March 8, 2004
News Release

Kemper submits year-end 2003 financials


LONG GROVE, Ill., March 8, 2004– Kemper filed its year-end 2003 financial statements (2003 LMC financial statement2003 AMM financial statement) on Monday, March 1, 2004. The company posted a combined statutory surplus of $212 million. Of this amount, $202 million represents Lumbermens Mutual Casualty Company’s (LMC) surplus, which takes into account a reinsurance transaction completed in 2003 with its affiliate, American Manufacturers Mutual Insurance Company (AMM). The $10 million balance of the combined surplus was posted by AMM. Absent accounting allowances approved by the Illinois Department of Insurance, year-end 2003 surplus would have been negative. Further detail about the accounting allowances can be found in the footnotes to the financial statements.

Combined surplus at year-end 2002 was $745 million after recognition of certain adjustments made by KPMG as part of their annual audit.

On an operating basis, Kemper lost approximately $674 million in 2003, compared to a loss of approximately $312 million in 2002. Total assets for the organization were approximately $5.3 billion at year-end 2003, compared to approximately $8.0 billion one year earlier.

The company is expected to submit a run-off plan to the Ill. Department of Insurance later this month.