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Basis of Presentation | 9 Months Ended
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Sep. 30, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Basis of Presentation | Note 1 - Basis of Presentation The Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the SEC and include the accounts of Kemper Corporation (“Kemper”) and its subsidiaries (individually and collectively referred to herein as the “Company”) and are unaudited. All significant intercompany accounts and transactions have been eliminated. As discussed below, the Company adopted Accounting Standards Update (“ASU”) 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts, on January 1, 2012 and retrospectively adjusted its financial statements for prior periods for the impact of the adoption. On January 1, 2012, the Company also implemented a new model for allocating capital and net investment income to its business segments. Accordingly, the Company has also reclassified certain amounts in its segment results in the retrospectively adjusted financial statements to conform to the current presentation. The Company accounts for Fireside Auto Finance, Inc. (“Fireside”), formerly known as Fireside Bank, and Kemper’s former Unitrin Business Insurance operations as discontinued operations. See Note 2, “Discontinued Operations,” to the Condensed Consolidated Financial Statements. Certain financial information that is normally included in annual financial statements, including certain financial statement footnote disclosures, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) is not required by the rules and regulations of the SEC for interim financial reporting and has been condensed or omitted. In the opinion of the Company’s management, the Condensed Consolidated Financial Statements include all adjustments necessary for a fair presentation. The preparation of interim financial statements relies heavily on estimates. This factor and other factors, such as the seasonal nature of some portions of the insurance business, as well as market conditions, call for caution in drawing specific conclusions from interim results. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Consolidated Financial Statements and related notes included in the 2011 Annual Report. Accounting Standards Not Yet Adopted The Financial Accounting Standards Board (“FASB”) issues ASUs to amend the authoritative literature in the FASB Accounting Standards Codification (“ASC”). There have been seven ASUs issued in 2012 that amend the original text of the ASC. The ASUs are not expected to have a material impact on the Company. Adoption of New Accounting Standards In October 2010, the FASB issued ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. The standard is effective for interim and annual reporting periods beginning after December 15, 2011. The provisions of the standard can be applied either prospectively or retrospectively. The standard amends ASC Topic 944, Financial Services—Insurance, and modifies the definition of the types of costs incurred by insurance entities that can be capitalized in the acquisition of new and renewal contracts. The Company adopted the standard on January 1, 2012 and applied its provisions retrospectively. The adoption of the standard reduced consolidated shareholders’ equity by $99.5 million on January 1, 2012. The Company’s financial statements have been retrospectively adjusted as if ASU 2010-26 had been adopted prior to all periods presented. Note 1 - Basis of Presentation (continued) The impact of the adoption of the new accounting standard on Income from Continuing Operations and Net Income and the related basic and diluted per share amounts for the nine and three months ended September 30, 2012 is presented below:
(Dollars in Millions, Except Per Share Amounts) |  | Nine Months Ended Sep 30, 2012 |  | Three Months Ended Sep 30, 2012
Decrease in: |  |  |  |
Income from Continuing Operations |  | $ | (7.5 | ) |  | $ | (2.5 | )
Net Income |  | $ | (7.5 | ) |  | $ | (2.5 | )
Income from Continuing Operations per Unrestricted Share: |  |  |  |
Basic |  | $ | (0.13 | ) |  | $ | (0.04 | )
Diluted |  | $ | (0.13 | ) |  | $ | (0.04 | )
Net Income Per Unrestricted Share: |  |  |  |
Basic |  | $ | (0.13 | ) |  | $ | (0.04 | )
Diluted |  | $ | (0.13 | ) |  | $ | (0.04 | )
The following line items presented in the Condensed Consolidated Statements of Income for the nine and three months ended September 30, 2011 were affected by the adoption of the new accounting standard:
|  | Nine Months Ended Sep 30, 2011 |  | Three Months Ended Sep 30, 2011
(Dollars in Millions, Except Per Share Amounts) |  | As Originally Reported |  | As Adjusted |  | Effect of Change |  | As Originally Reported |  | As Adjusted |  | Effect of Change
Insurance Expenses |  | $ | 500.8 |  |  | $ | 513.5 |  |  | $ | 12.7 |  |  | $ | 172.6 |  |  | $ | 176.8 |  |  | $ | 4.2 |
Income Tax Benefit (Expense) |  | $ | (5.1 | ) |  | $ | (0.5 | ) |  | $ | 4.6 |  |  | $ | 4.6 |  |  | $ | 6.1 |  |  | $ | 1.5 |
Income from Continuing Operations |  | $ | 44.8 |  |  | $ | 36.7 |  |  | $ | (8.1 | ) |  | $ | 3.8 |  |  | $ | 1.1 |  |  | $ | (2.7 | )
Net Income |  | $ | 58.3 |  |  | $ | 50.2 |  |  | $ | (8.1 | ) |  | $ | 4.7 |  |  | $ | 2.0 |  |  | $ | (2.7 | )
Income from Continuing Operations per Unrestricted Share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.74 |  |  | $ | 0.61 |  |  | $ | (0.13 | ) |  | $ | 0.06 |  |  | $ | 0.01 |  |  | $ | (0.05 | )
Diluted |  | $ | 0.74 |  |  | $ | 0.61 |  |  | $ | (0.13 | ) |  | $ | 0.06 |  |  | $ | 0.01 |  |  | $ | (0.05 | )
Net Income Per Unrestricted Share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.96 |  |  | $ | 0.83 |  |  | $ | (0.13 | ) |  | $ | 0.08 |  |  | $ | 0.03 |  |  | $ | (0.05 | )
Diluted |  | $ | 0.96 |  |  | $ | 0.83 |  |  | $ | (0.13 | ) |  | $ | 0.08 |  |  | $ | 0.03 |  |  | $ | (0.05 | )
In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements. The standard is effective for the first interim or annual period beginning on or after December 15, 2011. The new standard amends the existing fair value definition and enhances disclosure requirements. The Company adopted the standard in the first quarter of 2012 and, except for the additional disclosure requirements, the initial application of the standard did not have an impact on the Company. Note 1 - Basis of Presentation (continued) In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment. The standard is effective for the first interim or annual period beginning on or after December 15, 2011. The standard amends ASC Topic 350, Intangibles—Goodwill and Other, and gives companies the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company adopted the standard in the first quarter of 2012. The initial application of the standard did not have an impact on the Company. In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. The standard deferred certain paragraphs in ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, related to the presentation of reclassification adjustments but also required companies to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. The Company adopted the standard in the first quarter of 2012. Other than the inclusion of the Condensed Consolidated Statement of Comprehensive Income, the initial application of the standard did not have an impact on the Company.

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