Kemper Corp. earned some kudos from Fitch Ratings over its improved financial strength, and a subsidiary gained an outlook upgrade.

Specifically, Fitch affirmed Kemper’s “A-” (Strong) financial strength ratings. As well, it boosted the ratings outlook and issuer default rating to Positive from Stable for subsidiary Trinity Universal Insurance Co.

The outlook revision for Trinity is connected to improved underwriting results due in part to its $1.3 billion cash and stock acquisition of Infinity Property and Casualty Corp. last year.

Fitch noted that Kemper has improved the financial performance of its P/C business in recent years, thanks to its ongoing profit improvement plan. Examples that gained Fitch’s notice include a 2018 combined ratio of 98.2, down from 1045.6 the year before. Fitch credits Kemper with taking “pricing actions, moderating loss trends and strong performance” stemming from the Infinity acquisition.

Kemper also deserves credit for paying back $215 million out of the $250 million term loan it borrowed to finance the Infinity acquisition, as well as the shareholders equity growth stemming from the acquisition.

As well, Fitch noted Kemper’s “stable underlying earnings, strong capitalization and effective niche in the home service market” for its life/health segment.

“The group has been a steady source of capital for Kemper, with dividend capacity to support parent objective,” Fitch said.

Source: Fitch Ratings