Good morning, ladies and gentlemen and welcome to Kemper’s Third Quarter 2012 Earnings Conference Call. My name is Shawn and I will be your coordinator today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded for replay purposes. I would now like to introduce your host for today’s conference, Ms. Diana Hickert-Hill, Vice President, Investor Relations and Corporate Identity. Ms. Hickert-Hill, you may begin.

Thank you, operator. Good morning, everyone, and thank you for joining us. After the market’s close yesterday, we filed our Form 10-Q with the SEC and issued our press release and financial supplement. You can find these documents on the Investors section of our website kemper.com. This morning you will hear from three of our business executives, starting with Don Southwell, Kemper’s Chairman, President and Chief Executive Officer, Jim Schulte, Kemper’s Property and Casualty Group Executive; and finally, Dennis Vigneau, Kemper’s Senior Vice President and Chief Financial Officer. We will make a few opening remarks to provide context around our third quarter results. We will then open up the call for a question-and-answer session. During this interactive portion of the call, our three presenters will be joined by John Boschelli, Kemper’s Vice President and Chief Investment Officer; and Ed Konar, Kemper’s Life & Health Group Executive. Please note that our discussion today may contain forward-looking statements. Our actual results may differ materially from these statements. Please refer to our Form 10-K filed with the SEC on February 17, 2012 as well as our third quarter 2012 Form 10-Q and earnings release for financial information on potential risks associated with relying on forward-looking statements. This morning’s discussion also includes non-GAAP financial measures that we believe maybe meaningful to investors. In our 10-Q, supplement and earnings release, non-GAAP financial measures have been reconciled to GAAP, where required in accordance with SEC rules. Now I will turn the call over to Don Southwell.

Thank you, Diana. Before I get into the results for the third quarter, I want to comment on Superstorm Sandy. Many people were affected by the storm and we hope that those dealing with the aftermath are getting their lives back on track. I’m proud to tell you our customer servicing claims professionals are hard at work, assisting our customers as they deal with this devastation. We are committed to fulfilling our promises to our customers, answering their questions and paying for their covered losses. This is part of the Kemper value proposition and we do this well. We’re still determining financial estimates from the storm, but we do expect it to be material to our fourth quarter results. We’ll provide an update to the market, when we have further details. As you’ve heard in the introduction I’ve asked Jim Schulte to provide an update on our property and casualty businesses. I’ll focus my remarks on just three topics. First, our view of our overall performance, second an update on our life and health and investment performance and third, our status and thoughts on capital. To start with views on our overall third quarter performance, we continue to make good progress on many fronts in the quarter. We have been implementing rate increases and tightening our underwriting as we focus on improving margins. These activities coupled with lower catastrophes in the quarter help deliver improved results. But we have more work to do. Moving on to our life and health business and investment update, in the life and health segment, the top line remained relatively steady as we continued our shift away from dwelling and hospitalization products. We also delivered solid bottom line performance. I’m pleased with our Reserve National team’s performance as it continues to shift the supplemental and…

Thank you, Don. Kemper’s third quarter overall property and casualty results improved, when compared to the same period last year as well as sequentially. A better overall weather environment coupled with strategic actions we’ve implemented contributed to the bottom line improvement. Severity was up in the personal auto market and the market is becoming more aggressive on rate. Overall, the P&C group’s underlying combined ratio was 101%, which was better than the second quarter of this year, but up by half percentage point compared to the same period last year. We have implemented planned price increases across our P&C businesses and selectively reduced exposure especially in homeowners. We are seeing early indications that the actions are beginning to take effect. I will walk through each of our P&C businesses, starting with direct. As we continue to evaluate our options in our direct segment. We have begun to execute plans to optimize the value of the in force book of business. We stopped the direct marketing spend early in the quarter and initiated additional expense reductions consistent with the change in strategy. We are reducing infrastructure costs by consolidating programs and system platforms. In addition, we are reducing staff levels in line with top line projection. New business sales came in slightly above expectations in the quarter, primarily from affinity and worksite lines, as well as the residual sales from previous direct marketing campaign. Our previously announced actions to limit business in Michigan, Florida, and New York continue as planned. About 80% of the Michigan business has run off the book since the beginning of the year. We continue to focus to improve the bottom line results by taking rate actions in line with full indications, as well as taking underwriting. By year-end, we will have filed for rate increases of…

Thanks, Jim and good morning everyone. As you have heard, the third quarter results showed improvement in several areas. This morning I’ll share further insights on where our actions are beginning to improve financial results as well as highlight a few areas that remain challenging as we head into 2013. Beginning with Kemper’s consolidated revenues and earnings; reported revenues for Kemper were $646 million in the third quarter, up about 6% from last quarter and 9% over the last year. Earned premiums were $527 million in the quarter, down slightly from the third quarter of 2011, earned premiums of $543 million. This change is largely from actions taken in the direct business to improve profitability. Kemper’s Life and Health segment reported stable earned premiums of $160 million. Consolidated net investment income for the company was $70 million in the third quarter and included $1 million loss from equity method investments. In the third quarter of last year, Kemper reported net investment income of $59 million. This result included a $14 million loss from equity method investments. This asset class has a less predictable earnings pattern, but has historically delivered strong lifetime returns and provides diversification benefits to the entire portfolio. Overall, average invested assets were stable and on a year-to-date basis, the pre-tax equivalent book yield was 5.6%, consistent with the prior year. Finally, net realized investment gains in the quarter were $51 million pre-tax, an increase of $55 million over last year. During the quarter, we repositioned approximately 20% or $275 million on a book value basis in our municipal bond portfolio. This opportunistic sale captured a portion of the strong appreciation we’ve seen over the last several quarters in this portfolio. Overall, we netted a pre-tax gain of $45 million and boosted property and casualty statutory capital by…

(Operator Instructions) I have a question from Paul Newsome with Sandler O’Neill. Please go ahead with your question. Paul Newsome – Sandler O’Neill: Thank you very much for the call. I was wondering what is – if you can assess or the possibility that the dividend capacity of the insurance companies in the fourth quarter as well as the buyback could be impacted by Hurricane Sandy losses?

Dennis, do you want to take that one?

Sure. Good morning, Paul. We are certainly monitoring and working through the final tally on Sandy. The dividend capacity that we anticipate and the $20 million to $25 million coming up in the fourth quarter is going to be from the life company. So, I don’t think anything would impact that coming up, nowhere to at this point expect there to be a material impact to the overall capacity as we look forward in the 2013 as a result of that. Paul Newsome – Sandler O’Neill: Terrific. Do you have any summary statistics – I mean number of claims, that kind of stuff for Hurricane Sandy yet?

Paul, we’ve got some information about Sandy. It was a very wide storm, 60 million people. We’ve had a number of claims and we haven’t inspected all those claims yet and we think it will be certainly towards the end of next week before we get enough claims to maybe start talking about what the financial impact would be. Jim, do you have any numbers of claims to toss out at this point in time.

Yes, so far we have roughly 4,000 claims reported, but 75% of that is home claims, 25% auto. On the auto side, it has been reported by some other companies we are seeing several total losses due to the flooding activity. Paul Newsome – Sandler O’Neill: All right. How is that running versus just roughly what happened with you in Irene?

It’s a totally different storm. Logistics on this storm are much more difficult with the flooding. It’s hard to get various areas and of course the Nor’easter that occurred in the last year or so that didn’t help matters either. So, it’s been tougher to get out, to inspect the risks on this one. But we did have our people on the ground in advance of the storm. We have over 100 of our colleagues up in the area and we are hard at it.

Paul, I understand your desire to get some kind of a handle on this, but it’s just too soon to really give you much in the way of helpful information on this until we get a better handle on that (inaudible). Paul Newsome – Sandler O’Neill: What you’ve said is quite helpful actually. Thank you very much. I’ll let someone else ask the question. I appreciate it.

Sure.

(Operator Instructions) Our next question comes from Miranda Davidson with Raymond James. Please go ahead with your question. Miranda Davidson – Raymond James: Guys, I’m calling in for Steven. He is on the road. Do you think you could you talk a little bit about the loss cost trends in auto for the quarter. Are you seeing an uptick in anything?

Jim, you want to take that one?

Yes. We are seeing some uptick in auto trends track pretty close to industry trends. We watch fast track data which has a quarter lag and severity is up on fast track in virtually every line. And as you know frequency has tailed off in general over the last few years, but we’ve seen frequency pickup in physical damage in a couple of our business center. Miranda Davidson – Raymond James: Okay. Thank you.

I’m not showing any other questions in the queue at this time.

Thank you, operator. If anybody else has any questions, this is Diana and you can reach me after the call.

Thank you. Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the conference. You may now disconnect. Good day.