XML 45 R24.htm IDEA: XBRL DOCUMENT v3.22.0.1
Shareholders' Equity
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Shareholders' Equity SHAREHOLDERS’ EQUITY
Common Stock Issuance
Kemper is authorized to issue 20 million shares of $0.10 par value preferred stock and 100 million shares of $0.10 par value common stock. No preferred shares were issued or outstanding at December 31, 2021 and 2020. There were 63,684,628 shares and 65,436,207 shares of common stock outstanding at December 31, 2021 and 2020, respectively.
On June 7, 2019, the Company completed a public offering of its common stock and issued 1.6 million shares of common stock, at $83.00 per share. Gross proceeds from the offering were $128.9 million. Transaction costs, including the underwriting discount, were $1.7 million. In July 2019, the Company used the net proceeds of $127.2 million from the offering, together with a portion of the proceeds from the 2023 Term Loan (see Note 19, “Debt”) to redeem all $150.0 million in aggregate outstanding principal of its 7.375% Subordinated Debentures due 2054.
Common Stock Repurchases
On May 6, 2020, Kemper’s Board of Directors authorized the repurchase of up to an additional $200.0 million of Kemper common stock, in addition to the $133.0 million remaining under the August 6, 2014 authorization, bringing the remaining share repurchase authorization to approximately $333.3 million as of December 31, 2020. As of December 31, 2021, the remaining share repurchase authorization was $171.6 million under the repurchase program.
During the years ended 2021 and 2020, Kemper repurchased and retired approximately 2,085,000 and 1,617,000 shares, respectively, of its common stock under its share repurchase authorization for an aggregate cost of $161.7 million and $110.4 million and an average cost per share of $77.58 and $68.29, respectively.
These purchases were made in the open market in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934.
Kemper did not repurchase any of its common stock in open market transactions in the fourth quarter of 2021.
Employee Stock Purchase Plan
During the years ended December 31, 2021, 2020, and 2019, the Company issued 79,000, 61,000, and 24,000 shares under the Kemper Employee Stock Purchase Plan (“ESPP”), respectively, at an average discounted price of $58.08, $61.57, and $66.08 per share. Compensation costs charged against income were $0.8 million, $0.7 million, and $0.3 million for the years ended December 31, 2021, 2020, and 2019, respectively.
Dividends
Various state insurance laws restrict the amount that an insurance subsidiary may pay in the form of dividends, loans or advances without the prior approval of regulatory authorities. Also, that portion of an insurance subsidiary’s net equity which results from differences between statutory insurance accounting practices and GAAP would not be available for cash dividends, loans or advances. Kemper’s insurance subsidiaries paid dividends of $347.0 million to Kemper in 2021. In 2022, Kemper’s insurance subsidiaries would be able to pay $191.2 million in dividends to Kemper without prior regulatory approval. Kemper’s insurance subsidiaries had net assets of $4.5 billion, determined in accordance with GAAP, that were restricted from payment to Kemper without prior regulatory approval at December 31, 2021.
Kemper’s insurance subsidiaries are required to file financial statements prepared on the basis of statutory insurance accounting practices, a comprehensive basis of accounting other than GAAP. Statutory capital and surplus for the Company’s life and health insurance subsidiaries was $446.0 million and $430.4 million at December 31, 2021 and 2020, respectively. Statutory net income (loss) for the Company’s life and health insurance subsidiaries was $(12.4) million, $60.7 million and $90.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Statutory capital and surplus for the Company’s property and casualty insurance subsidiaries was $1.5 billion and $1.7 billion at December 31, 2021 and 2020, respectively. Statutory net income (loss) for the Company’s property and casualty insurance subsidiaries was $(206.9) million, $361.6 million and $347.6 million for the years ended December 31, 2021, 2020 and 2019, respectively. Statutory capital and surplus and statutory net income exclude parent company operations.
Kemper’s insurance subsidiaries are also required to hold minimum levels of statutory capital and surplus to satisfy regulatory requirements. The minimum statutory capital and surplus, or company action level risk-based capital (“RBC”), necessary to satisfy regulatory requirements for the Company’s life and health insurance subsidiaries collectively was $157.7 million at December 31, 2021. The minimum statutory capital and surplus necessary to satisfy regulatory requirements for the Company’s
NOTE 14. SHAREHOLDERS’ EQUITY (Continued)
property and casualty insurance subsidiaries collectively was $668.2 million at December 31, 2021. Company action level RBC is the level at which a company is required to file a corrective action plan with its regulators and is equal to 200% of the authorized control level RBC.
In 2021, Kemper issued dividends and dividend equivalents of $81.0 million, of which $80.6 million was paid to shareholders. Except for certain financial covenants under Kemper’s credit agreement or during any period in which Kemper elects to defer interest payments, there are no restrictions on Kemper’s ability to pay dividends to its shareholders. Certain financial covenants, namely minimum net worth and a maximum debt to total capitalization ratio, under Kemper’s credit agreement could limit the amount of dividends that Kemper may pay to shareholders at December 31, 2021. Kemper had the ability to pay without restrictions of $1.2 billion in dividends to its shareholders and still be in compliance with all financial covenants under its credit agreement at December 31, 2021.