CNO - Earnings call transcript Q3 2019 | CNO Financial Group, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the CNO Financial Third Quarter Earnings Results Conference Call. [Operator Instructions] I would now like to hand the conference over to Jennifer Childe VP of Investor Relations. Please go ahead.

Jennifer Childe

Thank you, Denise. Good morning and thank you for joining us on CNO Financial Group's Third Quarter 2019 Earnings Conference Call. remarks Chief Bhojwani Financial include and Executive will McDonough Paul Officer. presentation from Chief Gary Officer; Today's

Following the presentation business leaders we will also for question-and-answer have the period. available several other

information call, be we During yesterday's this referring conference to release. press contained will in

release presentation a can morning's website Media section cnoinc.com. also and of Form our available in was visiting of You by the in website X-K our yesterday. the at section filed obtain is This the Investors

it on our November file expect post or XX-Q We website Form before our and X. to on

Let today as non-GAAP me forward-looking the actual than number which measures for which remind we you different substitutes that any be most directly of the by cause are of measures. statements. should forward-looking not statements comparable Today's may results make materially contemplated GAAP a to presentation be subject contain considered to those number factors a

be the unless quarter will measures You'll to third the XXXX presentation of corresponding find a changes quarter be reconciliation and will GAAP performance non-GAAP financial the comparisons XXXX. appendix. between made Throughout specified to any making measures comparisons in referring the third we otherwise and

with to that over Gary. I'll And turn it

Gary Bhojwani

morning you thank everyone Good for us. joining Jennifer. Thanks, and

we're slide growth. very with to making drive pleased Turning to on the I'm efforts progress our five. sales

of For lines product and up. X fifth solid the consecutive metrics all quarter of our business our were growth scorecard growth all We across delivered a segments.

deploying specifically to profitably slightly expanding within growing and We use. channel capital Humana continue new wealthier franchise right our with priorities Medicare and well market middle the income to the a highest in strategic execute to new services pilot and the consumers advantage excess to our against its best products launching younger including direct-to-consumer

quarter by $X.XX and rate spend lower share were results higher the operating Third This in quality by portfolio attributable to lower income of lowered which quarter interest in lower-investment environment this by reallocation the we our both income is investment which year. operating first per income $X.XX. our income completed at Colonial reduced and advertising the Penn up impacted

We continue believe the in context credit repositioning the sense that to of cycle. current the make

pressure impact. to While are in we we action the areas mitigate our from macroeconomic are conditions operating taking a difficult feeling decisive

For example partnership technology help only partnership Not is Technologies. with new to entered and years. the of we over deliver we into it five a technology generate recently to efficiencies CNO strategic services. the drive how also expect It Cognizant savings but $XX million expected next will transform HCL

navigate These on detail our Paul interest additional We as will also long-term we while a enhance the the competitive improve foundation few in our position partnership profile for moments. and continued laying pursue through rate low will provide just the success. actions cost earnings to environment. reduce measures will our more

of the a review six slide to scorecard. Turning for growth

as I collected strong. fifth metrics collected Our the up. XX%. our third within X% growth XX% grew premiums mentioned year premiums were collected healthy grew first of and in Annuity growth and remained operating topline X This increased quarter our quarter quarter and health Total the by consecutive scorecard was NAP production up of premiums all X%. segments were

Turning to Bankers Life.

to continue growth reinvigorate the the to to strategic right We against make expand force agent to initiatives progress to to our and reshape productivity. namely optimize

premiums. of underlying their increase agent Our see producing in retention second with a sales recruits stronger On only productive of consecutive also count. strategy translates and increase This which XX% growth overall year base the in our fifth which our seeing generated deliver more recruiting us lower with to to retention we're success success recruit results. we retention Agent X% to reflected stay fewer is collected quarter to more points into continues our agent Not a agents first year. are our into efforts. but agent but is year we agent in beginning new first of

also top XX% growth the of XXXX. continues value wealthier typically average right and of consumer now This X% XX% was per Annuity quarter The policy in are premium were the up sales on which a premiums to expand to the Our tend advance. strategy quarter. $X.X the billion. is in third account higher to to increase sold our annuities of up at have and collected stands

that these of our environment make sales duly focus pressures. middle-income the sales model Life a be financial and as advisers X is our worth X can rate or XX% low-interest to insurance -- Bankers Currently sales less on agents. our in sensitive consumer career Although are to licensed it generally headwind agency noting and results agents

is since before our they important amounts. XX% advisers policies and sales XX% I've shared higher annuity average financial of face sell approximately drive this As the

tend businesses Our broker position billion. increase to as to can when stronger retirement investment assets the Client XX% period and provide dealer grow and nicely. insurance continue relationships approximately $X.X registered advisor also be solutions well income products. as to we prior Consumer over

remains were middle-income serve the Life to X% ability a of down insurance and retirement Our insurance for the quarter. sales differentiator. consumers key at needs income our Bankers Life

steady However this past over recovery X reflects the quarters.

This retirement the We in the their demographics market increasingly of looking larger target are real to and for our retirement a solutions. to savings face shift possibility shift who outliving from see is also consistent life continue insurance of income sales general annuities. cases with

product second with to flow. a We Medicare At X% of growth our time because Supplement grew same sales Med Health response have contributor up a this in driven by earnings consumer quarter. to the quarter. third-party policies increase X% trade-off and launched growth that Advantage Medicare XX% in sales. Medicare we the reflects significant the during are the new B plan comfortable cash and positive annuities our was supplements NAP Supp been

in Medicare As sales included reminder are not income fee as and a Advantage recorded NAP.

expansion. year-to-date. our Washington XX% generated third quarter's to of cross-sell were reflect geographic product Washington Sales and results quarter growing our drivers: of fourth One to care Product Life sales diversify launched for XX% National. life Bankers focus efforts short-term total on diversification initiatives two three insurance was products. These this X% in a on the up record X Moving included This production which mix the and and the quarter National. sales; insurance our hospital XXXX; product the we primary of of sale which continued

roughly Our double-digit also initiatives National were of quarter X% the geographic of expansion marked have third sales. Worksite quarter sixth Worksite essentially successful XX% NAP. consecutive business in a declines from recent This in This now been flat strong recruiting compares of with in third business including sales both marking quarters benefited the Washington to agent comprising quarter. also year-to-date quarters. saw quarter and comprises count improvement is several year-over-year. XX% growth. the sales a the increase over this XX% worksite The past up double-digit individual

are by the made We in encouraged third progress the quarter.

challenges. However the farm to we communities face for as sales rural future foreseeable and still continue anticipate pressure

Finally the Recall integration at end the continues WBD at worksite Benefits consolidation technology platform to is of all acquired process tracking we with Design as that a run planned. smoothly office that Web activities back April. the

cross-selling success early to our While see the initial in in still we are process efforts. starting very

detail We on future will calls. more provide

in was first with year solid growth NAP XX% quarters our collected X% XXXX. quarter. to strong of Penn. growth growth delivered premium drove in growth the sales The in quarter in Turning X% persistency XX% third record-setting direct-to-consumer Penn coupled channel collected top up on quarter sales. in the and Colonial third total Colonial of recent premiums

product quarter Columbia. the rollout of our the is in Insurance District of XX the During and now expanded we Living and available it states

life insurance simplified issue As Living a riders. benefit health products combines Insurance reminder optional accelerated with

through and consistent Colonial telesales the product addresses This Humana with piloting Penn is Medicare right a sales market force. to Advantage need key the third-party with expand our middle of direct-to-consumer is our strategy.

brand distribution manufactured Colonial to to million visitors each calls we product customer more needs channel excited than of ability of approximately our Penn customers. an augments that to and handles market example opportunity colonialpenn.com is expansion consumer about middle and the this other are X year. valuable leveraging our and unique million It strong Medicare direct-to-consumer third-party are phone products. our sell website We seniors how eligible X.X and serve both

We web further and insurer. We platforms in us investments make the sessions X digital experience consumer direct-to-consumer top points enhance with are combination a of per customers. these web chat to also intend improve expand retention to month customer life The completing capabilities. our XXXX touch prospective makes and

our an Ultimately to our distribution important seamlessly all experience in buying the future we play as direct-to-consumer across evolve envision we to increasingly of experience. channel expect channels. role moving customer We our a multichannel through customers offer

agents. underway providing an and important more This drive source for Bankers all insurance and Colonial to have Penn of business for the also has generated been both Recently been WBD synergies Penn's future. expense cross-brand some call intend additional center Colonial leverage in and we support by Leads new collaboration efficiencies. growing of generate We began Life to expertise our between generate our brands to collaboration time.

Moving to slide XX.

Before turn over it our remind strategy. like to Paul to you I'd allocation of capital I

to We time. use deploying capital committed to and XXX% our best over its of highest are excess

to invested on the maximize unchanged remains goal return over Our run. capital long

to accordingly. options our continue will weigh We

Our shares activity $XXX returned more of shareholders has a this $XXX quarter million XX% in been our repurchases book have single during than value level approximately quarter. at we It's our capital we average since the accelerated share share third to of CNO repurchases. on quarter. position in trading repurchasing capital remains the million buyback strong. years in $XX including With three deployed an to Year-to-date discount million

trades undervalued to deployment. use value stock repurchases As discount remains highly primary excess as significant and share for a to capital use we vehicle long these our at our intend as -- book to

I'll discuss that, financials. now With the Paul to Paul? over turn it to

Paul McDonough

and good morning, Gary everyone. Thanks,

was third income quarter in XX% our including adjusting on lower up 'XX third down adverse with had or the financial in on the per earnings operating favorable interest diluted impact non-operating impact care investment to to $X.XX highlights compared QX rates and 'XX spreads share decline share quarter of X.X%. of Turning The was The AOCI. our quarter on market first down earnings approximately Operating quality income Year-to-date were for yields in per diluted the impact on long-term per $X.XX share an year-over-year. in in XX. transaction effect 'XX Slide a 'XX. quarter trade the

XXXX. in second Holding ended September XX at in June levels with XXXX Operating items significant company end flat XX investments cash at XX.X% XX.X% the months essentially quarter. were trailing and XX period the to was compared $XXX on year prior and the million of return the excluding XX% equity

quarter. Gary $XX in of stated stock repurchased third million As the we

the $XXX For XX past count share reducing million we've X%. average by months repurchased our weighted

ratio is and $X.X million XXX% risk-based billion Statutory but quarter end from CNO's earnings second targeted at our were down slightly respectively. within consolidated $XX the range. estimated the of capital capital XXX% and

peers prepared our be mentioned agency capital and management share rating of and RBC capital in enterprise call on As minimum to fourth targets targets liquidity I've quarter are the expect next and earnings own holding early XX%. that previous in excluding XXX% from the our reviewing conclusions I in risk million this year during quarter of year. we $XXX AOCI our specifically between Until to the perspectives. company we'll XXX% unchanged the quarters fourth XX% then views and we'll remain complete range; liquidity work context to total of our our debt and

in quarter to revenue and each Earnings or million an the decline in income benefited income than Bankers more in our technology reflects and third driven from in sales and earnings. increase in was growth $XX.X offset other by of Fee Advantage which Medicare Slide Life income an the year-over-year. segments. earnings broker growth down our Turning income operating investment The quarter initiatives. increase XX and XX% expenses impacted in segment dealer. by growth in fee were lower quarter the in other investments operating and investment

Sequentially expected. expenses QX from declined in XXXX as QX

expense. Colonial offset second Bankers with $X.X Nationals policy year claims Washington to continue of increased were income favorable operating due $X.X Penn's expenses to million associated were or earnings in down growth the with essentially recent were down quarter and those We initiatives. the increased lower investment higher flat by to million earnings experience expenses including marketing income as and period expect remainder for XX% operating be levels. the

the reminder range a capitalized Colonial to marketing deferred and million. to be as from over full million which $XX year-to-date of range previous $XX result to excludes of higher EBIT advertising a year effective XX% from -- guidance As million sales Penn's which year million now Colonial's the $XX of in to spend narrowed Colonial $XX supporting the is We growth. year-to-date a the expect Penn's advertising of the impact $XX.X spend majority Penn short-term grew cost million spend prior earnings. not earnings impact In-force X%

Earnings care period. million prior $X.X the from in $X.X was long-term in from run-off up million

volatile. report results normalized segment to can expect quarterly roughly breakeven but this continue be earnings of We to

Turning health the with Medicare Supplement fourth higher key to we slide was This Bankers guidance quarters XX%. to third Life XX.X%. in line in Bankers is consistent XX% experience our XX for benefit benefit and and the our ratio ratios. typically range seasonally of line ratio expected patterns XX.X% and of to essentially Life and long-term business interest-adjusted XX% in with last of our year to retained care flat was XX%. block benefit with the

a smaller As long-term the a reminder care just to size year to last benefit XXX wake ratio block the point translates basis in due move $XXXXXX the the of transaction of the in pretax.

interest-adjusted within health our to XX% ratio benefit with quarter-to-quarter in was experience benefit range. our and as also of points more XX%. year-over-year XX.X% smaller National remaining XXX base down the ratio Washington result line of a in We supplemental while basis expected guidance claims due favorable variation from to expect the

year XX% to and income the up Turning year in tighter in assets. year-over-year a spite Adjusting earned average investment QX we or and roughly is the CLO activity third income $X Recall is for second of the long-term in in in down quarter yield and did $X the equity prepayment allocation in investment results this our XX in to of the repositioning quarter. also our third during in BBB which yield investment which from slide quarter. transaction $X.X rates portfolio that in portfolio equity quarters. additional tranche corporate not to our invested reduced an net to significant our second third increase the reflects portfolio lower QX investment was this quality QX quarter for with the spreads. Sequentially million impacted lower any bonds earned declined million the We 'XX by of of to undertake attributable our of overall fixed repositioning cut decline This in care substantially. our by billion together

to in material few agreement in no non-operating million the through to savings like approximately but Partnership I'd $X partnership expected over in mentioned. comments million Gary charge quarter. deliver years it make The resulted in associated turning and the XXXX in third earnings $XX Before a XXXX technology about restructuring is costs savings to XXXX.

that, it Gary. back over with to And turn I'll

Gary Bhojwani

Thanks, Paul.

growth. talking we've For been the past five quarters with you about

clearly are from that topline We objective a on perspective. delivering

performance to intend and that our bottom the more cost business manage how Now hard turn to of as we at as while with we to a our shared attention I we're that aggressively efforts industry structure. maintaining especially in the costs. the Last manage more savings enterprise more dropping the is efficiency of partnership which well overall making you is taking growth today delivery example that quarter that our important given step look is just technology of This to One IT announced effective. $XX facing. one cost rate will we interest headwinds of our This million generate the immediate while line.

and while assess to business allow serve sustainable continue resources us actions opportunities streamline to our financial driving efficiencies. the better drive improving other results stakeholders. middle-income to our value We redirect for These to and market the

will have quarters. on say to next in We more this several the

York. New I XXXX for Day Before we for aware scheduled of February XX questions want have in open it Analyst you we to the up make

for you your We share group. will next Thank several interest more Financial the weeks. over details with CNO you in

open for Operator? We questions. it will now up

Paul McDonough

Thank you,

Operator

first Dan with from Citi. [Operator question Instructions] Your Bergman comes

is line Your open.

Daniel Bergman

see X if the outlook book the you in the -- the income net color just Good sequential provide quarter can backdrop or other the in the I start any any we morning, point I to investment basis there's saw third changes we decline for wanted for in absent Thanks. guess is to what any forward? expectation going yield reasonable should rate expect factors we on

Eric Johnson

any the I strategy reasonable rule it kind kind I to different morning. third result. yield in quarter the Johnson of think of than now in conditions. the quarter midst Yes, a changes change are Last current context investment X points quarter would a second basis the in would think I of number it -- book we in my to think and see be lead right market that that comments. Yes X of single-digit of no Eric quarterly quarter was in I is because was and Yes. that sure. Good handful second reason This erosion the speaking. basis will less be to don't a thumb the it I expect on mentioned earlier of

implies a it variable year-to-date last reasonable last over regarding had than in of with although fourth now although what We've table the it variable falls is. as word be else difficult in that's income something decent couple certainty. more pretty being I the of right there's year we really fourth run -- this being And well is as quarter income As noise. with the year years Washington circumstances variable that of I have some to quarter think see suggest that a not unless a good or ought kind off somewhere the

Daniel Bergman

-- might the should of much thoughts have lag actions we material any can you we we a can of you how time? how rate thinking pressure over a of and be rates? It's kind those before levers offset the any about that of? you we pressure high-level related disposal offset And kind maybe Is to cost tools a from savings? question. earlier across very there we're should the have helpful. of at be more industry that it seeing thinking your the that lower mainly effect? expect How factors Just on interest Are other think much And

Gary Bhojwani

in that. to let area it speak if then generally him I'll Eric maybe the add investment to further wants and anything I'll do

looking to would a on think topline to and high our growth. growth optimize I but now. ways for several I priority laser-focused efficiencies. quarters at always for to we was get say driving drive done We that We've that value. we're really maintaining I consistent pivot get feel like topline that our shareholder need level business to first now And think

the So that's We pull. that levers want to to us. we're that types of really clearly And is more to things say we've And that you want environment important don't we of next we on. or that point that investment of the today anything have at moment. the the this I would recognize the and considering. we're this got example step foreshadowing IT we've share we're an today But announced terms makes as tools different But in things change fact else got we we even specific working that's can the critical. all other for challenging use to how we the

Paul McDonough

Paul. managing that expenses just it's and growth addition the more I and in Dan, getting earnings driving to would efficient therefore on margin. add

tool we we're on big margin. how largely have be is through our management. about repurchase continue obvious The share Certainly the on to other thoughtful that deploying capital capital we'll excess

bit in is we course of our context trading. accelerated QX in year stock that where a the of Of this

as higher there to on that that there rating is and other there. Obviously I'd extent would reduce margin on the doing make capital. with drive appropriate our the looking to to The room free mentioned sure But ourselves the be it that get ROE. may to we're up We'd that comfortable agencies at that with analysis calls at agree we thing any conclusion the have is may also whether we ongoing. a last arrive need capital X is target

Gary Bhojwani

Yes.

this on that a Gary. the interest There's I another to and said and investment on pressure of exerting. is You Dan, like earlier. appropriately is rates have what focus Paul so lot I'd add one and and Again are should macroeconomic results know environment the -- thing there this

pretty want team those our a for sight I I and think investment be lose fair and very don't Eric his have that's done area darn about people fact concerned that of to sure the we all make to in good about. of But the job. talking midst things

me result it to compliments me think and reasonable other so of just job about he's team to we've a at. got new next a look to acknowledge does I rate pretty sitting give to to much players the that money benchmark want or on the you as as any As there pains when compared him

make to zeal want make sure get So I our to in that we the better. to want pursue doesn't lost all areas

Paul McDonough

Very helpful. Thank you,

Operator

Binner next FBR. Riley Randy with comes question from B. Your

is Your line open.

Randy Binner

expand that understanding just to morning. set and but follow there? what processes that's to just time can IT years. Thanks. on of what cost-save you could more be is And kind an just over over that to Good initiative; so to an IT guess might said just cost-save might how level be of to the million would extent initiatives up the I you give of then share understand you impact full run that through streamlined the five of you further to $XX kind It wait details be examples want might helpful could Gary primarily -- so program initiatives.

Gary Bhojwani

Sure. this Randy, Gary. is

can supplement about I'll So then to. level it high at more data if he wants Paul any talk and with a

The first is There that But now. we can IT remember correct thing important say other IT. would number to it's about it's are a in for within I to the area of strictly where efficiencies. continue think improve strictly the this things. our And organization few is areas it's I

We thing contract process is IT And another in about five with early first began evolution. renewal that coming step our XXXX. was this this years ago Cognizant. The in for up

to delivery other development the continue and been for up at years. on I we choosing maintenance testing. And something in and This Cognizant sure pretty provide this application HCL the hand correctly. has We began extensive signal and evaluation partners next us ended two this been step ago. So Cognizant I HCL. some time through make to is had five with new a want they'll that entirely the went it. isn't evolution

select and cybersecurity They're they'll new relationship services. infrastructure helping this operations partner us in a be and with IT

cost the and has us. that those years the you on placing emphasis types a think evolved last If for just few in that can things you the are how -- moment about much of understand cybersecurity just

So change ways at cost or evolution our speed think really comes improvement the to to to you high undertaken a market down we've help this costs in improvement level it this drive our enhance should customer about that other some there new cost cybersecurity that bear we're is driving brought down kind spend in because do. position of just avoidance to it are is to technologies as the and with money not need just of that way example and experience cost be and to enhance to a X to an that

rather to partner and with we'd So HCL Cognizant do that.

that's description or it off I'll that to pass So throw to any you in want if high-level Paul a numbers you ...

Paul McDonough

Sure.

I given own a clarify simply savings of point savings IT you and that's well that in we as pricing think that or our into as would out numbers we've as partners the are translated contracts the the department but our the well. I concurrently embedded with Randy reflection organized just some

Randy Binner

expectations Supp Medicare us That be made on you on it been then companies Medicare you open around -- a Medicare for time. this long area of you to focus Advantage and update on Can lot enrollment for period? seems doing preparations coming to a one And specific And all a seemed any open have popular sales? Okay. period. for the particularly enrollment just or

and setting for just I'm general? up enrollment Medicare you in open the kind you period So products how of this curious think

Gary Bhojwani

Bankers at into an enrollment -- the getting policies were we're up the that's pleased throes And very I before XX%. Med it's the that we're Life I example first shared as We've of issued period. Well, would Advantage open the think thing say.

average some at that of So a I X we of And results for bodes Supp that on those everybody in least well. X think every that type we would Med sell cross-sell. very remind policies

good and what on time our open about the this Penn means Colonial addition So platform. we very of around are that doors new feel What's Advantage Med getting that us. for the is

the of beginning think think relatively the I have we kind we that it's Frankly anticipate for us. I a at But really will if good states. basis. only XXXX. Penn success build be it's learning Colonial X at modest XXXX position results at it relatively that Now well foundation it a it the modest on go position But think for and because will how our very will I direct-to-consumer that us to we're that's

So about see and you results the good feel position short answer why Supp the QX. Med Med that QX. no Randy that Advantage the reason us I we really in And well would is for give shouldn't we

Randy Binner

you. Alright, thank

Operator

from comes with Your Erik next Bass Autonomous Research. question

line open. Your is

Eric Johnson

you. thank Hi,

book and and the impact bringing I Eric you're know direct has those is talked about of so spreads on bigger just target First, question yields wondering are picture impact at you but the at if investing on And imagine And that earnings could going of it interest have quarterly on assets earnings. quantify of some isn't kind down I assuming coming drag. rates reason forward kind levels the maybe a would remain them new annuities a rate necessarily offsets? no if on much an how to current hit

you could it would if lens be an that helpful. earnings put So in

Paul McDonough

Sure.

yield it's to earned income variable line then translates you your -- guess to Paul. I all of And trend Eric, book kind of reiterate run of So obviously math I So contribution a relative that and first what the of that Eric just investment then said models. can yield. I'd through our

relative that. had the to there favorable try of for continues on of would terms that our I'll impact I certainly very of lower on rates In I quantify some had some returns. we spread be some target spreads business returns I you. modest the But to spread notwithstanding we've compression guess our that don't to have modest compression spread think emphasize

Eric Johnson

Got you building anything there. mean like talk for given GAAP you any the the in Obviously Penn. I sales it would helpful it. And Colonial on of in-force volumes. the can earnings the maybe affects see with kind and a short seems It run then good be there story volumes outlook emerging about expenses but how

Gary Bhojwani

delta take I'd profit We And pleased. this miss that to next to a happy due extremely managing if frankly business. Colonial really Penn telesales like want quarter to with consensus direct-to-consumer the be by share increased virtually like quarter business our we're high We about that. numbers would a level good we that at a tough $X.XX pleased the metric Penn but chat volumes. We the chunk growth way is that are when doing. Penn high the in-force $X.XX like the responding. franchise. year at this comment some I'm And the and look Again We're of very take on consensus from drove you to the that with we the still Colonial perhaps. recap way that really you think big the the I are I'll if the ago way a chat can online comp a look like then was really expense level building response Yes, in XXXX long I it we consumers a happening any very is of again. Paul with at day showed trade the pleased what I'm Colonial working. were miss persistency very of agents again that a sessions advertising And what's evolving. growth. is month. due all a half show and is like the business like doing We We to top able

of this out. We building long. want we it that very make good day all the keep the persistency something that's there to And think and well. So building in-force again all is I'd trade there's

do I it again. was it and spent money well we'd think

Eric Johnson

a wasn't I follow-up Paul a comment. it. had sure Got if or

Paul McDonough

I've say just to nothing was add going got to to that. I No.

Operator

Dowling next Partners. Lee from with question & comes Your Humphrey

is line open. Your

Humphrey Lee

on that WBD. Gary's my thanks seeing think tell morning, still remarks you for in but of talked can In about success elaborate I how we cross-selling it's you taking it? some some terms should far Good that and through prepared too seen signs early of of questions. success the know have early you're and to you about

Gary Bhojwani

potential been has think they've some to fantastic Yes. think a technology our Sure, solution. a cross-sell comment those remember they've small world Gary. when We're Humphrey, I'll we into Benefits. high this technology some of serve for a agents the firms that worksite good get firms we have for job they worksite is And really seeing the nimble We're some that and worksite really couldn't Again, had is their existing building done our double to just cases they when built are into in X thesis back business we the And at growing of before exactly Web really didn't seeing that technology acquired there. level. that goes now. It we're quarters We this get tool about digits what accounts think agents. a seeing I of happen. because multinational

accounts seeing So those and able use WBD's get them platform. being to we're into

tell a of pleased. X the quoting too were their existing too some as did that quarters sharing We're start to existing our to I It's seeing thesis wasn't we're it with X National the to putting we X those actually company started X we're also share business National that numbers previously that make sense products mature of have being sharing waited we early and distribution very holding forward way you their WBD dealer data. that those numbers into up. I'm their where broker roughly insurance seeing theses very -- can early to Washington Washington quarters meaning that would cross-selling on or that areas more really It's pleased I agents so we lot and to agents our using insurance within now And look traction with mix. just but of able that and to then the X are existing those guess us sufficiently of related were early yet fundamental with but business for way points platform using are

Humphrey Lee

then color. that a follow-up especially Medicare of Supplement. period kind with the enrollment to Appreciate And

any you of through if go looking year kind period? you are the looking in pricing of the into factoring as I this some was increases going are wondering terms of at just you dynamics kind pricing enrollment of your Given into rate

Gary Bhojwani

speak -- We data. did that. got He's to let actually, I'll the the Paul

Paul McDonough

with of the were XXXX Good I did period Obviously regulatory X%. consistent in file the neighborhood fairly to of morning, that's Humphrey. which and But subject so rate as increases we quarter in on rate are We effective January mentioned -- place. call those the increases approval. prior approved second

Humphrey Lee

your largely and line So were in approval the expectation? filing the with

Paul McDonough

Yes.

those -- approval. think to so what July think frame large we we for will I we in XXXX. filed think their have June subject to just back So filed by I'm I decided time January clear on don't I I be effective approved. guess of regulators signaling rates that's the and we yet filed what is been by ultimately

Gary Bhojwani

not anything ordinary was any terms in requests. reason think seeing the the We're why out they be. there shouldn't of We of really don't

to expect problems. wouldn't we be there any So

Humphrey Lee

Got it.

to to few benefit asked Medicare back rate kind able kind you XX% to elevated Do if Supplement as to XX% of -- opposed get range? the that terms expect were recent increase closer be you years more in range for. you the more of ratio So a to

Gary Bhojwani

the you provide. million. too meaning minus take any midpoint more that X% about swing and about is with than pretty precision refine or that XX% trying million I'm way it's just than we that have quarter guidance think comfortable so I And I range. think of it's with stated range window. wouldn't if of on give plus of a quarter we then given in a book I'm that to given comfortable size that's XX% it pretty predict with $X to to $X estimate kind try to less In That you're you especially this a want a tough the I a talking the

Humphrey Lee

you. Thank right. All Okay.

Your next Goldman question comes from Alex Scott Sachs. from

Alex Scott

morning. Good

the of what's think what's about from adding kind when these I fee annualized you're that comparing translate on actual guess to that lines reasonable with sort earn off? sales income product some way persistency to premiums look of sales. the this premium that growth? like that is rolling for And should the going is separate and I into like going net all how and because indexed net And the and I fixed And side premiums expect and a you're numbers as annuity know probably pretty the like would in fees income probably of had just the to unfair -- on that I what doing benefits one how investment question that investment on I from little First too net know was big I are growth I progress. at how is well

Paul McDonough

Good It's Alex. Paul. morning,

to clever that's not guidance you know think us I which as we're ask is a to doing. provide way

model. ask growth We we're I X your certainly put your think we And think run last you up the not I on own to projections. them. estimates that I your it since providing have quarters just to in to back put to that you to guidance has the have make own through some sustainability

Alex Scott

guess, you this what yes me drag did piece and I let talk -- it it been cause? apologies. about maybe Can that's Understood, of persistency how way. would kind of try and trending that

Paul McDonough

Yes.

anything from think I So Alex. I we're cause been, where deviate that won't quote seeing that recent trends meaningfully to don't specific would numbers But they've

Alex Scott

then had income. having income what on lesson next the reallocation And now. I okay. net investment it's right that's I you, and impact earnings just the to Got the get net and doing is investment on

just you I into talked guys play a how does RBC? to Can about capital as want means the offset, make these and that And stock for like and associated can being the up RBC you You -- about target an other I making guess. net investment or buy think with you're the potentially lot deploy into you from on you talk maybe dinging that that giving actions plays decisions where sure back not at not income but some able I'm benefits to freeing

Paul McDonough

Sure.

the in of risk risk investment QX point free that change up a from is where So portfolio We our time. portfolio. certainly function profile capital the of profile our the at and part our sit we some back don't today. that did target capital of reallocated expect We in risk to profile our risk investment materially is in inherent

of business as capital view our So once and need with any more capital what do that up. our before that should an conclusion our be we business -- again anything will of target reach broadly And fairly static. that's that should at socialize But be. freed the look agencies appropriate inform we'll with profile we to it the we risk rating

Alex Scott

for All the right. you Thank responses.

Paul McDonough

Thank you,

Operator

from [Operator comes question with Instructions] next Tom Your Evercore. Gallagher

is line open. Your

Tom Gallagher

Thanks.

And ask at down capital was you're $XX the look buyback the slide quarter while at million. you're the really and I at you're this about Gary just generating if current here. This you're you just at pace. So way if to using and I drawing a I made repurchase high thinking the looking obviously reasonable comments a on for -- at and here? reason sustain the sources not cash actually your I is Is level very look any uses that what share a things flow

excess you we about about of draw how I sizing that? think capital if on decide I think to buybacks? just So then should incremental that guess follow-up curious would the be And down would do to

Gary Bhojwani

then screw I'll give and correct me up. when Paul you high-level will response I it

say conditions the primary if think it's this undervalued. undervaluing buybacks tool If level we use first me to quarter. current this allowed as stock continue of but the comfortable past in we're will to let don't capital. that undervalued stayed stock to I'm know it's that you say are we So at I excess if deploy with market very the keep I level and they If engaged remain buybacks as guys our the

Now of up make I freed to to really work and capital capital about levels Paul quarters. have the that and the we're how much in get to to want rest the going don't have do of assess our ahead team future decisions

sustainable the don't want that with transaction less I company. get just it's long do So quarters. this a and trying risky you want how to to how capital in LTC we'll simplistic for our make perspective to future we to much in a project if to that know have we're observation bring I

ought stock smart relative It much Eric me be hold we'll make risky we're compelling pretty incredibly has that know been argument very the and that to reflected and needing we've agencies seems to made the we'll be to allocations to to I several quarters it. capital not the BBB less that has The straightforward for much and than to to company. that as how we we Johnson more an our a moves think actions our our about able continue about do that. with value with words deploy a We rating last

done as to remain continue it the us for for market and stays actions conditions take So at these to just like quarters. you it should the is -- appropriate levels several if last expect we've to

Tom Gallagher

And sense. whether just Paul. or numbers it's then a make Eric That question

sequential comments or million a point but the I tell expectation listen it quarterly And I which maybe give X that's if like $X look I'm amounts on me you question applying If sequential Eric's least something negative to of. level buybacks to that or you his little quarter. that impact on I if asking not EPS. drag that least validated -- million. so of at at up can this you it at an earnings annualized basis. call coming would X%. then it to of with drag X% I $X to to sort basis over $X to get about directionally compare The million if then about $X But I'm translate of execute me at Gary -- just continue and I'm a And NII million if

I -- can on know or someone the quantify me positive clarify math don't you drag that. be of if out the would it looks So doing like coming an EPS it look if NII help that net you'd correctly I'm if like buyback impact versus basis.

Eric Johnson

Yes Eric. Tom, it's

terms has -- entering the not math with also of right actually well have and do -- of how of sizing which that that the in that sensitive. about think but actually factor you income it to then impacts do market you're which you for retention market AUM you're including as area a And probably approximate variable moving is how doing think a rough lot with inserts degree to got that complexity. growth is aspects your the and I very knobs I think the and sales product with into that to exception are an are general dials You're on because you has

short the have can that calculation about time So of I think range but a period very that's outcomes. pretty you're of decent thinking over a correctly it

leap Although effective a yield on based we in call so quarter But bit your things if what I around at it a quite over you given can or year the a just predictable. mentioned. look pretty it's

Thomas Gallagher

Okay, thanks.

Operator

at up to the no are further over turn I'll time. coming questions this back There presenters. the call

Jennifer Childe

again you joining us you We look for future. all the to speaking Thank in forward today. with

Operator

conference today's concludes call. This

may You disconnect. now

CNO Financial (CNO) 7 Nov 192019 Q3 Earnings call transcript