CNO Financial Group Reports Third Quarter 2025 Results
CNO Financial Group (NYSE: CNO) reported 3Q25 net income of $23.1M or $0.24 per diluted share versus $9.3M ($0.09) in 3Q24. Net operating income was $127.2M or $1.29 per diluted share, up from $119.2M ($1.11) a year earlier. Total new annualized premiums (NAP) rose 26% with Life NAP +32% and Health NAP +20%. CNO increased its run-rate operating ROE target by 50 bps toward a 200-bp improvement through 2027 (off a 2024 run-rate of 10%).
Other items: returned $76.4M to shareholders; book value per share $27.24 (book value per diluted share excluding AOCI $38.10, +6%); executed a Bermuda reinsurance transaction reinsuring $1.8B of inforce supplemental health reserves; recognized a $96.7M goodwill and asset impairment.
CNO Financial Group (NYSE: CNO) ha riportato un utile netto nel 3Q25 di 23,1 milioni di dollari o 0,24 dollari per azione diluita rispetto a 9,3 milioni di dollari (0,09) nel 3Q24. L''utile operativo netto era di 127,2 milioni di dollari o 1,29 dollari per azione diluita, in aumento da 119,2 milioni di dollari (1,11) un anno prima. Le nuove premi annualizzati totali (NAP) sono salite del 26% con NAP Vita +32% e NAP Health +20%. CNO ha aumentato il proprio bersaglio di ROE operativo a regime di 200 pb di miglioramento entro il 2027 (da un valore di 2024 in esecuzione del 10%).
Altri elementi: hanno restituito agli azionisti 76,4 milioni di dollari; valore contabile per azione 27,24 dollari (valore contabile per azione diluita escluso AOCI 38,10 dollari, +6%); eseguita una transazione di riassicurazione Bermuda che reinsura 1,8 miliardi di dollari di riserve sanitarie supplementari in essere; riconosciuto un impairment di avviamento e attività di 96,7 milioni di dollari.
CNO Financial Group (NYSE: CNO) informó que el ingreso neto del 3T25 fue de 23,1 millones de dólares o 0,24 dólares por acción diluida, frente a 9,3 millones (0,09) en el 3T24. El ingreso neto operativo fue de 127,2 millones de dólares o 1,29 dólares por acción diluida, frente a 119,2 millones (1,11) hace un año. Las primas anuales nuevas totales (NAP) subieron 26% con NAP de Vida +32% y NAP de Salud +20%. CNO incrementó su objetivo de ROE operativo a ritmo de ejecución en 50 pb, buscando una mejora de 200 pb hasta 2027 (a partir de un ritmo de 2024 del 10%).
Otros rubros: devolvieron a los accionistas 76,4 millones de dólares; valor contable por acción de 27,24 dólares (valor contable por acción diluida excluido AOCI 38,10 dólares, +6%); se ejecutó una operación de reaseguro en Bermudas que reinsuró 1,8 mil millones de dólares de reservas de salud vigentes; se reconoció una impairment por fondo de comercio y activos por 96,7 millones de dólares.
CNO Financial Group (NYSE: CNO) 은 2025년 3분기 순이익이 2310만 달러 또는 희석주당 0.24달러로 2024년 3분기(0.09) 대비 증가했습니다. 순영업이익은 1억 2720만 달러 또는 희석주당 1.29달러로 전년 동기 1억 1920만 달러 (1.11) 대비 증가했습니다. 총 연간화된 신규 보험료(NAP)는 26% 상승했으며 Life NAP +32% 및 Health NAP +20%입니다. CNO 는 실행 ROE 목표를 연환산 50bp 올려 2027년까지 200bp의 개선을 목표로 했습니다(2024년 런레이트 10%에서).
기타 항목: 주주들에게 7,64천만 달러를 반환; 주당 장부가(BVPS) 27.24달러 (AOCI 제외 희석 주당 장부가 38.10달러, +6%); 현존 보충 건강 보험 준비금을 재보험하는 버뮤다 재보험 거래를 통해 18억 달러를 재보험; 영업권 및 자산손상으로 9,670만 달러를 인식.
CNO Financial Group (NYSE: CNO) a déclaré un bénéfice net pour le T3 25 de 23,1 M$ ou 0,24 $ par action diluée, contre 9,3 M$ (0,09) au T3 24. Le résultat opérationnel net s’élevait à 127,2 M$ ou 1,29 $ par action diluée, en hausse par rapport à 119,2 M$ (1,11) il y a un an. Les nouveaux primes annuelles totales (NAP) ont augmenté de 26%, avec NAP Vie +32% et NAP Santé +20%. CNO a relevé son objectif de ROE opérationnel à rythme de croisière de 50 pb vers une amélioration de 200 pb d’ici 2027 (par rapport à un taux de 2024 de 10%).
Autres éléments : ont retourné 76,4 M$ aux actionnaires; valeur comptable par action 27,24 $ (valeur comptable diluée hors AOCI 38,10 $, +6%); exécuté une opération de réassurance bermudienne réassurant 1,8 Md$ de réserves de santé en vigueur; reconnu une impairment de goodwill et d’actifs de 96,7 M$.
CNO Financial Group (NYSE: CNO) meldete für das 3Q25 einen Nettogewinn von 23,1 Mio. USD bzw. 0,24 USD je verwässertem Anteil gegenüber 9,3 Mio. USD (0,09) im 3Q24. Netto operatives Ergebnis betrug 127,2 Mio. USD bzw. 1,29 USD je verwässertem Anteil, gegenüber 119,2 Mio. USD (1,11) vor einem Jahr. Die neuen jährlichen Prämien (NAP) stiegen um 26%, mit Life NAP +32% und Health NAP +20%. CNO hob sein operatives ROE-Ziel um 50 Basispunkte an und strebt eine Gesamterhöhung von 200 Basispunkten bis 2027 an (ausgehend von einem 2024er Laufrate von 10%).
Weitere Punkte: Rückführung von 76,4 Mio. USD an Aktionäre; buchwert je Aktie 27,24 USD (buchwert je verwässerter Aktie exkl. AOCI 38,10 USD, +6%); eine Bermuda-Reinsurance-Transaktion, die 1,8 Mrd. USD an laufenden Zusatzgesundheitsrückstellungen reinsichert; Anerkennung eines Impairments von 96,7 Mio. USD auf Geschäfts- und Vermögenswerte.
مجموعة CNO المالية (بورصة نيويورك: CNO) أبلغت عن صافي دخل للربع الثالث من عام 2025 قدره 23.1 مليون دولار أو 0.24 دولار للسهم المخصص مخففاً مقابل 9.3 مليون دولار (0.09) في الربع الثالث من 2024. كان صافي الدخل التشغيلي يبلغ 127.2 مليون دولار أو 1.29 دولار للسهم المخفف، مرتفعاً من 119.2 مليون دولار (1.11) قبل عام واحد. ارتفعت الأقساط السنوية الجديدة الإجمالية (NAP) بنسبة 26% مع NAP الحياة +32% وNAP الصحة +20%. زادت CNO هدفها ل ROE تشغيلي بمقدار 200 نقطة أساس لتحسين حتى 2027 من معدل 2024 البالغ 10%.
أمور أخرى: عادت 76.4 مليون دولار إلى المساهمين؛ قيمة الدفتر للسهم 27.24 دولار (قيمة الدفتر للسهم المخفف باستثناء AOCI 38.10 دولار، +6%); نفذت معاملة إعادة تأمين من برمودا reinsuring 1.8 مليار دولار من مخصصات الصحة الإضافية قيد النفاذ؛ الاعتراف بتراجع قيمة للعناية بالسمعة والأصول بقيمة 96.7 مليون دولار.
- Net operating income of $127.2M in 3Q25
- Total NAP up 26% year-over-year
- Life NAP up 32% and Health NAP up 20%
- Executed Bermuda reinsurance cession of $1.8B inforce reserves
- Returned $76.4M to shareholders in the quarter
- Book value per diluted share excluding AOCI $38.10, +6%
- Recorded a $96.7M non-operating goodwill and other asset impairment
- Net income includes $8.8M of net investment losses in 3Q25
- Changes in embedded derivative liabilities reduced earnings by $18.1M
Insights
CNO shows stronger operating earnings, sales growth and a raised ROE target, despite a material non-operating impairment.
The company reported higher net operating income of
Risks and dependencies include a sizeable non-operating goodwill and asset impairment of
Watch near-term items: execution of the reinsurance cession and its impact on statutory capital and operating loss timing, completion of the Worksite exit by
Continued strong production and solid earnings; Increasing 2027 ROE target by 50 basis points
Significant items(6) positively impacted both net income and net operating income(1) by
"Results in the quarter demonstrate the strength of the CNO business model," said Gary C. Bhojwani, chief executive officer. "Continued sales growth and expanding underwriting margins underscore our momentum. We're generating consistent, repeatable results across both our Consumer and Worksite Divisions, with record Direct-to-Consumer and Worksite insurance sales in the third quarter."
"We continue to advance our strategic roadmap, highlighted by executing our second reinsurance transaction with our
Third Quarter 2025 Highlights (as compared to the corresponding period in the prior year unless otherwise stated)
- Total new annualized premiums ("NAP")(4) up
26% ; Total Life NAP up32% ; Total Health NAP up20% - Consumer Division NAP up
27% ; Worksite Division NAP up20% - Annuity account value up
8% ; Client assets in brokerage and advisory up28% - Increasing run rate operating return on equity ("ROE") target by 50 basis points for 200 basis points of total improvement through 2027 (off 2024 run rate of
10% ) - Returned
$76.4 million - Book value per share was
$27.24 $38.10 6% - ROE of
12.5% ; Operating ROE(5) of12.1%
Other Announcements
- The company recognized third quarter non-cash goodwill and other asset impairments in non-operating income that relate to the acquisitions of Web Benefits Design and DirectPath in 2019 and 2021, respectively.
- CNO's wholly-owned
Bermuda reinsurance company executed its second transaction, reinsuring$1.8 billion 50% of new supplemental health business written by Washington National will be ceded to theBermuda company as part of the agreement. - In October 2025, the company decided to streamline its Worksite Division operations and sharpen its focus on the Division's core insurance business by exiting the fee services side of the Worksite business, which includes services acquired in the Web Benefits Design and DirectPath acquisitions. The exit is expected to be substantially complete in the first half of 2026. Once complete, the company expects the exit from this business to reduce annual fee revenue by roughly
$30 million 1% of total revenue) and increase annual pre-tax income by roughly$20 million
FINANCIAL SUMMARY
Quarter End
(Amounts in millions, except per share data)
(Unaudited)
Net operating income, a non-GAAP(a) financial measure, is used consistently by CNO's management to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes certain non-operating items as defined in note (1). Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company's business. Net income is the most directly comparable GAAP measure.
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Per diluted share |
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Quarter ended |
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Quarter ended |
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September 30, |
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September 30, |
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2025 |
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2024 |
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% |
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2025 |
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2024 |
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% |
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Income from insurance products (b) |
1.52 |
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$ 1.21 |
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26 |
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$ 149.5 |
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|
$ 129.2 |
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16 |
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Fee income |
(0.04) |
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(0.03) |
|
33 |
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(3.9) |
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(2.7) |
|
44 |
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Investment income not allocated to product lines (c) |
0.40 |
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|
0.42 |
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(5) |
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39.5 |
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|
45.5 |
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(13) |
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Expenses not allocated to product lines |
(0.23) |
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(0.17) |
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35 |
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(22.3) |
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(18.5) |
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21 |
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Operating earnings before taxes |
1.65 |
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|
1.43 |
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|
162.8 |
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153.5 |
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Income tax expense on operating income |
(0.36) |
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(0.32) |
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13 |
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(35.6) |
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(34.3) |
|
4 |
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Net operating income (1) |
1.29 |
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|
1.11 |
|
16 |
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127.2 |
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119.2 |
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7 |
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Net realized investment losses from disposals, |
(0.09) |
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(0.10) |
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(8.8) |
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(11.1) |
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Net change in market value of investments |
0.06 |
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|
0.11 |
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5.8 |
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12.3 |
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Changes in fair value of embedded derivative |
(0.18) |
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(1.19) |
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(18.1) |
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(127.1) |
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Expenses related to TechMod initiative |
(0.07) |
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— |
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(7.2) |
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— |
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Goodwill and other asset impairment |
(0.98) |
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— |
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(96.7) |
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— |
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Other |
(0.02) |
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(0.15) |
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(1.6) |
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(16.6) |
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Non-operating income before taxes |
(1.28) |
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(1.33) |
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|
(126.6) |
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|
(142.5) |
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Income tax expense on non-operating income |
0.23 |
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|
0.31 |
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|
22.5 |
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|
32.6 |
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Net non-operating income |
(1.05) |
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(1.02) |
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|
(104.1) |
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|
(109.9) |
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Net income |
$ 0.24 |
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|
$ 0.09 |
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$ 23.1 |
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$ 9.3 |
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Weighted average diluted shares outstanding |
98.6 |
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|
107.1 |
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(a) |
GAAP is defined as accounting principles generally accepted in |
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(b) |
Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Insurance product margin is management's measure of the profitability of its annuity, health and life segments' performance and consists of insurance policy income plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs. |
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(c) |
Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the funding agreement-backed notes ("FABN") program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our federal home loan bank ("FHLB") investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from company-owned life insurance ("COLI") and alternative investments income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program. |
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FINANCIAL SUMMARY (continued)
Management vs. GAAP Measures
(Dollars in millions, except per share data)
(Unaudited)
Shareholders' equity, excluding accumulated other comprehensive income (loss), and book value per share, excluding accumulated other comprehensive income (loss), are non-GAAP measures that are utilized by management to view the business without the effect of accumulated other comprehensive income (loss) which is primarily attributable to fluctuations in interest rates associated with fixed maturities, available for sale. Management views the business in this manner because the Company has the ability and generally, the intent, to hold investments to maturity and meaningful trends can be more easily identified without the fluctuations. In addition, shareholders' equity excludes net operating loss carryforwards in our non-GAAP return on equity measures as such assets are not discounted and, accordingly, will not provide a return to shareholders until after it is realized as a reduction to taxes that would otherwise be paid. Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns.
___________________________________________________________________________________________________
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Quarter ended |
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September 30, |
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2025 |
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2024 |
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Trailing four quarters: |
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Net Income |
$ 319.3 |
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$ 274.2 |
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Net operating income (a non-GAAP financial measure) |
433.8 |
|
425.2 |
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Net operating income, excluding significant items |
399.4 |
|
376.9 |
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Average of each of the trailing four quarters average: |
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Shareholders' equity |
$ 2,560.6 |
|
$ 2,325.3 |
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Accumulated other comprehensive loss |
1,245.2 |
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1,514.4 |
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Shareholders' equity, excluding accumulated other comprehensive loss |
3,805.8 |
|
3,839.7 |
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Net operating loss carryforwards |
(225.8) |
|
(218.9) |
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Shareholders' equity, excluding accumulated other comprehensive loss and net operating loss |
$ 3,580.0 |
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$ 3,620.8 |
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Ratios: |
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Return on equity |
12.5 % |
|
11.8 % |
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Operating return on equity (a non-GAAP financial measure) (5) |
12.1 % |
|
11.7 % |
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Operating return on equity, excluding significant items (a non-GAAP financial measure) (5) |
11.2 % |
|
10.4 % |
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Shareholders' equity |
$ 2,611.0 |
|
$ 2,687.8 |
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Accumulated other comprehensive loss |
1,118.9 |
|
1,116.0 |
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Shareholders' equity, excluding accumulated other comprehensive loss |
3,729.9 |
|
3,803.8 |
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Basic shares outstanding |
95,840,989 |
|
103,922,954 |
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Diluted shares outstanding |
97,902,763 |
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106,141,800 |
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Book value per share |
$ 27.24 |
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$ 25.86 |
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Book value per diluted share |
$ 26.67 |
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$ 25.32 |
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Accumulated other comprehensive loss per diluted share |
11.43 |
|
10.52 |
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Book value per diluted share, excluding accumulated other comprehensive loss (a non-GAAP financial |
$ 38.10 |
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$ 35.84 |
Non-Operating Items
Net investment losses in 3Q25 were
During 3Q25 and 3Q24, we recognized an increase in earnings of
During 3Q25 and 3Q24, we recognized a decrease in earnings of
During 3Q25, we incurred
We recognized a
Other non-operating items in 3Q24 included a charge of
INVESTMENT PORTFOLIO
(Dollars in millions)
Fixed maturities, available for sale, at amortized cost by asset class as of September 30, 2025 are as follows:
|
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Investment |
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Below |
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Total |
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Corporate securities |
13,543.9 |
|
$ 682.2 |
|
$ 14,226.1 |
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United States Treasury securities and obligations of |
206.2 |
|
— |
|
206.2 |
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States and political subdivisions |
3,323.3 |
|
23.6 |
|
3,346.9 |
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Foreign governments |
121.9 |
|
— |
|
121.9 |
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Asset-backed securities |
1,476.5 |
|
70.6 |
|
1,547.1 |
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Agency residential mortgage-backed securities |
896.0 |
|
— |
|
896.0 |
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Non-agency residential mortgage-backed securities |
1,297.2 |
|
272.5 |
(a) |
1,569.7 |
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Collateralized loan obligations |
1,127.4 |
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— |
|
1,127.4 |
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Commercial mortgage-backed securities |
2,074.4 |
|
103.6 |
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2,178.0 |
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Total |
$ 24,066.8 |
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$ 1,152.5 |
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$ 25,219.3 |
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(a) |
Certain structured securities rated below investment grade by Nationally Recognized Statistical Rating Organizations may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the National Association of Insurance Commissioners (NAIC). |
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As of September 30, 2025, the fair value of CNO's available for sale fixed maturity portfolio was
Statutory (based on non-GAAP measures) and GAAP Capital Information
The consolidated statutory risk-based capital ratio of our
During 3Q25, we repurchased
Unrestricted cash and investments held by our holding company were
Book value per common share was
The debt-to-capital ratio was
Return on equity for the trailing four quarters ended September 30, 2025 and 2024 was
In this news release, CNO includes non-GAAP measures to enhance investors' understanding of management's view of the business. The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing a broader perspective. CNO's definitions of non-GAAP measures may differ from other companies' definitions. More detailed information including various GAAP and non-GAAP measurements are located at CNOinc.com in the Investors section under SEC Filings.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS:
This press release may contain forward-looking statements within the meaning of federal securities laws. These prospective statements reflect management's current expectations, but are not guarantees of future performance. Accordingly, please refer to CNO's cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company's Form 10-K for the year ended December 31, 2024 and any subsequent Form 10-Q or Form 10-K on file with the Securities and Exchange Commission and on the Company's website at CNOinc.com in the Investors section. CNO specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
The Company will host a conference call to discuss results on November 4, 2025 at 11:00 a.m. Eastern Time. During the call, we will be referring to a presentation that will be available at the Investors section of the company's website.
To participate by dial-in, please register at https://www.netroadshow.com/events/login/LE9zwo3l1n8LCba0M35GdCBypZJ59DuLjEa. Upon registering, you will be provided with call details and a registrant ID used to track attendance on the conference call. Reminders will also be sent to registered participants via email.
For those investors who prefer to listen to the call online, we will be broadcasting the call live via webcast. The event can be accessed through the Investors section of the company's website: ir.CNOinc.com. Participants should go to the website at least 15 minutes before the event to register and download any necessary audio software.
ABOUT CNO FINANCIAL GROUP
CNO Financial Group, Inc. (NYSE: CNO) secures the future of middle-income America. CNO provides life and health insurance, annuities, financial services and workforce benefits solutions through our family of brands, including Bankers Life, Colonial Penn, Optavise and Washington National. Our customers work hard to save for the future, and we help protect their health, income and retirement needs with 3.3 million policies and
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CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in millions, except per share data) (unaudited) |
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Three months ended |
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September 30, |
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September 30, |
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2025 |
|
2024 |
|
2025 |
|
2024 |
|
Revenues: |
|
|
|
|
|
|
|
|
Insurance policy income |
$ 658.4 |
|
$ 645.0 |
|
$ 1,960.4 |
|
$ 1,914.9 |
|
Net investment income: |
|
|
|
|
|
|
|
|
General account assets |
382.9 |
|
366.3 |
|
1,136.3 |
|
1,019.9 |
|
Policyholder and other special-purpose portfolios |
116.8 |
|
87.6 |
|
158.6 |
|
312.3 |
|
Investment gains (losses): |
|
|
|
|
|
|
|
|
Realized investment losses |
(12.9) |
|
(13.1) |
|
(38.0) |
|
(49.4) |
|
Other investment gains (losses) |
9.9 |
|
14.3 |
|
9.8 |
|
41.2 |
|
Total investment losses |
(3.0) |
|
1.2 |
|
(28.2) |
|
(8.2) |
|
Fee revenue and other income |
33.6 |
|
29.5 |
|
117.2 |
|
113.4 |
|
Total revenues |
1,188.7 |
|
1,129.6 |
|
3,344.3 |
|
3,352.3 |
|
Benefits and expenses: |
|
|
|
|
|
|
|
|
Insurance policy benefits |
702.1 |
|
731.0 |
|
1,930.5 |
|
1,942.0 |
|
Liability for future policy benefits remeasurement loss |
(30.8) |
|
7.3 |
|
(55.8) |
|
(29.1) |
|
Change in fair value of market risk benefits |
(12.4) |
|
(20.9) |
|
(8.0) |
|
(45.6) |
|
Interest expense |
56.6 |
|
68.0 |
|
177.7 |
|
192.4 |
|
Amortization of deferred acquisition costs and present value of future profits |
69.9 |
|
64.0 |
|
205.9 |
|
185.9 |
|
Goodwill and other asset impairment |
96.7 |
|
— |
|
96.7 |
|
— |
|
Gain on extinguishment of borrowings related to variable interest entities |
— |
|
— |
|
(1.5) |
|
— |
|
Other operating costs and expenses |
270.4 |
|
269.2 |
|
816.8 |
|
798.9 |
|
Total benefits and expenses |
1,152.5 |
|
1,118.6 |
|
3,162.3 |
|
3,044.5 |
|
Income before income taxes |
36.2 |
|
11.0 |
|
182.0 |
|
307.8 |
|
Income tax expense |
13.1 |
|
1.7 |
|
45.6 |
|
69.9 |
|
Net income |
$ 23.1 |
|
$ 9.3 |
|
$ 136.4 |
|
$ 237.9 |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
96,603,000 |
|
105,101,000 |
|
98,639,000 |
|
107,265,000 |
|
Net income |
$ 0.24 |
|
$ 0.09 |
|
$ 1.38 |
|
$ 2.22 |
|
Diluted: |
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
98,553,000 |
|
107,131,000 |
|
100,670,000 |
|
109,078,000 |
|
Net income |
$ 0.24 |
|
$ 0.09 |
|
$ 1.36 |
|
$ 2.18 |
NOTES
|
(1) |
Management believes that an analysis of net income applicable to common stock before: (i) net realized investment gains or losses from sales, impairments and the change in allowance for credit losses, net of taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) changes in fair value of embedded derivative liabilities and market risk benefits related to our fixed indexed annuities, net of taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) gains or losses related to material reinsurance transactions, net of taxes; (vi) loss on extinguishment of debt, net of taxes; (vii) changes in the valuation allowance for deferred tax assets and other tax items; (viii) costs related to our three-year project to modernize certain elements of our technology ("TechMod") that are incremental to normal spend and will not recur following implementation, net of taxes; (ix) goodwill and other asset impairment expenses; and (x) other non-operating items including earnings attributable to variable interest entities, net of taxes ("net operating income," a non-GAAP financial measure) is important to evaluate the financial performance of the company, and is a key measure commonly used in the life insurance industry. The income tax expense or benefit allocated to the items included in net non-operating income (loss) represents the current and deferred income tax expense or benefit allocated to the items included in non-operating earnings. Management believes this information helps provide a better understanding of the business and a more meaningful analysis of results of our insurance product lines. A reconciliation of net operating income to net income applicable to common stock is provided in the table on page 2. Additional information concerning this non-GAAP measure is included in our periodic filings with the Securities and Exchange Commission that are available on CNO's website, CNOinc.com, in the Investors section under SEC Filings. |
|
(2) |
Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised and restricted stock and performance units were vested. The dilution from options, restricted shares and performance units is calculated using the treasury stock method. Under this method, we assume the proceeds from the exercise of the options (or the unrecognized compensation expense with respect to restricted stock and performance units) will be used to purchase shares of our common stock at the closing market price on the last day of the period. In addition, the calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments. |
|
(3) |
The calculation of this non-GAAP measure differs from the corresponding GAAP measure because accumulated other comprehensive income (loss) has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in the unrealized appreciation (depreciation) of our investments. |
|
(4) |
Measured by new annualized premiums for life and health products, which includes |
|
(5) |
Operating return on equity and operating return on equity, excluding significant items are calculated as follows: (i) operating return on equity is equal to the trailing four quarters of net operating income(1) divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards, for the trailing four quarters; and (ii) operating return on equity, excluding significant items is equal to the trailing four quarters of net operating income(1), excluding significant items, divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards, for the trailing four quarters. |
The following summarizes: (i) net operating income; (ii) significant items; (iii) net operating income, excluding significant items; and (iv) net income (loss) (dollars in millions):
|
|
|
|
|
|
|
|
|
Net operating |
|
|
|
|
|
|
|
|
|
|
|
Net operating |
|
income, |
|
|
|
|
|
|
|
|
|
|
|
income, |
|
excluding |
|
|
|
Net |
|
|
|
|
|
|
|
excluding |
|
significant |
|
|
|
income - |
|
|
|
Net operating |
|
Significant |
|
significant |
|
items - trailing |
|
Net |
|
trailing |
|
|
|
income |
|
items |
|
items (a) |
|
four quarters |
|
income (loss) |
|
four quarters |
|
4Q23 |
|
$ 133.9 |
|
$ (26.4) |
(b) |
$ 107.5 |
|
$ 312.8 |
|
$ 36.3 |
|
$ 276.5 |
|
1Q24 |
|
57.5 |
|
— |
|
57.5 |
|
311.7 |
|
112.3 |
|
389.6 |
|
2Q24 |
|
114.6 |
|
— |
|
114.6 |
|
364.0 |
|
116.3 |
|
432.2 |
|
3Q24 |
|
119.2 |
|
(21.9) |
(c) |
97.3 |
|
376.9 |
|
9.3 |
|
274.2 |
|
4Q24 |
|
138.0 |
|
3.1 |
(d) |
141.1 |
|
410.5 |
|
182.9 |
|
420.8 |
|
1Q25 |
|
81.1 |
|
(5.3) |
(e) |
75.8 |
|
428.8 |
|
21.5 |
|
330.0 |
|
2Q25 |
|
87.5 |
|
— |
|
87.5 |
|
401.7 |
|
91.8 |
|
305.5 |
|
3Q25 |
|
127.2 |
|
(32.2) |
(f) |
95.0 |
|
399.4 |
|
23.1 |
|
319.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See note (6) for additional information. |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Comprised of |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Comprised of |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Comprised of |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e) Comprised of |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f) Comprised of |
||||||||||||
A reconciliation of pre-tax operating earnings (a non-GAAP financial measure) to net income is as follows (dollars in millions):
|
|
|
|
Trailing four quarters |
||
|
|
|
|
3Q25 |
|
3Q24 |
|
Pre-tax operating earnings (a non-GAAP financial measure) |
$ 553.6 |
|
$ 549.0 |
||
|
Income tax expense |
(119.8) |
|
(123.8) |
||
|
Net operating income |
433.8 |
|
425.2 |
||
|
Non-operating items: |
|
|
|
||
|
Net realized investment losses from sales, impairments and change in allowance for credit |
(78.9) |
|
(36.2) |
||
|
Net change in market value of investments recognized in earnings |
9.0 |
|
38.2 |
||
|
Changes in fair value of embedded derivative liabilities and market risk benefits |
30.1 |
|
(170.9) |
||
|
Fair value changes related to the agent deferred compensation plan |
6.6 |
|
(10.3) |
||
|
Expenses related to TechMod initiative |
(10.4) |
|
— |
||
|
Goodwill and other asset impairment |
(96.7) |
|
— |
||
|
Other |
0.8 |
|
(15.9) |
||
|
Non-operating loss before taxes |
(139.5) |
|
(195.1) |
||
|
Income tax benefit on non-operating loss |
25.0 |
|
44.1 |
||
|
Net non-operating loss |
(114.5) |
|
(151.0) |
||
|
Net income |
$ 319.3 |
|
$ 274.2 |
||
A reconciliation of consolidated capital, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders' equity, is as follows (dollars in millions):
|
|
|
|
1Q23 |
|
2Q23 |
|
3Q23 |
|
4Q23 |
|
Consolidated capital, excluding accumulated other comprehensive |
|
|
|
|
|
|
|
||
|
|
income (loss) and net operating loss carryforwards |
|
|
|
|
|
|
|
|
|
|
(a non-GAAP financial measure) |
$ 3,543.8 |
|
$ 3,603.0 |
|
$ 3,744.2 |
|
$ 3,712.8 |
|
|
Net operating loss carryforwards |
152.4 |
|
126.3 |
|
102.6 |
|
79.6 |
||
|
Accumulated other comprehensive loss |
(1,664.4) |
|
(1,733.5) |
|
(1,956.7) |
|
(1,576.8) |
||
|
Common shareholders' equity |
$ 2,031.8 |
|
$ 1,995.8 |
|
$ 1,890.1 |
|
$ 2,215.6 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q24 |
|
2Q24 |
|
3Q24 |
|
4Q24 |
|
Consolidated capital, excluding accumulated other comprehensive |
|
|
|
|
|
|
|
||
|
|
income (loss) and net operating loss carryforwards |
|
|
|
|
|
|
|
|
|
|
(a non-GAAP financial measure) |
$ 3,536.8 |
|
$ 3,596.7 |
|
$ 3,529.9 |
|
$ 3,810.0 |
|
|
Net operating loss carryforwards |
311.2 |
|
296.5 |
|
273.9 |
|
76.6 |
||
|
Accumulated other comprehensive loss |
(1,480.3) |
|
(1,464.3) |
|
(1,116.0) |
|
(1,371.4) |
||
|
Common shareholders' equity |
$ 2,367.7 |
|
$ 2,428.9 |
|
$ 2,687.8 |
|
$ 2,515.2 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q25 |
|
2Q25 |
|
3Q25 |
|
|
|
Consolidated capital, excluding accumulated other comprehensive |
|
|
|
|
|
|
|
||
|
|
income (loss) and net operating loss carryforwards |
|
|
|
|
|
|
|
|
|
|
(a non-GAAP financial measure) |
$ 3,498.9 |
|
$ 3,504.3 |
|
$ 3,483.6 |
|
|
|
|
Net operating loss carryforwards |
295.3 |
|
271.1 |
|
246.3 |
|
|
||
|
Accumulated other comprehensive loss |
(1,239.1) |
|
(1,252.7) |
|
(1,118.9) |
|
|
||
|
Common shareholders' equity |
$ 2,555.1 |
|
$ 2,522.7 |
|
$ 2,611.0 |
|
|
||
A reconciliation of consolidated capital, excluding accumulated other comprehensive loss and net operating loss carryforwards (a non-GAAP financial measure) to common shareholders' equity, is as follows (dollars in millions):
|
|
|
Trailing four quarter average |
||
|
|
|
3Q25 |
|
3Q24 |
|
Consolidated capital, excluding accumulated other comprehensive |
|
|
|
|
|
|
income (loss) and net operating loss carryforwards |
|
|
|
|
|
(a non-GAAP financial measure) |
$ 3,580.0 |
|
$ 3,620.8 |
|
Net operating loss carryforwards |
225.8 |
|
218.9 |
|
|
Accumulated other comprehensive loss |
(1,245.2) |
|
(1,514.4) |
|
|
Common shareholders' equity |
$ 2,560.6 |
|
$ 2,325.3 |
|
|
|
|
|
(6) |
The tables below summarize the financial impact of significant items on our net operating income for the quarters during the nine months ended September 30, 2025 and the year ended December 31, 2024 that had significant items impacting our net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions, except per share data). |
|
|
|
Three months ended |
||||
|
|
|
September 30, 2025 |
||||
|
|
|
Actual |
|
Significant |
|
Excluding items |
|
Insurance product margin |
|
|
|
|
|
|
|
Annuity margin |
|
$ 72.9 |
|
$ (16.6) |
(a) |
$ 56.3 |
|
Health margin |
|
157.0 |
|
(21.1) |
(a) |
135.9 |
|
Life margin |
|
70.6 |
|
(3.6) |
(a) |
67.0 |
|
Total insurance product margin |
|
300.5 |
|
(41.3) |
|
259.2 |
|
Allocated expenses |
|
(151.0) |
|
— |
|
(151.0) |
|
Income from insurance products |
|
149.5 |
|
(41.3) |
|
108.2 |
|
Fee income |
|
(3.9) |
|
— |
|
(3.9) |
|
Investment income not allocated to product lines |
|
39.5 |
|
— |
|
39.5 |
|
Expenses not allocated to product lines |
|
(22.3) |
|
— |
|
(22.3) |
|
Operating earnings before taxes |
|
162.8 |
|
(41.3) |
|
121.5 |
|
Income tax (expense) benefit on operating income |
|
(35.6) |
|
9.1 |
|
(26.5) |
|
Net operating income |
|
$ 127.2 |
|
$ (32.2) |
|
$ 95.0 |
|
|
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 1.29 |
|
$ (0.33) |
|
$ 0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Comprised of |
|||||||||||
|
|
|
Three months ended |
||||
|
|
|
March 31, 2025 |
||||
|
|
|
Actual |
|
Significant |
|
Excluding items |
|
Insurance product margin |
|
|
|
|
|
|
|
Annuity margin |
|
$ 54.5 |
|
$ — |
|
$ 54.5 |
|
Health margin |
|
126.2 |
|
— |
|
126.2 |
|
Life margin |
|
68.2 |
|
(6.8) |
(a) |
61.4 |
|
Total insurance product margin |
|
248.9 |
|
(6.8) |
|
242.1 |
|
Allocated expenses |
|
(161.2) |
|
— |
|
(161.2) |
|
Income from insurance products |
|
87.7 |
|
(6.8) |
|
80.9 |
|
Fee income |
|
(0.8) |
|
— |
|
(0.8) |
|
Investment income not allocated to product lines |
|
38.0 |
|
— |
|
38.0 |
|
Expenses not allocated to product lines |
|
(20.3) |
|
— |
|
(20.3) |
|
Operating earnings before taxes |
|
104.6 |
|
(6.8) |
|
97.8 |
|
Income tax (expense) benefit on operating income |
|
(23.5) |
|
1.5 |
|
(22.0) |
|
Net operating income |
|
$ 81.1 |
|
$ (5.3) |
|
$ 75.8 |
|
|
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 0.79 |
|
$ (0.05) |
|
$ 0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Comprised of |
|||||||||||
|
|
|
Three months ended |
||||
|
|
|
December 31, 2024 |
||||
|
|
|
Actual |
|
Significant |
|
Excluding items |
|
Insurance product margin |
|
|
|
|
|
|
|
Annuity margin |
|
$ 55.0 |
|
$ — |
|
$ 55.0 |
|
Health margin |
|
130.1 |
|
3.9 |
(a) |
134.0 |
|
Life margin |
|
68.0 |
|
— |
|
68.0 |
|
Total insurance product margin |
|
253.1 |
|
3.9 |
|
257.0 |
|
Allocated expenses |
|
(146.1) |
|
— |
|
(146.1) |
|
Income from insurance products |
|
107.0 |
|
3.9 |
|
110.9 |
|
Fee income |
|
20.6 |
|
— |
|
20.6 |
|
Investment income not allocated to product lines |
|
65.3 |
|
— |
|
65.3 |
|
Expenses not allocated to product lines |
|
(19.0) |
|
— |
|
(19.0) |
|
Operating earnings before taxes |
|
173.9 |
|
3.9 |
|
177.8 |
|
Income tax (expense) benefit on operating income |
|
(35.9) |
|
(0.8) |
|
(36.7) |
|
Net operating income |
|
$ 138.0 |
|
$ 3.1 |
|
$ 141.1 |
|
|
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 1.31 |
|
$ 0.03 |
|
$ 1.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Comprised of |
|||||||||||
|
|
|
Three months ended |
||||
|
|
|
September 30, 2024 |
||||
|
|
|
Actual |
|
Significant |
|
Excluding items |
|
Insurance product margin |
|
|
|
|
|
|
|
Annuity margin |
|
$ 91.1 |
|
$ (36.2) |
(b) |
$ 54.9 |
|
Health margin |
|
127.8 |
|
4.3 |
(b) |
132.1 |
|
Life margin |
|
63.3 |
|
0.7 |
(b) |
64.0 |
|
Total insurance product margin |
|
282.2 |
|
(31.2) |
|
251.0 |
|
Allocated expenses |
|
(153.0) |
|
— |
|
(153.0) |
|
Income from insurance products |
|
129.2 |
|
(31.2) |
|
98.0 |
|
Fee income |
|
(2.7) |
|
— |
|
(2.7) |
|
Investment income not allocated to product lines |
|
45.5 |
|
— |
|
45.5 |
|
Expenses not allocated to product lines |
|
(18.5) |
|
2.9 |
(c) |
(15.6) |
|
Operating earnings before taxes |
|
153.5 |
|
(28.3) |
|
125.2 |
|
Income tax (expense) benefit on operating income |
|
(34.3) |
|
6.4 |
|
(27.9) |
|
Net operating income |
|
$ 119.2 |
|
$ (21.9) |
|
$ 97.3 |
|
|
|
|
|
|
|
|
|
Net operating income per diluted share |
|
$ 1.11 |
|
$ (0.19) |
|
$ 0.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Significant items impacting the health margin were revised from |
|||||||||||
|
(b) |
Comprised of |
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|
(c) |
Comprised of |
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SOURCE CNO Financial Group
FAQ
What were CNO's 3Q25 net income and net operating income (NYSE: CNO)?
How much did CNO increase new annualized premiums (NAP) in 3Q25?
What is the impact of CNO's October 2025 Bermuda reinsurance transaction on reserves?
Why did CNO record a $96.7M charge in 3Q25 and what does it relate to?
How did CNO adjust its ROE objectives after 3Q25 results?
What shareholder returns and book value metrics did CNO report for 3Q25?
