KMPR - thesis explained simply

the chart basically screams "buy when everything looks worst" in insurance terms, timing that trough is always the hard part

what's tough about it? in 2023, 8 months after the 30% hike was approved, stock nearly doubled. this time around they are breaking the ask into four 6.9% applications and two rounds are (nearly) complete. Each round takes about 4 months. We're right in the middle of it.

The rate earn in mechanism is a reasonable basis for the recovery thesis, but two details make the timing less certain than the chart suggests. Kemper's Q2 2026 presentation confirms that previously approved California increases began earning in during Q2, while another 6.9% increase had been filed. I would distinguish that pending filing from an approved increase before assuming all four rounds follow a predictable schedule.There's also a difference between the companywide Specialty P&C underlying combined ratio of 102.3% and California personal auto's 107.3% in Q2. California improved from 109.2% sequentially, but policies in force also declined 10%. The economics are interesting: holding claim costs and the insured mix constant, two fully earned 6.9% increases could theoretically take a 107.3% combined ratio to roughly 94%. That supports the possibility of recovery, but doesn't establish the timing or account for loss-cost inflation and customer retention. I'd track actual approval/effective dates, California's earned premium and combined ratio, and policy retention before treating the projected 90-95% outcome as the base case.The operational recovery and the $50 stock target are also separate claims; the latter still needs an earnings and valuation bridge.

You don't have to wait for Kemper to tell you when their rate increase application has been approved. You can see it directly from the CDI website, a few days after the first of the month. Here's the latest showing what's just been approved: [https://www.insurance.ca.gov/0250-insurer…) For convenience, this is the current status of all pending and filed so far: |File|Program|Asked|Approved|Status| |:-|:-|:-|:-|:-| |25-2194|Infinity SPEC|6.9%|6.9%|Approved 2026-02-09| |25-2462|Infinity RSVP|6.9%|3.0%|Approved 2026-04-20 (haircut)| |26-701|Infinity SPEC|6.9%|6.9%|Approved 2026-09-11| |26-1232|Infinity RSVP|6.9%|—|Still open| So the second round is two applications (SPEC + RSVP). SPEC is done at full ask. RSVP is the one still pending. If you go back and look at the approval rates for non-standard auto, what that shows (closed dates from 2024-01-01 through the 9/30/26 list, hard-NSA panel): * 22 / 22 closed rate filings were APPROVED (0 denials in that cut). * Mean grant ≈ 85% of ask (haircuts happen, especially on big asks). * Among asks ≤7%: 5 / 7 got the full ask; mean grant ≈ 89%. The two haircuts were both Infinity RSVP. Anyway, you find me a better set up than this and i'm all ears

I went through the CDI closed filings spreadsheet you linked. You're right about the distinction I missed.The records confirm full 6.9% approvals for SPEC filings 25-2194 and 26-701, while RSVP filing 25-2462 received 3% against a 6.9% request. The later RSVP filing isn't in the closed list, consistent with your point that it's still pending. That makes the regulatory progress more concrete than my original comment suggested. Thanks for pointing me to the primary data.I haven't independently reconstructed your full 2024-2026 approval sample yet, so I wouldn't treat its approval rate as verified. But the documented SPEC approvals do strengthen the recovery setup.The remaining part I'd focus on is how much earned premium each program represents, when those increases flow through, and whether improved underwriting margins offset declining California policy counts.That's where the regulatory thesis becomes a measurable earnings thesis, and ultimately where the $50 valuation needs support.