A Letter To Shareholders

To my fellow shareholders:

2024 was a strong year for CNO.  Our operating performance was among our best in several years.  We delivered earnings growth and improved return on equity (ROE).  Our stock price reached an all-time record high.

Two other notable achievements stand out: how our team delivered on our promises to customers and executed on our strategic priorities.  Each enhances and enables our capabilities to deliver sustained profitable growth and long-term shareholder value.  I touch on both in this letter.

I begin by recognizing and thanking our 3,500 associates, 4,800 exclusive agents and more than 5,000 independent partners.  In our industry, we do not operate factories or manufacture durable goods.  It is our associates and agents who deliver on the promises of our products and services.  They meet with clients and employers, pay claims, manage our products and investments, and more.

At CNO, the core of our business is helping people.  The connection to our mission and purpose drives results for all our stakeholders.  Our associates reported being highly engaged and feeling inspired by our mission and purpose to help secure the future of middle-income America.  Internal survey results on both items exceed financial services company benchmarks.  This commitment also supports better customer outcomes.  Bankers Life customers gave us 4.9 stars out of 5 in 2024, with Optavise clients reporting 90% member satisfaction.

Our dedicated people and clear purpose drive our success and the difference we make for our customers.  Highlights from our performance in 2024 include:

• Paid $2.1 billion in claims to our policyholders and processed 607,000 new applications.
• Grew operating earnings per diluted share (EPS)¹ by 28% from 2023 to $3.97 per share.
• Generated 11.9% operating return on equity (ROE).¹
• Reached an all-time high share price, outperforming the S&P 500.
• Achieved record sales in both our Consumer and Worksite Divisions.
• Returned $349 million to shareholders.
• Increased our quarterly dividend for the 12th consecutive year.
• Named one of America’s Best Insurance Companies by Forbes.
• Named one of America’s Most Responsible Companies by Newsweek.
• Recognized as one of the Healthiest 100 Workplaces in America^® for the 11th year.
• Celebrated the opening of our new corporate office in Carmel, Indiana.

I extend our appreciation to the CNO Board of Directors and Board Chair Dan Maurer for their continued stewardship and steadfast commitment.  We were pleased to welcome Ms. Jess Turner to the Board in October 2024.  Jess is Executive Vice President, Global Head of Open Banking and API at Mastercard (NYSE: MA).  She has significant experience in fintech and financial services, and we look forward to continuing to work with her in 2025 and beyond.

In January 2025, we also welcomed Mr. Joel Koehneman as Chief Accounting Officer, succeeding Ms. Micki Wildin.  Joel spent 16 years in the audit practice of PricewaterhouseCoopers (PwC), primarily focused on life insurance clients, and he brings considerable technical skill and product knowledge to CNO.  

Strong Operating Performance

In 2024, CNO demonstrated our ability to grow the franchise while also growing earnings and improving profitability. We entered 2024 with considerable momentum—and we capitalized on it.  Our team executed well across the board. The result: meaningful earnings growth, ROE improvement and one of CNO’s best operating performances of the past several years.

Our performance reflected ongoing strength in our underwriting margins and net investment income.  For the second year, new money rates exceeded 6% in all four quarters.  Effective expense discipline balanced resources between growth initiatives, technology investments and operational efficiency.  Our Bermuda reinsurance structure continued to enhance our financial health and durable capital position.  Book value per diluted share^1,2 grew to more than $37.

Our stock price reached a record high in November 2024 and outperformed the S&P 500 for the full year. I remain pleased that our stock performance was in the top quartile of our peer group in 2024.  We aim to build on this trend by continuing to deliver sales growth and ROE improvement.

Business Highlights

In our Consumer Division, 2024 marked the most productive year on record for the Bankers Life field force.  The fourth quarter results represented nine consecutive quarters of sales growth and eight quarters of growth in producing agent count.  Nearly all product categories were up for the year, including strong results in Field agent-sold Life insurance (up 10%), Health insurance (up 18%) and Long-Term Care insurance (up 35%).  Medicare policies sold grew 5%.  Assets in our brokerage and advisory services and annuity collected premiums both reached record highs, as clients increasingly seek out professional guidance to help build and protect their retirement incomes.

CNO is one of the only companies in the industry blending direct-to-consumer (D2C) with exclusive agents to enhance customer experience and create sustainable lead-sharing capabilities.  Customers can engage with us online, over the phone, virtually, or in-person with an agent who delivers the “last mile” of sales and service.  Agents provide local expertise and build lasting relationships with our customers.

The Consumer Division’s integrated distribution model is a competitive advantage for how we serve the middle-income market.  Our well-established, nationwide agent force operates at a scale that would be nearly impossible to build anew today.  Millions of prospective customers also engage with our leading D2C life insurance business each year.  Our model remains effective and sustainable.  We expect our differentiated offerings to continue to generate sustained growth in 2025 and beyond.

Within the Worksite Division, we posted record full-year insurance sales (up 16%) and strong agent recruiting.  Fourth quarter 2024 marked our 11th consecutive quarter of insurance sales growth and eighth consecutive quarter of sustained agent count growth.

Our solid performance illustrates the value that employers recognize in our integrated insurance and benefits solutions.  Through our Optavise brand, we provide employers and employees with a single source for accessing voluntary benefits insurance products and fee-based services, such as expert guidance, advocacy services and benefits administration technology.  We serve a wide range of clients and industries with our diversified distribution through exclusive agents, brokers and independent partners.  New products and continued investment in our geographic expansion continue to generate meaningful results. 

Despite the strong performance in insurance sales, our Worksite fee-based services business has yet to achieve full potential.  Green shoots in fee revenue and sales results are early indicators of future performance.  We remain bullish on our ability to execute our strategic plan for Worksite.

Investments, Capital and Shareholder Return

CNO’s high-quality investment portfolio performed well, benefiting from higher interest rates and maintaining solid credit performance.  Our approach to portfolio management remains opportunistic yet disciplined, led by our tenured and highly experienced team.

Our solid balance sheet, strong cash flows and disciplined capital management underscore our financial strength. We ended 2024 with capital and liquidity results well above target levels.  We generated $284 million of free cash flow.

CNO remains committed to responsibly deploying our excess capital, which resulted in a significant amount of capital returned to shareholders.  In 2024, we returned $349 million to shareholders, a 50% increase from 2023. In the past 10 years, we returned $3.0 billion to shareholders in the form of securities repurchases of $2.4 billion and dividends of $0.6 billion.  During the same time period, we reduced our share count by 50%.

In May of 2024, we raised our quarterly dividend to $0.16 per share, our 12th consecutive annual increase.  

Track Record of Execution

CNO’s strong position today (and we expect in future years) is the result of our strategic growth roadmap coupled with steady execution throughout multiple quarters.  Consider the flywheel concept developed by Jim Collins.  Individual wins and sustained effort across the value chain create momentum.  Compounded over time, these seemingly small wins generate meaningful growth.

Before 2019, our “fix and focus” strategy was aimed at fortifying our balance sheet.  It culminated in our successful long-term care reinsurance transaction in 2018 and subsequent upgrades to investment grade ratings.  In 2019, we turned our attention to restarting our sales engine.  We leveraged our distribution and product strengths while motivating our team to rethink our business approach with a growth mindset.  This included faster decision-making, taking more smart, calculated risks, and ramping up pilots and test programs.  Embracing this mindset within our culture fueled our sales momentum.    

Alongside these milestone steps, critical strategic choices that were made in prior periods are enabling—and in some cases accelerating—our growth today.  Seeds planted in past years are presently bearing fruit.

Several early choices have seamlessly become a part of how we manage our business and sustain momentum.  We prioritized face-to-face agent distribution, optimized our Medicare product portfolio and built new, shorter-duration long-term care insurance policies.  We also moved to an up-in-quality investment portfolio and established CNO Bermuda Re with favorable timing for market conditions.

I offer a deeper perspective on two strategic choices as examples of meaningful contributions to our 2024 results from prior decisions. 

First, in 2016, we began operating our broker-dealer and registered investment advisor, which allowed us to offer holistic retirement solutions to the middle-income market and provide a more attractive career path for our producers.  The results have been significant.  Client assets in brokerage and advisory reached a record $4.1 billion in 2024, up 28%.  These clients tend to have higher persistency than our insurance-only customers.  Agents also stay with us longer when offered a long-term career path to become financial advisors.

Second, we completed a strategic transformation of our business units in 2020 to realign our operating model with changing consumer behaviors.  Our Consumer and Worksite Divisions were the result.  This transformation provided the foundation for our growth momentum.  The strategy to combine our exclusive agent and D2C Consumer businesses enabled us to share resources, expertise, leads and sales between channels.  Unifying our Worksite offerings strengthened our capabilities to serve employers with a holistic (and unique) combination of voluntary insurance products, benefits administration technology and services.  Customers and employer groups benefit as well.  Our model supports enhanced sales, service and customer experience. 

These building blocks, coupled with normal course business initiatives to drive sustainable growth, contribute to the strong financial foundation CNO enjoys today.  There are countless elements to “our flywheel.”  Each step forward is a mile marker on the path and not our final destination.  As our track record has demonstrated, we fully intend to keep leveling up as we advance CNO’s growth story.

Why Invest in CNO

We operate in a market with sustained demographic tailwinds.  The middle-income market is growing yet underserved.  Beginning in 2024, Americans are turning age 65 (the traditional first year of Medicare eligibility) at peak levels—about 11,000 per day through 2027.³

Most insurers in our space focus on affluent or mass affluent customers and retirees.  It has long been CNO’s position that middle-income customers need and deserve access to the same professional guidance and critical insurance and retirement products as do more affluent customers.  With our diverse distribution and broad product portfolio, our capabilities to reach and build lasting relationships with middle-income customers are unparalleled. 

During my 30-plus years as a business leader, I have learned that in the real world growth rarely comes in a straight line.  Various factors (both inside and outside of our control) influence quarterly performance.  Market volatility is a common example in our industry.  We believe CNO is an attractive investment because of our business fundamentals and numerous macroeconomic and demographic tailwinds.  This is why I am bullish on our growth opportunity over the next three to five years.

By leveraging our diverse business model—across markets, distribution channels and products—we offer a differentiated opportunity for long-term shareholder value.  As such, our diversification establishes natural hedges, both lowering our risk profile and adding balance to our performance. 

Our model includes the unique combination of exclusive agent, D2C and independent partner distribution.  How we integrate our channels to serve this market (at home and in the workplace) differentiates CNO from our insurance peers.  We offer middle-income consumers among the broadest product suites in the industry, including insurance, securities and services.  At the same time, our products are high-quality, straightforward and well-priced.  The combination of both manufactured and distributed products lends balance to our portfolio.

Customers continue to look for technology to supplement—not replace—human interaction.  We remain committed to investments in AI capabilities and technology-enabled tools, such as our myHealthPolicy.com online Medicare marketplace and instant decision accelerated underwriting.  In February 2025, we also announced an initiative to invest $170 million over three years to modernize certain elements of our technology.  This investment aims to upgrade systems, strengthen our technology foundation and enable long-term business growth.

Our success is ultimately rooted in the strength of our talented, dedicated team.  It is our people who set us apart in our business and our communities.  You can learn more about our corporate social responsibility commitments on our website.

What to Expect in 2025

We expect 2025 to continue to benefit from favorable interest rate and demographic environments.  Geopolitical events may elevate the risk of market volatility.  It is too early to fully assess the implications of the new administration’s policies on markets and the U.S. economy.  Based on our track record, I am confident we will navigate the year ahead from a position of strength.

As CNO enters 2025, we expect to continue to drive both sales and earnings growth while delivering operating ROE improvement over the next three years and beyond.  Our financial position is robust, strengthened by our disciplined expense and capital management.  Your company remains well positioned to deliver shareholder value. 

Please continue to take care of yourself and one another in 2025.  Thank you for your continued support of, and interest in, CNO Financial Group.

Regards,


Gary C. Bhojwani
Chief Executive Officer
CNO Financial Group, Inc.

March 21, 2025

This letter contains forward-looking statements. These statements are subject to significant risks and uncertainties, including those described in our Annual Report on Form 10-K that accompanies this letter.

¹ A non-GAAP measure. See Annex A—“Information Related to Certain Non-GAAP Financial Measures” of our Proxy Statement filed on March 26, 2025, with the Securities and Exchange Commission for a description of these measures and a reconciliation to the corresponding GAAP measures.
² Excluding accumulated other comprehensive income (loss).
³ CBS News, April 18, 2024. “Baby boomers are hitting ‘peak 65.’ Two-thirds don’t have nearly enough saved for retirement.”