There is no 'E' so no P/E. Using P= discounted value of earnings or cash flows or dividends with some Growth rate "g", well "g" is surely much lower in future and we've seen the stagnation/flatness/no growth in per share equity (even when shares have been purchased which reduces the denominator)

Turning to P/BV, the large majority of insurers trade at P/BV .15 to .45 now. Even ANAT which is conservative and whose results were not bad trades at .35 of BV. Look at PFG, PL, PRU, HIG, LNC, FFG, NWLI, etc for yourself.

And why less than 1.0 BV? Well if your Book Value keeps dropping each quarter and this quarter so far is even worse, then expect the Price to fall more.

0. the economy

1. interest rates a low levels, and yield curve muted on the long end. Well, look for:
(a) lower investment income on money to be invested
(b) lower profit spread of earned rate minus what credit to policyholder, considering also the guarantees on older contracts with long term interest guarantees of 2 to 5% - how much affected?
Just look at the profitability of the Old American block 5.4m to 2.9m to 0.3m

2. Existing asset values. Look at PL who valued many assets at 90cents on the dollar, and analysts were skeptical and share price has tanked. We don;t have a breakdown on the asset values... if valued relatively high, don;t expect such values to be believed. Foreign bonds, some detail there would be helpful.

3. Decline in new sales of insurance, renewal premiums to Savings annuities - these are in addition to the market declines. Gains on mortality of immediate annuities are earned a tiny bit each each (if profitable), but all it takes is one investment face value to lose 10/20/30% and it will take many years of mortality to make up for that single, right now, investment loss. It would be good if there was a potential to have a large, right now, gain on the bonds, but that's relatively infrequent commpared to losses.

4. See all the other previous reasons in other messages, including this stock is very illiquid. If it was Private, then International Private Equity Valuation guidelines would apply a 30% discount for that factor alone ... surely Irwin A. Michael, a CFA, whose funds are a larger holder of KCLI ought to know this valuation. his Dirt Cheap funds? well, look at the holdings, and you can see... cheap gets cheaper.


Buy and hold for "long term" is the "wrong term". Of course, bag holders just continue to extend the time horizon more and more into the future, meanwhile their sits in a dead money losing stock.