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 and nine months ended September 30, 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 months ended March 31, 2026 or 2025.

Previous wording

The Company believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in the Company’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause the Company’s loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on incurred losses and LAE and the Combined Ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has no bearing on the performance of the Company’s insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance.

Current wording

The Company believes Underlying Losses and LAE and the Underlying Combined Ratio are useful to investors and uses these financial measures to reveal the trends in the Company’s Property & Casualty Insurance segment that may be obscured by catastrophe losses and prior-year reserve development. These catastrophe losses may cause the Company’s loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on incurred losses and LAE and the Combined Ratio. Prior-year reserve developments are caused by unexpected loss development on historical reserves. Because reserve development relates to the re-estimation of losses from earlier periods, it has minimal bearing on the performance of the Company’s insurance products in the current period. The Company believes it is useful for investors to evaluate these components separately and in the aggregate when reviewing the Company’s underwriting performance.

Previous wording

Net Loss Attributable to Kemper Corporation was $21.0 million ($(0.34) per unrestricted common share) for the three months ended September 30, 2025, compared to Net Income Attributable to Kemper Corporation of $73.7 million ($1.15 per unrestricted common share) for the same period in 2024.

Current wording

Net Loss attributable to Kemper Corporation was $1.7 million ($(0.03) per unrestricted common share) for the three months ended March 31, 2026, compared to Net Income attributable to Kemper Corporation of $99.7 million ($1.56 per unrestricted common share) for the same period in 2025.

Previous wording

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

Current wording

A reconciliation of Net (Loss) Income attributable to Kemper Corporation to Adjusted Consolidated Net Operating Income (a non-GAAP financial measure) for the three months ended March 31, 2026 and 2025 is presented below.

Previous wording

Net Income (Loss) attributable to Kemper Corporation decreased by $94.7 million for the three months ended September 30, 2025, compared to the same period in 2024, due primarily to lower Adjusted Consolidated Net Operating Income.

Current wording

Net (Loss) Income attributable to Kemper Corporation decreased by $101.4 million for the three months ended March 31, 2026, compared to the same period in 2025, due primarily to lower Adjusted Consolidated Net Operating Income.

Previous wording

The loss from Non-Core Operations increased by $3.3 million for the three months ended September 30, 2025 compared to the same period in 2024 primarily due to $21.7 million of impairment losses recognized on Internal-Use Software assets reported as Other Assets on the Condensed Consolidated Balance Sheets as the business continues run-off, partially offset by lower catastrophe losses and lower adverse prior year development. Additionally, on August 1, 2025, certain Company subsidiaries entered into a renewal rights agreement with a third party and certain of its affiliates (collectively, the “Third Party”) whereby the Third Party will offer replacement policies for certain policies written by the Company’s subsidiaries in New York after the expiration of their current term. Execution of the terms of the agreement is contingent upon the granting of regulatory approvals by the New York Department of Financial Services.

Current wording

The loss from Non-Core Operations increased by $3.3 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to reduced earned premiums outpacing expense reductions as the business continues to run off, as well as higher adverse prior year development. Separately, on August 1, 2025, certain Non-Core Operations subsidiaries entered into a renewal rights agreement with a third party and certain of its affiliates (collectively, the “Third Party”) whereby the Third Party will offer replacement policies for certain policies written by these subsidiaries in New York in accordance with the state’s non-renewal rules. During the first quarter of 2026, these subsidiaries received regulatory approval from the New York Department of Financial Services for their withdrawal plans from the state.

Previous wording

Corporate and Other Adjusted Net Operating Loss decreased by $6.1 million for the three months ended September 30, 2025 compared to the same period in 2024, primarily driven by lower interest expense due to the redemption of $450 million of 4.350% senior notes.

Current wording

Corporate and Other Adjusted Net Operating Loss decreased by $3.1 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by lower interest expense due to the redemption of $450 million of 4.350% senior notes in the first quarter of 2025.

Previous wording

Earned Premiums increased by $64.8 million to $1,133.3 million for the three months ended September 30, 2025 compared to $1,068.5 for the same period in 2024, primarily driven by a $98.3 million increase from the Specialty Property & Casualty Insurance segment due to higher average earned premiums per exposure resulting from rate increases. This was partially offset by a $32.7 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 decreased by $88.6 million to $999.3 million for the three months ended March 31, 2026, compared to $1,087.9 million for the same period in 2025. This was primarily driven by a $77.0 million decrease from the Specialty Property & Casualty Insurance segment, mainly attributable to lower personal automobile volumes, a $28.0 million Florida Statutory Profit Limit Refund, and further impacted by a $12.7 million reduction 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. These decreases were partially offset by higher commercial automobile volumes within the Specialty Property & Casualty Insurance segment.

Previous wording

Net Realized Investment Gains decreased by $4.5 million for the nine months ended September 30, 2025, compared to the same period in 2024, due primarily to decreased gains on sales of fixed maturity and equity securities, partially offset by the absence of net realized losses on ultra-long treasury future derivatives transactions that did not qualify for hedge accounting.

Current wording

Net Realized Investment Gains decreased by $0.5 million to $0.4 million for the three months ended March 31, 2026, compared to $0.9 million for the same period in 2025, due primarily to decreased gains on sales of fixed maturity and equity securities, partially offset by the absence of net realized losses on ultra-long treasury future derivative transactions that did not qualify for hedge accounting.

Previous wording

Impairment losses increased by $2.6 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily driven by an increase in the allowance for credit losses on fixed maturity securities.

Current wording

Impairment losses increased by $2.0 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by an increase in the allowance for credit losses on fixed maturity securities.

Previous wording

The Specialty Property & Casualty Insurance segment reported Total Segment Adjusted Net Operating Income of $184.5 million for the nine months ended September 30, 2025, compared to Total Segment Adjusted Net Operating Income of $275.1 million for the same period in 2024. Segment adjusted net operating results decreased by $90.6 million which included a $58.3 million decrease from personal automobile insurance and a $32.3 million decrease from commercial automobile insurance. The decrease in personal automobile Adjusted Net Operating Income was primarily driven by higher underlying losses. The decrease in commercial automobile insurance Adjusted Net Operating Income was primarily driven by higher adverse prior year development.

Current wording

The Specialty Property & Casualty Insurance segment reported Total Segment Adjusted Net Operating Income of $0.1 million for the three months ended March 31, 2026, compared to Total Segment Adjusted Net Operating Income of $97.9 million for the same period in 2025. Segment adjusted net operating results decreased by $97.8 million, which included a $100.9 million decrease from personal automobile insurance and a $3.1 million increase from commercial vehicle insurance. The decrease in personal automobile Adjusted Net Operating Income was primarily driven by higher underlying losses resulting from higher claim severity and frequency in California, lower business volumes, as well as a $28.0 million Florida Statutory Profit Limit Refund, partially offset by higher average earned premiums per exposure resulting from rate increases. The increase in commercial automobile insurance Adjusted Net Operating Income was primarily driven by higher earned premium per exposure, partially offset by higher underlying losses and adverse prior year development.

Previous wording

Earned Premiums in the Specialty Property & Casualty Insurance segment increased by $98.3 million for the three months ended September 30, 2025, compared to the same period in 2024, due to higher average earned premiums per exposure resulting from rate increases and higher commercial automobile volumes.

Current wording

Earned Premiums in the Specialty Property & Casualty Insurance segment decreased by $77.0 million for the three months ended March 31, 2026, compared to the same period in 2025, due to lower personal automobile volumes and a $28.0 million Florida Statutory Profit Limit Refund, partially offset by higher commercial automobile volumes.

Previous wording

Net Investment Income decreased by $2.6 million for the nine months ended September 30, 2025, compared to the same period in 2024, mostly driven by lower levels and yields from fixed maturity securities and lower yields from Short-term investments, partially offset by higher earnings on Company-Owned Life Insurance and increased earnings on alternative investments.

Current wording

Net Investment Income in the Specialty Property & Casualty Insurance segment increased by $4.8 million for the three months ended March 31, 2026, compared to the same period in 2025, due primarily to higher levels and yields from fixed maturity securities and increased earnings on alternative investments, partially offset by lower average short-term investments.

Previous wording

Incurred Loss and LAE were $2,287.3 million or 76.5% of earned premiums for the nine months ended September 30, 2025 compared to $1,869.2 million or 71.3% 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 and adverse prior year development. Underlying losses and LAE as a percentage of earned premiums were 74.0% for the nine months ended September 30, 2025, a deterioration of 3.6 percentage point, compared to the same period in 2024 due to increased claim severity and frequency in personal automobile primarily related to bodily injury and property damage coverages, partially offset by higher average earned premiums per exposure (11.8% increase year over year). 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 $66.1 million for the nine months ended September 30, 2025, compared to adverse development of $5.2 million for the same period in 2024, an increase of $60.9 million due primarily to evolving loss patterns on bodily injury coverages in commercial automobile and higher than expected development on litigated matters. Catastrophe losses and LAE (excluding reserve development) were $10.1 million for the nine months ended September 30, 2025 compared to $18.0 million for the same period in 2024, a decrease of $7.9 million due to fewer catastrophe events and lower severity per event in the current period.

Current wording

Incurred losses and LAE were $747.7 million, or 84.5% of earned premiums for the three months ended March 31, 2026, compared to $686.8 million, or 71.4% of earned premiums, for the same period in 2025. Incurred losses and LAE as a percentage of earned premiums increased primarily due to a deterioration in the underlying loss and LAE ratio and adverse prior year development in commercial automobile, partially offset by favorable prior year development in personal automobile. Underlying losses and LAE as a percentage of earned premiums were 84.0% for the three months ended March 31, 2026, a deterioration of 13.1 percentage points, compared to the same period in 2025, due to higher claim severity and frequency primarily related to bodily injury and property damage coverages in California, partially offset by higher average earned premium per exposure (4.7% increase year over year). 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 $3.6 million for the three months ended March 31, 2026, compared to adverse development of $0.7 million for the same period in 2025, a deterioration of $2.9 million due primarily to evolving loss patterns on bodily injury coverages in commercial automobile. Catastrophe losses and LAE (excluding reserve development) were $1.3 million for the three months ended March 31, 2026 compared to $3.8 million for the same period in 2025, an improvement of $2.5 million due to fewer catastrophe events in 2026.

Previous wording

The Specialty Property & Casualty Insurance segment’s nine months ended September 30, 2025 effective tax rate was 19.5% compared to 20.1% for the same period in 2024. The effective income tax rate for the nine months ended September 30, 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.

Current wording

The Specialty Property & Casualty Insurance segment’s first quarter of 2026 effective income tax rate was 114.3% compared to 19.8% for the same period in 2025. The effective income tax rate for the first quarters of 2026 and 2025 differs from the federal statutory income tax rate primarily due to investments in Company-Owned Life Insurance, tax-exempt investment income and nondeductible stock and executive compensation. The difference in effective tax rates between the first quarters of 2026 and 2025 is primarily due to changes in pretax income.

Previous wording

Earned Premiums on personal automobile insurance increased by $230.0 million for the nine months ended September 30, 2025, compared to the same period in 2024, due to higher average earned premiums per exposure resulting from rate increases. Incurred losses and LAE were $1,735.5 million, or 74.5% of earned premiums for the nine months ended September 30, 2025, compared to $1,483.7 million, or 70.7% of earned premiums, for the same period in 2024. Incurred losses and LAE as a percentage of earned premiums increased primarily due to deterioration in the underlying loss and LAE ratio. Underlying losses and LAE as a percentage of related earned premiums were 74.3% for the nine months ended September 30, 2025, compared to 69.9% for the same period in 2024, a deterioration of 4.4 percentage points driven by higher claim severity and frequency primarily related to bodily injury and property damage coverages that were offset by higher average earned premiums per exposure (11.2% increase year over year). Favorable loss and LAE reserve development was $1.4 million for the nine months ended September 30, 2025, compared to adverse development of $5.1 million for the same period in 2024, an improvement of $6.5 million due primarily to the stabilization of loss patterns in bodily injury coverages and improving settlement patterns on policies with personal injury protection coverage, partially offset by higher losses associated with litigated matters. Catastrophe losses and LAE (excluding reserve development) were $7.6 million for the nine months ended September 30, 2025, compared to $13.5 million for the same period in 2024, an improvement of $5.9 million due to fewer catastrophe events and lower severity per event in the current period.

Current wording

Earned Premiums on personal automobile insurance decreased by $106.7 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to lower volumes and a $28.0 million Florida Statutory Profit Limit Refund. Incurred losses and LAE were $566.7 million, or 87.6% of earned premiums for the three months ended March 31, 2026, compared to $526.5 million, or 69.9% of earned premiums, for the same period in 2025. Incurred losses and LAE as a percentage of earned premiums increased due to a deterioration in the underlying loss and LAE ratio. Underlying losses and LAE as a percentage of related earned premiums were 87.7% for the three months ended March 31, 2026, compared to 70.1% for the same period in 2025, a deterioration of 17.6 percentage points. The deterioration was driven by higher claim severity and frequency, primarily related to bodily injury and property damage coverages in California, and the Florida Statutory Profit Limit Refund, partially offset by higher average earned premium per exposure (3.3% increase year over year). Favorable loss and LAE reserve development was $2.5 million for the three months ended March 31, 2026, compared to favorable development of $4.6 million for the same period in 2025, a deterioration of $2.1 million due primarily to loss patterns in bodily injury and higher losses associated with litigation matters, partially offset by development on personal injury protection and collision coverages. Catastrophe losses and LAE (excluding reserve development) were $1.1 million for the three months ended March 31, 2026, compared to $2.7 million for the same period in 2025, an improvement of $1.6 million due to fewer catastrophe events in 2026.

Previous wording

Earned Premiums in commercial automobile insurance increased by $44.5 million for the three months ended September 30, 2025, compared to the same period in 2024, due primarily to higher average earned premiums per exposure resulting from rate increases, targeted mix shifts, and higher business volumes. Incurred losses and LAE were $213.4 million, or 91.9% of earned premiums in 2025, compared to $140.6 million, or 74.9% 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 73.0% in the three months ended September 30, 2025, compared to 72.6% during the same period in 2024, a deterioration of 0.4 percentage points driven by increased claim severity that was partially offset by higher average earned premiums per exposure (7.0% increase year over year). Adverse loss and LAE reserve development was $43.5 million for the three months ended September 30, 2025, compared to adverse development of $2.7 million for the same period in 2024, an increase of $40.8 million due to evolving loss patterns and higher defense costs associated with attorney-represented bodily injury coverages. Catastrophe losses and LAE (excluding reserve development) were $0.4 million for the three months ended September 30, 2025, compared to $1.5 million for the same period in 2024, an improvement of $1.1 million due to fewer catastrophe events and lower severity per event in the current period.

Current wording

Earned Premiums from commercial automobile insurance increased by $29.7 million for the three months ended March 31, 2026, compared to the same period in 2025, due primarily to higher average earned premium per exposure, targeted mix shifts, and higher business volumes. Incurred losses and LAE were $181.0 million, or 76.0% of earned premiums in 2026, compared to $160.3 million, or 76.9% of earned premiums in 2025. 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 73.3% for the three months ended March 31, 2026, compared to 73.9% during the same time period in 2025, an improvement of 0.6 percentage points driven by higher average earned premium per exposure (2.5% increase year over year), partially offset by higher claim frequency and severity, primarily related to bodily injury coverages. Adverse loss and LAE reserve development was $6.1 million for the three months ended March 31, 2026, compared to adverse development of $5.3 million for the same period in 2025, a deterioration of $0.8 million due primarily to evolving loss patterns and higher defense costs associated with attorney-represented bodily injury coverages. Catastrophe losses and LAE (excluding reserve development) were $0.2 million for the three months ended March 31, 2026 compared to $1.1 million for the same period in 2025, a decrease of $0.9 million due to fewer catastrophic events in 2026.

Previous wording

The Life Insurance segment reported Total Segment Adjusted Net Operating Income of $18.6 million for the three months ended September 30, 2025, compared to Net Operating Income of $15.0 million for the same period in 2024. The increase in segment net operating results was primarily due to favorable changes in mortality experience from life insurance products, lower incurred losses and LAE on property insurance products, and lower insurance expenses, partially offset by a decrease in net investment income.

Current wording

The Life Insurance segment reported Total Segment Adjusted Net Operating Income of $18.0 million for the three months ended March 31, 2026, compared to $17.2 million for the same period in 2025. The increase in segment net operating results was due primarily to lower Insurance Expenses and higher Earned Premiums, partially offset by higher Policyholders’ Benefits from life insurance products.

Previous wording

Earned Premiums increased by $1.3 million for the nine months ended September 30, 2025, compared to the same period in 2024, due primarily to higher average premiums per policy on life insurance products.

Current wording

Earned Premiums increased $1.1 million for the three months ended March 31, 2026, compared to the same period in 2025, due primarily to higher average premiums per policy on life insurance products.

Previous wording

Net investment income increased by $16.0 million for the nine months ended September 30, 2025, compared to the same period in 2024, due primarily to lower losses on alternative investments and higher earnings on Company-Owned Life Insurance. The nine months ended September 30, 2024 included a $15.1 million pre-tax loss from an investment valuation adjustment of a real estate investment in our alternative investment portfolio.

Current wording

Net investment income increased by $0.3 million for the three months ended March 31, 2026, compared to the same period in 2025, due primarily to increased earnings on alternative investments and higher earnings on Company-Owned Life Insurance, partially offset by lower yields on fixed maturities.

Previous wording

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

Current wording

Net Investment Income for the three months ended March 31, 2026 and 2025 is presented below:

Previous wording

Net Investment Income was $301.9 million and $304.5 million for the nine months ended September 30, 2025 and 2024, respectively. Net Investment Income decreased by $2.6 million in 2025, mostly driven by lower levels and yields from fixed maturity securities and lower yields from Short-term investments, partially offset by higher earnings on Company-Owned Life Insurance and increased earnings on alternative investments.

Current wording

Net Investment Income was $107.1 million and $101.2 million for the three months ended March 31, 2026 and 2025, respectively. Net Investment Income increased by $5.9 million in 2026, mostly driven by increased earnings on alternative investments, higher levels of fixed maturity securities and mortgage loans (included in other investments), partially offset by lower average short-term invested assets.

Previous wording

Unrealized losses on investments decreased $106.9 million and $179.5 million for the three and nine months ended September 30, 2025, respectively, primarily attributable to decreases in interest rates.

Current wording

Unrealized losses on investments increased $89.5 million for the three months ended March 31, 2026, primarily due to increases in interest rates.

Previous wording

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

Current wording

The components of Change in Fair Value of Equity and Convertible Securities for the three months ended March 31, 2026 and 2025 are presented below:

Previous wording

The components of Net Realized Investment Gains for the three and nine months ended September 30, 2025 and 2024 are presented below:

Current wording

The components of Net Realized Investment Gains for the three months ended March 31, 2026 and 2025 are presented below:

Previous wording

The components of Impairment Losses in the Condensed Consolidated Statements of (Loss) Income for the three and nine months ended September 30, 2025 and 2024 were:

Current wording

The components of Impairment Losses in the Condensed Consolidated Statements of (Loss) Income for the three months ended March 31, 2026 and 2025 were:

Previous wording

1 Includes losses from intent-to-sell securities and direct write-down securities of $0.1 million and $1.4 million for the three and nine months ended September 30, 2025, respectively, and $0.3 million and $2.0 million for the three and nine months ended September 30, 2024, respectively.

Current wording

1 Includes losses from intent-to-sell securities and direct write-down securities of $1.3 million and $1.2 million for the three months ended March 31, 2026, and 2025 respectively.

Previous wording

The Company’s fixed maturity investment portfolio is comprised primarily of high-grade corporate, municipal and agency bonds. At September 30, 2025, approximately 94.1% 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 March 31, 2026, approximately 93.5% 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.

Previous wording

Gross unrealized losses on the Company’s investments in below-investment-grade fixed maturities were $20.0 million and $14.2 million at September 30, 2025 and December 31, 2024, respectively.

Current wording

Gross unrealized losses on the Company’s investments in below-investment-grade fixed maturities were $18.5 million and $13.6 million at March 31, 2026 and December 31, 2025, respectively.

Previous wording

The Company’s short-term investments primarily consist of U.S. Treasury bills, short-term bonds and money market funds . At September 30, 2025, the Company had $98.8 million invested in U.S. Treasury bills and short-term bonds and $272.5 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 money market funds, U.S. Treasury bills and short-term bonds. At March 31, 2026, the Company had $294.8 million invested in money market funds, which primarily invest in U.S. Treasury securities, and $1.8 million invested in U.S. Treasury bills and short-term bonds.

Previous 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 September 30, 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 senior debt, mezzanine 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 March 31, 2026 and December 31, 2025 is presented below.

Previous wording

Expenses for the three and nine months ended September 30, 2025 and 2024 were:

Current wording

Expenses for the three months ended March 31, 2026 and 2025 were:

Previous wording

Interest expense decreased by $5.3 million and $12.8 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024 primarily due to redemption of $450 million of 4.350% senior notes.

Current wording

Interest expense decreased by $2.1 million for the three months ended March 31, 2026, compared to the same period in 2025, 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 nine months ended September 30, 2025 and September 30, 2024. The Company’s effective income tax rate, which was 27.3% and 20.4% for the three months ended September 30, 2025 and 2024, respectively, and 18.3% and 19.5% for the nine months ended September 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.

Current wording

The federal corporate statutory income tax rate was 21% for the three months ended March 31, 2026 and March 31, 2025. The Company’s effective income tax rate, which was 44.6% and 19.1% for the three months ended March 31, 2026 and 2025, 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 $3.6 million for the three months ended September 30, 2025, compared to $3.9 million for the same period in 2024. Tax-exempt investment income and dividends received deductions were $11.3 million for the nine months ended September 30, 2025, compared to $12.1 million for the same period in 2024.

Current wording

Tax-exempt investment income and dividends received deductions were $3.6 million for the three months ended March 31, 2026, compared to $3.8 million for the same period in 2025.

Previous wording

The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $10.8 million for the three months ended September 30, 2025, compared to $9.5 million for the same period in 2024. The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $31.5 million for the nine months ended September 30, 2025, compared to $25.6 million for the same period in 2024.

Current wording

The nontaxable increase in cash surrender value on Company-Owned Life Insurance was $11.6 million for the three months ended March 31, 2026, compared to $10.2 million for the same period in 2025.

Previous wording

The Company realized investment tax credits and other federal income tax credits of $0.3 million for the three months ended September 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 $0.9 million for the nine months ended September 30, 2025, compared to realized investment tax credits and other federal income tax credits of $0.9 million for the same period in 2024.

Current wording

The Company realized federal income tax credits of $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

The amount of expense recognized for long-term equity-based compensation expense was $0.1 million lower than the amount that would be deductible under the IRC for the three months ended September 30, 2025, compared to $0.9 million higher for the same period in 2024. The amount of expense recognized for long-term equity-based compensation expense was $2.3 million lower than the amount that would be deductible under the IRC for the nine months ended September 30, 2025, compared to $0.6 million lower for the same period in 2024.

Current wording

The amount of expense recognized for long-term equity-based compensation expense under GAAP was $5.4 million higher than the amount that would be deductible under the IRC for the three months ended March 31, 2026, compared to $2.0 million lower for the same period in 2025.

Previous wording

The amount of nondeductible executive compensation was $12.7 million for the three months ended September 30, 2025, compared to $4.2 million for the same period in 2024. The amount of nondeductible executive compensation was $23.2 million for the nine months ended September 30, 2025, compared to $12.6 million for the same period in 2024.

Current wording

The amount of nondeductible executive compensation was $1.5 million for the three months ended March 31, 2026, compared to $5.3 million for the same period in 2025.

Previous wording

Tax benefits of $9.9 million were recorded for the three months ended September 30, 2025, compared to a tax benefit of $6.6 million for the same period in 2024 related to income taxes imposed in the foreign jurisdiction in which the Company operates. Tax benefits of $5.5 million were recorded for the nine months ended September 30, 2025, compared to a tax benefit of $17.1 million for the same period in 2024 related to income taxes imposed in the foreign jurisdiction in which the Company operates..

Current wording

Tax benefit of $8.2 million was recorded for the three months ended March 31, 2026, compared to a tax expense of $0.8 million for the same period in 2025 related to income taxes imposed in the foreign jurisdiction in which the Company operates.