AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a-” (Excellent) of the property/casualty subsidiaries and affiliated insurance companies of Kemper Corporation (Kemper) [NYSE: KMPR], collectively referred to as Kemper Property & Casualty Group (Kemper P&C or the group). AM Best also has revised the outlooks to negative from stable and affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of Kemper’s life subsidiaries, collectively referred to as Kemper Life Group (Kemper Life) (Chicago, IL). Concurrently, AM Best has revised the outlook to negative from stable and affirmed the Long-Term ICR of “bbb-” (Good), the Long-Term Issue Credit Ratings (Long-Term IRs) and indicative Long-Term IRs of Kemper, the ultimate parent, headquartered in Chicago, IL. (See below for further discussion and a detailed listing of all companies and Credit Ratings [ratings].)
Lastly, AM Best has withdrawn the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Kemper Financial Indemnity Company (KFIC) (Chicago, IL), each with a stable outlook. KFIC was previously a subsidiary of Kemper and was sold on Sept. 1, 2026.
The ratings of Kemper P&C reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The negative outlooks reflect Kemper P&C’s earnings deterioration through late 2025 and early 2026, driven by the group’s concentrated business profile and exposure to the California auto insurance market. Furthermore, the negative outlooks account for California’s challenging regulatory environment, which may prolong the group’s ability to achieve rate adequacy and improve operating results. Results have been impacted by California’s increase in auto insurance liability limits in early 2025, which doubled bodily injury coverage minimums and tripled property damage limits. As the group’s business is primarily non-standard auto, a majority of its policyholders hold coverage at the minimum limits. As a result, Kemper P&C has experienced elevated claim severity due to the increase in limits and an increase in attorney attachment. AM Best notes there has been sequential improvement in underwriting results through the first half of 2026 but such results remain unprofitable. At the parent level, Kemper has experienced an increase in financial leverage, primarily as a result of a decline in shareholders equity. As of June 30, 2026, adjusted financial leverage (which considers equity credit for hybrid securities issued), stood at 28.6%, per AM Best’s calculation. In addition to underwriting losses, Kemper was impacted by a non-cash goodwill impairment and reciprocal surplus note credit loss allowance in the second quarter of 2026.
Management continues to implement strategic initiatives to correct performance. Kemper P&C has been pursuing rate adequacy actively through approved and pending California personal auto rate increases. The company had a 6.9% rate increase approved with an effective date in April 2026 and an additional 3.0% rate increase approved with an effective date in June 2026. As these rate increases continue to be filed and approved, AM Best expects a gradual improvement in performance.
The ratings of Kemper Life reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, appropriate ERM, as well as consideration of the group’s affiliation with lead rating unit, Kemper P&C. The negative outlooks for Kemper Life reflect the overall negative outlooks for Kemper and its insurance subsidiaries.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with the outlooks revised to negative from stable for the members of Kemper Property & Casualty Group:
- Trinity Universal Insurance Company
- Alpha Property & Casualty Insurance Company
- Capitol County Mutual Fire Insurance Company
- Charter Indemnity Company
- Financial Indemnity Company
- Infinity Insurance Company
- Infinity Assurance Insurance Company
- Infinity Auto Insurance Company
- Infinity Casualty Insurance Company
- Infinity Indemnity Insurance Company
- Infinity Safeguard Insurance Company
- Infinity Select Insurance Company
- Infinity Standard Insurance Company
- Infinity County Mutual Insurance Company
- Kemper Independence Insurance Company
- Merastar Insurance Company
- Mutual Savings Fire Insurance Company
- Old Reliable Casualty Company
- Response Insurance Company
- Response Worldwide Direct Auto Insurance Company
- Response Worldwide Insurance Company
- Union National Fire Insurance Company
- United Casualty Insurance Company of America
- Unitrin Advantage Insurance Company
- Unitrin Auto and Home Insurance Company
- Unitrin County Mutual Insurance Company
- Unitrin Direct Insurance Company
- Unitrin Direct Property & Casualty Company
- Unitrin Preferred Insurance Company
- Unitrin Safeguard Insurance Company
- Valley Property & Casualty Insurance Company
- Warner Insurance Company
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed with the outlooks revised to negative from stable for the members of Kemper Life Group:
- United Insurance Company of America
- Mutual Savings Life Insurance Company
- The Reliable Life Insurance Company
- Union National Life Insurance Company
The following Long-Term IRs have been affirmed with the outlooks revised to negative from stable:
Kemper Corporation—
— “bbb-” (Good) on $400 million 2.4% senior unsecured notes, due 2030
— “bbb-” (Good) on $400 million 3.8% senior unsecured notes, due 2032
— “bb” (Fair) on $150 million junior subordinated debentures, due 2062
The following indicative Long-Term IRs under the shelf registration have been affirmed with the outlooks revised to negative from stable for the shelf registration:
Kemper Corporation—
— “bbb-” (Good) on senior unsecured debt
— “bb+” (Fair) on subordinated debt
— “bb” (Fair) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260911885899/en/
Media gallery
