Kemper : 4Q 2020 Earnings Call Presentation

Fourth Quarter 2020 Earnings

February 1, 2021

Earnings Call Presentation - 4Q 2020

Preliminary Matters

Cautionary Statements Regarding Forward-Looking Information

This presentation may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.

Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this presentation. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those factors listed in periodic reports filed by Kemper Corporation with the Securities and Exchange Commission ("SEC"). The COVID-19 outbreak and subsequent global pandemic ("Pandemic") is an extraordinary event that creates unique uncertainties and risks. Kemper cannot provide any assurances as to the impacts of the Pandemic and related economic conditions on the Company's operating and financial results.

No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this presentation, including any such statements related to the Pandemic. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.

Non-GAAP Financial Measures

This presentation contains non-GAAP financial measures that the company believes are meaningful to investors. Non-GAAP financial measures have been reconciled to the most comparable GAAP financial measure.

Earnings Call Presentation - 4Q 2020

2

Create Long-Term Shareholder Value

Leverage competitive advantages to grow returns and BVPS1 over time

	Diversified sources
Sustainable competitive	of earnings;
Strong capital/liquidity
advantages and build
positions;
core capabilities
Disciplined approach
	to capital management

Strategic focus:

Growing returns and book value per share over time

Consumer-related businesses with opportunities that:

• Target niche markets
• Have limited, weak or unfocused competition
• Require unique expertise (underwriting, claim, distribution, analytics and other)

Deliver low double-digit ROE2 over time

¹ Book value per share	Earnings Call Presentation - 4Q 2020	3
2 Return on equity

Fourth Quarter 2020 Highlights

Solid results and premium growth in a challenging environment

Shareholder

Value Creation

Delivered double-digit ROE and 10% growth in adjusted consolidated net operating EPS

• Net income of $98 million and adjusted consolidated net operating income1 of $106 million; earnings per share of $1.46 on a diluted basis; adjusted consolidated net operating EPS1 of $1.59
• 10% ROAE2, 16% ROATCE2 excluding net unrealized gains on fixed maturities and goodwill1
• Book value per share ex. net unrealized gains on fixed maturities and goodwill1 grew 15% year-over-year
• Successfully executed the transfer of ~45% of Kemper's approximately $660 million pension liability
• Expanding specialty auto footprint with announced acquisition of American Access

4th Quarter

Overview

Top-line growth slightly impacted by operating environment; long-term trajectory remains intact

• Overall net earned premium growth of 6%
• Specialty P&C continues to produce solid earnings partially enhanced by favorable frequency trends; 4.3% growth in PIF (ex. Classic Car sale) reflects state shutdowns impacting shopping behavior
• In line with domestic trends, Life & Health results continue to be impacted by COVID-related mortality

	Strong capital and liquidity position provides significant financial flexibility
Financial	•	Diversified operations create sustainable earnings strength throughout economic cycles, delivering
	attractive returns to shareholders
Strength	•	Holding company continues to be a source of strength for subsidiaries: greater than $700 million in assets
		and $1.4 billion of liquidity

• • Debt-to-capitalratio of 20.4% is within target range of 17-22%
• Non-GAAPfinancial measure; please see reconciliation in appendix on pages 23-32

2 Return on average shareholders' equity (5-point average)

Earnings Call Presentation - 4Q 2020

4

American Access Will Accelerate Specialty Auto Growth

Company profile aligns with our strategy; 1Q 2021 expected close

Enhancing Specialty Market Capabilities

• $370 million cash transaction for a platform that has historically produced consistent and sustainable margins and cash flows
• Expands customer reach with a focus on low limit auto policies and broadens Hispanic customer base (>75% of customers)
• Accelerates geographic expansion and strengthens agency network
• Acquisition aligns with previously communicated capital deployment guidance
• • Scalable model that provides additional growth opportunities across new and existing geographies
  • Value accretive transaction - anticipated high single digit run-rate earnings increase; tangible book value expected to return to current levels within one year

Business Mix							GAAP Combined Ratio
Agency Channel Distribution	Geographic Mix			89.8%	95.9%	90.0%	88.5%	87.7%
		AZ				21.3%	18.1%	17.8%	18.7%
Captive	6%	IL							19.5%
27%			18%
				IN		77.8%
		TX	NV	6%		68.5%	72.2%	69.8%	68.2%
		62%
		8%
Independent
73%
LTM Net Written Premium: $359 million				2016	2017	2018	2019		9/30/20 LTM
							Loss & LAE Ratio		Net Expense Ratio2

Note: LTM figures are for the last twelve months ending September 30, 2020.
1 Assumes captive agency income tax-effected at 21%; excludes realized gains and change in fair value of equities.	Earnings Call Presentation - 4Q 2020	5
2 Expense ratio shown net of policy and installment fees.

Fourth Quarter Financial Highlights

16% ROATCE and 15% YoY growth in TBV per common share excluding unrealized gains1

		As Reported	As Reported
		Quarter Ended	Full Year
		Dec 31,	Dec 31,	Dec 31,	Dec 31,
(Dollars in millions, except per share amounts)	2020	2019	2020	2019
Net Income	$98	$125	$410	$531
Net Income - Per Diluted Share	$1.46	$1.85	$6.14	$7.96
Adjusted Consolidated Net Operating Income1	$106	$98	$439	$418
Adj. Consolidated Net Op. Income - Per Diluted Share1	$1.59	$1.45	$6.57	$6.27
Catastrophe Losses	$6	$16	$107	$77
Tangible Book Value Per Common Share excluding unrealized gains1	$41.65	$36.36
Return on Avg. Tangible Common Equity1	16.3%	24.7%
Specialty PIF growth (ex. Classic Car)	4.3%	9.3%

Focused and consistent strategy execution yields solid value creation for all stakeholders

¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32
Earnings Call Presentation - 4Q 2020	6

Review of Net Operating Income

Adjusted Consolidated Net Operating Income Per Share Increased 10%

				Three Months Ended, As Reported
	Dec. 31,	Sep. 30,	Jun. 30,	Mar. 31,	Dec. 31,	Variance
Dollars per Unrestricted Share - Diluted		2020		2020		2020		2020		2019	QoQ
Net Income	$	1.46	$	1.83	$	1.91	$	0.95	$	1.85	(0.39)
(Income) Loss from Change in FV of Equity & Convertible Securities		(0.86)		(0.53)		(0.86)		1.39		(0.46)	(0.40)
Investment Related (Gains)/Losses		-		(0.12)		(0.14)		(0.19)		(0.03)	0.03
Net Impairment Losses		(0.01)		0.01		0.08		0.14		0.02	(0.03)
Acquisition Related Transaction, Integration & Other Costs		0.24		0.17		0.21		0.14		0.07	0.17
Debt Extinguishment, Pension and Other Charges		0.76		-		-		-		-	0.76
Adj. Consolidated Net Operating Income1		1.59		1.36		1.20		2.43		1.45	0.14
Sources of Volatility:
Income (Loss) After-Tax From:
Catastrophes		(0.07)		(0.80)		(0.34)		(0.07)		(0.19)	0.12
											-
Prior-year Reserve Development		(0.10)		(0.10)		(0.22)		(0.01)		0.18	(0.28)
											-
Alternative Investment Income		0.27		0.12		(0.14)		0.07		0.07	0.20
											-
All Other*		(0.05)		(0.05)		-		1.03		-	(0.05)
Total from Sources of Volatility	$	0.05							$	0.06	$ (0.01)
$	(0.83)	$	(0.70)	$	1.02

Business model continues to produce high quality operating income

¹ Non-GAAP financial measure; see reconciliation in appendix pages 23-32	Earnings Call Presentation - 4Q 2020		7
*All Other includes partial satisfaction of judgment, sale of Classic Car, refinement of CEI estimate and
impact of purchase accounting

Reduced Pension Liability Exposure

Further de-riskednon-strategic pension obligation - Ongoing Plan funding > ~100%

• During the quarter, took advantage of the favorable environment to further reduce Kemper's pension benefit obligation to $382 million from $660 million at the end of 2019
• Exposure reduction accomplished through annuity purchases and lump-sum payments
• Transactions resulted in a $51 million (after-tax) noncash settlement charge recorded through the "Total Insurance Expenses" line item

$322 MM

Liability Reduction

Lump Sum

Payment,

$117 MM

Current

Pension

Benefit

GroupObligation,

Annuity $382 MM

Contracts,

$205 MM

Took advantage of an attractive pension environment to reduce non-value-added risk and further

strengthen an already strong balance sheet

Earnings Call Presentation - 4Q 2020

8

Consistent Capital Generation and Attractive Returns

Steady growth through various economic cycles

Total Adjusted Return of BVPS Ex. Unrealized Gains on Fixed Maturities and Goodwill

$29.66 $31.21 $31.10 $33.42

Growth 58%

$36.46 $38.43 $40.27 $40.70 $42.58 $44.41 $46.76

•	Strong execution and
	solid operating results
	have led to consistent
	book value growth and
	shareholder returns
•	Book value growth
	reflects efficient capital
	deployment decisions
	and focus on intrinsic

2016	2017	2018	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20
		Book Value Per Share ex. Goodwill and Unrealized¹			Cumulative Dividends Per Share Paid

value creation

Return on Shareholders' Equity

								24.7%
				19.9%	20.3%								•	Attractive returns on
					19.5%	18.8% 17.9%					equity through
				16.6%					16.3%
														economic cycles
	8.0%	11.4%					16.3%								•	ROATCE measure
			11.4%	13.3%	13.1%	13.0%	12.8%	12.3%	11.3%		appropriately captures
							how investors are
1.1%	6.6%	8.3%
												compensated on
0.9%																	tangible equity
2016	2017	2018	1Q19	2Q19	3Q19	4Q19	1Q20		2Q20	3Q20		4Q20
				ROATCE 2		ROE ex. Unrealized Gains on Fixed Maturities 3
	¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32					Earnings Call Presentation - 4Q 2020		9
	2 Return on average tangible common equity (rolling 5 point avg.); please see reconciliation in appendix on pages 23-32
	3 Return on average shareholder's equity excluding unrealized gains on fixed maturities (rolling 5 point avg.); please see reconciliation in appendix on pages 22-32

Strong Balance Sheet with Well-Funded Insurance Entities

Significant capital and liquidity positions

Parent Company Liquidity

(MM)						$1,433
$741	$684	$582	$641	$867	$700
$400	$660
$385	$385	$540	$733
$341	$299		$207
$197	$101
2015	2016	2017	2018	2019	2020

Borrowings Available Under Credit Agreement & from Subs HoldCo Cash & Investments

Risk-Based Capital Ratios

(%)

375 330 415 335 430 290 410 285 355 365 340 330

2015	2016	2017	2018	2019	2020E
		Life & Health			P&C (ex. Alliance United)

Cash Flow from Operating Activities		Debt-to-Capital <30%

(MM)

										27.4%	27.6%			23.0%
													21.9%			20.4%
																	16.4%
		Debt	$539	$534	$425
$215	$241	$241
										2015	2016	2017	2018	2019	2020
2015	2016	2017	2018	2019	2020		Total
	$2.7B		$2.7B		$2.7B		$4.0B		$4.8B	$5.7B
					Capitalization

Substantial financial flexibility for growth, investments and capital management

Earnings Call Presentation - 4Q 2020

10

Diversified Portfolio with Consistent Returns

Net Investment Income¹

(MM)		$97			$86		$68		$92		$103
				$6			$6					$11		$22
				$88			$80		$80	$81		$81
									$(12)
			4Q19	1Q20		2Q20	3Q20		4Q20
						Core Portfolio			Alternative Inv. Portfolio
	Diversified & Highly-Rated Portfolio
			Portfolio Composition			Fixed Maturity Ratings
		Short-term	Other					B / BB	≤ CCC
		7%	Corporates	5%
				8%
Alternatives²							2%
				6%
	Equity²	6%				52%				30%
				6%								63%
		U.S.							BBB
			Gov't
				15%
			States/								A or Higher
			Munis $10.4 Billion					$7.6 Billion

Overview

• Net investment income and portfolio yield benefitted from strong alternative investment income
• Investment portfolio is designed for growth of both income and total return
• Investment income supports long-term business objectives

Pre-Tax Equiv. Annualized Book Yield¹

		Alternatives
			Impact
4.6%			0.9%				4.7%
4.1%			4.2%
		3.2%

4Q19

1Q20

2Q20

3Q20

4Q20

Note: Charts may not balance due to rounding

¹ Includes COLI. Please see reconciliation of COLI's inclusion in net investment income on page 26Earnings Call Presentation - 4Q 202011 2 Equity securities excludes $295 million of Other Equity Interests of LP/LLC's that have been reclassified into Alternative Investments

Specialty Property & Casualty Insurance Segment1

Sustainable competitive advantages position Specialty for growth at solid margins

Key Highlights

• 2.5% growth in policies in-force, 4.3% excluding Classic Car, compared to 4Q'19
• • COVID-relatedshutdowns impacted shopping behavior
• Earned premiums increased 10%, led by continued growth opportunities in core and emerging geographies
• Long-termoutlook remains; attractive growth opportunities at solid margins

Key Metrics		Change
4Q'20	to 4Q'19
($ in millions)
Earned Premiums	$882	10.3%
Underlying Loss & LAE Ratio2	70.9%	(400)bps
Underlying Expense Ratio2	19.8%	160 bps
Policies In-Force (000)	1,866	2.5%
Policies In-Force ex. Classic Car (000)	1,858	4.3%

	Written Premium	Population CAGR
	TTM	YoY
State Groupings	($ million)	Growth	'16-'19	Est. '20-'30
California	$2,050	1.9%	0.3%	0.8%
Florida / Texas	$853	24.5%	1.3%	1.6%
Expansion States	$219	24.4%	1.0%	1.1%
Other	$50	-	0.3%	0.4%
Total	$3,172	8.4%
US				0.6%
Hispanic				1.6%

(%)			Underlying Combined Ratio¹
	93.1 92.3	93.1 93.1	91.0	88.9	90.8 89.4
				88.5			85.4
		4Q19	1Q20		2Q20	3Q20	Q420
					QTD		YTD

Strength of franchise continues to create value for our stakeholders

Source: Population growth sources include U.S. Census Bureau and The Association Institute	Earnings Call Presentation - 4Q 2020		12
¹ As adjusted for acquisition; see reconciliation on Pages 23-32
2 Non-GAAP financial measure; see reconciliation in appendix on pages 23-32

Preferred Property & Casualty Insurance Segment

Underlying combined ratio on a quarter-over-quarter basis decreased 3 points

Key Highlights

• Underlying combined ratio in the segment decreased to 93.6% for the quarter; 90.4% on a full year basis
• Auto underlying combined ratio reflects efforts to reposition the business for profitability, as well as macro environmental frequency trends
• Home & Other underlying full-year combined ratio improvement driven by underwriting, pricing, and exposure enhancements
• • Current-yearcatastrophe losses reflect reduction in third quarter wildfire losses

Key Metrics

($ in millions)

Auto

Earned Premiums

Policies In-Force (000)

Home & Other

Earned Premiums

Policies In-Force (000)

	Change
4Q'20	to 4Q'19

$107 (8.6)%

219 (11.5)%

$62 (8.7)%

198 (8.0)%

(%)

Underlying Combined Ratio¹

104.5	97.5		96.8	103.1
	88.6
82.9	83.5	80.4	77.6
77.8

4Q19		1Q20	2Q20	3Q20	4Q20
			Auto			Home & Other

Profitability improvement actions continue

¹ Non-GAAP financial measure; please see reconciliation in appendix on pages 23-32	13
Earnings Call Presentation - 4Q 2020

Life & Health Insurance Segment

Business remains profitable while absorbing protracted "P&C catastrophe-like" pandemic

Key Highlights

• Business remains profitable, despite challenging macro environment
• • Increased mortality experience remains largely in-line with country-wide trends
• Continued expectation that COVID will be an earnings event, not a capital event
• Confident in long-term cash flow and diversification benefits

Key Metrics			Change	(MM)
	4Q'20	to 4Q'19
($ in millions)
L&H
Net Operating Income	$9.4	(67.5)%
Life
Face Value of In-Force		$19,859	1.1%
Policies In-Force (000)		3,357	(2.6)%

Revenues1

$216	$214	$207	$211	$215
$55	$51	$44	$51	$53

$161

$163

$163

$161

$162

4Q19		1Q20	2Q20	3Q20	4Q20
		Earned Premiums			Net Investment Income²

Despite current environmental pressure, long-term fundamentals remain solid

Note: Chart may not balance due to rounding

¹ Excludes other incomeEarnings Call Presentation - 4Q 202014 2 Please see reconciliation of COLI's inclusion in net investment income on page 26

Appendix

Earnings Call Presentation - 4Q 2020

15

A Leading Specialized Insurer

Taking advantage of a diversified portfolio of niche businesses….

Founded in 1990 and headquartered in Chicago, with subsidiaries writing policies since 1911

~$14B		~6.2M		~30,000		~9,500
Assets		Policies		Agents/Brokers		Employees

Specialty P&C insurance providing		Preferred personal lines insurance		Life and health insurance
personal and commercial		providing preferred automobile,		providing life, supplemental
automobile insurance products		homeowners and other personal		benefits, and other property
		insurance products		insurance products

….to create value for all our stakeholders

Earnings Call Presentation - 4Q 2020

16

Capital Deployment Priorities

Dedicated to being good stewards of capital

1. Investment in the business
2. • Fund profitable organic growth at appropriate risk-adjusted returns
   • Strategic investments and acquisitions that enhance the business and meet or exceed our ROE targets over time
3. Return capital to shareholders
4. • Repurchase shares opportunistically
   • Maintain competitive dividends

Management and capital deployment priorities focused on maximizing shareholder value

Earnings Call Presentation - 4Q 2020

17

Investment Portfolio Exposure to COVID Impacted Categories

Fixed income investments in COVID exposed industry sectors is manageable

$ Amount (MM)

$140

$120

$100

$80

$60

$40

$20

$0

								1.6%
	1.2%	0.9%	0.9%
						0.6%	$122
	$89	$69	0.5%										0.4%
		$68
													0.3%
			$39		$49	0.2%							0.3%
							0.0%	0.0%	$32	$25	0.0%	$21	0.1%		0.1%
								$13
									$2	$4				$1		$5		$4
	AA	A	BBB High		A	BBB High	AA	A	BBB	High	AA	A	BBB	High
				Yield				Yield					Yield					Yield
		Energy				Retail				Leisure				Transportation
	($264MM | 4% of Port)			($185MM | 2% of Port)			($63MM / 1% of Port)		($31MM | <0.5% of Port)

Exposure to COVID sectors is well diversified across high quality assets;

1% of fixed maturity portfolio is in high yield COVID exposed sector investments

1.8%

1.6%

1.4%

1.2%

1.0%

0.8%

0.6%

0.4%

0.2%

0.0%

% of Fixed Maturity Portfolio

Earnings Call Presentation - 4Q 2020

18

Below Investment Grade Fixed Maturities Portfolio of $490 Million

Portfolio is diversified across different asset types

Below Investment Grade $ Amount (MM)

$250												45.0%
$200		42.2%										40.0%
											35.0%
$150												30.0%
											25.0%
$100		$207	20.9%	19.4%								20.0%
		12.6%							15.0%
$50			$103	$95	$62							10.0%
		3.8%	0.9%					5.0%
						$19	$5	0.2%	0.0%
							$0
$0									$1			0.0%
		Private	Private	CLO	Public	Munis	Foreign	Non-Agency	Redeemable
		Senior	Junior		Corp		Government	MBS	Preferred

% of Fixed Maturity Portfolio

Below investment grade portfolio represents roughly 6% of our fixed maturities portfolio

Earnings Call Presentation - 4Q 2020

19

CLO Composition ($768 Million)

CLOs represent 7.4% of investment portfolio

$ Amount (MM)

$600

$500

$400

$300

$200

$100

$0

			69.3%									80.0%
											70.0%
													60.0%
													50.0%
			$532									40.0%
													30.0%
	11.9%							12.4%			20.0%
					3.4%			10.0%
	$92			3.0%	$95
					$23	$26					0.0%
		AAA		AA		A		BBB		High Yield

% of CLO Portfolio

Well-diversified CLO book with 84% of holdings classified 'A' or higher

Earnings Call Presentation - 4Q 2020

20

Private Credit

~3% of total investments (62% of Alts portfolio)

Alternative Investment Portfolio of $533 Million

Portfolio is highly diversified with strategies focused on private credit, private equity and hedge funds $21.3

					Diversification across date of investment, industry
$71.6			and geography
					Private Equity
					~ 1% of total investments (21% of Alts portfolio)
$110.5	$329.6	Diversification across date of investment, industry
and geography
					Hedge Funds
					< 1% of total investments (13% of Alts portfolio)
					Diversified in strategies with focus on minimum
					correlation to public markets and additional liquidity
					relative to Private Credit and Private Equity strategies
		Private Credit		Private Equity	Tax Equity Funds
		Hedge Funds		Tax Equity Funds	< 1% of total investments (4% of Alts portfolio)

Alternative investment portfolio is ~5% of total investments and diversified across underlying

investment strategies with primary focus on current income generation

Earnings Call Presentation - 4Q 2020

21

2021 Reinsurance Program

Both programs were renewed with no significant change

Catastrophe Reinsurance Program (Multi-Year)

		1-Year Term
		Placed 1/1/21
		$25M xs $250M
		95% Placed
3-Year Term		3-Year Term		3-Year Term
Placed 1/1/19		Placed 1/1/20		Placed 1/1/21	Retention
31.67% Placed		31.67% Placed		31.67% Placed*
$100M xs $150M		$100M xs $150M		$100M xs $150M
3-Year Term		3-Year Term		3-Year Term	xs $225M of 5%
Placed 1/1/19		Placed 1/1/20		Placed 1/1/21	$50M
$100M xs $50M		$100M xs $50M		$100M xs $50M
31.67% Placed		31.67% Placed		31.67% Placed*
		Retention 100% of first $50M

• Policy placed at 1/1/21 similar to prior three years
• Total coverage: 95% of $225 million excess of $50 million

Aggregate Catastrophe Program

• Same coverage as 2020 program
• • Intended to reduce volatility from high- frequency, low severity events
• Coverage

• $50 million in excess of $60 million
• $500k deductible per storm
• Perils: All perils, excluding named storms (e.g., hurricanes) and earthquakes
• Covered Line: Property, Fire and Dwelling

2021 Aggregate Catastrophe

Reinsurance Program

*4% was placed on an annual basis through Reinsurance Facilities

Earnings Call Presentation - 4Q 2020

22

Non-GAAP Financial Measures

Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities is a ratio that uses a non-GAAP financial measure. It is calculated by dividing shareholders' equity after excluding the after-tax impact of net unrealized gains on fixed income securities by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. The Company uses the trend in book value per share, excluding the after-tax impact of net unrealized gains on fixed income securities in conjunction with book value per share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes the non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management. The Company believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.

Book Value Per Share Excluding Net Unrealized Gains on Fixed Maturities and Goodwill is a calculation that uses a non-GAAP financial measure. It is calculated by dividing shareholders' equity after excluding the after-tax impact of net unrealized gains on fixed income securities and goodwill by total Common Shares Issued and Outstanding. Book value per share is the most directly comparable GAAP financial measure. The Company uses the trends in book value per share excluding the after-tax impact of net unrealized gains on fixed income securities and goodwill in conjunction with book value per share to identify and analyze the change in net worth excluding goodwill attributable to management efforts between periods. The Company believes the non-GAAP financial measure is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are not influenced by management. The Company believes it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.

											For the Periods Ended
		4Q'20	3Q'20	2Q'20	1Q'20	4Q'19	3Q'19	2Q'19	1Q'19		2018		2017		2016
Book Value Per Share	$	69.74	$	66.47	$	64.15	$	57.54	$	59.59	$	58.43	$	55.34	$	51.13	$	47.10	$	41.11	$	38.52
Less: Net Unrealized Gains on Fixed Maturities Per Share			(11.07)		(9.84)		(9.02)		(4.01)		(6.51)		(6.92)		(5.52)		(3.72)		(1.70)		(5.54)		(3.52)
Book Value Per Share Excluding Net Unrealized Gains on Fixed
Maturities	$	58.67	$	56.63	$	55.13	$	53.53	$	53.08	$	51.51	$	49.82	$	47.41	$	45.40	$	35.57	$	35.00
Less: Goodwill			(17.02)		(17.03)		(17.06)		(17.04)		(16.72)		(16.71)		(16.74)		(17.12)		(17.18)		(6.28)		(6.30)
Book Value Per Share Excluding Net Unrealized Gains on Fixed
Maturities and Goodwill		$	41.65	$	39.60	$	38.07	$	36.49	$	36.36	$	34.80	$	33.08	$	30.29	$	28.22	$	29.29	$	28.70

Earnings Call Presentation - 4Q 2020

23

Non-GAAP Financial Measures

Return on Equity

						For the Periods Ended
		4Q'20	3Q'20	2Q'20	1Q'20	4Q'19	3Q'19	2Q'19	1Q'19	2018	2017	2016
Rolling 12 Month Return on Average Shareholders' Equity (5
Point Avg)	9.8%	10.8%	11.4%	11.8%	14.8%	12.1%	12.4%	10.8%	7.7%	5.9%	0.8%
Less: Net Unrealized Gains on Fixed Maturities	1.5%	1.5%	1.4%	1.2%	1.5%	1.0%	0.9%	0.6%	0.6%	0.7%	0.1%
Rolling 12 Month Return on Average Shareholders' Equity
Excluding Net Unrealized Gains on Fixed Maturities (5 Point
Avg)	11.3%	12.3%	12.8%	13.0%	16.3%	13.1%	13.3%	11.4%	8.3%	6.6%	0.9%
Less: Goodwill	5.0%	5.6%	6.0%	6.5%	8.4%	7.2%	6.6%	5.2%	3.1%	1.4%	0.2%
Rolling 12 Month Return on Average Shareholders' Equity
Excluding Net Unrealized Gains on Fixed Maturities and
Goodwill (5 Point Avg)		16.3%	17.9%	18.8%	19.5%	24.7%	20.3%	19.9%	16.6%	11.4%	8.0%	1.1%

Earnings Call Presentation - 4Q 2020

24

Non-GAAP Financial Measures

Reconciliation of "All Other" Sources of Volatility

		Three Months Ended, As Reported
	Dec. 31,	Sep. 30,	Jun. 30,	Mar. 31,	Dec. 31,	Variance
Dollars per Unrestricted Share - Diluted	2020	2020	2020	2020	2019	QoQ
						-
						-
All Other Volatility						-
Partial Satisfaction of Judgment	-	-	-	1.05	-	-
Sale of Classic Collectors Auto Business	-	-	-	-	-	-
Refinement of CEI Estimate	-	-	0.06	0.05	0.07	(0.07)
Impact of Purchase Accounting	(0.05)	(0.05)	(0.06)	(0.07)	(0.07)	0.02
Total All Other	(0.05)	(0.05)	-	1.03	-	(0.05)

Earnings Call Presentation - 4Q 2020

25

Non-GAAP Financial Measures

Reconciliation of COLI investment into Net Investment Income. Prior to 1Q 2020, COLI was reported in "Other Income." Starting in the 1Q 2020, COLI was reported in net investment income.

			For the
		Period Ended
Consolidated			4Q'19
Reported Net Investment Income	$	93.9
COLI Investment Income		$	3.6
Total Adjusted Net Investment Income	$	97.5
Reported Pre-Tax Equivalent Book Yield			4.5%
COLI Pre-Tax Equivalent Book Yield			0.1%
Total Pre-Tax Equivalent Book Yield			4.6%
Life and Health
Reported Net Investment Income	$	52.0
COLI Investment Income		$	2.7
Total Adjusted Net Investment Income	$	54.7

Earnings Call Presentation - 4Q 2020

26

Non-GAAP Financial Measures

Kemper believes that Adjusted Consolidated Net Operating Income provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. Income (Loss) from Change in Fair Value of Equity and Convertible Securities, Net Realized Gains on Sales of Investments and Impairment Losses related to investments included in the Company's results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the Company's investments, the timing of which is unrelated to the insurance underwriting process. Acquisition Related Transaction and Integration Costs may vary significantly between periods and are generally driven by the timing of acquisitions and business decisions which are unrelated to the insurance underwriting process. Debt Extinguishment, Pension and Other Charges relate to (i) loss from early extinguishment of debt, which is driven by the Company's financing and refinancing decisions and capital needs, as well as external economic developments such as debt market conditions, the timing of which is unrelated to the insurance underwriting process; (ii) settlement of pension plan obligations which are business decisions are made by the Company, the timing of which is unrelated to the underwriting process; and (iii) other charges that are non-standard, not part of the ordinary course of business, and unrelated to the insurance underwriting process. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company's business or economic trends.

Earnings Call Presentation - 4Q 2020

27

Non-GAAP Financial Measures

Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share is a non-GAAP financial measure computed by dividing Adjusted Consolidated Net Operating Income (Loss) attributed to unrestricted shares by the weighted-average unrestricted shares and equivalent shares outstanding. The most directly comparable GAAP financial measure is Diluted Net Income Per Unrestricted Share.

Kemper believes that Diluted Adjusted Consolidated Net Operating Income Per Unrestricted Share provides investors with a valuable measure of its ongoing performance because it reveals underlying operational performance trends that otherwise might be less apparent if the items were not excluded. Income from change in fair value of equity and convertible securities, net realized gains on sales of investments, impairment losses related to investments, acquisition related transaction, integration and other costs and loss from early extinguishment of debt included in Kemper's results may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions that impact the values of the company's investments, the timing of which is unrelated to the insurance underwriting process.

								For the Three Months Ended
Per Unrestricted Share				4Q20				3Q20			2Q20			1Q20				4Q19
Net Income - Diluted	$	1.46		$	1.83	$	1.91	$	0.95		$	1.85
Net (Income) Loss From:
Change in Fair Value of Equity & Convertible Securities			(0.86)				(0.53)			(0.86)			1.39				(0.46)
Net Realized Gains on Sales of Investments			-				(0.12)			(0.14)			(0.19)				(0.03)
Impairment Losses			(0.01)				0.01			0.08			0.14				0.02
Acquisition Related Transaction, Integration and Other Costs			0.24				0.17			0.21			0.14				0.07
Debt Extinguishment, pension and other charges			0.76				-			-			-				-
Adj. Consolidated Net Operating Income - Diluted	$	1.59		$	1.36	$	1.20	$	2.43		$	1.45

Earnings Call Presentation - 4Q 2020

28

Non-GAAP Financial Measures

Underlying Combined Ratio is a non-GAAP financial measure. It is computed by adding the Current Year Non-catastrophe Losses and LAE Ratio with the Insurance Expense Ratio. The most directly comparable GAAP financial measure is the Combined Ratio, which is computed by adding total incurred losses and LAE, including the impact of catastrophe losses and loss and LAE reserve development from prior years, with the Insurance Expense Ratio.

The Company believes the underlying combined ratio is useful to investors and is used by management to reveal the trends in the Company's property and casualty insurance businesses that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses cause loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of our insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company's underwriting performance. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.

Earnings Call Presentation - 4Q 2020

29

Non-GAAP Financial Measures

Underlying Combined Ratio - Continued

							For the Three Months Ended
			4Q20			3Q20			2Q20			1Q20			4Q19
Specialty P&C Insurance
Combined Ratio as Reported		91.7%			86.3%		91.0%		94.5%			93.8%
Current Year Catastrophe Loss and LAE Ratio	(0.6%)		(0.2%)	(0.6%)	0.0%		(0.5%)
Prior Years Non-Catastrophe Losses and LAE	0.2%		(0.2%)	(1.3%)	(0.6%)		0.5%
Prior Years Catastrophe Losses and LAE Ratio		0.0%			0.0%		0.0%		0.0%			0.0%
Underlying Combined Ratio	91.3%		85.9%	89.1%	93.9%		93.8%
Preferred P&C Insurance
Combined Ratio as Reported		96.2%			129.9%		102.2%		92.6%			97.5%
Current Year Catastrophe Loss and LAE Ratio	3.1%		(35.5%)	(12.6%)	(2.7%)		(6.4%)
Prior Years Non-Catastrophe Losses and LAE	(5.6%)		(3.6%)	(5.0%)	1.8%		3.8%
Prior Years Catastrophe Losses and LAE Ratio		(0.1%)			(0.1%)		(0.2%)		0.6%			1.7%
Underlying Combined Ratio	93.6%		90.7%	84.4%	92.3%		96.6%
Preferred Auto
Combined Ratio as Reported		112.3%			103.5%		100.1%		99.5%			103.6%
Current Year Catastrophe Loss and LAE Ratio	(0.4%)		(1.6%)	(2.0%)	(0.2%)		(1.3%)
Prior Years Non-Catastrophe Losses and LAE	(9.2%)		(5.3%)	(9.8%)	(1.9%)		2.4%
Prior Years Catastrophe Losses and LAE Ratio		0.4%			0.2%		0.3%		0.1%			(0.2%)
Underlying Combined Ratio	103.1%		96.8%	88.6%	97.5%		104.5%
Preferred Home & Other
Combined Ratio as Reported	68.6%		175.6%	105.4%	80.7%		87.0%
Current Year Catastrophe Loss and LAE Ratio	9.2%		(94.1%)	(28.8%)	(7.0%)		(15.3%)
Prior Years Non-Catastrophe Losses and LAE	0.6%		(0.6%)	2.3%	8.3%		6.3%
Prior Years Catastrophe Losses and LAE Ratio		(0.8%)			(0.5%)		(1.1%)		1.5%			4.9%
Underlying Combined Ratio	77.6%		80.4%	77.8%	83.5%		82.9%
													Earnings Call Presentation - 4Q 2020		30

Non-GAAP Financial Measures

As Adjusted for Acquisition - Continued

Specialty P&C Insurance Segment
					Three Months Ended
	31-Dec-20		30-Sep-20		30-Jun-20		31-Mar-20		31-Dec-19
Earned Premiums
Kemper Specialty P&C - GAAP As Reported	$	882.4	$	871.4	$	759.0	$	822.5	$	799.7
Current Year Non-CAT Losses and LAE
Kemper Specialty P&C - GAAP As Reported	$	626.2	$	589.0	$	515.8	$	619.8	$	599.5
Less: Impact of Purchase Accounting
Amortization of Fair Value Adjustment to Infinity's Unpaid Loss and LAE		0.4			0.3			0.8			0.7			0.8
As Adjusted 1	$	625.8	$	588.7	$	515.0	$	619.1	$	598.7
Insurance Expenses
Kemper Specialty P&C - GAAP As Reported	$	179.1	$	159.5	$	161.2	$	152.1	$	150.7
Less: Impact of Purchase Accounting		4.1			4.2			4.5			5.2			5.2
As Adjusted 1	$	175.0	$	155.3	$	156.7	$	146.9	$	145.5
As Adjusted 1 Underlying Combined Ratio
As Adjusted 1 Underlying Loss & LAE Ratio		70.9%			67.6%			67.8%			75.3%			74.9%
As Adjusted 1 Expense Ratio		19.8%			17.8%			20.6%			17.9%			18.2%
As Adjusted 1 Underlying Combined Ratio		90.8%			85.4%			88.5%			93.1%			93.1%

¹ As Adjusted is a non-GAAP measure, which is comprised by excluding impact of purchase accounting in 2018 and	Earnings Call Presentation - 4Q 2020	31
including historical results of Kemper and Infinity in periods prior to acquisition date of July 2, 2018.

Non-GAAP Financial Measures

As Adjusted for Acquisition - Continued

Specialty Personal Automobile Insurance
					Three Months Ended
	31-Dec-20		30-Sep-20		30-Jun-20		31-Mar-20		31-Dec-19
Earned Premiums
Kemper Specialty Auto - GAAP As Reported	$	796.1	$	792.2	$	689.8	$	753.2	$	733.1
Current Year Non-CAT Losses and LAE
Kemper Specialty Auto - GAAP As Reported	$	569.1	$	543.4	$	472.4	$	576.0	$	557.5
Less: Impact of Purchase Accounting
Amortization of Fair Value Adjustment to Infinity's Unpaid Loss and LAE		0.3			0.2			0.6			0.6			0.6
As Adjusted 1	$	568.8	$	543.2	$	471.8	$	575.4	$	556.9
Insurance Expenses
Kemper Specialty Auto - GAAP As Reported	$	162.8	$	145.6	$	146.7	$	139.2	$	138.1
Less: Impact of Purchase Accounting		3.3			3.2			3.5			4.5			4.5
As Adjusted 1	$	159.5	$	142.4	$	143.2	$	134.7	$	133.6
As Adjusted 1 Underlying Combined Ratio
As Adjusted 1 Underlying Loss & LAE Ratio		71.4%			68.6%			68.4%			76.4%			76.0%
As Adjusted 1 Expense Ratio		20.0%			18.0%			20.8%			17.9%			18.2%
As Adjusted 1 Underlying Combined Ratio		91.5%			86.5%			89.2%			94.3%			94.2%

¹ As Adjusted is a non-GAAP measure, which is comprised by excluding impact of purchase accounting in 2018 and	Earnings Call Presentation - 4Q 2020	32
including historical results of Kemper and Infinity in periods prior to acquisition date of July 2, 2018.