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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill balances by business segment at December 31, 2024 and 2023 were:
DOLLARS IN MILLIONS |  | 2024 |  | 2023
Specialty Property & Casualty Insurance |  | $ | 1,043.0 |  |  | $ | 1,043.0 |
Life Insurance |  | 207.7 |  |  | 207.7 |
Total |  | $ | 1,250.7 |  |  | $ | 1,250.7 |
The Company tests goodwill for recoverability at the reporting unit level on an annual basis, or whenever events or circumstances indicate the fair value of a reporting unit may have declined below its carrying value. The Company performed a qualitative goodwill impairment assessment for all reporting units with goodwill as of October 1, 2024. The qualitative assessment takes into consideration changes in macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, events impacting reporting units, and changes in Kemper’s stock price since the last quantitative assessment, which was performed on October 1, 2022. Based on its qualitative assessment, the Company concluded that the associated goodwill was recoverable for each reporting unit. During the second quarter of 2023, the Company identified impairment indicators impacting the fair value of the Preferred Property & Casualty Insurance business in connection with ongoing evaluation of strategic alternatives for the Preferred Insurance business. As a result, the business’s fair value was determined using a combination of available market information, market comparisons and a discounted cash flow valuation method based on the present value of future earnings. The fair value calculated in the second quarter of 2023 was lower than the carrying value of the business, resulting in a pre-tax impairment charge of $49.6 million and an after-tax impairment charge of $45.5 million. A substantial portion of the goodwill that was impaired was not tax deductible. The goodwill impairment charge is reported separately in the Consolidated Statements of Income (Loss) for the year ended December 31, 2023, with a corresponding reduction to goodwill in the Consolidated Balance Sheet as of December 31, 2023. In 2022, Kemper completed the sale of Reserve National to Medical Mutual of Ohio. As a result of the sale, goodwill attributed to Reserve National was separately tested for recoverability and the Company incurred goodwill impairment of $11.4 million. The remaining $0.3 million of goodwill attributable to Reserve National was derecognized at the time of the sale. See Note 4, “Dispositions”, for more information. The gross carrying amount and accumulated amortization of definite and indefinite life intangible assets at December 31, 2024 and 2023 were:
|  | 2024 |  | 2023
(Dollars in Millions) |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Amount
Definite Life Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Value of Business Acquired |  | $ | 237.5 |  |  | $ | 225.4 |  |  | $ | 12.1 |  |  | $ | 237.5 |  |  | $ | 223.7 |  |  | $ | 13.8 |
Customer Relationships |  | 43.8 |  |  | 42.3 |  |  | 1.5 |  |  | 43.8 |  |  | 42.1 |  |  | 1.7 |
Agent Relationships |  | 81.6 |  |  | 43.9 |  |  | 37.7 |  |  | 81.6 |  |  | 38.2 |  |  | 43.4 |
Trade Names |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Internal-Use Software |  | 395.1 |  |  | 180.3 |  |  | 214.8 |  |  | 388.0 |  |  | 178.0 |  |  | 210.0 |
Total Definite Life Intangible Assets |  | 758.0 |  |  | 491.9 |  |  | 266.1 |  |  | 750.9 |  |  | 482.0 |  |  | 268.9 |
Indefinite Life Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Trade Names |  | 5.2 |  |  | — |  |  | 5.2 |  |  | 5.2 |  |  | — |  |  | 5.2 |
Insurance Licenses |  | 44.2 |  |  | — |  |  | 44.2 |  |  | 44.2 |  |  | — |  |  | 44.2 |
Total Indefinite Life Intangible Assets |  | 49.4 |  |  | — |  |  | 49.4 |  |  | 49.4 |  |  | — |  |  | 49.4 |
Total Intangible Assets |  | $ | 807.4 |  |  | $ | 491.9 |  |  | $ | 315.5 |  |  | $ | 800.3 |  |  | $ | 482.0 |  |  | $ | 318.3 |
NOTE 15. GOODWILL AND INTANGIBLE ASSETS (Continued) The Company records intangible assets acquired in business combinations and certain costs incurred developing and customizing internal-use software within Other Assets on the Consolidated Balance Sheets. Definite life intangible assets are amortized over the estimated profit emergence period or estimated useful life of the asset. Indefinite life intangible assets are not amortized, but rather tested annually for impairment. In 2024, 2023 and 2022, the Company recognized the following amortization expense on definite life intangible assets:
DOLLARS IN MILLIONS |  | 2024 |  | 2023 |  | 2022
Specialty Property & Casualty Insurance |  | $ | 16.6 |  |  | $ | 17.9 |  |  | $ | 21.6 |
Life Insurance |  | 6.0 |  |  | 3.4 |  |  | 3.8 |
Total Segment Amortization Expense |  | 22.6 |  |  | 21.3 |  |  | 25.4 |
Corporate and Other |  | 21.8 |  |  | 26.1 |  |  | 26.7 |
Non-Core Operations |  | 1.9 |  |  | 1.2 |  |  | 1.6 |
Total Amortization Expense |  | $ | 46.3 |  |  | $ | 48.6 |  |  | $ | 53.7 |
The amount of amortization expense expected to be recorded in the next five years for definite life intangible assets is as follows:
DOLLARS IN MILLIONS |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  |  |  |
Definite Life Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Value of Business Acquired |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 1.5 |  |  | $ | 1.4 |  |  | $ | 1.3 |  |  |  |  |
Customer Relationships |  | 0.4 |  |  | 0.4 |  |  | 0.3 |  |  | 0.2 |  |  | 0.2 |  |  |  |  |
Agent Relationships |  | 8.6 |  |  | 8.6 |  |  | 4.9 |  |  | 4.9 |  |  | 4.9 |  |  |  |  |
Internal-Use Software |  | 35.5 |  |  | 30.9 |  |  | 25.3 |  |  | 22.1 |  |  | 14.7 |  |  |  |  |
Total |  | $ | 46.1 |  |  | $ | 41.4 |  |  | $ | 32.0 |  |  | $ | 28.6 |  |  | $ | 21.1 |  |  |  |  |

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