June 8, 2005
News Release

Kemper announces delayed audit and expected surplus reductions


LONG GROVE, Ill., June 8, 2005 – The Kemper Insurance Companies today announced that the Illinois Department of Financial and Professional Regulation - Division of Insurance (DOI) has granted an extension from June 1st for the filing of the 2004 audited statutory financial statements as the audit by KPMG LLP, Kemper’s independent auditing firm, is currently ongoing. Kemper is working closely with KPMG to promptly complete the audit.

Statutory surplus to be reflected in Kemper’s audited financial statements as of December 31, 2004 is currently expected to be materially less than the approximately $182 million that was reflected on Kemper's combined 2004 unaudited statutory statements. This is primarily due to potential reductions in reinsurance recoverables (including increases in related payables), and adverse changes in asset valuations.

In addition, Kemper currently expects that certain other adjustments negatively affecting surplus may be recorded in the second quarter of 2005. Although there is uncertainty as to amount because neither the audit nor the second quarter is yet completed, Kemper expects that its combined surplus at June 30, 2005 will be approximately $100 million.

Kemper continues to operate under the previously filed run-off plan as supplemented from time to time and approved by the DOI.

For more information about Kemper, visit its website at www.kemperinsurance.com


    Linda Kingman