Kemper Struggles With Securities Unit --- Huge Insurer Seeks To Stem Big Losses
CHICAGO -- Nearly a decade after Kemper Corp. charged exuberantly into the securities business, the insurance giant is trying to resuscitate its struggling brokerage unit.</br></br>From 1982 to 1984, Kemper gobbled up five well-known regional brokerage firms at prices befitting the start of a roaring bull market in stocks. But the acquisitions never coalesced into a viable operation. Work overlaps and internal rivalries, exacerbated by the securities-industry recession following the 1987 crash, socked Kemper with more than $200 million of losses in its securities unit during the past four years.</br></br>Now the company approaches the end of a radical, 11-month reorganization of its Kemper Securities Group Inc. It is stripping down the regional firms -- Bateman Eichler, Hill Richards Inc. in Los Angeles; Blunt Ellis & Loewi in Milwaukee; Prescott, Ball & Turben in Cleveland; Boettcher & Co. in Denver; and Lovett Underwood Neuhaus & Webb in Houston -- and moving many of their functions to Chicago. In the process, it has laid off about 1,100 employees at the five firms -- almost one in five.</br></br>Kemper projects the reorganization will save $50 million this year for the securities division, which posted a loss of $193.5 million in 1990, including a $126.5 million charge to cover goodwill and other restructuring-related costs.</br></br>At Kemper Securities, the reorganization's chief architect is James R. Boris, chairman and chief executive officer since January 1990. Mr. Boris declined to be interviewed because, a spokesman says, the reorganization isn't complete. In a recent newsletter distributed internally, Mr. Boris called the restructuring "sweeping and often traumatic" yet necessary to make the securities division competitive. A Kemper spokesman declined to comment.