Kemper’s California nonstandard auto book is about $1.8B of premium (it was about $2.1B last year). That book has been running around a 107% combined ratio, so they’re losing roughly 7 cents on every dollar of premium. California Department of Insurance just approved about a 7% price increase on the main program there (Infinity SPEC).
If that 7% earns through and claims don’t jump, the simple math is:
>0.07 × $1.8B / \~59M shares ≈ $2.14/share pretax (\~$1.70 after tax)
They can keep filing more rate increases. Recent Infinity California approvals have been taking a median of about 3–4 months, and they’ve been getting through (sometimes with a haircut on the ask). While California is still inadequate, there’s no obvious reason that path has to stop here.
Looking out about 1–2 years: if the company overall gets to around a mid-95% combined ratio on about $4B of premium, that’s roughly 5 points of underwriting margin.
>$4B × 5% ≈ $200M pretax ≈ $3.40/share
In Kemper’s own good years the stock usually traded around 11–12× earnings, which on that number is about $40.
>$3.40 × 11–12× ≈ $37–$41
Large P&C peers today sit in a similar band (about 8–12× trailing, 10–13× forward). Getting toward \~$50 still needs more than that simple $200M: more California rate filings, some volume once the book is adequate, and/or a couple points of claims and ops improvement.
On the ops side they hired Todd Williams as Chief Claims Officer from Bristol West, under Eric Kappler (also from Bristol West). That franchise has run nonstandard loss ratios well ahead of Kemper’s classified NSA book in recent years.
>\+1–2 Specialty combined-ratio points ≈ \~$0.50–$1/share
At a normal 11–12× earnings multiple, that is another \~$5–$12 on the stock price (call it roughly $5–$10 as a round range), and the target moves from about $40 into roughly the $45–$50 area.
Earlier post: [www.reddit.com/r/ValueInvesting/commen…nce\_company\_trading\_near/](https://www.reddit.com/r/ValueInvesting/comments/1tr8il0/kmpr_a_60down_insurance_company_trading_near/)
Spreadsheet (search Infinity): [www.insurance.ca.gov/0250-insurers/0800-r…-List-YTD-9-30-26.xlsx](https://www.insurance.ca.gov/0250-insurers/0800-rate-filings/0100-rate-filing-lists/rate-filing-approvals/upload/Approval-Closed-List-YTD-9-30-26.xlsx)