CNO Financial Group, Inc.

CNO reported second quarter operating earnings per diluted share of $1.26, up 45% from the prior year. Operating return on equity was 14.1% on a trailing 12-month basis, or 13.1% excluding significant items. Book value per diluted share excluding AOCI was $39.92, up 5%, and the company returned $77 million to shareholders, including $60 million of share repurchases. The expense ratio was 18.4%, and net investment income increased 8% year over year, while net investment income not allocated to products increased 46%. On the sales side, total new annualized premiums were up 7%; Consumer total Health NAP was up 17%, Medicare Supplement NAP was up 52%, Life NAP was down 9%, annuity collected premiums were $536 million (up 3%), and Worksite life and health NAP was up 29%. For 2026, management raised operating EPS guidance to $4.60-$4.80, narrowed the expense ratio outlook to 18.8%-19.0%, lowered the effective tax rate assumption to approximately 21.5%, and reaffirmed all remaining guidance metrics, including target RBC ratio, holdco liquidity, leverage, and full-year free cash flow expectations. Management said operating ROE is expected to exceed the prior 12% year-end 2027 target already in 2026.

Gary Bhojwani framed the quarter as a continuation of CNO’s multi-quarter execution streak, emphasizing 16 straight quarters of sales growth in Consumer and 17 in Worksite. He highlighted the company’s “exclusive middle market” focus and captive distribution model as a durable moat, and said the business is benefiting from favorable demographics, strong agent productivity, and diversified demand across health, wealth, and income solutions. His tone was confident and upbeat, while still acknowledging that some lines, especially life, can be uneven quarter to quarter.

Paul McDonough focused on earnings leverage, margin strength, and capital discipline. He pointed to $1.26 of operating EPS, 18.4% expense ratio, 8% growth in net investment income, 46% growth in net investment income not allocated to products, and a 377% consolidated RBC ratio with $233 million of holdco liquidity and 26.1% debt-to-capital. He said the company deployed $60 million to share repurchases in the quarter, expects expenses to normalize over the rest of the year, and reiterated that free cash flow should benefit from getting closer to target capital levels at operating subsidiaries, including Bermuda, subject to regulatory approvals.

Analysts pressed on whether long-term care claim trends are becoming sustainably better; management said claims are running modestly lower than expected, but it will complete its annual review in the third quarter before drawing conclusions. Questions also focused on slowing Consumer NAP growth, and Gary Bhojwani said he cannot predict quarter-to-quarter direction but sees a strong multi-year backdrop from demographics, product demand, and field productivity. On capital deployment and share repurchases above book value, management said the framework has not changed: reinvest in the business, selectively pursue inorganic opportunities, and return excess capital through dividends and buybacks. On Bermuda, management said excess capital has built up and could support a third treaty or other liability seeding, but timing depends on regulatory approvals.