Solid production, abettor abundance and basic return; $100 actor in allotment repurchases
CARMEL, Ind., May 2, 2022 /PRNewswire/ — CNO Banking Group, Inc. (NYSE: CNO) today appear that for the division concluded March 31, 2022, net assets was $112.3 million, or $0.93 per adulterated share, compared to $147.4 million, or $1.08 per adulterated share, in 1Q21. Net operating assets (1) in 1Q22 was $51.1 million, or $0.42 per adulterated share, compared to $75.2 million, or $0.55 per adulterated share, in 1Q21.
“Our after-effects in the aboriginal division connected to authenticate the backbone and animation of our business,” said Gary C. Bhojwani, arch controlling officer. “From a assembly standpoint, we generated increases in four of our bristles advance agenda metrics and delivered aciculate advance in abettor productivity, while abiding cogent basic to our shareholders.”
“Earnings were pressured by bazaar animation in the division and we saw several factors activate to normalize, including balance in our another advance allotment and a trend aback against pre-pandemic claims levels in assertive of our healthcare products. Adjusting for these factors and an access in non-deferrable announcement expense, our basal margins and balance remained stable.”
“While bread-and-butter ambiguity is acceptable to persist, CNO is well-positioned to cross prevailing bazaar altitude and capitalize on the advance opportunities in avant-garde of us.”
First Division 2022 Highlights
FINANCIAL SUMMARY Division End (Amounts in millions, except per allotment data)(Unaudited)
Net operating income, a non-GAAP(a) banking measure, is acclimated consistently by CNO’s administration to appraise the operating achievement of the Aggregation and is a admeasurement frequently acclimated in the activity allowance industry. It differs from net assets primarily because it excludes assertive non-operating items such as net advance assets (losses), changes in fair ethics of anchored derivatives and the accountability for a deferred advantage plan, and assertive cogent and abnormal items included in net income. Administration believes an assay of net operating assets is important in compassionate the advantage and operating trends of the Company’s business. Net assets is the best anon commensurable GAAP measure.
Per adulterated share
Quarter ended
Quarter ended
March 31,
March 31,
2022
2021
%change
2022
2021
%change
Income from allowance articles (b)
$ 0.37
$ 0.50
(26)
$ 44.4
$ 68.6
(35)
Fee income
0.08
0.05
60
9.9
7.3
36
Investment assets not allocated to artefact curve (c)
0.23
0.32
(28)
28.5
43.0
(34)
Expenses not allocated to artefact lines
(0.12)
(0.16)
(25)
(14.8)
(22.0)
(33)
Operating balance afore taxes
0.56
0.71
68.0
96.9
Income tax amount on operating income
(0.14)
(0.16)
(13)
(16.9)
(21.7)
(22)
Net operating assets (1)
0.42
0.55
(24)
51.1
75.2
(32)
Net accomplished advance assets from sales, impairments and change in allowance for acclaim losses (net of accompanying amortization)
(0.06)
0.03
(7.1)
3.6
Net change in bazaar amount of investments accustomed in earnings
(0.21)
(0.05)
(25.5)
(6.4)
Fair amount changes in anchored acquired liabilities (net of accompanying amortization)
0.75
0.60
90.8
82.1
Other
0.19
0.10
23.1
13.8
Non-operating assets afore taxes
0.67
0.68
81.3
93.1
Income tax amount on non-operating income
(0.16)
(0.15)
(20.1)
(20.9)
Net non-operating income
0.51
0.53
61.2
72.2
Net income
$ 0.93
$ 1.08
$ 112.3
$ 147.4
Weighted boilerplate adulterated shares outstanding
121.0
136.7
(a)
GAAP is authentic as accounting attempt about accustomed in the United States of America.
(b)
Income from allowance articles is the sum of the allowance margins of the annuity, bloom and activity segments, beneath allocated allowance authoritative expenses. It excludes the fee assets segment, balance advance income, ancestor aggregation costs and assets taxes. Allowance allowance is management’s admeasurement of the advantage of its annuity, bloom and activity segments’ achievement and consists of premiums added allocated advance assets beneath allowance action benefits, absorption credited, commissions, announcement amount and acquittal of accretion costs.
(c)
Investment assets not allocated to artefact curve is authentic as net advance assets less: (i) disinterestedness allotment accustomed to policyholder anniversary balances; (ii) the advance assets allocated to our artefact lines; (iii) absorption amount on addendum payable and advance borrowings; and (iv) assertive costs accompanying to anniversary affairs that are anniversary by special-purpose advance income.
FINANCIAL SUMMARY (continued) Administration vs. GAAP Measures (Dollars in millions, except per allotment data)(Unaudited)
Shareholders’ equity, excluding accumulated added absolute income, and book amount per share, excluding accumulated added absolute income, are non-GAAP measures that are activated by administration to appearance the business afterwards the aftereffect of accumulated added absolute assets which is primarily attributable to fluctuations in absorption ante associated with anchored maturities, accessible for sale. Administration angle the business in this address because the Aggregation has the adeptness and generally, the intent, to ascendancy investments to ability and allusive trends can be added calmly articular afterwards the fluctuations. In addition, shareholders’ disinterestedness excludes net operating accident carryforwards in our non-GAAP acknowledgment on disinterestedness measures as such assets are not discounted and, accordingly, will not accommodate a acknowledgment to shareholders until afterwards it is accomplished as a abridgement to taxes that would contrarily be paid. Administration believes that excluding this amount from the disinterestedness basic of this admeasurement enhances the compassionate of the aftereffect these non-discounted assets accept on operating returns.
Quarter ended
March 31,
2022
2021
Trailing twelve months acknowledgment on disinterestedness (a)
8.1 %
9.6 %
Trailing twelve months operating acknowledgment on equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure) (6)
11.2 %
12.3 %
Trailing twelve months operating return, excluding cogent items, on equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure) (6)
10.7 %
11.7 %
Shareholders’ equity
$ 3,690.9
$ 4,860.7
Accumulated added absolute income
(380.5)
(1,518.1)
Shareholders’ equity, excluding accumulated added absolute income
3,310.4
3,342.6
Net operating accident carryforwards
(238.2)
(323.1)
Shareholders’ equity, excluding accumulated added absolute assets and net operating accident carryforwards
$ 3,072.2
$ 3,019.5
Book amount per adulterated share
$ 30.89
$ 36.11
Accumulated added absolute income
(3.19)
(11.28)
Book amount per adulterated share, excluding accumulated added absolute assets (a non-GAAP banking measure) (2)
$ 27.70
$ 24.83
(a)
Calculated application boilerplate shareholders’ disinterestedness for the altitude period.
INSURANCE OPERATIONS
Annuity articles accounted for 24 percent of the Company’s allowance for the quarter.
Annuity premiums calm added 13 percent and accomplishment anniversary ethics added 8 percent in 1Q22 compared to 1Q21.
Health articles accounted for 66 percent of the Company’s allowance allowance for the division and 65 percent of allowance action income.
Life articles accounted for 10 percent of the Company’s allowance allowance for the division and 34 percent of allowance action income.
Sales of bloom articles were bottomward 3 percent and sales of activity articles were up 5 percent in 1Q22 compared to 1Q21.
ANNUITY COLLECTED PREMIUMS (Dollars in millions)(Unaudited)
Quarter concluded March 31,
2022
2021
%change
Annuity calm premiums
$ 368.6
$ 325.4
13
INSURANCE POLICY INCOME (Dollars in millions)(Unaudited)
Quarter concluded March 31,
2022
2021
%change
Annuity
$ 5.0
$ 5.4
(7)
Health
406.7
416.5
(2)
Life
213.3
210.5
1
Total allowance action income
$ 625.0
$ 632.4
(1)
SALES MEASURED AS NEW ANNUALIZED PREMIUMS FOR LIFE AND HEALTH PRODUCTS (Dollars in millions)(Unaudited)
Quarter concluded March 31,
2022
2021
%change
Health
$ 34.8
$ 35.7
(3)
Life
55.8
53.0
5
Total new annualized premiums (4)
$ 90.6
$ 88.7
2
INSURANCE MARGIN (Amounts in millions, except per allotment data)(Unaudited)
Insurance allowance is management’s admeasurement of advantage of its annuity, bloom and activity segments’ achievement and consists of premiums added allocated advance assets beneath allowance action benefits, absorption credited, commissions, announcement amount and acquittal of accretion costs. Assets from allowance articles is the sum of the allowance margins of the annuity, bloom and activity segments, beneath allocated allowance authoritative expenses. It excludes the fee assets segment, advance assets not allocated to artefact lines, costs not allocated to artefact curve and assets taxes. Administration believes this admonition helps accommodate a bigger compassionate of the business and a added allusive assay of our operations. Allowance income, a non-GAAP measure, is a basic of net operating income, which is accommodated to net assets in the Banking Summary area above.
Quarter ended
March 31,2022
% ofinsurancepolicyincome
March 31,2021
% ofinsurancepolicyincome
%change
Margin
Annuity absorption margin
$ 44.6
$ 57.9
(23)
Life allowance absorption margin
1.5
1.9
(21)
Total interest-sensitive margin
46.1
59.8
(23)
Insurance margin
Health
124.8
31
124.7
30
—
Life (a)
18.3
9
25.2
12
(27)
Total added allowance margin
143.1
23
149.9
24
(5)
Total allowance margin
189.2
209.7
Allocated expenses
(144.8)
(141.1)
Income from allowance products
$ 44.4
$ 68.6
Per adulterated share
$ 0.37
$ 0.50
Weighted boilerplate adulterated shares
121.0
136.7
(a)
Net of $29.3 actor and $23.3 actor of non-deferred television announcement amount accompanying to our absolute administration approach in the 2022 and 2021 periods, respectively.
Total allocated costs were $144.8 million, up 3 percent from the year-ago quarter.
Total allowance margins were agreeably impacted by about $16 actor and $22 actor in the abode concluded March 31, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.
ANNUITY RESULTS BY PRODUCT TYPE(Dollars in millions)(Unaudited)
Annuity margin
Quarter ended
March 31,
2022
2021
Fixed base annuities
$ 33.2
$ 48.3
Fixed absorption annuities
8.1
8.8
Other annuities
3.3
0.8
Total
$ 44.6
$ 57.9
Annuity calm premiums
Quarter ended
March 31,
2022
2021
Annuity calm premiums
$ 368.6
$ 325.4
Average net allowance liabilities (5)
Quarter ended
March 31,
2022
2021
Fixed base annuities
$ 8,268.4
$ 7,464.8
Fixed absorption annuities
1,761.9
1,951.6
Other annuities
488.0
512.2
Total
$ 10,518.3
$ 9,928.6
Margin/average net allowance liabilities (a)
Quarter ended
March 31,
2022
2021
Fixed base annuities
1.61%
2.59%
Fixed absorption annuities
1.84%
1.80%
Other annuities
2.70%
0.62%
Total
1.70%
2.33%
(a)
Defined as annualized anniversary accomplishment allowance disconnected by boilerplate net allowance liabilities (5).
Total accomplishment margins were agreeably impacted by about nil and $1 actor in the abode concluded March 31, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.
HEALTH INSURANCE RESULTS BY PRODUCT TYPE(Dollars in millions)(Unaudited)
Health margin
Quarter ended
March 31,
2022
2021
Amount
% ofinsurancepolicyincome
Amount
% ofinsurancepolicyincome
%change
Supplemental bloom and added health
$ 57.2
33
$ 50.4
30
13
Medicare supplement
36.2
22
38.2
21
(5)
Long-term care
31.4
47
36.1
55
(13)
Total
$ 124.8
31
$ 124.7
30
—
Health allowance action income
Quarter ended
March 31,
2022
2021
%change
Supplemental bloom and added health
$ 173.5
$ 169.8
2
Medicare supplement
166.8
181.0
(8)
Long-term care
66.4
65.7
1
Total
$ 406.7
$ 416.5
(2)
Health NAP (4)
Quarter ended
March 31,
2022
2021
%change
Supplemental bloom and added health
$ 21.5
$ 21.1
2
Medicare supplement
6.5
8.2
(21)
Long-term care
6.8
6.4
6
Total
$ 34.8
$ 35.7
(3)
Total bloom margins were agreeably impacted by about $32 actor and $40 actor in the abode concluded March 31, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.
LIFE INSURANCE RESULTS BY PRODUCT TYPE(Dollars in millions)(Unaudited)
Life margin
Quarter ended
March 31,
2022
2021
Amount
% ofinsurancepolicyincome
Amount
% ofinsurancepolicyincome
%change
Life allowance absorption margin
$ 1.5
$ 1.9
(21)
Life allowance margin:
Traditional life
2.9
2
12.9
8
(78)
Interest acute life
15.4
36
12.3
30
25
Subtotal
18.3
9
25.2
12
(27)
Total margin
$ 19.8
$ 27.1
(27)
Life allowance action income
Quarter ended
March 31,
2022
2021
%change
Traditional life
$ 170.2
$ 169.7
—
Interest acute life
43.1
40.8
6
Total
$ 213.3
$ 210.5
1
Life NAP (4)
Quarter ended
March 31,
2022
2021
%change
Traditional life
$ 48.2
$ 45.9
5
Interest acute life
7.6
7.1
7
Total
$ 55.8
$ 53.0
5
Average net allowance liabilities (5) and absorption margin
Quarter ended
March 31,
2022
2021
%change
Interest acute activity products
$ 1,011.9
$ 954.7
6
Interest margin/average net allowance liabilities (5)
0.59 %
0.80 %
(26)
Total activity margins were afield impacted by about $16 actor and $19 actor in the abode concluded March 31, 2022 and 2021, respectively, due to the estimated impacts of COVID-19.
QUARTERLY AVERAGE EXCLUSIVE PRODUCING AGENTS
Average Absolute Producing Abettor Count
Quarter ended
March 31,
%
2022
2021
change
Consumer
Field agents (a) (c)
3,939
4,389
(10)
Tele-sales agents
217
258
(16)
Total agents
4,156
4,647
(11)
Registered agents (b) (c)
663
646
3
Worksite (a) (c)
208
241
(14)
(a)
Producing agents represent the anniversary boilerplate of absolute agents that accept submitted at atomic one action in the month.
(b)
Registered agents are dually accountant as allowance agents and banking assembly who can buy and advertise balance for clients, and/or advance admiral who can accommodate advancing advance admonition for clients.
(c)
Agent counts represent the boilerplate of the aftermost 3 months.
INVESTMENTS INVESTMENT INCOME NOT ALLOCATED TO PRODUCT LINES (Dollars in millions, except per allotment data)
Management uses advance assets not allocated to artefact curve as the admeasurement to appraise the achievement of the advance segment. It is authentic as net advance assets beneath the advance assets allocated to our artefact segments and absorption amount on debt. We additionally appearance advance assets not allocated to artefact curve per adulterated allotment as an important and advantageous admeasurement to appraise achievement of the advance articulation as it takes into application our allotment repurchase program.
Quarter concluded March 31,
2022
2021
%change
Net advance income
$ 208.2
$ 338.2
(38)
Allocated to artefact lines:
Annuity
(115.1)
(115.7)
(1)
Health
(71.8)
(71.5)
—
Life
(36.3)
(35.8)
1
Equity allotment accustomed to policyholder anniversary balances
71.9
(42.5)
(269)
Amounts allocated to artefact curve and accustomed to policyholder anniversary balances
(151.3)
(265.5)
(43)
Amount accompanying to capricious absorption entities and added non-operating items
(7.2)
(7.8)
(8)
Interest amount on accumulated debt
(15.7)
(15.5)
1
Interest amount on advance borrowings from the Federal Home Accommodation Bank program
(2.4)
(2.7)
(11)
Expenses accompanying to allotment agreement-backed agenda program
(7.3)
—
n/m
Less amounts accustomed to deferred advantage affairs (offsetting advance income)
4.2
(3.7)
(214)
Total adjustments
(28.4)
(29.7)
Investment assets not allocated to artefact lines
$ 28.5
$ 43.0
(34)
Per adulterated share
$ 0.23
$ 0.32
INVESTMENT PORTFOLIO (Dollars in millions)
The acceding of the advance portfolio at March 31, 2022 is as follows:
$
% of total
Fixed maturities, accessible for sale, at fair value
$ 23,479.4
86
Equity balance at fair value
91.0
—
Mortgage loans
1,213.3
4
Policy loans
119.5
1
Trading securities
223.0
1
Investments captivated by capricious absorption entities
1,180.8
4
Other invested assets
1,121.8
4
Total advance portfolio
$ 27,428.8
100
Fixed maturities, accessible for sale, at amortized amount by asset chic as of March 31, 2022 are as follows:
Investmentgrade
Belowinvestmentgrade
Total
Corporate securities
$ 13,110.8
$ 821.8
$ 13,932.6
United States Treasury balance and obligations of the United States government and agencies
168.0
—
168.0
States and political subdivisions
2,634.4
11.6
2,646.0
Foreign governments
78.2
—
78.2
Asset-backed securities
1,034.6
155.1
1,189.7
Agency residential mortgage-backed securities
33.9
—
33.9
Non-agency residential mortgage-backed securities
1,163.9
662.7
(a)
1,826.6
Collateralized accommodation obligations
681.8
7.4
689.2
Commercial mortgage-backed securities
2,341.3
83.8
2,425.1
Total
$ 21,246.9
$ 1,742.4
$ 22,989.3
(a)
Certain structured balance rated beneath advance brand by Nationally Accustomed Statistical Rating Organizations may be assigned a NAIC 1 or NAIC 2 appellation based on the amount base of the aegis about to estimated recoverable amounts as bent by the National Association of Allowance Commissioners (NAIC).
The fair amount of CNO’s accessible for auction anchored ability portfolio was $23.5 billion compared with an amortized amount of $23.0 billion. Net abeyant assets were comprised of gross abeyant assets of $1.2 billion and gross abeyant losses of $647 million. The allowance for acclaim losses was $36.6 actor at March 31, 2022.
At both amortized amount and fair value, 92 percent of anchored maturities, accessible for sale, were rated “investment grade”.
Non-Operating Items
Net advance losses in 1Q22 were $7.1 actor (net of accompanying amortization) including the abortive change in the allowance for acclaim losses of $30.7 actor which was recorded in earnings. Net advance assets in 1Q21 were $3.6 actor (net of accompanying amortization) including the favorable change in the allowance for acclaim losses of $9.6 actor which was recorded in earnings.
During 1Q22 and 1Q21, we accustomed a abatement in balance of $25.5 actor and $6.4 million, respectively, due to the net change in bazaar amount of investments accustomed in earnings.
During 1Q22 and 1Q21, we accustomed an access in balance of $90.8 actor and $82.1 million, respectively, consistent from changes in the estimated fair amount of anchored acquired liabilities accompanying to our anchored base annuities, net of accompanying amortization. Such amounts accommodate the impacts of changes in bazaar absorption ante acclimated to actuate the derivative’s estimated fair value.
In 1Q22 and 1Q21, added non-operating items included an access in balance of $22.7 actor and $13.2 million, respectively, for the mark-to-market change in the abettor deferred advantage plan accountability which was impacted by changes in the basal actuarial assumptions acclimated to amount the liability. We admit the mark-to-market change in the estimated amount of this accountability through balance as assumptions change.
Statutory (based on non-GAAP measures) and GAAP Basic Information
Our circumscribed approved risk-based basic arrangement was estimated at 365% at March 31, 2022, absorption estimated 1Q22 approved operating assets of $30 actor and the acquittal of allowance aggregation assets to the captivation aggregation of $69.6 actor during 1Q22.
During the aboriginal division of 2022, we repurchased $100.0 actor of accepted banal beneath our balance repurchase program. We repurchased 4.1 actor accepted shares at an boilerplate amount of $24.65 per share. As of March 31, 2022, we had 117.2 actor shares outstanding and had ascendancy to repurchase up to an added $266.9 actor of our accepted stock. During 1Q22, assets paid on accepted banal totaled $16.1 million.
Unrestricted banknote and investments captivated by our captivation aggregation were $192 actor at March 31, 2022, compared to $249 actor at December 31, 2021.
Book amount per accepted allotment was $31.48 at March 31, 2022 compared to $43.69 at December 31, 2021. Book amount per adulterated share, excluding accumulated added absolute assets (2), was $27.70 at March 31, 2022, compared to $26.86 at December 31, 2021.
The debt-to-capital arrangement was 23.6 percent and 17.8 percent at March 31, 2022 and December 31, 2021, respectively. Our debt-to-total basic ratio, excluding accumulated added absolute assets (3) was 25.6 percent at both March 31, 2022 and December 31, 2021.
Return on disinterestedness for the abaft four abode concluded March 31, 2022 and 2021, was 8.1% and 9.6%, respectively. Operating return, excluding cogent items, on equity, excluding accumulated added absolute assets and net operating accident carryforwards (6) for the abaft four abode concluded March 31, 2022 and 2021, was 10.7% and 11.7%, respectively.
In this anniversary release, CNO includes non-GAAP measures to enhance investors’ compassionate of management’s appearance of the business. The non-GAAP measures are not a acting for GAAP, but rather a supplement to access accuracy by accouterment broader perspective. CNO’s definitions of non-GAAP measures may alter from added companies’ definitions. Added abundant admonition including assorted GAAP and non-GAAP abstracts are amid at CNOinc.com in the Investors area beneath SEC Filings.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS:
This columnist absolution may accommodate avant-garde statements aural the acceptation of federal balance laws. These -to-be statements reflect management’s accepted expectations, but are not guarantees of approaching performance. Accordingly, amuse accredit to CNO’s cautionary anniversary apropos avant-garde statements, and the business ambiance in which the Aggregation operates, absolute in the Company’s Anatomy 10-K for the year concluded December 31, 2021 and any consecutive Anatomy 10-Q or Anatomy 10-K on book with the Balance and Exchange Commission and on the Company’s website at CNOinc.com in the Investors section. CNO accurately disclaims any obligation to amend or alter any avant-garde anniversary because of new information, approaching developments or otherwise.
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
The Aggregation will host a appointment alarm to altercate after-effects on May 3, 2022 at 11:00 a.m. Eastern Time. During the call, we will be apropos to a presentation that will be accessible at the Investors area of the company’s website.
To participate by dial-in, amuse annals at http://www.directeventreg.com/registration/event/7976502. Upon registering, you will be provided with alarm capacity and a apprentice ID acclimated to clue appearance on the appointment call. Reminders will additionally be beatific to registered participants via email.
For those investors who adopt to accept to the alarm online, we will be broadcasting the alarm alive via webcast. The accident can be accessed through the Investors area of the company’s website: ir.CNOinc.com. Participants should go to the website at atomic 15 anniversary afore the accident to annals and download any all-important audio software.
ABOUT CNO FINANCIAL GROUP
CNO Banking Group, Inc. (NYSE: CNO) secures the approaching of middle-income America. CNO provides activity and bloom insurance, annuities, banking services, and workforce allowances solutions through our ancestors of brands, including Bankers Life, Colonial Penn and Washington National. Our barter assignment adamantine to save for the future, and we advice assure their health, assets and retirement needs with 3.2 actor behavior and $35 billion in absolute assets. Our 3,400 associates, 4,400 absolute agents and 4,700 absolute accomplice agents adviser individuals, families and businesses through a lifetime of banking decisions. For added information, appointment CNOinc.com.
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Dollars in millions)(unaudited)
March 31,2022
December 31,2021
ASSETS
Investments:
Fixed maturities, accessible for sale, at fair amount (net of allowance for acclaim losses: March 31,2022 – $36.6 and December 31, 2021 – $7.6; amortized cost: March 31, 2022 – $22,989.3 andDecember 31, 2021 – $21,867.6)
$ 23,479.4
$ 24,805.4
Equity balance at fair value
91.0
131.1
Mortgage loans (net of allowance for acclaim losses: March 31, 2022 – $5.1 and December 31,2021 – $5.6)
1,213.3
1,218.6
Policy loans
119.5
120.2
Trading securities
223.0
227.2
Investments captivated by capricious absorption entities (net of allowance for acclaim losses: March 31, 2022- $5.9 and December 31, 2021 – $3.7; amortized cost: March 31, 2022 – $1,198.9 andDecember 31, 2021 – $1,206.8)
1,180.8
1,199.6
Other invested assets
1,121.8
1,224.0
Total investments
27,428.8
28,926.1
Cash and banknote equivalents – unrestricted
546.0
632.1
Cash and banknote equivalents captivated by capricious absorption entities
48.0
99.6
Accrued advance income
227.9
216.4
Present amount of approaching profits
222.8
222.6
Deferred accretion costs
1,487.6
1,112.0
Reinsurance receivables (net of allowance for acclaim losses: March 31, 2022 – $3.0 andDecember 31, 2021 – $3.0)
4,298.2
4,354.3
Income tax assets, net
534.2
118.3
Assets captivated in abstracted accounts
3.6
3.9
Other assets
671.0
519.1
Total assets
$ 35,468.1
$ 36,204.4
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Liabilities for allowance products:
Policyholder anniversary liabilities
$ 14,546.3
$ 13,689.7
Future action benefits
11,646.5
11,670.7
Liability for action and arrangement claims
507.3
501.8
Unearned and avant-garde premiums
250.0
246.7
Liabilities accompanying to abstracted accounts
3.6
3.9
Other liabilities
912.3
830.9
Investment borrowings
1,640.5
1,715.8
Borrowings accompanying to capricious absorption entities
1,133.1
1,147.9
Notes payable – absolute accumulated obligations
1,137.6
1,137.3
Total liabilities
31,777.2
30,944.7
Commitments and Contingencies
Shareholders’ equity:
Common banal ($0.01 par value, 8,000,000,000 shares authorized, shares issued andoutstanding: March 31, 2022 – 117,241,006; December 31, 2021 – 120,377,152)
1.2
1.2
Additional paid-in capital
2,085.7
2,184.2
Accumulated added absolute income
380.5
1,947.1
Retained earnings
1,223.5
1,127.2
Total shareholders’ equity
3,690.9
5,259.7
Total liabilities and shareholders’ equity
$ 35,468.1
$ 36,204.4
CNO FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in millions, except per allotment data)(unaudited)
Three months ended
March 31,
2022
2021
Revenues:
Insurance action income
$ 625.0
$ 632.4
Net advance income:
General anniversary assets
277.5
282.7
Policyholder and added special-purpose portfolios
(69.3)
55.5
Investment assets (losses):
Realized advance assets (losses)
18.8
(6.0)
Other advance assets (losses)
(51.5)
3.2
Total advance losses
(32.7)
(2.8)
Fee acquirement and added income
42.4
38.2
Total revenues
842.9
1,006.0
Benefits and expenses:
Insurance action benefits
346.7
459.1
Interest expense
23.8
24.1
Amortization
103.9
99.7
Other operating costs and expenses
219.2
233.1
Total allowances and expenses
693.6
816.0
Income afore assets taxes
149.3
190.0
Income tax amount on aeon income
37.0
42.6
Net income
$ 112.3
$ 147.4
Earnings per accepted share:
Basic:
Weighted boilerplate shares outstanding
118,622,000
134,140,000
Net income
$ .95
$ 1.10
Diluted:
Weighted boilerplate shares outstanding
121,002,000
136,653,000
Net income
$ .93
$ 1.08
NOTES
(1)
Management believes that an assay of Net assets applicative to accepted banal before: (i) net accomplished advance assets or losses from sales, impairments and the change in allowance for acclaim losses, net of accompanying acquittal and taxes; (ii) net change in bazaar amount of investments accustomed in earnings, net of taxes; (iii) fair amount changes due to fluctuations in the absorption ante acclimated to abatement anchored acquired liabilities accompanying to our anchored base annuities, net of accompanying acquittal and taxes; (iv) fair amount changes accompanying to the abettor deferred advantage plan, net of taxes; (v) accident on concealment of debt, net of taxes; (vi) changes in the appraisal allowance for deferred tax assets and added tax items; and (viii) added non-operating items consisting primarily of balance attributable to capricious absorption entities, net of taxes (“Net operating income,” a non-GAAP banking measure) is important to appraise the banking achievement of the company, and is a key admeasurement frequently acclimated in the activity allowance industry. Administration uses this admeasurement to appraise achievement because the items afar from net operating assets can be afflicted by contest that are different to the company’s basal fundamentals. A adaptation of Net operating assets to Net assets applicative to accepted banal is provided in the table on folio 2. Added admonition apropos this non-GAAP admeasurement is included in our alternate filings with the Balance and Exchange Commission that are accessible in the “Investors – SEC Filings” area of CNO’s website, CNOinc.com.
(2)
Book amount per adulterated allotment reflects the abeyant concoction that could action if outstanding banal options were acclimatized and belted banal and achievement units were vested. The concoction from options, belted shares and achievement units is affected application the treasury banal method. Beneath this method, we accept the gain from the exercise of the options (or the anonymous advantage amount with account to belted banal and achievement units) will be acclimated to acquirement shares of our accepted banal at the closing bazaar amount on the aftermost day of the period. In addition, the adding of this non-GAAP admeasurement differs from the agnate GAAP admeasurement because accumulated added absolute assets (loss) has been afar from the amount of basic acclimated to actuate this measure. Administration believes this non-GAAP admeasurement is advantageous because it removes the animation that arises from changes in the abeyant acknowledgment (depreciation) of our investments.
(3)
The adding of this non-GAAP admeasurement differs from the agnate GAAP admeasurement because accumulated added absolute assets (loss) has been afar from the amount of basic acclimated to actuate this measure. Administration believes this non-GAAP admeasurement is advantageous because it removes the animation that arises from changes in the abeyant acknowledgment (depreciation) of our investments.
(4)
Measured by new annualized premiums for activity and bloom products, which includes 10% of distinct exceptional accomplished activity deposits and 100% of all added premiums (excluding annuities). Sales of third-party articles are excluded.
(5)
Net allowance liabilities are according to absolute allowance liabilities less: (i) amounts accompanying to reinsured business; (ii) deferred accretion costs; (iii) present amount of approaching profits; and (iv) the amount of unexpired options accustomed to allowance liabilities.
(6)
The afterward summarizes the calculations of: (i) operating acknowledgment on equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure); (ii) operating return, excluding cogent items, on equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure); and (iii) acknowledgment on disinterestedness are as follows (dollars in millions):
Trailing twelve months ended
1Q22
1Q21
Net operating income
$ 341.5
$ 353.2
Net operating income, excluding cogent items
$ 327.1
$ 335.2
Net income
$ 405.9
$ 470.4
Average accepted equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
$ 3,046.7
$ 2,876.5
Average accepted shareholders’ equity
$ 5,023.1
$ 4,903.1
Operating acknowledgment on equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
11.2 %
12.3 %
Operating return, excluding cogent items, on equity, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
10.7 %
11.7 %
Return on equity
8.1 %
9.6 %
The afterward summarizes: (i) operating earnings; (ii) cogent items; (iii) operating earnings, excluding cogent items; and (iv) net assets (loss) (dollars in millions):
Net operating
Net operating
income,
income,
excluding
Net
excluding
significant
income –
Net operating
Significant
significant
items – trailing
Net
trailing
income
items
items (a)
four quarters
income
four quarters
2Q20
$ 79.4
$ (17.7)
(b)
$ 61.7
$ 285.9
$ 82.0
$ 380.8
3Q20
112.6
—
112.6
329.3
129.2
468.0
4Q20
86.0
(6.4)
(c)
79.6
338.2
111.8
301.8
1Q21
75.2
6.1
(d)
81.3
335.2
147.4
470.4
2Q21
89.1
3.5
(e)
92.6
366.1
78.0
466.4
3Q21
92.8
2.3
(f)
95.1
348.6
99.8
437.0
4Q21
108.5
(20.2)
(g)
88.3
357.3
115.8
441.0
1Q22
51.1
—
51.1
327.1
112.3
405.9
(a)
See agenda (7) for added information.
(b)
Comprised of: (i) $45.9 actor of net favorable adjustments arising from our analysis of actuarial assumptions; (ii) $23.5 actor abortive appulse accompanying to authoritative matters; and (iii) an access in tax amount of $4.7 million.
(c)
Comprised of: (i) $11.8 actor of net favorable adjustments arising from our analysis of actuarial assumptions; (ii) $3.7 actor abortive appulse accompanying to asset impairments; and (iii) an access in tax amount of $1.7 million.
(d)
Comprised of: (i) $5.3 actor from acknowledged and authoritative matters; (ii) $2.5 actor of transaction costs accompanying to the ahead appear accretion of DirectPath, LLC; and (iii) a abatement in tax amount of $1.7 million.
(e)
Comprised of: (i) $4.5 actor from acknowledged and authoritative matters; and (ii) a abatement in tax amount of $1.0 million.
(f)
Comprised of: (i) $3.0 actor from acknowledged and authoritative matters; and (ii) a abatement in tax amount of $.7 million.
(g)
Comprised of: (i) $25.9 actor of net favorable adjustments arising from our analysis of actuarial assumptions; and (ii) an access in tax amount of $5.7 million.
A adaptation of pre-tax operating balance (a non-GAAP banking measure) to net assets is as follows (dollars in millions):
Twelve months ended
1Q22
1Q21
Pre-tax operating balance (a non-GAAP banking measure)
$ 441.7
$ 455.2
Income tax expense
(100.2)
(102.0)
Net operating income
341.5
353.2
Non-operating items:
Net accomplished advance assets (losses) from sales, impairments and change in allowance for acclaim losses, net of accompanying amortization
24.1
36.2
Net change in bazaar amount of investments accustomed in earnings
(36.5)
39.3
Fair amount changes in anchored acquired liabilities, net of accompanying amortization
75.9
69.7
Fair amount changes accompanying to the abettor deferred advantage plan
18.4
(3.1)
Other
3.4
8.0
Non-operating assets (loss) afore taxes
85.3
150.1
Income tax amount on non-operating income
(20.9)
(32.9)
Net non-operating income
64.4
117.2
Net income
$ 405.9
$ 470.4
A adaptation of circumscribed capital, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure) to accepted shareholders’ equity, is as follows (dollars in millions):
1Q20
2Q20
3Q20
4Q20
Consolidated capital, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
$ 2,701.2
$ 2,784.2
$ 2,905.1
$ 2,956.2
Net operating accident carryforwards
469.4
426.8
377.2
341.9
Accumulated added absolute income
595.2
1,520.2
1,801.6
2,186.1
Common shareholders’ equity
$ 3,765.8
$ 4,731.2
$ 5,083.9
$ 5,484.2
1Q21
2Q21
3Q21
4Q21
Consolidated capital, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
$ 3,019.5
$ 3,035.6
$ 3,036.3
$ 3,068.9
Net operating accident carryforwards
323.1
292.9
266.9
243.7
Accumulated added absolute income
1,518.1
1,995.5
1,929.7
1,947.1
Common shareholders’ equity
$ 4,860.7
$ 5,324.0
$ 5,232.9
$ 5,259.7
1Q22
Consolidated capital, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
$ 3,072.2
Net operating accident carryforwards
238.2
Accumulated added absolute income
380.5
Common shareholders’ equity
$ 3,690.9
A adaptation of circumscribed capital, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure) to accepted shareholders’ equity, is as follows (dollars in millions):
Trailing four division average
1Q22
1Q21
Consolidated capital, excluding accumulated added absolute assets (loss) and net operating accident carryforwards (a non-GAAP banking measure)
$ 3,046.7
$ 2,876.5
Net operating accident carryforwards
271.0
385.5
Accumulated added absolute income
1,705.4
1,641.1
Common shareholders’ equity
$ 5,023.1
$ 4,903.1
(7)
The tables beneath abridge the banking appulse of cogent items on our net operating income. Administration believes that anecdotic the appulse of these items enhances the compassionate of our operating after-effects (dollars in millions, except per allotment data).
Three months ended
December 31, 2021
Actualresults
Significantitems
Excludingsignificant items
Insurance artefact margin
Annuity margin
$ 93.9
$ (26.9)
(a)
$ 67.0
Health margin
129.5
—
129.5
Life margin
30.4
1.0
(a)
31.4
Total allowance artefact margin
253.8
(25.9)
227.9
Allocated expenses
(143.3)
—
(143.3)
Income from allowance products
110.5
(25.9)
84.6
Fee income
2.9
—
2.9
Investment assets not allocated to artefact lines
42.8
—
42.8
Expenses not allocated to artefact lines
(17.4)
—
(17.4)
Operating balance afore taxes
138.8
(25.9)
112.9
Income tax (expense) anniversary on operating income
(30.3)
5.7
(24.6)
Net operating income
$ 108.5
$ (20.2)
$ 88.3
Net operating assets per adulterated share
$ 0.87
$ (0.16)
$ 0.71
(a)
Adjustments arising from our absolute anniversary actuarial analysis of assumptions.
Three months ended
September 30, 2021
Actualresults
Significantitems
Excludingsignificant items
Insurance artefact margin
Annuity margin
$ 52.5
$ —
$ 52.5
Health margin
117.9
—
117.9
Life margin
53.2
—
53.2
Total allowance artefact margin
223.6
—
223.6
Allocated expenses
(140.5)
—
(140.5)
Income from allowance products
83.1
—
83.1
Fee income
2.6
—
2.6
Investment assets not allocated to artefact lines
50.9
—
50.9
Expenses not allocated to artefact lines
(17.3)
3.0
(a)
(14.3)
Operating balance afore taxes
119.3
3.0
122.3
Income tax (expense) anniversary on operating income
(26.5)
(0.7)
(27.2)
Net operating income
$ 92.8
$ 2.3
$ 95.1
Net operating assets per adulterated share
$ 0.72
$ 0.02
$ 0.74
(a)
Comprised of $3.0 actor from acknowledged and authoritative matters.
Three months ended
June 30, 2021
Actualresults
Significantitems
Excludingsignificant items
Insurance artefact margin
Annuity margin
$ 66.0
$ —
$ 66.0
Health margin
120.9
—
120.9
Life margin
39.7
—
39.7
Total allowance artefact margin
226.6
—
226.6
Allocated expenses
(141.6)
—
(141.6)
Income from allowance products
85.0
—
85.0
Fee income
6.6
—
6.6
Investment assets not allocated to artefact lines
47.8
—
47.8
Expenses not allocated to artefact lines
(23.8)
4.5
(a)
(19.3)
Operating balance afore taxes
115.6
4.5
120.1
Income tax (expense) anniversary on operating income
(26.5)
(1.0)
(27.5)
Net operating income
$ 89.1
$ 3.5
$ 92.6
Net operating assets per adulterated share
$ 0.66
$ 0.03
$ 0.69
(a)
Comprised of $4.5 actor from acknowledged and authoritative matters.
Three months ended
March 31, 2021
Actualresults
Significantitems
Excludingsignificant items
Insurance artefact margin
Annuity margin
$ 57.9
$ —
$ 57.9
Health margin
124.7
—
124.7
Life margin
27.1
—
27.1
Total allowance artefact margin
209.7
—
209.7
Allocated expenses
(141.1)
—
(141.1)
Income from allowance products
68.6
—
68.6
Fee income
7.3
—
7.3
Investment assets not allocated to artefact lines
43.0
—
43.0
Expenses not allocated to artefact lines
(22.0)
7.8
(a)
(14.2)
Operating balance afore taxes
96.9
7.8
104.7
Income tax (expense) anniversary on operating income
(21.7)
(1.7)
(23.4)
Net operating income
$ 75.2
$ 6.1
$ 81.3
Net operating assets per adulterated share
$ 0.55
$ 0.04
$ 0.59
(a)
Comprised of: (i) $5.3 actor from acknowledged and authoritative matters; and (ii) $2.5 actor of transaction costs accompanying to the ahead appear accretion of DirectPath, LLC. The acknowledged and authoritative affairs primarily abide of an access to our accountability for claims and absorption pursuant to the Global Resolution Agreement, as we accept now candy and absolute best of the claims provided by the third affair accountant acceptance us to added accurately appraisal the ultimate liability.
Three months ended
December 31, 2020
Actualresults
Significantitems
Excludingsignificant items
Insurance artefact margin
Annuity margin
$ 68.1
$ (16.1)
(a)
$ 52.0
Health margin
125.2
—
125.2
Life margin
37.3
4.3
(a)
41.6
Total allowance artefact margin
230.6
(11.8)
218.8
Allocated expenses
(162.7)
—
(162.7)
Income from allowance products
67.9
(11.8)
56.1
Fee income
2.9
—
2.9
Investment assets not allocated to artefact lines
57.8
—
57.8
Expenses not allocated to artefact lines
(17.8)
3.7
(b)
(14.1)
Operating balance afore taxes
110.8
(8.1)
102.7
Income tax (expense) anniversary on operating income
(24.8)
1.7
(23.1)
Net operating income
$ 86.0
$ (6.4)
$ 79.6
Net operating assets per adulterated share
$ 0.61
$ (0.04)
$ 0.57
(a)
Adjustments arising from our absolute anniversary actuarial analysis of assumptions.
(b)
Unfavorable appulse accompanying to asset impairments.
Three months ended
June 30, 2020
Actualresults
Significantitems
Excludingsignificant items
Insurance artefact margin
Annuity margin
$ 123.8
$ 40.0
(a)
$ 72.3
(91.5)
(a)
Health margin
95.5
—
95.5
Life margin
36.1
5.6
(a)
41.7
Total allowance artefact margin
255.4
(45.9)
209.5
Allocated expenses
(128.1)
—
(128.1)
Income from allowance products
127.3
(45.9)
81.4
Fee income
5.2
—
5.2
Investment assets not allocated to artefact lines
8.2
—
8.2
Expenses not allocated to artefact lines
(38.5)
23.5
(b)
(15.0)
Operating balance afore taxes
102.2
(22.4)
79.8
Income tax (expense) anniversary on operating income
(22.8)
4.7
(18.1)
Net operating income
$ 79.4
$ (17.7)
$ 61.7
Net operating assets per adulterated share
$ 0.55
$ (0.12)
$ 0.43
(a)
Given our apprehension that absorption ante will abide low for the long-term, we performed an actuarial unlocking exercise in the additional division of 2020 to reflect our acceptance that boilerplate new money ante will abide collapsed at 4 percent forever. This change and the accompanying impacts to persistency assumptions had a $45.6 actor abortive appulse on pre-tax earnings. As allotment of the actuarial unlocking exercise, we additionally afflicted our assumptions accompanying to the approaching advantage costs we acquire in accouterment allowances on anchored base annuities which had a favorable appulse on pre-tax balance of $91.5 million. The appulse of these changes in assumptions is abbreviated beneath (dollars in millions):
Line of business
Fixed indexannuities
Fixed interestannuities
Interest-sensitive life
Total
Favorable (unfavorable)
Impacts of an boilerplate new money amount acceptance of 4 percent
Insurance action benefits
$ (5.0)
$ —
$ (7.4)
$ (12.4)
Amortization
(25.6)
(9.4)
1.8
(33.2)
Subtotal
(30.6)
(9.4)
(5.6)
(45.6)
Impacts of changes in approaching advantage costs
Insurance action benefits
104.8
—
—
104.8
Amortization
(13.3)
—
—
(13.3)
Subtotal
91.5
—
—
91.5
Impact on pre-tax income
$ 60.9
$ (9.4)
$ (5.6)
$ 45.9
This actuarial unlocking exercise did not alter our absolute anniversary analysis of all assumptions for our allowance products, which we completed in the fourth division of 2020.
(b)
We added our accountability for claims and absorption pursuant to the ahead appear Global Resolution Acceding entered into in November 2018. Pursuant to this agreement, a third-party accountant is acting on account of 42 states and the District of Columbia for the purpose of anecdotic asleep insureds and arrangement holders area allowances are payable pursuant to bearding acreage laws. The third-party accountant has provided admonition that we accept candy and absolute acceptance us to added accurately appraisal the ultimate accountability pursuant to this agreement.
Appearance aboriginal content:https://www.prnewswire.com/news-releases/cno-financial-group-reports-first-quarter-2022-results-301537660.html
SOURCE CNO Banking Group
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