 20.1 50.1 34.3 45.3 Add: Catastrophe Losses and LAE at Planned Load (33.9) (35.9) (43.0) (40.3) (35.0) (15.1) Total Adjustments, After-tax 60.9 33.8 (22.9) 9.8 (0.7) 30.2 Normalized Earnings 15.8$ 21.7$ 67.5$ 67.1$ 54.5$ 24.0$ Legacy Non-standard Auto Net Operating Income (Loss) 19.8$ 1.2$ 10.4$ 3.1$ (9.1)$ 4.6$ Adjustments, After-Tax: Normalize Catastrophe Losses and LAE: Remove: Catastrophe Losses and LAE Including Development, as Reported 2.5 3.2 2.4 2.4 2.5 2.9 Add: Catastrophe Losses and LAE at Planned Load (1.8) (1.8) (2.4) (2.1) (2.1) (1.5) Total Adjustments, After-tax 0.7 1.4 - 0.3 0.4 1.4 Normalized Earnings 20.5$ 2.6$ 10.4$ 3.4$ (8.7)$ 6.0$ Year Ended December 31,

 
26 Strategic Update for Investors – September 21, 2016 Non-GAAP Financial Measures Normalized Combined Ratio is a non-GAAP financial measure that is most directly comparable to the GAAP financial measure of the Combined Ratio. The Combined Ratio is computed by dividing the sum of total incurred losses and LAE and insurance expenses by earned premiums. The Normalized Combined Ratio is computed by normalizing incurred losses and LAE by removing the GAAP- reported amounts for catastrophe losses and LAE (including development) and including the Company’s planned load for catastrophe losses and LAE. No adjustments were necessary to compute the Normalized Combined Ratio for the Alliance United business. Six Months Ended 2011 2012 2013 2014 2015 1H 2016 Preferred Personal Lines Combined Ratio, GAAP-basis 114.3% 108.8% 94.2% 97.5% 96.9% 109.0% Remove: Impact on Ratio from Catastrophe Losses and LAE Including Development, as Reported (13.5%) (10.2%) (3.1%) (8.6%) (6.7%) (18.9%) Add: Impact on Ratio from Catastrophe Losses and LAE at Planned Load Ratio 4.8% 5.3% 6.6% 7.0% 6.9% 6.3% Normalized Combined Ratio 105.6% 103.8% 97.7% 95.8% 97.0% 96.4% C mb ne Ra io, GAAP-basis 99.8% 105.3% 102.5% 103.8% 109.4% 100.8% Remove: Impact on Ratio from Catastrophe Losses and LAE Including Development, as Reported (0.9%) (1.2%) (0.9%) (1.0%) (1.1%) (2.5%) Add: Impact on Ratio from Catastrophe Losses and LAE at Planned Load Ratio 0.6% 0.6% 0.9% 0.9% 0.9% 1.3% Normalized Combined Ratio 99.5% 104.7% 102.5% 103.7% 109.3% 99.6% Year Ended December 31, Legacy Non-standard Auto

 

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