S&P places Kemper on watch

S&P said it placed its ratings for Kemper Corp. and its subsidiaries on CreditWatch with negative implications.

The negative watch follows Kemper announcing its plan to establish a reciprocal exchange for its nonstandard auto business and the possible divestment or other options for its Kemper Personal Insurance unit, the agency said.

“Kemper's strategy for the reciprocal exchange is still evolving, as is the final capital structure for the group, which we plan to consider in our analysis once we learn more. Since the company will continue to service the existing specialty personal auto policies that will remain on the book over the next five to seven years, the full strategic benefits of the prospective business mix and capital structure will not be known until closer to that time,” S&P said in a press release.

To resolve the CreditWatch, the agency said it plans to reevaluate the credit profile of Kemper once it has more information from management on the future business mix and financial structure.

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