CNO Financial Group (CNO) Q3 2024 earnings summary

Executive summary

• Operating earnings per diluted share rose 26% to $1.11, with broad-based strength across earnings, production, investments, and capital.

• Net operating income increased to $119.2 million in Q3 2024 from $101.3 million in Q3 2023, driven by record annuity collected premiums and strong Medicare and long-term care sales.

• Ninth consecutive quarter of strong sales momentum, with producing agent count growth and record annuity collected premiums up 25% year-over-year.

• Returned $107 million to shareholders in the quarter, maintaining capital and liquidity above target levels.

• Net income for Q3 2024 was $9.3 million, down from $167.3 million in Q3 2023, mainly due to non-economic accounting impacts from market volatility.

Financial highlights

• Book value per diluted share (ex-AOCI) increased 6% to $35.84; book value per common share was $25.86 at September 30, 2024.

• Net investment income rose 7% year-over-year to $299.5 million, with new investments averaging single A rating and six-year duration.

• Operating return on equity was 11.7% as reported and 10.5% excluding significant items (trailing 12 months).

• Expense ratio was 18.8% for the quarter and 19.2% on a trailing 12-month basis.

• Debt to capital ratio (excluding AOCI) was 32.5% at quarter end, or 26.0% adjusting for senior notes maturing next year.

Outlook and guidance

• 2024 operating EPS guidance raised and narrowed to $3.50–$3.60, excluding significant items.

• Excess cash flow to holding company guidance raised to $250–$275 million, midpoint up 50% from original range.

• Expense ratio guidance maintained at 19.0–19.2%.

• Target leverage remains 25–28%; RBC ratio target 375%, with year-end expected well above target.

• Minimum holding company liquidity set at $150 million.