CNO Financial Group (CNO) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $116.3 million, up from $73.7 million in Q2 2023, with net operating income rising to $114.6 million and operating EPS up 94% to $1.05 per share.

• Achieved eighth consecutive quarter of sales growth and sixth consecutive quarter of producing agent count growth, with strong performance in both agent force and underwriting margins.

• Book value per diluted share excluding AOCI increased 11% to $36.00, and book value per share rose to $22.80.

• Returned $77 million to shareholders in Q2 2024, including $60 million in share repurchases.

• Raised 2024 operating EPS guidance to $3.30–$3.50 and excess cash flow guidance to $200–$250 million.

Financial highlights

• Net operating income was $114.6 million, up from $62.3 million in Q2 2023; diluted EPS for Q2 2024 was $1.06, up from $0.64.

• Book value per diluted share excluding AOCI was $36.00, up 11% year-over-year; book value per share (ex-AOCI) was $36.55 at June 30, 2024.

• Expense ratio improved to 19.31% (trailing 12 months), with 2024 forecast narrowed to 19.0%–19.2%.

• Net investment income increased 12% to $297.1 million in Q2 2024, with average yield on allocated investments at 4.81%.

• Debt to capital ratio was 32% as reported, 25.5% adjusted for upcoming debt maturity.

Outlook and guidance

• Raised full-year 2024 operating EPS guidance to $3.30–$3.50 and excess cash flow to $200–$250 million.

• Projected expense ratio for 2024 narrowed to 19.0%–19.2%; effective tax rate ~23%.

• Maintaining target leverage of 25–28% and consolidated RBC ratio of 375%, with year-end levels expected above targets.

• Minimum holding company liquidity targeted at $150 million.

• Expect alternative investments to generate 9–10% returns for the remainder of the year.