Kemper announces $150 million accelerated share repurchase

By Navneeta Nandan

Aug 14 - (The Insurer) - Specialty insurer Kemper Corporation has entered into an accelerated share repurchase transaction (ASR) to buy back $150 million of its outstanding common shares, over its previously announced $550 million repurchase authorizations.

Under the ASR agreement, Kemper will pay $150 million to Goldman Sachs on Thursday and expects an initial delivery of 2,279,203 shares of Kemper common stock.

The total number of shares to be repurchased in the ASR agreement will be based on the volume-weighted average price of Kemper common stock on specified dates during the term of the ASR agreement, less a discount.

The transaction is expected to be completed within nearly three months.

Shares of Kemper were down 21.3% on August 7 after it posted its quarterly results on August 6, which missed the Wall Street expectations. The company generated a combined ratio of 95.4%, up 4.7 points from the prior-year period, driven by elevated claim severity and unfavorable prior-year development.

The falling of shares led to Piper Sandler downgrading the stock to underweight from overweight.

In the ASR announcement on Thursday, president and CEO Joseph Lacher said, "We believe our shares are undervalued, and this transaction represents a compelling use of capital."