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, with insurance product margin up to $282.2 million.

• Record annuity collected premiums rose 25% year-over-year, with strong Medicare and long-term care sales and continued agent force growth.

• Policyholder and client assets increased 12% year-over-year, with brokerage and advisory client assets up 35% to $3.9B.

• Returned $107 million to shareholders in the quarter and raised full-year guidance for earnings and cash flow.

Financial highlights

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

• Net investment income rose 7% year-over-year, with new money rate above 6% for the seventh consecutive quarter.

• Operating ROE was 11.7% (as reported) and 10.5% (excluding significant items) on a trailing 12-month basis.

• Debt to capital ratio (excluding AOCI) was 32.5% at Q3 2024, adjusted to 26.0% for expected debt repayment.

• Returned $107 million to shareholders; $90 million of excess capital deployed on share repurchases, reducing diluted shares by 7% year-over-year.

Outlook and guidance

• Raised and narrowed 2024 operating EPS guidance (excluding significant items) to $3.50–$3.60, 11% above initial range.

• Raised and narrowed excess cash flow guidance to $250–$275 million, midpoint 50% higher than original range.

• Maintaining expense ratio guidance at 19.0–19.2% and target leverage at 25–28%.

• Targeting a consolidated RBC ratio of 375% and minimum holding company liquidity of $150 million.

• Management cited favorable demographic trends and a supportive macroeconomic environment as tailwinds entering 4Q24.