CNO Financial Group Q4 Earnings Call Highlights

Core Viewpoint - CNO Financial Group reported strong financial performance in 2025, exceeding guidance with significant growth in operating earnings, sales, and capital position, while maintaining a focus on agent productivity and navigating macroeconomic uncertainties. Financial Performance - Operating earnings per diluted share were $4.40, reflecting an 11% increase, driven by strong insurance product margins and investment performance [2] - The company returned $386 million to shareholders, including $320 million in share buybacks, while raising its quarterly common stock dividend for the 13th consecutive year [1][6] - Operating return on equity (ROE) improved to 11.4% excluding significant items, up from a 10% run rate in 2024 [13] Sales and Production Growth - CNO achieved record total new annualized premium (NAP) growth of 15%, supported by 14 consecutive quarters of sales growth and an increase in producing agent count [3][7] - In the consumer division, life NAP increased by 10%, with direct-to-consumer life sales up 20%, benefiting from technology-driven productivity enhancements [8] - The worksite division reported record insurance sales up 15% for the full year, marking the second consecutive year of record production [10] Capital Position and Investment Strategy - The company holds a strong capital position with a risk-based capital (RBC) ratio of 380% and $31 billion in invested assets, 97% of which are investment grade [6][19] - CNO plans to continue a three-year technology modernization initiative totaling approximately $170 million, with $75 million expected in 2026 [5][21] - New investments in the quarter totaled about $1.6 billion, with an average rating of single-A and an average duration of six years [17] 2026 Outlook - Management expects operating EPS of $4.25 to $4.45 and free cash flow of $200 million to $250 million for 2026, assuming a stable macro environment [5][20] - The company anticipates continued growth in producing agent count while emphasizing productivity as a primary focus [22] - CNO expects ongoing pressure on the Medicare Advantage market but strength in Medicare Supplement sales [23]