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- **Record Sales Growth**: Q3 NAP up 26% to $125M, driven by 56% D2C life insurance growth and 23% health insurance expansion.
- **Strategic Restructuring**: $20M annual loss fee services business exited, freeing capital for core insurance and share buybacks.
- **ROE Target Hike**: 2027 operating ROE target raised to +200bps vs. 2024, with 50bps from fee exit and Bermuda treaty.
- **Investment Strength**: 11 consecutive quarters of new money rates >6%, supporting 7% net investment income growth.

**【CEO Opening Remarks】**
- Q3 2025 total new annualized premiums reached $125 million, up 26% YoY, driven by double-digit growth in both Consumer and Worksite divisions.
- Record D2C life insurance sales of $125 million (+56% YoY) due to non-TV marketing (72% of leads) and strategic partnerships.
- Exit of Worksite fee services business (Web Benefits Design and DirectPath) to focus on core insurance operations, with exit process expected to complete by mid-2026.
- 13th consecutive quarter of producing agent comp growth and 11th consecutive quarter of agent count growth.

**【CFO Financial Highlights】**
- Operating EPS of $1.29 (+16% YoY), driven by strong investment results (11 consecutive quarters of new money rates >6%) and cost discipline.
- GAAP net income of $420 million and Non-GAAP EPS of $1.08 exceeded expectations.
- $96.7 million impairment charge on fee services business goodwill, with additional $15-20 million exit costs expected in Q4 2025.
- Updated 2027 operating ROE target raised to +200bps vs. 2024 run rate (from prior +150bps), with 50bps incremental improvement from fee services exit and Bermuda treaty.
- Excess capital deployment: $76 million in Q3 share buybacks, $310 million YTD, with 8% reduction in diluted shares outstanding.

**【Q&A Key Highlights】**
1. **D2C Sales Growth**: CEO emphasized selective partnerships (e.g., Hispanic market) and shifting marketing mix away from TV. Q4 D2C growth expected to moderate due to seasonal trends.
2. **Fee Services Exit Impact**: CFO noted $20 million annual pretax loss elimination and no material impact on Worksite insurance sales. Cash flow impact aligns with GAAP results.
3. **Bermuda Treaty Expansion**: CFO exploring life insurance cessions to diversify product mix, with no immediate statutory impacts.
4. **Medicare Trends**: Actuary confirmed 10% rate increase filings, with continued shift from Medicare Advantage to Supplement plans (+33% Medicare Supplement sales YoY).

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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CNO

CNO fundamentals

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