Predictions of better earnings this year for Kemper Corp. remain accurate, even though first-quarter results continued a disappointing trend, Joseph E. Luecke, chairman and chief executive officer, said Wednesday.
Luecke said the tightening markets for property-casualty insurance and reinsurance are ”offering an opportunity that probably comes but once a decade to build and expand a book of profitable business.”
The property-casualty industry as a whole had a disastrous 1984, with outlays for claims and expenses costing $1.17 for every $1 collected in premiums. Kemper`s property-casualty operations also lost money in 1984, and in the first quarter of 1985, they were $5.8 million in the red.
However, at the company`s annual meeting Wednesday, Luecke said the tightening market–higher premiums and more restrictive policies–will be reflected in Kemper`s earnings by the end of 1985, although ”in some segments, earnings may still remain at unsatisfactory levels.”
Kemper will benefit not only from the higher prices, Luecke said, but from the company`s ability to write business that competitors can`t handle. Marginal insurance companies may not be able to take advantage of the higher premiums because they don`t have enough capital to back up any business; those customers will have to look elsewhere–such as to Kemper–for their insurance, he said.
He noted that Kemper used $50 million from a recent public stock offering to boost the capital of its reinsurance operations to ”enable us to continue to increase our sales in this time of opportunity.”
At the annual meeting, shareholders approved a doubling in the number of authorized common shares, to 50 million from 25 million, although Luecke said there are no immediate plans to offer any of that stock. Noting that Kemper`s investment-services operations recently bought a majority interest in the brokerage firm of Boettcher & Co., Luecke said the company has no plans for other acquisitions.
