Q2 2026 CNO Financial Group Inc Earnings Call Transcript
Key Points
- CNO Financial Group Inc (CNO) delivered a very strong quarter with operating earnings per diluted share up 45% in Q2 2026 and 43% year-to-date, excluding significant items.
- The company achieved its 16th consecutive quarter of sales growth and its fourth consecutive quarter of producing agent income growth, demonstrating consistent business momentum.
- Sales results were strong across both divisions, with total new annualized premiums up 7% and multiple sales records set, including records in annuities and brokerage and advisory.
- The company raised its full-year 2026 operating earnings per share guidance to a range of $4.60 to $4.80, an 8% increase at the midpoint from prior guidance, reflecting confidence in the business.
- CNO Financial Group Inc (CNO) maintained a robust capital position with a consolidated risk-based capital ratio of 377%, holding company liquidity of $233 million, and returned $77 million to shareholders in the quarter.
- The company's investment portfolio continues to perform well, with the new money rate at 6.16% for the 14th consecutive quarter above 6%, and total net investment income up 8% year-over-year.
- The worksite division delivered its 17th consecutive quarter of sustained sales growth, with record life and health new annualized premiums up 29% and new clients up 84%.
- The company's Medicare supplement business benefited from favorable morbidity and rate increases, and the shift in consumer preferences away from Medicare Advantage towards Medicare supplement is a positive trend for the company.
- Life new annualized premiums in the consumer division were down 9% for the quarter against a strong comparable, primarily driven by lower direct-to-consumer sales.
- The company acknowledged that the transition in marketing channels away from television advertising towards more efficient channels may create some quarterly variability in B2C life sales.
- The favorable morbidity in the Medicare supplement business resulted in a reserve release from better-than-expected first-quarter claims development, which the company does not expect to recur.
- The company noted that the expense ratio of 18.4% reflects favorable expense performance that is viewed as a timing difference, and expenses are expected to normalize over the remainder of the year.
- The company faces competitive pressures in the annuity market, with new entrants and an 'arms race' in crediting rates, although it is somewhat insulated by its captive distribution model and middle-market focus.
- The company's long-term care margins have been strong, but the CFO noted that the favorable claims experience is on the favorable end of current assumptions and will be reviewed in the third quarter, indicating uncertainty about sustainability.
- The company's CEO acknowledged that the streak of consecutive sales growth quarters will eventually break, and he could not predict whether Q3 will be above Q2, indicating potential for deceleration in the consumer division.
Ladies and gentlemen, thank you for standing by.
My name is Krista, and I will be your conference operator today, CI Financial Group second quarter 2026 earning earnings results. ( Operators Instructions ) I would now like to turn the conference over to Adam Oville, please go ahead.
Good morning and thank you for joining us on CNO Financial Group's second quarter 2026 earnings conference call, today's presentation will include remarks from Gary Budwani, Chief Executive Officer, and Paul McDonough, Chief Financial Officer.
Following the presentation, we will also have other business leaders available for the question-and-answer period.
During this conference call we will be referring to information contained in yesterday's press release, you could have seen release by visiting our website at CNN.com.
This morning's presentation is also available in the investors section of our website and was filed in a Form 8k.
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