CNO - Earnings call transcript Q4 2024 | CNO Financial Group, Inc. 5.125

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Operator

Good morning, all, and thank you for joining us for the CNO Financial Group Fourth Quarter 2024 Earnings Call. My name is Colin. I'll be coordinating your call today. [Operator Instructions] And now I'd like to hand it over to your host, Adam Auvil, the floor is yours.

Adam Auvil

Good morning, and thank you for joining us on CNO Financial Group's Fourth Quarter 2024 Earnings Conference Call. Today's presentation will include remarks from Gary Bhojwani, Chief Executive Officer; and Paul McDonough, Chief Financial Officer.

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

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

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

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

of -- XXXX full performance making made any that, over the I'll a the will GAAP turn to in measures the be call find specified, measures between year GAAP and Throughout non-GAAP the Gary. year we'll to You'll appendix. referring comparisons and with unless full otherwise corresponding reconciliation XXXX. And presentation, to comparisons, be the changes

Gary Bhojwani

both everyone, also morning, improving at year our several and of one financial performances the divisions. the to highlighted time. operating showcasing over you franchise, us. CNO for Good past and Worksite Consumer years, delivered and an performance Adam. Thanks, sales ability the XXXX was grow full growing the joining in earnings exceptional while quarter thank same records profitability our best and by

expansion. proven our priorities enable profitable on sustained year's commitment strategic leverage to model ROE drive growth, performance to This demonstrated our our business and execute

force. of in growth, our investment counts year results our producing tenth most for Life our earnings, eighth Our strong consecutive capital. and production, field quarter Bankers results We the were agent ever productive and consecutive across delivered sales quarter broad-based

model in total detail the were multiple to Production annualized our divisions premium which division's strength For product lines, demonstrates the in in consumers. year, the set our I'll needs varied up more in X% of each records these across of full middle-income was results serve both the new enterprise. and cover comments.

to momentum share continued of sales was increase growth. sustained XX%. Operating Our per into translate $X.XX, diluted earnings an earnings

Excluding increase discipline. Earnings strong results favorable net by and margins, underwriting further the income were supported significant investment was XX%. items, expense

New for money exceeded target have consecutive liquidity were will financial $XXX X% and detail now. into rates on quarters greater levels, Paul X returned dividend. to while a performance. Capital above million well we XX% go increase the share, was excluding we shareholders diluted And over Book value in XX%. year up raised XXth a this common AOCI, $XX.XX, quarterly year, row, for per stock XXXX. our our

of continued Additional strong nearly performance and year and an free all-time in flow price. categories, include product highlights all cash growth generation share position capital our high full

our the Slide but metrics for growth up and of to our year. were All for scorecard. one quarter X growth the full Turning and scorecard

As in on our during drivers Paul capital. X a remarks. in reminder, our capital division next I'll cover X investments the will each his of in slides. key and distribution performance: discuss growth investments scorecard focuses production,

Beginning with Slide X. on the division Consumer

capped and XX% up year, X% up NAP enhanced sold sales and consecutive policies Advantage sales year, executed NAP the our growth strength continued in NAP our was on field sales the of We outstanding Supplement agent up XX% XX%. the growth. delivered products. year, for off XX% year the quarter Medicare delivered Our led NAP. for was full well and total up was Consumer Health product by for multiple an were division Division Consumer new across by ninth categories. record Medicare of

policies total XX%. we record in X%, agents Our new our added to carriers number the quarter, of strong annual up field and MA period. We X XX. were enrollment bringing a another Medicare certified delivered MA MA submitted plan up sponsors

reflected exclusive lasting not few are meet local that agents to sales XX% MA the Advantage who NAP both their Medicare build due as additional part our agents, the has years over Persistency planning the help can in last large Supp reminder, for a in relationships point consistently in that. address a and care improved retirement Med to with customers clients. needs. Long-term serve meaningful for was introduction Medicare up year. products As

continue We our to product this growing market. need see a within for target

less. election and exclusive were disciplined for leads our are represented middle also established Life years reminder, to spend. costs remain the their brokerage cover care. agents the affordable X stability essential designed year, XX% plans consecutive approach for benefit of years were opportunistic a was As our sold or clients growth. year, our XX% offer block. The and LTC of advisory seventh and benefit The by policies year DXC quarter television have balanced approach quarters periods advertising. In had of to our costs up relationships in fourth managing of consumer. previous or annuity sales. high, less for with to driven These line down the Annuity premiums production XX% capping off when market with years more funding add consecutive record we a X and marketing of quarter X than collected our for our periods long-term to X direct-to-consumer the products X

rate year to more with X% in accounts client in recruiting, XX% marked of was new up agent distribution us for year, strength retention. The producing efficiency and direct-to-consumer and sales agent with our NAP. consecutive Technology division. Highlights XXXX the assets, than sold their processed up were operational XX% almost our technology instant the brokerage of health quarter all billion policies a account our and on generated Medicare XX% fueled continue of underwriting policies. of to full the year decision in and and our AEP fourth investments momentum portion XX%. digital nearly accelerated quarter we now gains productivity XXXX. eighth products submitted $X.X division. entrust up annuity delivered The enable advisory clients meaningful growth our on Myhealthpolicy.com, our XX% were included Consumer sales life record values, our MA comp of simplified insurance the billion decision When growth platform of our of For during Producing with for XX% from in up the agent web $XX a channels assets and -- full a XXXX. combined

delivered an Consumer and with division pleased the The outstanding I'm very year, results.

force a to will delivery capability virtual our remains in-person mile Our the valuable an unique sales complete established and differentiator. agent of and with last critical attractive connection marry service

continue differentiated generate to our expect force and sales offerings sustained in agent XXXX. to We growth

the and X Slide performance. Division Next, Worksite

very growth. XX% up full year insurance quarter XX%. record record sales insurance consecutive fourth our the up finished Division represents strong quarter Worksite year insurance This with XXth of and Our sales

strategic initiatives Worksite our New share growth strong products X performance. contributed to I'll NAP year-end results significantly and in particular. programs on

sales illness was products was accident up growth hospital insurance XX%, double-digit in XX%, new XX%. generated XXXX. indemnity and up up was Critical First,

worksite our Second, of the year geographic expansion initiative quarter. growth for XX% NAP XX% NAP growth of in total contributed and the the

generated our As reminder, This strategic fifth targets the identified a share of grow initiative quarter this consecutive is areas this market program. by growth we've opportunities footprint. and where to

sales. We cultivate the XXXX. year Fee the new from continue of for XX% was X initiative and all their and were up for clients remain programs expect quarter insurance small up Lastly, sales up bullish groups agents for into and group acquire helped on This momentum new base. XX% employer off NAP XX%. to a

X% services reminder, the XX% count up growth. metric quarters Recruiting year, a agent As is benefit indicator Producing annual and of growth. for was the value the revenue contract up a was remained this reflects of off sold leading consecutive capping year, retention XX strong. for and fee of

easy. agents I previously, maintaining simultaneously agent As mentioned onboarding while is productivity new not

division's and our career pleased our insurance on opportunity with record employers to that for our plan ability we sales. drive the remain benefit confident results field execute fee Worksite maximize Opportunities momentum solid performance the and and the in steady to illustrates over in We sales strategic Worksite the caliber and Our it. and Worksite's solutions. offer. am still the cross exist highlight year. force value past our recruiting business integrated growth, both of recognize I The

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

Paul McDonough

everyone. and Gary, good you, Thank morning,

year operating certainly XXX quarter basis with The XX% results margin. margins, and excluding Turning product The reflect XX% the and operating interest X. rates and of year higher with our improved coupled capital a up in the management. to share, the in the significant by return product We growth and strong points. year. items, and financial results the business, insurance highlights puts items very takes strong in on for mostly reflect finished investment also per insurance expense earnings significant on Admittedly, the disciplined few Slide ex equity returns

XX%. basis, year rate run operating on return equity about full estimate On the a at we

of It with the line the free reduction of of average X% on represents end We in to in shares in year, weighted and capital the business. in incentive This debt the the back wake ratio reflects guided XX% return the share expense increase accelerating underlying capital contributed were the expenses Our excess a dynamics accrual with a our expectations May. comp strong also issuance prior the year diluted cash $XXX from our outstanding. deployed flow the range. repurchases to pushing in million of high

continued and down X long-term rate. to would range within what interest categories. growth in quarter with of but a growth to Turning we the to our all benefit insurance Slide higher trends product from sustainable reflecting across general, in favorable care that margins our translating the of year, claims as product both sales they supplemental are run of outcomes, are much bit, for morbidity rates In Drilling favorable health X. together margin our a have consider to expected

releases a mortality benefited for expect closed due impact favorable block higher degree, We do not to quarter, addition, from to reserve lesser continue. other policies. annuity third In a margins this larger to though on consecutive

on equity in rate XX% product about return product X adjusts XXXX these of Our in in estimated insurance margin run the operating lines. outperformance for XXXX

was new average in Capital. in FABN year, Alternative up The investment Rialto billion. along XXXX yield rate offering increase total results the income X%. the million growth yield with bringing increase a for was net up the on the a products quarter. We investment Total investment $X.X year. The in allocated Turning FABN issuance quarter basis XX. quarter, XX in met Investment points to to Slide quarter. not for from quarter income to was third year-over-year. drove investment XX%, was million yield the X% to watermark The $XXX expectations the the X-year this products up due the business, consecutive completed our allocated for the primarily allocated X.XX%, high X.XX%, year X% XX% a income $XX.X for in above and money eighth to in investments the offering and dividend setting

comprised approximately average X.X with an quarter the A duration just of in of rating $XXX million and investments an of new Our assets average under years.

Our new presentation. on are the XX detail XX summarized more Slides in investments and of

value maturity of quarter prior Turning invested investment-grade Approximately of half to up XX% of of quality average years. grew the recent roughly XX% due with Slide rated the result business. our year, half growth in growth assets in from was and XX. to fixed an the the of reflecting market our issuances with the bias portfolio other several FABN over rating at A, end last the The

to Turning XX. Slide

the notes be provided demonstrates on at result and guidance was XX.X% February. end end quarter Adjusting maturity guidance free to XXX%. remains high million, million At completed the cash paid strong. at third ability call as off reflecting the above leverage original in the year was Available free well provided consolidated We the This well will flow May to as for last the cash to the flow. our well for was minimum, of senior year, risk-based ratio Leverage strong issuance Our end company capital above excess $XXX generate target the at Holdco in reported. of flow May was quarter liquidity the enterprise's generated range our debt $XXX as holding this quarter capital cash in position significant quarter Holdco. the continued that end, exceeding XX.X%.

Turning XX our XXXX guidance. and to Slide

over we estimate the at return XXXX. about by in equity return points that equity mentioned, I about in expect we points basis XX% XXXX. rate next XX.X% other X about improve run From of our operating and words, rate basis including baseline, to expect ROE an in on In years, to operating generate As XX.X% by run on operating XXXX. XXX XX XXXX we

We and expect per earnings share $X.XX. operating XXXX between $X.XX

treaty related with the some to moment. IT expect the on a reinsurance line exploring further in XXXX XX.X% by a ratio that expenses XXXX an between to $XX.X second our touch We expense be and and midpoint with from in and pressure inclusive Bermuda with of company I'll initiative

similar ratio the expect quarterly seasonality first then year. last quarter the to of to trend end down follow We and the at the the a through in X the starting high years, expense grading

income results fee driven to our a decrease assumption the some expect long-term Medicare net by improved a income income, generate Advantage modest and pressure notwithstanding our which between puts will assumption standard in mix not growth Advantage in in fee We allocated a by investments return investment that line in shift And sales, expect smaller rate alternative we in run sales Medicare providers, on driven near term. XX%. of continued with our X%

again term. business, quarter full fee is are we second our also and balance In on putting the quarters roughly roughly quarter third which X/X and the side of the the We of near income addition, the in income making the with Worksite pressure in in fourth year first breakeven. fee the investments expect in service

manage to We continue Holdco between be excess Consistent tax minimum our to risk-based prior a of of cash liquidity $XXX insurance to to XXXX company years, capital the and expect rate million and $XXX XXX% consolidated to and companies, holding XXXX leverage XX%. we in ratio $XXX target U.S.-based XX%, with effective expect and XX% between million will flow the be we million.

million starting metrics In to certain modernize product on cloud, The XQ leverage over addition expected AI will speed experience $XX cost high-level more is approximately service. in next want more XXXX to equity flow order to million leveraging over and we year. over our It $XX technology excess agent's the and Holdco and in the customer to That for reflected development, continued long $XXX this these stack, stable result million business an of in XXXX. guidance years, project projected X will new including our It would of X initiative technologies enabling cash technology years, term. initiative our the return that X-year of up approximately enhance which the elements position to growth in be a preview to effectively improvement improve to for and in XXXX. is is the in us a agile 'XX

amortized A In through incurred portion capitalized through will initiative, operating the this for terms be of small a income over be time. as income. accounting portion will small and expensed operating

expand are are expenses, The income. third on nonoperating The is and excluded metrics project largely this initiative majority expenses expense equity all the mentioned, improvement inclusive paid the included to rate as are expensed some emphasize from years benefit closing, As the not our other expect in income will as as on related on expenses above sales and do some next of be of company. excluded for component we the the beyond XXXX. investing while putting write-offs. of operating incurred, clearly that to costs investment. well onetime during and X-year period nature would run X-year I pressure equity In X and ratio continue of and as the this XXXX the over but project income metrics from guidance a the earnings return asset the They return parties in improve discrete long-term technology period. In also to words, operating of

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

Gary Bhojwani

Paul. Thanks,

Slide XX. to Turning

several the have earnings in next calls, As over strategic evolution expanding of us you the the step heard is discuss CNO. last ROE

investment That our our transaction and reinsurance balance phase grade upgrade Before and to long-term strategy successful an culminated our ratings. was fortifying strengthening XXXX, focused at and in aimed fixed sheet. care

the consumer our our with of units strategic business turned transformation attention sales engine. model we operating restarting our We realign changing our behaviors. to XXXX, completed to Around

the consecutive the positioning strong. Our growth CNO and XX XXXX result is today. growth, quarters Worksite Consumer of a our these divisions results. for CNO create blocks financial strong optimizing have been were building we of efforts. From foundation momentum and With enjoys onwards, These sales

in to operating using expect to results. enterprise and improvement the points we ROE over multiple from to levers expect we to years. growth. sales to shared long-term We're the guidance, this critical the that deliver generate investing It's deliver XXXX Paul continuing across XXX our into next back As while basis of momentum note business our X improvement enable these

already address a for sample thoughts won't I critical our Number highlights slide advisory. This them is one, representative income of but flight. a in retirement will brokerage share need initiatives a market. and handful. all, on Generating

accelerate. Re. three, Number to remain product services Number refreshed products. demand Significant Bermuda for Consumers CNO these the opportunities our additional have new expect product portfolio. to leverage embraced two, new our offerings. We and

We remain regulators opportunities in working on with Bermuda. and treaty business do with future additional to are to pleased our initial committed

Number four, modernizing our technology.

be we're CNO our to bring Upgrading and and foundation. enhanced As our in long-term would growth. future. team without efficiency stability at for to and enable CNO. team success. Paul our capabilities investing our this possible have And growth our technology the will of the referenced, tech and none leadership systems in of outstanding the drive executes now positioning We're associates How we

recognize the ROE next not also our target is our path and years for on a X mile final that the We marker destination.

intend as record we track keep leveling has up we advance growth our story. fully As demonstrated, C&O's to

also had performance force. momentum Turning sales with enter in financial and once full our a growing profitability. agent exceptional grow ability We earnings XX. to demonstrated a considerable to year We franchise XXXX. Slide year and improving new CNO again while growing the

Our drive in XXXX continue CNO and beyond. is remains well and expansion cash profitable capital and strong. positioned liquidity generation ROE to position, flow growth

you interest your Financial in of and thank Group. We CNO support for

will it Operator? questions. open now We up for

Operator

of Barnidge Piper Sandler. John first [Operator question from Instructions] Our comes

John Barnidge

about an free in How as excess You flow cash guidance should well. offered we assumed be guidance? buybacks thinking

on be color helpful. that would further Some

Paul McDonough

it's John, Paul.

the relative Holdco the position cash guidance together free our you 'XX. flow with of So should the end to consider cash excess at liquidity I think minimum

I capital. think uses for that that in share more XXXX, capacity repurchase gives you compelling sense a of absent

leave there. I I'd it think

John Barnidge

question. opportunity contributed Distribution is been there? in XX% has XX% How good. in expansion XQ, follow-up My geographic much full year. like the it it Geographic of NAP looks expansion, growth additional

Gary Bhojwani

far, short against this. been front The of what results always a lot. just balance answer, with end the think to our we're John, pleased this We so discipline. We're have very is expense we're trying at and

our tremendous see we Worksite particularly potential, in business. So

Our consumer division footprint. a very national has well-developed

division is Worksite Our considerably smaller.

we has agents have, the literally agents. about think of you dedicated our the Division Worksite number If X/XX

you that sense. So a gives

Division have has all that nor the there's think same the that's there's a Now expansion by upside. upside what the the wise, necessary, think I of Worksite potential do to and I yielded, more lot I No, has think believe neither a but footprint? lot geographic left. very I'm encouraged I more

Operator

comes Krueger Bruyette, Keefe, question next of from Our Woods. Ryan &

Ryan Krueger

First, I you're what to opportunities. there? considering Bermuda just you ask, evaluating more you think, any Paul, sense wanted mentioned give Can of additional us you're

Paul McDonough

get of to Sure. process. the ahead I want don't

specifics. won't I opportunities So we provide the But evaluating closely are, any are prioritizing what very yes, opportunities. those

establish the good a Ireland, so Monetary over focus their Authority. develop Bermuda, Bermuda in the to there. in last year has team got relationships stride. place the We're with the hitting just including team. an established on Our or They're been We've

treaty. now to And for primary that beyond the initial to our leverage look so opportunities platform focus is

Ryan Krueger

fourth us in into of what some you you give continue you fixed And and and levels XXXX? annuities, this will also saw in pretty towards you're kind historical fixed color strong seeing there annuities, around quarter activity. surrender Can rates sales if back the particularly indexed think moderate

Paul McDonough

Ryan. on comment on activity. can broadly surrenders, more on the comment then sales and -- I'll Gary

year. years have to of current high from a a of the down stabilized but were are they back wouldn't couple come down they and level. little they've to last ago, little gotten seemed the bit surrenders the at bit where I So watermark say sort a

to on And then forward the front. it Gary, over turn I'll sales going you

Gary Bhojwani

sales. the Yes. continues that of feel retiring us, the Thanks, to that near number Paul. We're We very Ryan, that. be people thanks annuity question. with about demographics are opportunity hitting And meaning of day XX bullish for the have the are peak the think growing. with every or turning we We

things fewer virtually anymore. are There continue. nonexistent meaning that to and offered, that expect alternatives are offer pensions we income and fewer lifetime other So

So to we there's a specifically for you think together, we continued in income things those America, we service, think going take be particularly that the when demand. middle population

Now world run we've for had line. good experience, a and comps real doesn't tougher in the move my straight a us. are really The in getting

there very So those are year's to that's here I headwinds. a it a be getting pretty comps because not tougher. certainly X I Will trend, to happen look just see sure think to if will going the you good up given present our But to aggregate, think let's at growth. you're going robust in quarter quarter? longer-term or match call I'm X will But years, a continue to demand strong.

our they're Our a using such clients tool. products, need useful because these agents love them

bright we for for So America. see middle-income really a future annuities

Operator

[Operator next of James. from question Instructions] Wilma Burdis comes Our Raymond

Wilma Jackson Burdis

on you then tech tech consultants, items? us Could of the the implementing investments? for the other systems, about talk platforms, just Is it can a investments? give you and cases breakdown a use of bit And few AI a kind of

Paul McDonough

sure start I'm new evolve want some I'll the more And focus AI landscape. to from this with initiative the systems various allow new primary we'll provide platforms off, color. systems and of fully cloud-based leverage and to admin changing converting the able will to this mainframe SaaS us select adopt investment, be policy legacy in then foundational Gen future. Sure. And and quickly platform, solutions. in with to it technologies is general, The Gary

Gary Bhojwani

can I just maybe that. Yes, supplement

to just consumers that think getting from them can't from where of on about building exactly and these were new things agents flexibility that the kinds can I been what in technology historical, at home, ourselves to touched speak, really built this way keep and and away cases, expect, we they have the We some systems. old to these we need mainframe platforms. think really Paul position to away on offer and is so getting these

to that are flexibility. so We have us on that to based, cloud and give systems Software-as-a-Service based have that are newer

that of. can't to the This foundation can new foundation. non-tech guy. on -- a doesn't anymore. put it's of top these is these top other an and been on me work a just old building is us put new explained really, It whistles putting features, new way new We features bells we So keep

that thing think, would a all has This much new as that clarify As side to what can just of I have add to technology not seasonal challenge get insurers XX-year or version just imperative virtually this deal I that looking some note, it's you a so have is a that for? years, executive, we changed dealt and insurance these recent need with. with that have new on unique benefits. Wilma, in foundation does so that we and were features they

Wilma Jackson Burdis

great And pieces, just that lot and of That it's small things about many sounds helps. a it the with streamline those guide improvement. can the to think the of then investment I through talked moving Yes, identify? of us realize definitely small X-year see maybe them. platform ROE But help this did. And help that will what confidence? pieces, there's certainly pieces as gives like there you you well. probably some you've Are

if that. talk all could about So maybe you

Gary Bhojwani

with Yes. Wilma, kind maybe I of... will start

Paul McDonough

Wilma... So

Gary Bhojwani

I'm want do go start? Paul, sorry, to you ahead.

Paul McDonough

ahead. please No, go

Gary Bhojwani

Okay.

I'll let with I'm about then to think how and maybe start comments some in more some of guidance, philosophical, going general kind about just little a we Paul fill specifics. maybe bit I think

when obvious, years, we things provided but see look careful know sounds really that I make, I the public in that you'll And that and provided a is the about guidance we them things I the particularly we've of X think we're we're what you we cautious about if mindful commitments been very setting. we one the is CNO about. of types make of when think over particularly within last guidance

been that But belief delivering a actually our it say we've I I look at record making And we pretty committing about think when very of a think we're we track in. got about do So that we've things take to it. a careful if track good will really we were you really disciplined record, that. had sure we strong

we've our some gotten the I on quite that that's into in is feedback providing for time. think ROE, because shareholders thing was something we've the from visibility This particular, working on more about that. biggest been

ROE know, comp you of incentive As metrics. is our one

In I'm make feel So ability but able We the got didn't we're we've where we've attention we like natural in guidance feel a to our to in being the we evolution. to it, feel and right point prior. We really like sight, get line execute place very had it this like is where to always point words, and against on. all good that, the of we've on sight, got people good line that other got saying of point so that provide the now credibility, was good we've intentional a it.

number about So things. we a do good things. to feel are those our There of ability

add There do sure things expense can guidance. Paul, or that to it's discipline. that thinking our commitment how pulling to it's different reexploring you our we at against specifics perform you whether at there, about spoke that? take If levers we're we'll handle it's we're a look number that slide that I more any reinsurance, the capital, that of a to, make looking are in whether of terms to want whether

Paul McDonough

add comments. couple I'd guess I a of

expect not what to foreseeable drives with couple of years the longer 'XX additional we're specific rates. the that So we I for sales sort sales growth give will in together the interest higher that Wilma, beyond terms going would future, last over improvement. of growth over continue guidance of the and emphasize But that next

goes at imagine compounding lower, knows, who that's maybe about stays it and don't tailwind. there, in Let's I here settles a imagine the X.X% much goes higher XX-year

additional begin that have 'XX. So show we'll until that There do expansion. things to of in that's help 'XX part will in of don't sight a it. There of in bit terms are little more up are things line that that and in we're 'XX in driving ROE 'XX that doing we 'XX really

in ROE that last this put the things just getting confidence X-year all the of aggregate, of a us metric all out. the slide that it's give things to or are So we've alluded deck, Gary our in in about, lot referenced that talked

Operator

of Jefferies. Kamath Our comes from Suneet next question

Suneet Kamath

Paul, but with on first of will million of you time results. the like what the embedded be I element be you sort don't lot over the over ROE. years, if in and know frame? it savings all what sounds -- We And had a So I it's But thought quantified associated said got then don't X $XXX tech this from would then recall excluded I investments. operating that

what's understand to wanted just on I there? So going

Paul McDonough

also Yes. be all, this of Suneet, allows really as platform about. technology not first stable our a it cost this leverage us to investment. for better a savings, this it's or the rate no worse technology, more translate will don't cost expect was so that play. to Gary but significant talking to But current of isn't We creates -- run

It's an the So company, that's make that We're cost really point these It's at investments, many in right? and not as the where long-term kinds a way, enables our evolution play. growth of our a by also. investment the to business, Gary will as play. of we said, a need of peers

based of We're some you long-term don't that As really mainframe this investment to growth. technology. got some an industry, of sort the making and aging enable allow systems leverage we've are newer to

free nonoperating the it in characterize through, equity, it, flow in a as the the Holdco. then it. And on it of impact income, impact inclusive all as lot majority nonoperating. of yes, operating cash give terms of a we of guidance of flow will on impact of on the We'll visibility component really that's will is So how the 'XX and

million $XXX $XX at to Holdco midpoint free flow after in is million tech the mod the investing XXXX. cash in that So

Suneet Kamath

it. Got

kind insurance guess this just so just getting and kind companies then high longer? enough of And it is Bermuda, many like point raise that it. treaties at see should say, when worry or at just Just I does of does you seem a of on Okay. life a opportunity. we think takes using companies doing enough, if Bermuda hand lot about how curious these a I or some it approved that's level, just are I And have concern a

Paul McDonough

lots of effectively, capacity also in being efficiently that a I think growth. I an a I it's don't that works that well foresee regulatory very I operates, for has market think, that Bermuda. issue regime very mean and

see So as I an don't that issue.

I that many And think expect will there. think, I companies business have moved trend that's so I continue. why

Operator

question next Matten Our BMO. Jack from Instructions] of [Operator comes

Francis Matten

some the of there? on range, And $XXX million a that know you XXXX mentioned that strong might I about range? cause I of $XXX I some off moving end the just baseline. versus that Any through. can flow you coming outlook. question that are the lower discuss the you a to higher end investments think understand Just drivers to other IT excess of very reach pieces the million cash the you're If flowing

Paul McDonough

of determine just It's are of the moving dynamics flow. our pieces a cash the obviously lots that of There estimate business. Sure. free reflection of

together I think put business that pace, that all you to healthy/reasonable of million making it the And reflects we're investments tech in a what $XXX commitment organic in is $XXX a at this growth million balance like you mod. to get.

growth, economic to the of or terms pace be climate. end primarily of what organic end, at causes the low you In the it's high the

we recession, less results a in third which And down, capital or into which higher the more to the portfolio. causes that then risk is tip take primary sort of of some credit charges. our investment element inside If degree you migration

Francis Matten

for That Just we more there over XX.X% of given this you to year? operating that And time, the is expect a of I keep benefits makes that program the on we think it And about the like it. coming leverage should might just the the color a expect? saving being ratio I kind ratio any like to guess, should to longer-term it. time? other over follow-up to down about commentary relative expense of that heard Got a XX% pure IT kind program. expense There's expect might you not initiative. to get on the sense. And But just

Paul McDonough

long the down. this So broadly, in would expenses IT expect run, not just our come to expense ratio I initiative,

mod, time you're ratio the that exploring some as That 'XX takes that because the grow, leverage we that we largely additional pressure our and before It's some to more and As see would down. that's expense the Bermuda on Bermuda expect to would guided from related actually something can operating and you to of a get Authority. the help, margin on company, Monetary tech proposing this income some expenses money 'XX you'd moving move operating down sessions midpoint you operating margin, that lever pressure from on of develop not to right? to

it earnings to also mind, my in the business, that growing balance reflects but business, the we're growing the get trying profitability. between So in to investing and improving

So I that certainly for down. probably some maybe flat point, think but moving balance, a the while in of context at

Operator

Autonomous. question next of Our from Wes comes Carmichael

Wesley Carmichael

the rate to Paul, favorable on XX% ROE commentary think has relative getting the LTC rate run been I to your levels. long-term here, pretty in On run care,

with thinking of really You you're for of XX% core Any power versus $XXX not terms the that guide, helpful. be but I'm how help million on uplift had much how be? earnings ROE margin what XXXX. would would about had in a maybe in looking

Paul McDonough

Right.

So million than making $X really are per other a which got expect or and X we that that in we kind -- of sorry, the XXXX. quarter, or lot X we're which more million adjustments $X annuities, annuities,

So LTC Health. Supp that's margin is the one adjustment. And then in to other the and

of the adjustments math or making the -- you there high our XXXX. range to experience can the happening expectations. what's always been we around of the continue do kind that and And of get sort XX% at in really favorable end to And forever. So the quite don't that happen there something is to expect of has we're

of the happen basis That's part some what expect We will to where -- we're the that's reversion the in guidance. that's mean. what 'XX -- for XXXX. And assuming

Wesley Carmichael

consumer do new refreshed from demand for mentioned And it. offerings. Gary, What term? your product margins CNO you prepared remarks your and you in see think in you Got and maybe attractive perspective? I are near Where the a seeing

Gary Bhojwani

products we had Yes. good the question. in good seen demand. Thanks We've have the refreshed. for We've really fortune

we Worksite launched new a On seen to -- the We annuity side, on lost some we've those. side. new all features the launched and products, good reception of number

But doing us As tech product keep or major launches mod, initiative. envision executing to organization here I to technology don't at with X this look to against honest, continue next focused years, we effectively forward we'll X be our for the the modernization products. move need because we

So more on would tweaks X full X expect launches. be enhancements to years, new product for make I next to than the we any

I that. do think there's opportunity to

organization bandwidth the major doing of types those handle but initiative. modifications, thick of to see modernization in technology there's the I us within we're think don't launches this I while

Operator

hand currently no Adam I'd We remarks. Auvil to have questions. to back further like for any closing

Adam Auvil

participating questions. you for your of a call. great you, Thank further to the any thank operator, out day. reach and in have Relations team rest all Investor Have if you today's Please

Operator

everyone call. for today's conclude to like thank We'd joining. We

disconnect your lines. may now You

CNO Financial Group, Inc. 5.125 (CNO) 7 Feb 252024 Q4 Earnings call transcript