KEMPER Corp

Previous wording

Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. There were no applicable significant non-recurring items that the Company excluded from the calculation of Adjusted Consolidated Net Operating Income for the three months ended March 31, 2025 or 2024.

Current wording

Significant non-recurring items are excluded when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, and (b) there has been no similar charge or gain within the prior two years. There were no applicable significant non-recurring items that the Company excluded from the calculation of Adjusted Consolidated Net Operating Income for the three and six months ended June 30, 2025 or 2024.

Previous wording

Change in Fair Value of Equity and Convertible Securities, Net Realized Investment Gains 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 and Disposition Related Transaction Costs, Integration Costs, and Restructuring and Other 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 Settlement 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 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. Goodwill Impairment Charges are excluded because they are infrequent and non-recurring charges. Non-Core Operations includes the results of our Preferred Insurance business which we expect to fully exit. These results are excluded because they are irrelevant to our ongoing operations and do not qualify for Discontinued Operations under GAAP. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.

Current wording

Change in Fair Value of Equity and Convertible Securities, Net Realized Investment (Losses) Gains 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 and Disposition Related Transaction Costs, Integration Costs, and Restructuring and Other 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 Settlement 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 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. Goodwill Impairment Charges are excluded because they are infrequent and non-recurring charges. Non-Core Operations includes the results of our Preferred Insurance business which we expect to fully exit. These results are excluded because they are irrelevant to our ongoing operations and do not qualify for Discontinued Operations under GAAP. Significant non-recurring items are excluded because, by their nature, they are not indicative of the Company’s business or economic trends.

Previous wording

Net Income attributable to Kemper Corporation was $99.7 million ($1.56 per unrestricted common share) for the three months ended March 31, 2025, compared to Net Income attributable to Kemper Corporation of $71.3 million ($1.11 per unrestricted common share) for the same period in 2024.

Current wording

Net Income Attributable to Kemper Corporation was $72.6 million ($1.13 per unrestricted common share) for the three months ended June 30, 2025, compared to Net Income Attributable to Kemper Corporation of $75.4 million ($1.17 per unrestricted common share) for the same period in 2024.

Previous wording

A reconciliation of Net Income attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income (a non-GAAP financial measure) for the three months ended March 31, 2025 and 2024 is presented below.

Current wording

A reconciliation of Net Income attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income (a non-GAAP financial measure) for the three and six months ended June 30, 2025 and 2024 is presented below.

Previous wording

Net Income attributable to Kemper Corporation increased by $28.4 million for the three months ended March 31, 2025, compared to the same period in 2024, due primarily to higher Adjusted Consolidated Net Operating Income.

Current wording

Net Income attributable to Kemper Corporation increased by $25.6 million for the six months ended June 30, 2025, compared to the same period in 2024, due primarily to higher Adjusted Consolidated Net Operating Income.

Previous wording

Total Revenues increased by $50.0 million to $1,193.0 million for the three months ended March 31, 2025, compared to $1,143.0 million for the same period in 2024. The increase was primarily driven by higher earned premiums.

Current wording

Total Revenues increased by $95.7 million to $1,225.6 million for the three months ended June 30, 2025, compared to $1,129.9 million for the same period in 2024. The increase was primarily driven by higher earned premiums.

Previous wording

Earned Premiums increased by $56.0 million to $1,087.9 million for the three months ended March 31, 2025, compared to $1,031.9 million for the same period in 2024, primarily driven by a $122.2 million increase from the Specialty Property & Casualty Insurance segment due to higher average earned premium per exposure resulting from rate increases and higher business volumes. This was partially offset by a $68.6 million reduction in premiums from our Preferred Insurance business, reported as Non-Core Operations, due primarily to lower volumes resulting from the exit and run-off of the business.

Current wording

Earned Premiums increased by $97.1 million to $1,130.8 million for the three months ended June 30, 2025 compared to $1,033.7 for the same period in 2024, primarily driven by a $148.2 million increase from the Specialty Property & Casualty Insurance segment due to higher average earned premium per exposure resulting from rate increases and higher business volumes. This was partially offset by a $50.8 million reduction in premiums from our Preferred Insurance business, reported as Non-Core Operations, due primarily to lower volumes resulting from the exit and run-off of the business.

Previous wording

Net Realized Investment Gains decreased by $5.7 million to $0.9 million for the three months ended March 31, 2025, compared to $6.6 million for the same period in 2024, due primarily to decreased gains on sales of fixed maturity investments, partially offset by the absence of net realized losses on ultra-long treasury future derivative transactions that did not qualify for hedge accounting.

Current wording

Net Realized Investment (Losses) Gains decreased by $7.3 million for the six months ended June 30, 2025, compared to the same period in 2024, due primarily to decreased gains on sales of fixed maturity investments, partially offset by the absence of net realized losses on ultra-long treasury future derivatives transactions that did not qualify for hedge accounting.

Previous wording

The Specialty Property & Casualty Insurance segment reported Total Segment Adjusted Net Operating Income of $97.9 million for the three months ended March 31, 2025, compared to Total Segment Adjusted Net Operating Income of $69.2 million for the same period in 2024. Segment adjusted net operating results improved by $28.7 million that included a $25.4 million and $3.3 million increase from personal automobile and commercial vehicle insurance, respectively, due primarily to higher average earned premiums per exposure resulting from rate increases, partially offset by increased underlying claim severity.

Current wording

The Specialty Property & Casualty Insurance segment reported Total Segment Adjusted Net Operating Income of $79.0 million for the three months ended June 30, 2025, compared to Total Segment Adjusted Net Operating Income of $102.3 million for the same period in 2024. Segment adjusted net operating results decreased by $23.3 million that included a $13.8 million and $9.5 million decrease from personal automobile and commercial automobile insurance, respectively, due primarily to an increase in the Underlying Combined Ratio for personal automobile insurance and higher adverse prior year development in commercial automobile insurance, partially offset by growth from rate increases and business volumes.

Previous wording

Net Investment Income in the Specialty Property & Casualty Insurance segment increased by $9.4 million for the three months ended March 31, 2025, compared to the same period in 2024, due primarily to higher levels of Fixed Income securities, higher rate earned on Company-Owned Life Insurance, and higher average levels of Short-term Investments.

Current wording

Net Investment Income in the Specialty Property & Casualty Insurance segment increased by $3.0 million for the three months ended June 30, 2025, compared to the same period in 2024, due primarily to higher levels of invested assets resulting from growth.

Previous wording

Insurance Expenses were $205.1 million, or 21.3% of earned premiums, for the three months ended March 31, 2025, compared to $176.9 million, or 21.1% of earned premiums for the same period in 2024. Insurance Expenses increased $28.2 million due to higher volume-related expenses associated with increased business volumes.

Current wording

Insurance Expenses were $214.8 million, or 21.3% of earned premiums, for the three months ended June 30, 2025, compared to $180.7 million, or 20.9% of earned premiums for the same period in 2024. Insurance Expenses increased $34.1 million primarily due to higher volume-related expenses associated with increased business volumes.

Previous wording

The Specialty Property & Casualty Insurance segment’s first quarter of 2025 effective income tax rate was 19.8% compared to 19.9% for the same period in 2024. The effective income tax rate for the first quarters of 2025 and 2024 differs from the federal statutory income tax rate primarily due to investments in Company-Owned Life Insurance, Tax-Exempt Investment Income and Dividends Received Deductions. The change in the effective tax rate from the first quarter of 2024 is driven by an increased benefit from Company-Owned Life Insurance.

Current wording

The Specialty Property & Casualty Insurance segment’s three months ended June 30, 2025 effective tax rate was 20.3% compared to 20.1% for the same period in 2024. The effective income tax rate for the second quarters of 2025 and 2024 differs from the federal statutory income tax rate due to investments in Company-Owned Life Insurance, Tax-Exempt Investment Income and nondeductible expenses.

Previous wording

Incurred losses and LAE were $686.8 million, or 71.4% of earned premiums for the three months ended March 31, 2025, compared to $619.1 million, or 73.7% of earned premiums, for the same period in 2024. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio. Underlying losses and LAE as a percentage of earned premiums were 70.9% for the three months ended March 31, 2025, an improvement of 1.6 percentage points, compared to the same period in 2024, driven by higher average earned premium per exposure (12.6% increase year over year) resulting from rate increases and lower underlying claims frequency, partially offset by higher claims average severity. Underlying losses and LAE exclude the impact of catastrophes and loss and LAE reserve development. Adverse loss and LAE reserve development (including catastrophe reserve development) was $0.7 million for the three months ended March 31, 2025, compared to adverse development of $6.0 million for the same period in 2024, an improvement of $5.3 million due primarily to normalization in loss patterns within property damage coverages. Catastrophe losses and LAE (excluding reserve development) were $3.8 million for the three months ended March 31, 2025 compared to $4.1 million for the same period in 2024, an improvement of $0.3 million due to fewer catastrophe events in the quarter.

Current wording

Incurred Loss and LAE were $1,436.2 million or 72.8% of earned premiums for the six months ended June 30, 2025 compared to $1,221.3 million or 71.7% of earned premiums, for the same period in 2024. Incurred losses and LAE as a percentage of earned premiums increased primarily due to a deterioration in the underlying loss and LAE ratio. Underlying losses and LAE as a percentage of earned premiums were 71.6% for the six months ended June 30, 2025, a deterioration of 1.0 percentage point, compared to the same period in 2024 due to increased claim severity in personal automobile, partially offset by higher average earned premium per exposure (12.6% increase year over year) resulting from rate increases and favorable frequency trends as the Company optimized pricing to support sustained long-term policy growth. Underlying losses and LAE exclude the impact of catastrophes and loss and LAE reserve development. Adverse loss and LAE reserve development (including catastrophe reserve development) was $14.7 million for the six months ended June 30, 2025, compared to adverse development of $5.1 million for the same period in 2024, an increase of $9.6 million due primarily to emerging loss patterns on bodily injury coverages and higher than expected development on litigated matters, partially offset by favorable development on property damage and policies with personal injury protection coverage. Catastrophe losses and LAE (excluding reserve development) were $9.1 million for the six months ended June 30, 2025 compared to $14.4 million for the same period in 2024, a decrease of $5.3 million due to fewer catastrophe events and lower severity per event in the current period.

Previous wording

Earned Premiums on personal automobile insurance increased by $78.4 million for the three months ended March 31, 2025, compared to the same period in 2024, due to higher average earned premium per exposure resulting from rate increases and higher business volumes. Incurred losses and LAE were $526.5 million, or 69.9% of earned premiums for the three months ended March 31, 2025, compared to $496.3 million, or 73.5% of earned premiums, for the same period in 2024. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to an improvement in the underlying loss and LAE ratio. Underlying losses and LAE as a percentage of related earned premiums were 70.1% for the three months ended March 31, 2025, compared to 71.9% for the same period in 2024, an improvement of 1.8 percentage points primarily driven by higher average earned premiums per exposure resulting from rate increases, partially offset by higher claims average severity trends. Favorable loss and LAE reserve development was $4.6 million for the three months ended March 31, 2025, compared to adverse development of $7.1 million for the same period in 2024, an improvement of $11.7 million due primarily to stabilization of loss patterns in bodily injury and property damage coverages. Catastrophe losses and LAE (excluding reserve development) were $2.7 million for the three months ended March 31, 2025, compared to $3.5 million for the same period in 2024, an improvement of $0.8 million mainly due to few catastrophe events in the quarter.

Current wording

Earned Premiums on personal automobile insurance increased by $176.2 million for the six months ended June 30, 2025, compared to the same period in 2024, due to higher average earned premium per exposure resulting from rate increases and higher business volumes. Incurred losses and LAE were $1,097.8 million, or 71.1% of earned premiums for the six months ended June 30, 2025, compared to $976.4 million, or 71.4% of earned premiums, for the same period in 2024. Incurred losses and LAE as a percentage of earned premiums decreased primarily due to favorable prior year development and lower catastrophe losses and LAE, partially offset by increased underlying losses and LAE. Underlying losses and LAE as a percentage of related earned premiums were 71.2% for the six months ended June 30, 2025, compared to 70.1% for the same period in 2024, a deterioration of 1.1 percentage points as the increase in loss costs, particularly claim severity, that were offset by higher average earned premium per exposure (11.9% increase year over year) as we optimized pricing to support sustained long-term policy growth. Favorable loss and LAE reserve development was $9.3 million for the six months ended June 30, 2025, compared to adverse development of $7.7 million for the same period in 2024, an improvement of $17.0 million due primarily to the improvement of loss patterns in bodily injury and property damage coverages and improving settlement patterns on policies with personal injury protection coverage. Catastrophe losses and LAE (excluding reserve development) were $7.0 million for the six months ended June 30, 2025, compared to $11.4 million for the same period in 2024, an improvement of $4.4 million due to fewer catastrophe events and lower severity per event in the current quarter.

Previous wording

Earned Premiums from commercial automobile insurance increased by $43.8 million for the three months ended March 31, 2025, compared to the same period in 2024, due primarily to higher average earned premium per exposure resulting from rate increases and targeted mix shifts, and higher business volumes. Incurred losses and LAE were $160.3 million, or 76.9% of earned premiums in 2025, compared to $122.8 million, or 74.6% of earned premiums in 2024. Incurred losses and LAE as a percentage of earned premiums increased primarily due to higher claims average severity trends. Underlying losses and LAE as a percentage of earned premiums were 73.9% for the three months ended March 31, 2025, compared to 74.8% during the same time period in 2024, an improvement of 0.9 percentage points due primarily to higher average earned premiums per exposure resulting from rate increases and mix shifts and a lower frequency of claims, partially offset by higher claims average severity trends. Adverse loss and LAE reserve development was $5.3 million for the three months ended March 31, 2025, compared to favorable development of $1.1 million for the same period in 2024, a deterioration of $6.4 million due primarily to evolving loss patterns in bodily injury coverages.

Current wording

Earned Premiums in commercial automobile insurance increased by $94.2 million for the six months ended June 30, 2025, compared to the same period in 2024, due primarily to higher average earned premium per exposure resulting from rate increases, targeted mix shifts, and higher business volumes. Incurred losses and LAE were $338.4 million, or 78.7% of earned premiums in 2025, compared to $244.9 million, or 72.9% of earned premiums in 2024. Incurred losses and LAE as a percentage of earned premiums increased primarily due to adverse prior year development. Underlying losses and LAE as a percentage of earned premiums were 72.7% for the six months ended June 30, 2025, compared to 72.8% during the same time period in 2024, an improvement of 0.1 percentage points due primarily to higher average earned premiums per exposure resulting from rate increases, mix shifts, and a lower frequency of claims, partially offset by higher claim severity trends. Adverse loss and LAE reserve development was $24.0 million for the six months ended June 30, 2025, compared to favorable development of $2.6 million for the same period in 2024, an increase of $26.6 million due primarily to evolving loss patterns and higher defense costs associated with attorney-represented bodily injury coverages, partially offset by favorable loss development patterns on property damage coverages.

Previous wording

The Life Insurance segment’s first quarter 2025 effective income tax rate was 15.0% compared to 15.2% for the same period in 2024. The effective income tax rate for the first quarters of 2025 and 2024 differs from the federal statutory income tax rate primarily due to investments in Company-Owned Life Insurance and Tax-Exempt Investment Income. The decrease in the effective tax rate from the first quarter of 2024 is driven by an increased benefit from Company-Owned Life Insurance.

Current wording

The Life Insurance segment’s three months ended June 30, 2025 effective income tax rate was 12.7% compared to 85.0% for the same period in 2024. The effective income tax rate for the second quarter of 2025 and 2024 differs from the federal statutory income tax rate due to investments in Company-Owned Life Insurance and Tax-Exempt Investment Income. The change in the effective tax rate from the three months ended June 30, 2024 is driven by the segment generating income in the current period versus a net loss in 2024, while recognizing consistent tax benefits related to Company-Owned Life Insurance and Tax-Exempt Investment Income.

Previous wording

The Life Insurance segment reported Total Segment Adjusted Net Operating Income of $17.2 million for the three months ended March 31, 2025, compared to $11.9 million for the same period in 2024. The increase in segment net operating results was primarily due to higher net investment income.

Current wording

The Life Insurance segment reported Total Segment Adjusted Net Operating Income of $29.8 million for the six months ended June 30, 2025, compared to $11.7 million for the same period in 2024. The increase in segment net operating results was primarily due to higher net investment income mostly driven by a reduction in losses from alternative investments.

Previous wording

Earned Premiums increased $2.4 million for the three months ended March 31, 2025, compared to the same period in 2024, due primarily to higher average rates on life insurance products.

Current wording

Earned Premiums increased by $2.1 million for the six months ended June 30, 2025, compared to the same period in 2024, due primarily to higher average premiums per policy on life insurance products.

Previous wording

Net investment income increased by $4.1 million for the three months ended March 31, 2025, compared to the same period in 2024, due primarily to lower losses on alternative investments and higher rate earned on Company-Owned Life Insurance.

Current wording

Net investment income increased by $18.3 million for the six months ended June 30, 2025, compared to the same period in 2024, due primarily to lower losses on alternative investments.

Previous wording

Net Investment Income for the three months ended March 31, 2025 and 2024 is presented below:

Current wording

Net Investment Income for the three and six months ended June 30, 2025 and 2024 is presented below:

Previous wording

The change in unrealized losses on investments for the three months ended March 31, 2025 was a decrease of $70.5 million, primarily attributable to decreases in interest rates.

Current wording

Unrealized losses on investments decreased $2.1 million and $72.6 million for the three and six months ended June 30, 2025, respectively, primarily attributable to decreases in interest rates.

Previous wording

The components of Change in Fair Value of Equity and Convertible Securities for the three months ended March 31, 2025 and 2024 are presented below:

Current wording

The components of Change in Fair Value of Equity and Convertible Securities for the three and six months ended June 30, 2025 and 2024 are presented below:

Previous wording

Net Realized Gains on Sales of Investments

Current wording

Net Realized (Losses) Gains on Sales of Investments

Previous wording

The components of Net Realized Investment Gains for the three months ended March 31, 2025 and 2024 are presented below:

Current wording

The components of Net Realized Investment (Losses) Gains for the three and six months ended June 30, 2025 and 2024 are presented below:

Previous wording

The Company regularly reviews its investment portfolio to determine whether a decline in the fair value of an investment has occurred from credit or other, non-credit related factors. If the decline in fair value is due to credit factors and the Company does not expect to receive cash flows sufficient to support the entire amortized cost basis, the credit loss is reported in the Condensed Consolidated Statements of Income in the period that the declines are evaluated. Conversely, an increase in the fair

Current wording

The Company regularly reviews its investment portfolio to determine whether a decline in the fair value of an investment has occurred from credit or other, non-credit related factors. If the decline in fair value is due to credit factors and the Company does not expect to receive cash flows sufficient to support the entire amortized cost basis, the credit loss is reported in the Condensed Consolidated Statements of Income in the period that the declines are evaluated. Conversely, an increase in the fair value or disposal of an investment with a previously established credit allowance will result in the reversal of impairment losses reported in the Condensed Consolidated Statements of Income in the period.

Previous wording

The components of Impairment Losses in the Condensed Consolidated Statements of Income for the three months ended March 31, 2025 and 2024 were:

Current wording

The components of Impairment Losses in the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2025 and 2024 were:

Previous wording

1 Includes losses from intent-to-sell securities and direct write-down securities of $1.2 million and $1.5 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

1 Includes losses from intent-to-sell securities and direct write-down securities of $0.1 million and $1.3 million for the three and six months ended June 30, 2025, respectively, and $0.2 million and $1.7 million for the three and six months ended June 30, 2024, respectively.

Previous wording

The Company’s fixed maturity investment portfolio is comprised primarily of high-grade corporate, municipal and agency bonds. At March 31, 2025, approximately 94.5% of the Company’s fixed maturity investment portfolio was rated investment-grade, which the Company defines as a security issued by a high quality obligor with at least a relatively stable credit profile and where it is highly likely that all contractual payments of principal and interest will timely occur and carry a rating from the National Association of Insurance Commissioners (“NAIC”) of 1 or 2. Securities with a rating of 1 or 2 from the NAIC typically are rated by one or more Nationally Recognized Statistical Rating Organizations and either have a rating of AAA, AA, A or BBB from Standard & Poor’s (“S&P”); a rating of Aaa, Aa, A or Baa from Moody’s Investors Service (“Moody’s”); or a rating of AAA, AA, A or BBB from Fitch Ratings.

Current wording

The Company’s fixed maturity investment portfolio is comprised primarily of high-grade corporate, municipal and agency bonds. At June 30, 2025, approximately 94.2% of the Company’s fixed maturity investment portfolio was rated investment-grade, which the Company defines as a security issued by a high quality obligor with at least a relatively stable credit profile and where it is highly likely that all contractual payments of principal and interest will timely occur and carry a rating from the National Association of Insurance Commissioners (“NAIC”) of 1 or 2. Securities with a rating of 1 or 2 from the NAIC typically are rated by one or more Nationally Recognized Statistical Rating Organizations and either have a rating of AAA, AA, A or BBB from Standard & Poor’s (“S&P”); a rating of Aaa, Aa, A or Baa from Moody’s Investors Service (“Moody’s”); or a rating of AAA, AA, A or BBB from Fitch Ratings.

Previous wording

Gross unrealized losses on the Company’s investments in below-investment-grade fixed maturities were $14.0 million and $14.2 million at March 31, 2025 and December 31, 2024, respectively.

Current wording

Gross unrealized losses on the Company’s investments in below-investment-grade fixed maturities were $19.8 million and $14.2 million at June 30, 2025 and December 31, 2024, respectively.

Previous wording

The Company’s short-term investments primarily consist of U.S. Treasury bills, short-term bonds and money market funds . At March 31, 2025, the Company had $273.3 million invested in U.S. Treasury bills and short-term bonds and $272.1 million invested in money market funds, which primarily invest in U.S. Treasury securities.

Current wording

The Company’s short-term investments primarily consist of U.S. Treasury bills, short-term bonds and money market funds . At June 30, 2025, the Company had $133.0 million invested in U.S. Treasury bills and short-term bonds and $274.6 million invested in money market funds, which primarily invest in U.S. Treasury securities.

Previous wording

The Company owns investments in various limited liability investment companies and limited partnerships that primarily invest in mezzanine debt, real estate, and senior debt. Investments in limited liability investment companies and limited partnerships are reported either as Equity Method Limited Liability Investments, Other Equity Interests included in Equity Securities at Fair Value, or Other Investments, depending on the accounting method used to report the investment. Additional information pertaining to these investments at March 31, 2025 and December 31, 2024 is presented below.

Current wording

The Company owns investments in various limited liability investment companies and limited partnerships that primarily invest in mezzanine debt, senior debt, and leveraged buyouts. Investments in limited liability investment companies and limited partnerships are reported either as Equity Method Limited Liability Investments, Other Equity Interests included in Equity Securities at Fair Value, or Other Investments, depending on the accounting method used to report the investment. Additional information pertaining to these investments at June 30, 2025 and December 31, 2024 is presented below.

Previous wording

Expenses for the three months ended March 31, 2025 and 2024 were:

Current wording

Expenses for the three and six months ended June 30, 2025 and 2024 were:

Previous wording

Insurance Expenses were $286.1 million in 2025 compared to $268.0 million in 2024. Policy acquisition costs increased $9.4 million and business unit operating costs increased $10.8 million compared to the same period in 2024, primarily due to growth in the Specialty Property & Casualty Insurance segment from higher average earned premium per exposure resulting from rate increases and higher business volumes, partially offset by reductions due to lower volumes resulting from the exit and run-off of the Preferred Insurance business.

Current wording

Insurance Expenses were $293.1 million for the three months ended June 30, 2025, compared to $272.5 million for the same period in 2024. Policy acquisition costs increased $18.0 million and business unit operating costs increased $7.4 million compared to the same period in 2024, primarily due to growth in the Specialty Property & Casualty Insurance segment from higher business volumes, partially offset by reductions due to lower volumes resulting from the exit and run-off of the Preferred Insurance business.

Previous wording

Other Expenses decreased by $10.0 million in 2025, compared to 2024, due primarily to lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs from the completion of certain strategic initiatives and lower costs in connection with investments in information technology.

Current wording

Other Expenses decreased by $0.3 million and $10.3 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, due primarily to lower Acquisition and Disposition Related Transaction, Integration, Restructuring and Other Costs from the completion of certain strategic initiatives and lower costs in connection with investments in information technology.

Previous wording

Interest expense decreased by $2.6 million for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to redemption of $450 million of 4.350% senior notes.

Current wording

Interest expense decreased by $4.9 million and $7.5 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024 primarily due to redemption of $450 million of 4.350% senior notes.

Previous wording

The federal corporate statutory income tax rate was 21% for the three months ended March 31, 2025 and March 31, 2024. The Company’s effective income tax rate, which was 19.1% for the three months ended March 31, 2025 and 2024, differs from the federal corporate income tax rate due primarily to (1) the effects of tax-exempt investment income, (2) nontaxable income associated with the change in cash surrender value on Company-Owned Life Insurance, (3) general business tax credits, (4) a permanent difference between the amount of long-term equity-based compensation expense recognized under GAAP and the amount deductible for Federal tax purposes, (5) a permanent difference associated with nondeductible executive compensation, (6) impact of deferred taxes in foreign jurisdictions, and (7) a change in valuation allowance related to foreign deferred tax assets.

Current wording

The federal corporate statutory income tax rate was 21% for the six months ended June 30, 2025 and June 30, 2024. The Company’s effective income tax rate, which was 20.2% and 19.0% for the three months ended June 30, 2025 and 2024, respectively, and 19.6% and 19.0% for the six months ended June 30, 2025 and 2024, respectively, differs from the federal corporate income tax rate due primarily to (1) the effects of tax-exempt investment income, (2) nontaxable income associated with the change in cash surrender value on Company-Owned Life Insurance, (3) general business tax credits, (4) a permanent difference between the amount of long-term equity-based compensation expense recognized under GAAP and the amount deductible for Federal tax purposes, (5) a permanent difference associated with nondeductible executive compensation, (6) impact of deferred taxes in foreign jurisdictions, and (7) a change in valuation allowance related to foreign deferred tax assets.

Previous wording

Tax-exempt investment income and dividends received deductions were $3.8 million for the three months ended March 31, 2025, compared to $5.8 million for the same period in 2024.

Current wording

Tax-exempt investment income and dividends received deductions were $3.9 million for the three months ended June 30, 2025, compared to $2.4 million for the same period in 2024. Tax-exempt investment income and dividends received deductions were $7.7 million for the six months ended June 30, 2025, compared to $8.2 million for the same period in 2024.

Previous wording

The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $10.2 million for the three months ended March 31, 2025, compared to $7.1 million for the same period in 2024.

Current wording

The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $10.5 million for the three months ended June 30, 2025, compared to $9.0 million for the same period in 2024. The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $20.7 million for the six months ended June 30, 2025, compared to $16.1 million for the same period in 2024.

Previous wording

The Company realized federal income tax credits of $0.3 million for the three months ended March 31, 2025 and 2024.

Current wording

The Company realized investment tax credits and other federal income tax credits of $0.3 million for the three months ended June 30, 2025, compared to realized investment tax credits and other federal income tax credits of $0.3 million for the same period in 2024. The Company realized investment tax credits and other federal income tax credits of $0.6 million for the six months ended June 30, 2025, compared to realized investment tax credits and other federal income tax credits of $0.6 million for the same period in 2024.

Previous wording

The amount of expense recognized for long-term equity-based compensation expense under GAAP was $2.0 million lower than the amount that would be deductible under the IRC for the three months ended March 31, 2025, compared to $0.7 million lower for the same period in 2024.

Current wording

The amount of expense recognized for long-term equity-based compensation expense was $0.2 million lower than the amount that would be deductible under the IRC for the three months ended June 30, 2025, compared to $0.8 million lower for the same period in 2024. The amount of expense recognized for long-term equity-based compensation expense was $2.2 million lower than the amount that would be deductible under the IRC for the six months ended June 30, 2025, compared to $1.5 million lower for the same period in 2024.