Chicago-based insurer Kemper has reported a 21% increase in net investment income in the fourth quarter of 2014.
Although fourth quarter net investment income was $93.1m compared with $76.9m a year earlier, the 2014 total was $309.1m, down slightly from 2013's figure of $314.7m.
At $2.2bn, annual revenues were lower than 2013's $2.4bn, with annual net income at $114.5m versus $217.7m, but Donald Southwell, Kemper's chairman, president and CEO, said Kemper was "starting to see improvement". Fourth quarter net income was $65.4m, up on the $55.2m it made for the fourth quarter of 2013.
The increase in net investment income was driven by improved performance in the alternative investments portfolio, which includes limited partnerships, limited liability companies (both equity method investments and other equity interests) and fair value option securities. Kemper said that a total of $21.8m in dividend income was linked to the recovery of an investment in the alternative investments portfolio. Total net investment income from the portfolio was $26.8m in the fourth quarter of 2014, more than double 2013's figure of $10.7m.
Kemper said it expects to experience quarterly volatility in the alternative investments portfolio, but as performance exceeded expectations for both 2014 and 2013 it was pleased with returns over time.