Financial Data and Key Metrics Changes - CNO Financial Group achieved an operating return on equity of 11.4% for 2025, up from 10% in 2024, reflecting strong operational momentum [12][21] - Operating earnings per diluted share increased by 11% to $4.40, with full-year operating earnings per share exceeding guidance at $4.02 [5][12] - The company returned $386 million to shareholders, marking an 11% increase over 2024, and raised its quarterly common stock dividend for the 13th consecutive year [6][12] Business Line Data and Key Metrics Changes - The consumer division reported a record total new annualized premium (NAP) growth of 15%, with life NAP up 10% and Medicare supplement NAP up 49% for the year [7][8] - The worksite division also saw record insurance sales, with a 15% increase for the full year and 13% for the fourth quarter, driven by life insurance sales up 36% and hospital indemnity insurance up 41% [10][11] Market Data and Key Metrics Changes - Total health NAP increased by 22%, marking 14 consecutive quarters of growth, while Medicare Advantage policies sold decreased by 3% for the year [8][9] - The company expects overall demand for Medicare products to grow, with approximately 11,000 Americans turning 65 each day, indicating a stable market opportunity [9][29] Company Strategy and Development Direction - CNO Financial Group focuses on the underserved middle-income market, leveraging a last-mile captive agent distribution model as a competitive advantage [5][6] - The company is investing in technology modernization with a planned investment of approximately $170 million over three years, with $20 million deployed in 2025 and $75 million expected in 2026 [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic visibility due to layoffs and job market challenges, which could impact discretionary purchases but noted the ongoing opportunity from the aging population [28][29] - The company anticipates continued growth in producing agent count and productivity, emphasizing that agent productivity is a primary focus for 2026 [26][27] Other Important Information - CNO Financial Group's consolidated risk-based capital ratio was 380%, within the target range of 360%-390%, indicating a strong capital position [16][17] - The company issued $400 million of fixed-rate bonds in the fourth quarter, contributing to disciplined portfolio management and strong earnings fundamentals [15][16] Q&A Session Summary Question: Earnings emergence and target returns - Management indicated that the time to hit target returns varies by product, but confidence remains in meeting ROE targets due to strong sales momentum [23][24] Question: Environment impact on recruiting and agent count growth - Management expects to grow producing agent count in 2026, emphasizing productivity over sheer numbers, while acknowledging economic pressures on consumer spending [25][26] Question: Sustainability of growth levels - Management believes growth is sustainable, with Medicare supplement sales expected to rise while Medicare Advantage sales may decline due to market conditions [37][38] Question: Impact of Medicare Advantage distribution fees - Management has reflected expected pressures in Medicare Advantage in their projections, focusing more on Medicare supplement products [40][41] Question: Capital deployment strategy - Management plans to return excess capital to shareholders through share repurchases while being measured in capital deployment [44][46] Question: Investment portfolio exposure to software - The company has limited exposure to software in its investment portfolio, focusing on mission-critical software and maintaining a cautious approach to risk [72][73]