CNO Financial Group, Inc. (CNO) | Investment Case

1. Company Snapshot

1.a. Company Description

CNO Financial Group, Inc., through its subsidiaries, develops, markets, and administers health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States.It offers Medicare supplement, supplemental health, and long-term care insurance policies; life insurance; and annuities, as well as Medicare advantage plans to individuals through phone, online, mail, and face-to-face.The company also focuses on worksite and group sales for businesses, associations, and other membership groups by interacting with customers at their place of employment.

In addition, it provides fixed index annuities; fixed interest annuities, including fixed rate single and flexible premium deferred annuities; single premium immediate annuities; supplemental health products, such as specified disease, accident, and hospital indemnity products; and long-term care plans primarily to retirees and older self-employed individuals in the middle-income market.Further, the company offers universal life and other interest-sensitive life products; and traditional life policies that include whole life, graded benefit life, term life, and single premium whole life products, as well as graded benefit life insurance products.CNO Financial Group, Inc.

markets its products under the Bankers Life, Washington National, and Colonial Penn brand names.The company sells its products through agents, independent producers, and direct marketing.CNO Financial Group, Inc.

was founded in 1979 and is headquartered in Carmel, Indiana.

Show Full description

1.b. Last Insights on CNO

CNO Financial Group's recent performance was driven by strong production and solid earnings, with Q3 2025 net income rising to $23.1 million, or $0.24 per diluted share, from $9.3 million, or $0.09 per diluted share, in Q3 2024. The company increased its 2027 ROE target by 50 basis points. Additionally, CNO Financial Group's growth is fueled by rising premiums, tech investments, and acquisitions. Its investor briefing focused on the Consumer division highlighted growth prospects.

1.c. Company Highlights

Last Price	40.29
Change Percentage	-0.64%
Open	40.44
Previous Close	40.55
Market Cap ( Millions)	3842
Volume	391180
Year High	43.2
Year Low	34.63
M A 50	40.1
M A 200	38.97

FCF Yield	18.34%
Dividend Yield	1.64%
ROE	11.51%
Debt / Equity	160.16%
Net Debt / EBIDTA	394.28%
Price To Book	1.48
Price Earnings Ratio	13.48
Price To FCF	5.45
Price To sales	0.86
EV / EBITDA	8.89

2. CNO Financial Group's Strong Q3 Earnings: A Closer Look

CNO Financial Group delivered a robust Q3, with operating earnings per diluted share reaching $1.29, up 16% year-over-year. The company's net investment income continued to perform well, with an average yield on allocated investments of 4.91%, a 10 basis point increase from the previous year. The expense ratio improved to 18.6% in the quarter and 19.0% on a trailing 12-month basis. Revenue growth was driven by strong insurance sales, with total new annualized premiums reaching a record $125 million, up 26%. The company's EPS was significantly lower than estimates, with actual EPS at $0.2343 compared to estimates of $1.19.

Publication Date: Nov -06

                                    📋 Highlights
                                    Strong sales growth::
                                                Record total new annualized premiums of $125 million, up 26%, with double-digit insurance sales growth in both divisions.
Operating earnings growth::
                                                Operating earnings per diluted share rose 16% to $1.29, driven by favorable product margins and 6%+ new money rates for 11 consecutive quarters.
Bermuda treaty impact::
                                                Ceded $1.8 billion of Supplemental Health reserves to Bermuda, aiming for 50 bps incremental operating ROE improvement by 2027.
Worksite Division growth::
                                                Life insurance sales up 24%, Hospital Indemnity up 53%, and Accident insurance up 15%, with 14th consecutive quarter of growth.
Revised ROE target::
                                                Operating return on equity (ROE) target for 2027 increased to 200 bps improvement (from 150 bps) over a 2024 run rate of ~10%.

                                

Segment Performance

The Consumer Division saw significant growth, with life and health new annualized premiums up 27% and total life insurance sales up 33%. The Worksite Division also performed well, with insurance product sales delivering record sales and life and health new annualized premiums up 20%. The direct-to-consumer life insurance sales were particularly noteworthy, with a 56% increase, driven by process and technology enhancements.

Reinsurance Treaty and Capital Management

CNO Financial Group executed a second Bermuda treaty, ceding approximately $1.8 billion of Supplemental Health U.S. statutory reserves, which is expected to improve operating return on equity by 50 basis points through 2027. The company is revising its operating return on equity target for 2027 to an improvement of 200 basis points, up from the prior target of 150 basis points. The company's capital management strategy is focused on investing in sales growth and tech modernization, while also returning capital to shareholders through share repurchases.

Valuation and Outlook

With a Price-to-Book Ratio of 1.48, the market is pricing in a relatively modest valuation for CNO Financial Group. Given the company's strong Q3 earnings and improved outlook, the stock may be poised for further upside. Analysts estimate next year's revenue growth at 3.3%, which is relatively modest. However, the company's focus on improving profitability and return on equity may lead to further upside in the stock price. The company's ROE is currently at 11.51%, and with the expected improvement, it may reach the target of 12% in the near future.

3. NewsRoom

CNO Financial Group (NYSE:CNO) and Goosehead Insurance (NASDAQ:GSHD) Head-To-Head Survey

Nov -15

Source: defenseworld.net

CNO Financial Group Declares $0.17 Quarterly Dividend

Nov -12

Source: prnewswire.com

CNO Q3 Earnings Top on Strong Life Collected Premiums, Stock Up 4%

Nov -12

Source: zacks.com

Monumental Milestones at the 2025 CNO Financial Indianapolis Monumental Marathon

Nov -08

Source: prnewswire.com

CNO Financial Group, Inc. (CNO) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

Teacher Retirement System of Texas Has $2.15 Million Holdings in CNO Financial Group, Inc. $CNO

Nov -04

Source: defenseworld.net

CNO Financial Group Reports Third Quarter 2025 Results

Nov -03

Source: prnewswire.com

CNO Financial Group to Release Third Quarter Results on November 3, 2025

Oct -14

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.06%)

6. Segments

Health

Expected Growth: 4.83%

CNO Financial Group's Health segment growth of 4.83% is driven by increasing demand for supplemental health insurance, expansion of Medicare Advantage offerings, and strategic partnerships. Additionally, the company's focus on digital transformation, improved customer engagement, and cost savings initiatives have contributed to the growth.

Life

Expected Growth: 4.77%

CNO Financial Group's 4.77% growth in Life segment is driven by increasing demand for whole life insurance, expansion of distribution channels, and strategic partnerships. Additionally, the company's focus on middle-income markets, product diversification, and effective expense management have contributed to this growth.

Annuity

Expected Growth: 5.4%

The 5.4% growth of the annuity from CNO Financial Group, Inc. is driven by increasing demand for retirement income solutions, expansion of distribution channels, and competitive product offerings. Additionally, the company's focus on digital transformation and cost savings initiatives have improved operational efficiency, contributing to the growth.

Investments

Expected Growth: 5.4%

CNO Financial Group's 5.4% growth is driven by increasing demand for life insurance and annuity products, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, cost savings initiatives, and effective risk management have contributed to its growth momentum.

Fee and Other

Expected Growth: 7.42%

The 7.42% growth in Fee and Other revenue from CNO Financial Group, Inc. is driven by increasing demand for advisory services, expansion of distribution channels, and strategic partnerships. Additionally, the company's focus on digital transformation and process efficiencies has led to higher margins and revenue growth.

Reconciling Items

Expected Growth: 4.6%

CNO Financial Group's 4.6% growth is driven by increasing demand for life insurance and annuity products, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, cost savings initiatives, and effective capital management have contributed to its growth momentum.

7. Detailed Products

Bankers Life

A leading provider of insurance and retirement products to the middle-income market, focusing on the senior market

Washington National

A leading provider of supplemental health and life insurance products to the middle-income market

Colonial Penn

A leading provider of life insurance and other insurance products directly to consumers

8. CNO Financial Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

CNO Financial Group, Inc. operates in the insurance industry, where substitutes are limited. However, the company faces competition from other insurance providers, which can be considered as substitutes.

Bargaining Power Of Customers

CNO Financial Group, Inc. has a large customer base, which gives it bargaining power over its customers. However, the company's customers are individuals and small businesses, which have limited bargaining power.

Bargaining Power Of Suppliers

CNO Financial Group, Inc. has a diversified supplier base, which reduces the bargaining power of its suppliers. The company's suppliers are primarily reinsurance companies and other financial institutions.

Threat Of New Entrants

The insurance industry has high barriers to entry, including regulatory hurdles and capital requirements. This makes it difficult for new entrants to enter the market, reducing the threat of new entrants.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. CNO Financial Group, Inc. faces intense competition from other insurance providers, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	65.20%
Debt Cost	7.26%
Equity Weight	34.80%
Equity Cost	9.18%
WACC	7.93%
Leverage	187.34%

11. Quality Control: CNO Financial Group, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Unum

A-Score: 6.8/10

Value: 7.4

Growth: 5.7

Quality: 6.4

Yield: 5.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

CNO Financial Group

A-Score: 6.3/10

Value: 6.7

Growth: 6.4

Quality: 5.1

Yield: 4.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

Primerica

A-Score: 6.2/10

Value: 5.6

Growth: 7.3

Quality: 7.4

Yield: 3.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

F&G Annuities & Life

A-Score: 5.9/10

Value: 8.4

Growth: 8.4

Quality: 6.2

Yield: 5.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

Jackson Financial

A-Score: 5.9/10

Value: 5.3

Growth: 4.3

Quality: 7.1

Yield: 8.0

Momentum: 5.0

Volatility: 5.7

1-Year Total Return ->

American Equity

A-Score: 5.4/10

Value: 9.6

Growth: 7.3

Quality: 6.1

Yield: 1.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-6.02%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.93%

CNO Financial Group, Inc. - US12621E1038

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CNO

1.c. Company Highlights

Medium Volatility

Stable Momentum

Average Quality

Earnings Miss

Revenues Beats

Better Quality

Cheaper

Earnings Beats

Strong Momentum

Fairly Valued

Average Growth

2. CNO Financial Group's Strong Q3 Earnings: A Closer Look

Segment Performance

Reinsurance Treaty and Capital Management

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.06%)

6. Segments

Health

Expected Growth: 4.83%

Life

Expected Growth: 4.77%

Annuity

Expected Growth: 5.4%

Investments

Expected Growth: 5.4%

Fee and Other

Expected Growth: 7.42%

Reconciling Items

Expected Growth: 4.6%

7. Detailed Products

Bankers Life

Washington National

Colonial Penn

8. CNO Financial Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: CNO Financial Group, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

40.29$

Current Price

40.29$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA