AM Best Comments on Credit Ratings of Kemper Corp. Following Announcement of Acquisition of American Access Casualty Company

AM Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) rating of “bbb-” of Kemper Corporation (Kemper) (Delaware) [NYSE:KMPR], and the Financial Strength Rating (FSR) of A- (Excellent) and Long-Term ICRs of “a-” of its property/casualty operating subsidiaries, referred to as Kemper Property & Casualty Group, are unchanged by the announcement that Kemper plans to acquire American Access Casualty Company (American Access) (Downers Grove, IL) for $370 million in an all-cash transaction. The outlook of Kemper’s Credit Ratings (ratings) is positive.

The acquisition is in line with Kemper’s strategy of seeking growth in niche markets. Based on the most recent 12-month results, the acquisition will increase Kemper’s specialty auto net premiums written by over 10%, and will expand its geographic footprint and presence in Hispanic communities.

Following the close of the transaction, expected in the first quarter of 2021, Kemper’s financial leverage and coverage metrics are expected to remain comfortably within AM Best’s guidelines for the ratings. The transaction will drive an increase in tangible leverage, but management anticipates earnings over the course of the first year after the acquisition to neutralize this effect. As a result, AM Best does not expect that the transaction will have any adverse rating impact, but will continue to discuss its progress with management and assess its effects on Kemper’s operations.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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