CARMEL, Ind., Feb. 10, 2015 /PRNewswire/ -- CNO Financial
Group, Inc. (NYSE: CNO) today announced fourth quarter of 2014
operating earnings (1) of $59.3
million, or 29 cents per
diluted share, compared to $66.2
million, or 29 cents per
diluted share, in the fourth quarter of 2013. For the full
year 2014, CNO reported operating earnings (1) of $259.5 million, or $1.19 per diluted share, compared to $248.4 million, or $1.07 per diluted share in 2013. Net income and
operating earnings in the fourth quarter of 2014 reflect an
unfavorable $9.8 million
(5 cents per diluted share) after-tax
mark-to-market change in the agent deferred compensation plan
liability which was impacted by the use of a new mortality table
and the low interest rate environment. We have elected to
recognize the mark-to-market change in the estimated value of this
liability through earnings as assumptions change.
"We continued to profitably grow the enterprise in the fourth
quarter, along with advancing Bankers Life agent recruiting," said
Ed Bonach, CEO of CNO. "For
the year, we made important progress on several fronts, in
particular further reducing risk with the sale of CLIC, returning
capital to shareholders, investing in our franchise, and growing
our core businesses with increases in sales, collected premiums,
annuity account values and operating earnings."
Strategic Technology Partnership
CNO has entered into a comprehensive agreement with Cognizant
forming a strategic partnership for technology delivery that is
expected to accelerate our core IT process improvements and enable
more rapid innovation. Under the agreement, Cognizant will,
after the transition period, assume CNO's application development,
maintenance, and testing functions as well as select IT
infrastructure operations. Cognizant will also take over all
CNO operations located in Hyderabad,
India. The partnership will result in the movement of
approximately 640 IT positions from CNO to Cognizant, roughly 240
of which are U.S.-based. The agreement is expected to deliver
run-rate expense savings of approximately $10 million annually and to result in a modest
charge to earnings of approximately $6
million over the first two quarters of 2015 related to
certain one-time transition costs.
Commenting on the strategic partnership, CEO Ed Bonach said, "We are pleased to launch an
agreement with Cognizant, a leading provider of information
technology and related services to the insurance industry.
This partnership is critical to advancing our technology platforms,
enhancing our agent and customer experience, and positioning us
through innovation and efficiency to better compete in the
underserved middle-market."
Fourth Quarter 2014 Highlights
- Sales, as defined by total new annualized premium ("NAP") (2):
$114.8 million, up 1% from 4Q13
- Collected premium from our continuing operating segments (3):
$884.4 million up 3% from 4Q13
- Net income per diluted share: 41
cents in 4Q14 compared to 47
cents in 4Q13
- Net operating income (1) per diluted share: 29 cents in both 4Q14 and 4Q13 (including
(5) cents in 4Q14 for the
mark-to-market change in the agent deferred compensation plan
liability)
- Completed comprehensive annual review of actuarial assumptions,
resulting in a net $4 million
unfavorable pre-tax impact
- Unrestricted cash and investments held by our holding company
were $345 million at December 31, 2014
- Common stock repurchases, dividends and debt payments were
$111.5 million in 4Q14
Full Year 2014 Highlights
- Sales, as defined by total NAP (2): $425.4 million, up 2% from 2013
- Collected premium from our continuing operating segments (3):
$3,358.9 million up 2% from 2013
- Net income per diluted share: 24
cents in 2014 (including $(1.24) from the net loss on the sale of Conseco
Life Insurance Company ("CLIC") and gain on reinsurance
transactions) compared to $2.06 in
2013 (including $1.29 from the
release of the valuation allowance for deferred taxes and other tax
items)
- Net operating income (1) per diluted share: $1.19 in 2014 compared to $1.07 in 2013
- Consolidated risk-based capital ratio was approximately 434% at
December 31, 2014 compared to 410% at
December 31, 2013
- Statutory operating earnings in 2014 were $393 million and net insurance company dividends
to the holding company were $174
million
- Capital returned to shareholders in 2014 totaled $427 million, including securities repurchases of
$376 million and common stock
dividends of $51 million
Quarterly Segment Operating Results
|
Three months
ended
|
|
December
31,
|
|
2014
|
|
2013
|
|
(Dollars in
millions,
except per share data)
|
EBIT (5):
|
|
|
|
|
|
Bankers
Life
|
$
|
103.5
|
|
|
$
|
83.0
|
|
Washington
National
|
20.2
|
|
|
37.8
|
|
Colonial
Penn
|
2.8
|
|
|
(4.1)
|
|
Other CNO
Business:
|
|
|
|
|
|
Loss from
the long-term care business reinsured in 4Q13
|
—
|
|
|
(2.1)
|
|
Overhead
expense of CLIC expected to continue after the sale
|
—
|
|
|
(5.3)
|
|
EBIT from business
segments continuing after the CLIC sale
|
126.5
|
|
|
109.3
|
|
Corporate Operations,
excluding corporate interest expense
|
(23.8)
|
|
|
3.8
|
|
EBIT from
operations continuing after the CLIC sale
|
102.7
|
|
|
113.1
|
|
Corporate interest
expense
|
(10.8)
|
|
|
(11.4)
|
|
Operating earnings
before taxes
|
91.9
|
|
|
101.7
|
|
Tax expense on
operating income
|
32.6
|
|
|
35.5
|
|
Net operating income
(1)
|
59.3
|
|
|
66.2
|
|
Earnings of CLIC
prior to being sold (net of taxes)
|
—
|
|
|
9.7
|
|
Adjustment to loss on
sale of CLIC and gain (loss) on reinsurance transactions
(including impact of taxes)
|
2.9
|
|
|
(63.3)
|
|
Net realized
investment gains (losses) (net of related amortization and
taxes)
|
(2.3)
|
|
|
9.1
|
|
Fair value changes in
embedded derivative liabilities (net of related amortization
and taxes)
|
(11.4)
|
|
|
7.4
|
|
Valuation allowance
for deferred tax assets and other tax items
|
34.1
|
|
|
79.3
|
|
Other
|
1.3
|
|
|
(2.4)
|
|
Net income
|
$
|
83.9
|
|
|
$
|
106.0
|
|
|
|
|
|
|
|
Per diluted
share:
|
|
|
|
|
|
Net operating
income
|
$
|
.29
|
|
|
$
|
.29
|
|
Earnings of CLIC
prior to being sold (net of taxes)
|
—
|
|
|
.04
|
|
Adjustment to loss on
sale of CLIC and gain (loss) on reinsurance transactions (including
impact of taxes)
|
.01
|
|
|
(.28)
|
|
Net realized
investment gains (losses) (net of related amortization and
taxes)
|
(.01)
|
|
|
.04
|
|
Fair value changes in
embedded derivative liabilities (net of related amortization and
taxes)
|
(.05)
|
|
|
.04
|
|
Valuation allowance
for deferred tax assets and other tax items
|
.17
|
|
|
.35
|
|
Other
|
—
|
|
|
(.01)
|
|
Net income
|
$
|
.41
|
|
|
$
|
.47
|
|
The following table summarizes the financial impact of
significant items on our 4Q14 net operating income (dollars in
millions, except per share amounts):
|
Three months
ended
|
|
December 31,
2014*
|
|
Actual
results
|
|
Significant
items
|
|
Excluding
significant
items
|
Net Operating Income
(1):
|
|
|
|
|
|
|
|
|
Bankers
Life
|
$
|
103.5
|
|
|
$
|
(9.0)
|
|
|
$
|
94.5
|
|
Washington
National
|
20.2
|
|
|
10.0
|
|
|
30.2
|
|
Colonial
Penn
|
2.8
|
|
|
—
|
|
|
2.8
|
|
EBIT from business
segments continuing after the CLIC sale
|
126.5
|
|
|
1.0
|
|
|
127.5
|
|
Corporate Operations,
excluding corporate interest expense
|
(23.8)
|
|
|
15.0
|
|
|
(8.8)
|
|
EBIT from operations
continuing after the CLIC sale (5)
|
102.7
|
|
|
16.0
|
|
|
118.7
|
|
Corporate interest
expense
|
(10.8)
|
|
|
—
|
|
|
(10.8)
|
|
Operating earnings
before taxes
|
91.9
|
|
|
16.0
|
|
|
107.9
|
|
Tax expense on
operating income
|
32.6
|
|
|
5.6
|
|
|
38.2
|
|
Net operating
income
|
$
|
59.3
|
|
|
$
|
10.4
|
|
|
$
|
69.7
|
|
|
|
|
|
|
|
|
|
|
Net operating income
per diluted share
|
$
|
.29
|
|
|
$
|
.05
|
|
|
$
|
.34
|
|
The significant items in 4Q14 included: (i) adjustments arising
from our comprehensive annual actuarial review of assumptions
including $6 million of favorable
impacts in the Bankers Life segment and $10
million of unfavorable impacts in the Washington National
segment; (ii) the receipt of a $3
million settlement in the Bankers Life segment related to
the early termination in 2013 of a PDP quota-share agreement; and
(iii) an increase in expenses of $15
million in the Corporate Operations segment for the
mark-to-market change in the agent deferred compensation plan
liability.
* See page 12 for the table of Net Operating Income
Excluding Significant Items for the three months ended December 31, 2013.
Segment Results
Bankers Life markets and distributes a variety of
insurance products to middle-income Americans at or near retirement
through a dedicated field force of career agents. NAP in 4Q14
was $73.6 million, flat with
4Q13. NAP for the year ended December
31, 2014, was $261.6 million,
up 1 percent from 2013. Collected premiums were up 3 percent
in 4Q14 compared to 4Q13, driven by sales over the last 12 months
and favorable persistency. Annuity account values, on which
spread income is earned, increased 2 percent to $7.4 billion in 4Q14 compared to 4Q13.
Sales results for the quarter and year were impacted by a 3 percent
decrease in average producing agent count in 2014. However,
the average producing agent count increased in 4Q14 compared to
3Q14, reflecting improved recruiting in 4Q14. We anticipate
this segment's sales will grow 3 to 5 percent in 2015.
Pre-tax operating earnings in 4Q14 compared to 4Q13 were up
$20.5 million, or 25 percent.
Earnings in 4Q14 reflect the significant items described below and
favorable margins from our annuity block reflecting growth from
sales, higher account values and lower surrenders.
Pre-tax operating earnings in 4Q14 of $103.5 million included significant items of
$9 million, comprised of: (i)
$6 million of positive impacts from
our comprehensive annual actuarial review including impacts from
model enhancements, net of changes in assumptions related to
mortality and long-term interest rates; and (ii) the receipt of a
$3 million settlement related to the
early termination in 2013 of a PDP quota-share agreement.
Pre-tax operating earnings in 4Q13 of $83.0 million included significant items of
$3.2 million, including $5.8 million of favorable reserve developments in
the Medicare supplement block, net of $2.6
million of net unfavorable adjustments primarily related to
reserves established for remediation efforts.
Pre-tax operating earnings in 4Q14 included approximately
$2.5 million of additional income
from the recapture (completed in 3Q14) of a block of life insurance
business previously ceded to Wilton Reassurance Company
("Wilton Re"). This increase
to pre-tax operating earnings was partially offset by approximately
$2 million of overhead expenses that
were previously allocated to the Other CNO Business segment in
quarters prior to 2014 and have continued after the completion of
the sale of CLIC.
Washington National markets and distributes supplemental
health and life insurance to middle-income consumers through a
wholly-owned subsidiary and independent insurance agencies.
NAP in 4Q14 was $26.3 million, flat
with 4Q13. NAP for the year ended December 31, 2014, was $99.2 million, up 6 percent from 2013.
Collected premiums from the segment's supplemental health block
were up 5 percent in 4Q14 compared to 4Q13, driven by strong sales
and persistency. We anticipate this segment's sales will grow
5 to 7 percent in 2015.
Pre-tax operating earnings in 4Q14 compared to 4Q13 were down
$17.6 million, primarily resulting
from adjustments from our comprehensive annual actuarial review
described below and the favorable interest-adjusted benefit ratio
on the supplemental health insurance block in 4Q13.
Pre-tax operating earnings in 4Q14 of $20.2 million were reduced by $10 million primarily related to the impact of
loss recognition on a closed block of payout annuities resulting
from changes in assumptions related to long-term interest rates and
mortality experience.
Pre-tax operating earnings in 4Q14 also included approximately
$2 million of overhead expenses that
were previously allocated to the Other CNO Business segment in
quarters prior to 2014 and have continued after the completion of
the sale of CLIC.
Colonial Penn markets primarily graded benefit and
simplified issue life insurance directly to customers through
television advertising, direct mail, the internet and
telemarketing. NAP in 4Q14 was $14.9
million, up 6 percent from 4Q13, reflecting increased sales
of both graded benefit and simplified issue life insurance
products, including an increase in sales through the
internet. NAP for the year ended December 31, 2014, was $64.6 million, up 4 percent from 2013.
Collected premiums were up 5 percent in 4Q14 compared to 4Q13,
driven by increased sales and steady persistency. We
anticipate this segment's sales will grow 6 to 8 percent in
2015.
Pre-tax operating earnings in 4Q14 of $2.8 million were up $6.9
million compared to 4Q13, reflecting continued growth in the
in-force block, marketing cost effectiveness and a modest increase
in the deferral of acquisition costs due to a slight shift to
deferrable direct response advertising activities, partially offset
by favorable mortality experienced in 4Q13. In-force EBIT was
$11.3 million, down 7 percent from
4Q13, reflecting the favorable mortality experienced in 4Q13.
Full year 2014 in-force EBIT was $49.6
million, up 7 percent from 2013, primarily reflecting growth
in the block.
Recognizing the accounting standard related to deferred
acquisition costs, the amount of our investment in new business
during a particular period will have a significant impact on this
segment's results. We expect this segment to report slightly
positive earnings in 2015, but because of the seasonality of
advertising spend, we expect a loss in the $7 million range in 1Q15.
Corporate Operations includes our investment advisory
subsidiary and corporate expenses.
This segment's earnings included less favorable investment
returns in 4Q14 compared to the strong investment returns in
4Q13. Pre-tax operating earnings in 4Q14 also reflected an
increase in expenses of $15 million
for the mark-to-market change in the agent deferred compensation
plan liability which was impacted by the use of a new mortality
table and the low interest rate environment. We have elected
to recognize the mark-to-market change in the estimated value of
this liability through earnings as assumptions change.
Non-Operating Items Related to the Sale of CLIC
On July 1, 2014, we completed the
previously announced sale of CLIC to Wilton
Re. In 1Q14, we recognized an estimated loss on the
CLIC transaction of $298 million, net
of income taxes. In 3Q14 and 4Q14, we recognized a reduction
to the loss on the sale of CLIC of $6.0
million and $2.9 million,
respectively, to reflect the determination of the final sales price
and net proceeds.
The earnings related to the CLIC business prior to being sold
are also reflected as non-operating items. Such earnings, net
of taxes, were $9.7 million in
4Q13.
Other Non-Operating Items
Net realized investment losses in 4Q14 were $2.3 million (net of related amortization and
taxes) including total other-than-temporary impairment losses of
$12.6 million recorded in
earnings. Net realized investment gains in 4Q13 were
$9.1 million (net of related
amortization and taxes) including total other-than-temporary
impairment losses of $7.5 million
recorded in earnings.
During 4Q14 and 4Q13, we recognized an increase (decrease) in
earnings of ($11.4) million and
$7.4 million, respectively, resulting
from changes in the estimated fair value of embedded derivative
liabilities related to our fixed index annuities, net of related
amortization and income taxes. Such amount includes the
impacts of changes in market
interest rates used to determine the derivative's estimated fair
value.
In 4Q14, we reduced the valuation allowance for deferred tax
assets by $34.1 million primarily
related to higher actual non-life income, including the impacts of
tax audit adjustments.
In 4Q13, we reduced the valuation allowance for deferred tax
assets by $17.6 million primarily
resulting from the impact of our higher levels of income on
projected future taxable income used to determine recoverable net
operating loss and capital loss carryforwards.
In addition, tax items in 4Q13 reflected: (i) a $64.7 million net reduction in the deferred tax
valuation allowance resulting from the completion of certain
investment trading strategies resulting in the utilization of
capital loss carryforwards; (ii) an increase of $2.0 million to the deferred tax valuation
allowance due to the impact of the loss recognized on a reinsurance
transaction, net of projected increases to future taxable income;
and (iii) several other tax items resulting in a net unfavorable
impact of $1.0 million.
In 4Q13, two of our insurance subsidiaries with long-term care
business in the Other CNO Business segment entered into 100%
coinsurance agreements which ceded $550
million of closed block long-term care reserves to an
unaffiliated reinsurer. We recognized a loss on the
transaction of $63.3 million, net of
income taxes, in 4Q13.
Statutory (based on non-GAAP measures) and GAAP Capital
Information
Our consolidated statutory risk-based capital ratio was
approximately 434% at December 31,
2014, reflecting 4Q14 and full year 2014 consolidated
statutory operating earnings of $108
million and $393 million,
respectively, and the payment of net insurance company dividends to
the holding company of $174 million
during the year. In 4Q14, our insurance subsidiaries did not
pay dividends to the holding company which contributed to an
increase in Bankers Life's risk-based capital ratio to
approximately 411% at December 31,
2014.
During the fourth quarter of 2014, we repurchased $75.0 million of common stock under our
securities repurchase program. We repurchased 4.4 million
common shares at an average cost of $17.16 per share. Total securities
repurchased in 2014 totaled $376.5
million. CNO anticipates repurchasing common stock in
the range of $250 million to $325
million in 2015, absent compelling alternatives. As of
December 31, 2014, we had 203.3
million shares outstanding and had authority to repurchase up to an
additional $420.9 million of our
common stock. During 4Q14, we also paid common stock
dividends of $12.2 million.
Book value per diluted share, excluding accumulated other
comprehensive income (loss) (6), increased to $18.75 at December 31,
2014, compared to $18.62 at
December 31, 2013.
Our debt-to-total capital ratio, excluding accumulated other
comprehensive income (4) at December 31,
2014, was 17.1 percent, an increase of 20 basis points from
December 31, 2013, reflecting the
decrease to capital from the loss recognized on the sale of CLIC
and debt repayments of $63.1
million. Unrestricted cash and investments held by our
holding company were $345 million at
December 31, 2014, compared to
$309 million at December 31, 2013, reflecting the proceeds from
the sale of CLIC, partially offset by common stock and equivalent
repurchases and dividend and debt payments.
Earnings and Outlook Conference Call
The Company will host a conference call at 11:00 a.m. (EST) on Wednesday, February 11, 2015 to discuss fourth
quarter 2014 results and provide the outlook for 2015 sales, select
financial metrics and excess capital deployment plans. The
webcast can be accessed through the Investors section of the
company's website: http://ir.CNOinc.com. Participants should
go to the website at least 15 minutes before the event to register
and download any necessary audio software. During the call,
we will be referring to a presentation that will be available the
morning of the call at the Investors section of the company's
website.
About CNO Financial Group
CNO Financial Group, Inc. (NYSE: CNO) is a holding
company. Our insurance subsidiaries - principally Bankers
Life and Casualty Company, Colonial Penn Life Insurance Company and
Washington National Insurance Company - primarily serve
middle-income pre-retiree and retired Americans by helping them
protect against financial adversity and provide for a more secure
retirement. For more information, visit CNO online at
www.CNOinc.com.
- Tables Follow -
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Dollars in millions)
(unaudited)
|
|
|
December 31,
2014
|
|
December 31,
2013
|
ASSETS
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
Fixed maturities,
available for sale, at fair value (amortized cost: 2014 -
$18,408.1; 2013
- $21,891.8)
|
$
|
20,634.9
|
|
|
$
|
23,204.6
|
|
Equity securities at
fair value (cost: 2014 - $400.5; 2013 - $206.7)
|
419.0
|
|
|
223.0
|
|
Mortgage
loans
|
1,691.9
|
|
|
1,729.5
|
|
Policy
loans
|
106.9
|
|
|
277.0
|
|
Trading
securities
|
244.9
|
|
|
247.6
|
|
Investments held by
variable interest entities
|
1,367.1
|
|
|
1,046.7
|
|
Other invested
assets
|
443.6
|
|
|
423.3
|
|
Total
investments
|
24,908.3
|
|
|
27,151.7
|
|
Cash and cash
equivalents - unrestricted
|
611.6
|
|
|
699.0
|
|
Cash and cash
equivalents held by variable interest entities
|
68.3
|
|
|
104.3
|
|
Accrued investment
income
|
242.9
|
|
|
286.9
|
|
Present value of
future profits
|
489.4
|
|
|
679.3
|
|
Deferred acquisition
costs
|
770.6
|
|
|
968.1
|
|
Reinsurance
receivables
|
2,991.1
|
|
|
3,392.1
|
|
Income tax assets,
net
|
758.7
|
|
|
1,147.2
|
|
Assets held in
separate accounts
|
5.6
|
|
|
10.3
|
|
Other
assets
|
337.7
|
|
|
341.7
|
|
Total
assets
|
$
|
31,184.2
|
|
|
$
|
34,780.6
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Liabilities for
insurance products:
|
|
|
|
|
|
Policyholder account
balances
|
$
|
10,707.2
|
|
|
$
|
12,776.4
|
|
Future policy
benefits
|
10,835.4
|
|
|
11,222.5
|
|
Liability for policy
and contract claims
|
468.7
|
|
|
566.0
|
|
Unearned and advanced
premiums
|
291.8
|
|
|
300.6
|
|
Liabilities related to
separate accounts
|
5.6
|
|
|
10.3
|
|
Other
liabilities
|
587.6
|
|
|
590.6
|
|
Payable to
reinsurer
|
—
|
|
|
590.3
|
|
Investment
borrowings
|
1,519.2
|
|
|
1,900.0
|
|
Borrowings related to
variable interest entities
|
1,286.1
|
|
|
1,012.3
|
|
Notes payable –
direct corporate obligations
|
794.4
|
|
|
856.4
|
|
Total
liabilities
|
26,496.0
|
|
|
29,825.4
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Common stock ($0.01
par value, 8,000,000,000 shares authorized, shares issued and
outstanding: 2014 – 203,324,458; 2013 –
220,323,823)
|
2.0
|
|
|
2.2
|
|
Additional paid-in
capital
|
3,732.4
|
|
|
4,092.8
|
|
Accumulated other
comprehensive income
|
825.3
|
|
|
731.8
|
|
Retained
earnings
|
128.5
|
|
|
128.4
|
|
Total shareholders'
equity
|
4,688.2
|
|
|
4,955.2
|
|
Total liabilities and
shareholders' equity
|
$
|
31,184.2
|
|
|
$
|
34,780.6
|
|
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in millions,
except per share data)
(unaudited)
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Insurance policy
income
|
$
|
632.7
|
|
|
$
|
676.1
|
|
|
$
|
2,629.7
|
|
|
$
|
2,744.7
|
|
Net investment
income:
|
|
|
|
|
|
|
|
|
|
|
|
General account
assets
|
305.4
|
|
|
354.4
|
|
|
1,301.0
|
|
|
1,405.8
|
|
Policyholder and
reinsurer accounts and other special-
purpose portfolios
|
43.5
|
|
|
99.7
|
|
|
126.4
|
|
|
258.2
|
|
Realized investment
gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment
gains, excluding impairment losses
|
9.5
|
|
|
23.1
|
|
|
64.0
|
|
|
45.0
|
|
Other-than-temporary
impairment losses:
|
|
|
|
|
|
|
|
|
|
|
|
Total
other-than-temporary impairment losses
|
(12.6)
|
|
|
(8.1)
|
|
|
(27.3)
|
|
|
(11.6)
|
|
Portion of
other-than-temporary impairment losses
recognized in accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net impairment losses
recognized
|
(12.6)
|
|
|
(8.1)
|
|
|
(27.3)
|
|
|
(11.6)
|
|
Total realized gains
(losses)
|
(3.1)
|
|
|
15.0
|
|
|
36.7
|
|
|
33.4
|
|
Fee revenue and other
income
|
21.5
|
|
|
13.0
|
|
|
50.9
|
|
|
34.0
|
|
Total
revenues
|
1,000.0
|
|
|
1,158.2
|
|
|
4,144.7
|
|
|
4,476.1
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Insurance policy
benefits
|
639.3
|
|
|
710.2
|
|
|
2,586.2
|
|
|
2,839.7
|
|
Net loss on sale of
CLIC and (gain) loss on reinsurance
transactions
|
(2.9)
|
|
|
98.4
|
|
|
239.8
|
|
|
98.4
|
|
Interest
expense
|
22.0
|
|
|
25.3
|
|
|
92.8
|
|
|
105.3
|
|
Amortization
|
50.0
|
|
|
76.4
|
|
|
247.4
|
|
|
296.3
|
|
Loss on
extinguishment or modification of debt
|
—
|
|
|
—
|
|
|
.6
|
|
|
65.4
|
|
Other operating costs
and expenses
|
215.7
|
|
|
206.8
|
|
|
802.8
|
|
|
766.2
|
|
Total benefits and
expenses
|
924.1
|
|
|
1,117.1
|
|
|
3,969.6
|
|
|
4,171.3
|
|
Income before
income taxes
|
75.9
|
|
|
41.1
|
|
|
175.1
|
|
|
304.8
|
|
Income tax expense
(benefit):
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense on period
income
|
26.1
|
|
|
14.4
|
|
|
159.2
|
|
|
128.3
|
|
Valuation allowance
for deferred tax assets and other tax
items
|
(34.1)
|
|
|
(79.3)
|
|
|
(35.5)
|
|
|
(301.5)
|
|
Net income
|
$
|
83.9
|
|
|
$
|
106.0
|
|
|
$
|
51.4
|
|
|
$
|
478.0
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
204,298,000
|
|
|
221,056,000
|
|
|
212,917,000
|
|
|
221,628,000
|
|
Net income
|
$
|
.41
|
|
|
$
|
.48
|
|
|
$
|
.24
|
|
|
$
|
2.16
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
206,943,000
|
|
|
227,101,000
|
|
|
217,655,000
|
|
|
232,702,000
|
|
Net income
|
$
|
.41
|
|
|
$
|
.47
|
|
|
$
|
.24
|
|
|
$
|
2.06
|
|
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
EBIT FROM BUSINESS SEGMENTS
SUMMARIZED BY IN-FORCE AND NEW BUSINESS (7) (Dollars in
millions)
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
EBIT (5) from
In-force and New Business
|
|
|
|
|
|
|
|
|
|
|
|
Bankers Life
segment:
|
|
|
|
|
|
|
|
|
|
|
|
In-Force
Business
|
$
|
139.5
|
|
|
$
|
118.0
|
|
|
$
|
532.0
|
|
|
$
|
442.6
|
|
New
Business
|
(36.0)
|
|
|
(35.0)
|
|
|
(145.1)
|
|
|
(132.1)
|
|
Total
|
$
|
103.5
|
|
|
$
|
83.0
|
|
|
$
|
386.9
|
|
|
$
|
310.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington
National segment:
|
|
|
|
|
|
|
|
|
|
|
|
In-Force
Business
|
$
|
24.1
|
|
|
$
|
41.6
|
|
|
$
|
122.9
|
|
|
$
|
151.9
|
|
New
Business
|
(3.9)
|
|
|
(3.8)
|
|
|
(11.7)
|
|
|
(11.3)
|
|
Total
|
$
|
20.2
|
|
|
$
|
37.8
|
|
|
$
|
111.2
|
|
|
$
|
140.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Colonial Penn
segment:
|
|
|
|
|
|
|
|
|
|
|
|
In-Force
Business
|
$
|
11.3
|
|
|
$
|
12.1
|
|
|
$
|
49.6
|
|
|
$
|
46.2
|
|
New
Business
|
(8.5)
|
|
|
(16.2)
|
|
|
(48.8)
|
|
|
(58.7)
|
|
Total
|
$
|
2.8
|
|
|
$
|
(4.1)
|
|
|
$
|
.8
|
|
|
$
|
(12.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other CNO
Business:
|
|
|
|
|
|
|
|
|
|
|
|
In-Force
Business
|
$
|
—
|
|
|
$
|
(7.4)
|
|
|
$
|
—
|
|
|
$
|
(27.6)
|
|
New
Business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
$
|
—
|
|
|
$
|
(7.4)
|
|
|
$
|
—
|
|
|
$
|
(27.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Business
segments:
|
|
|
|
|
|
|
|
|
|
|
|
In-Force
Business
|
$
|
174.9
|
|
|
$
|
164.3
|
|
|
$
|
704.5
|
|
|
$
|
613.1
|
|
New
Business
|
(48.4)
|
|
|
(55.0)
|
|
|
(205.6)
|
|
|
(202.1)
|
|
Total EBIT from
business segments
continuing after the CLIC sale
|
$
|
126.5
|
|
|
$
|
109.3
|
|
|
$
|
498.9
|
|
|
$
|
411.0
|
|
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
SEGMENT OPERATING RESULTS (Dollars in millions, except per
share data)
|
|
|
|
Year ended
|
|
December
31,
|
|
2014
|
|
2013
|
|
|
EBIT (5):
|
|
|
|
|
|
Bankers
Life
|
$
|
386.9
|
|
|
$
|
310.5
|
|
Washington
National
|
111.2
|
|
|
140.6
|
|
Colonial
Penn
|
.8
|
|
|
(12.5)
|
|
Other CNO
Business:
|
|
|
|
|
|
Loss from the long-term
care business reinsured in 4Q13
|
—
|
|
|
(8.0)
|
|
Overhead expense of
CLIC expected to continue after the sale
|
—
|
|
|
(19.6)
|
|
EBIT from business
segments continuing after the CLIC sale
|
498.9
|
|
|
411.0
|
|
Corporate Operations,
excluding corporate interest expense
|
(54.4)
|
|
|
18.6
|
|
EBIT from operations
continuing after the CLIC sale
|
444.5
|
|
|
429.6
|
|
Corporate interest
expense
|
(43.9)
|
|
|
(51.3)
|
|
Operating earnings
before taxes
|
400.6
|
|
|
378.3
|
|
Tax expense on
operating income
|
141.1
|
|
|
129.9
|
|
Net operating income
(1)
|
259.5
|
|
|
248.4
|
|
Earnings of CLIC
prior to being sold (net of taxes)
|
15.2
|
|
|
25.5
|
|
Net loss on sale of
CLIC and gain (loss) on reinsurance transactions (including impact
of
taxes)
|
(269.7)
|
|
|
(63.3)
|
|
Net realized
investment gains (net of related amortization and taxes)
|
21.4
|
|
|
16.8
|
|
Fair value changes in
embedded derivative liabilities (net of related amortization and
taxes)
|
(23.4)
|
|
|
23.0
|
|
Loss on
extinguishment or modification of debt (net of taxes)
|
(.4)
|
|
|
(64.0)
|
|
Valuation allowance
for deferred tax assets and other tax items
|
54.9
|
|
|
301.5
|
|
Other
|
(6.1)
|
|
|
(9.9)
|
|
Net income
|
$
|
51.4
|
|
|
$
|
478.0
|
|
|
|
|
|
|
|
Per diluted
share:
|
|
|
|
|
|
Net operating
income
|
$
|
1.19
|
|
|
$
|
1.07
|
|
Earnings of CLIC
prior to being sold (net of taxes)
|
.07
|
|
|
.11
|
|
Net loss on sale of
CLIC and gain (loss) on reinsurance transactions (including impact
of
taxes)
|
(1.24)
|
|
|
(.27)
|
|
Net realized
investment gains (net of related amortization and taxes)
|
.10
|
|
|
.08
|
|
Fair value changes in
embedded derivative liabilities (net of related amortization and
taxes)
|
(.11)
|
|
|
.10
|
|
Loss on
extinguishment or modification of debt (net of taxes)
|
—
|
|
|
(.28)
|
|
Valuation allowance
for deferred tax assets and other tax items
|
.25
|
|
|
1.29
|
|
Other
|
(.02)
|
|
|
(.04)
|
|
Net income
|
$
|
.24
|
|
|
$
|
2.06
|
|
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
NET OPERATING INCOME EXCLUDING SIGNIFICANT ITEMS* (Dollars
in millions, except per share data)
|
|
|
|
Three months
ended
|
|
December 31,
2013*
|
|
Actual
results
|
|
Significant
items
|
|
Excluding
significant
items
|
Net Operating Income
(1):
|
|
|
|
|
|
|
|
|
Bankers
Life
|
$
|
83.0
|
|
|
$
|
(3.2)
|
|
|
$
|
79.8
|
|
Washington
National
|
37.8
|
|
|
—
|
|
|
37.8
|
|
Colonial
Penn
|
(4.1)
|
|
|
—
|
|
|
(4.1)
|
|
Other CNO
Business:
|
|
|
|
|
|
|
|
|
Loss from the
long-term care business reinsured in 4Q13
|
(2.1)
|
|
|
—
|
|
|
(2.1)
|
|
Overhead expense of
CLIC expected to continue after the sale
|
(5.3)
|
|
|
—
|
|
|
(5.3)
|
|
EBIT from business
segments continuing after the CLIC sale
|
109.3
|
|
|
(3.2)
|
|
|
106.1
|
|
Corporate Operations,
excluding corporate interest expense
|
3.8
|
|
|
—
|
|
|
3.8
|
|
EBIT from operations
continuing after the CLIC sale (5)
|
113.1
|
|
|
(3.2)
|
|
|
109.9
|
|
Corporate interest
expense
|
(11.4)
|
|
|
—
|
|
|
(11.4)
|
|
Operating earnings
before taxes
|
101.7
|
|
|
(3.2)
|
|
|
98.5
|
|
Tax expense on
operating income
|
35.5
|
|
|
(1.2)
|
|
|
34.3
|
|
Net operating
income
|
$
|
66.2
|
|
|
$
|
(2.0)
|
|
|
$
|
64.2
|
|
|
|
|
|
|
|
|
|
|
Net operating income
per diluted share
|
$
|
.29
|
|
|
$
|
(.01)
|
|
|
$
|
.28
|
|
* This table summarizes the financial impacts of
significant items (as described in the segment results section of
this press release) on our 4Q13 net operating income.
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
COLLECTED PREMIUMS
FROM CONTINUING OPERATING SEGMENTS (Dollars in
millions)
|
|
|
|
Three months
ended
|
|
December
31,
|
|
2014
|
|
2013
|
Bankers Life
segment:
|
|
|
|
|
|
Medicare
supplement
|
$
|
201.6
|
|
|
$
|
202.0
|
|
Long-term
care
|
126.7
|
|
|
134.3
|
|
Supplemental
health
|
4.6
|
|
|
3.3
|
|
Other
health
|
2.0
|
|
|
2.6
|
|
Life
|
115.5
|
|
|
93.5
|
|
Annuity
|
209.5
|
|
|
204.6
|
|
Total
|
659.9
|
|
|
640.3
|
|
Washington
National segment:
|
|
|
|
|
|
Supplemental health
and other health
|
133.9
|
|
|
127.3
|
|
Medicare
supplement
|
22.1
|
|
|
26.1
|
|
Life
|
6.7
|
|
|
7.8
|
|
Annuity
|
.5
|
|
|
.7
|
|
Total
|
163.2
|
|
|
161.9
|
|
Colonial Penn
segment:
|
|
|
|
|
|
Life
|
60.5
|
|
|
57.5
|
|
Supplemental
health
|
.8
|
|
|
1.0
|
|
Total
|
61.3
|
|
|
58.5
|
|
Total collected
premiums from continuing operating segments
|
$
|
884.4
|
|
|
$
|
860.7
|
|
NEW ANNUALIZED
PREMIUMS (2) (Dollars in millions)
|
|
|
|
Three months
ended
|
|
December
31,
|
|
2014
|
|
2013
|
Bankers Life
segment:
|
|
|
|
|
|
Medicare
supplement
|
$
|
28.6
|
|
|
$
|
31.5
|
|
Long-term
care
|
5.8
|
|
|
5.7
|
|
Supplemental
health
|
1.8
|
|
|
2.2
|
|
Life
|
24.9
|
|
|
22.4
|
|
Annuity
|
12.5
|
|
|
12.1
|
|
Total
|
73.6
|
|
|
73.9
|
|
Washington
National segment:
|
|
|
|
|
|
Supplemental
health
|
24.1
|
|
|
24.8
|
|
Life
|
2.2
|
|
|
1.4
|
|
Annuity
|
—
|
|
|
—
|
|
Total
|
26.3
|
|
|
26.2
|
|
Colonial Penn
segment:
|
|
|
|
|
|
Life
|
14.9
|
|
|
14.0
|
|
Total
|
14.9
|
|
|
14.0
|
|
Total new annualized
premiums
|
$
|
114.8
|
|
|
$
|
114.1
|
|
CNO FINANCIAL
GROUP, INC. AND SUBSIDIARIES
BENEFIT RATIOS ON MAJOR HEALTH LINES OF BUSINESS
|
|
|
|
Three months
ended
|
|
December
31,
|
|
2014
|
|
2013
|
Bankers Life
segment:
|
|
|
|
|
|
Medicare
Supplement:
|
|
|
|
|
|
Earned
premium
|
$193
million
|
|
$190
million
|
Benefit ratio
(8)
|
70.0
|
%
|
|
65.7
|
%
|
Long-Term
Care:
|
|
|
|
|
|
Earned
premium
|
$124
million
|
|
$131
million
|
Benefit ratio
(8)
|
131.8
|
%
|
|
130.0
|
%
|
Interest-adjusted
benefit ratio (a non-GAAP measure) (9)
|
77.8
|
%
|
|
80.0
|
%
|
Washington
National segment:
|
|
|
|
|
|
Medicare
Supplement:
|
|
|
|
|
|
Earned
premium
|
$21
million
|
|
$24
million
|
Benefit ratio
(8)
|
62.0
|
%
|
|
63.6
|
%
|
Supplemental health
(10):
|
|
|
|
|
|
Earned
premium
|
$132
million
|
|
$124
million
|
Benefit ratio
(8)
|
79.1
|
%
|
|
76.7
|
%
|
Interest-adjusted
benefit ratio (a non-GAAP measure) (9)
|
54.4
|
%
|
|
50.6
|
%
|
NOTES
|
(1)
|
Management believes
that an analysis of Net income applicable to common stock before:
(i) the net loss on the sale of CLIC and gain (loss) on reinsurance
transactions; (ii) the earnings of CLIC prior to being sold; (iii)
net realized investment gains or losses, net of related
amortization and taxes; (iv) fair value changes due to fluctuations
in the interest rates used to discount embedded derivative
liabilities related to our fixed index annuities, net of related
amortization and taxes; (v) loss on extinguishment or modification
of debt, net of taxes; (vi) changes in the valuation allowance for
deferred tax assets; and (vii) other non-operating items consisting
primarily of equity in earnings of certain non-strategic
investments and earnings attributable to variable interest
entities, net of taxes ("Net operating income," a non-GAAP
financial measure) is important to evaluate the financial
performance of the company, and is a key measure commonly used in
the life insurance industry. Management uses this measure to
evaluate performance because the items excluded from net operating
income can be affected by events that are unrelated to the
company's underlying fundamentals. Net realized investment
gains or losses include: (i) gains or losses on the sales of
investments; (ii) other-than-temporary impairments recognized
through net income; and (iii) changes in fair value of certain
fixed maturity investments with embedded derivatives. A
reconciliation of Net operating income to Net income applicable to
common stock is provided in the tables on pages 3 and 11.
Additional information concerning this non-GAAP measure is included
in our periodic filings with the Securities and Exchange Commission
that are available in the "Investors - SEC Filings" section of
CNO's website, www.CNOinc.com.
|
(2)
|
Measured by new
annualized premium, which includes 6% of annuity and 10% of single
premium whole life deposits and 100% of all other premiums.
Medicare Advantage sales are not comparable to other sales and are
therefore excluded in all periods.
|
(3)
|
Collected premiums
from our core operating segments include premiums collected in our
Bankers Life, Washington National and Colonial Penn segments.
Collected premiums from all sources (including CLIC operations
prior to the sale and the reinsured long-term care business
included in the former Other CNO Business segment) were $884.4
million in 4Q14, down 2 percent from 4Q13 and were $3,430.1 million
in 2014, down 1 percent from 2013.
|
(4)
|
The calculation of
this non-GAAP measure differs from the corresponding GAAP measure
because accumulated other comprehensive income (loss) has been
excluded from the value of capital used to determine this
measure. Management believes this non-GAAP measure is useful
because it removes the volatility that arises from changes in the
unrealized appreciation (depreciation) of our investments.
The corresponding GAAP measures for debt-to-total capital were
14.5% and 14.7% at December 31, 2014 and 2013,
respectively.
|
(5)
|
Management believes
that an analysis of earnings before the net loss on the sale of
CLIC and gain (loss) on reinsurance transactions, the earnings of
CLIC prior to being sold, net realized investment gains (losses),
fair value changes due to fluctuations in the interest rates used
to discount embedded derivative liabilities related to our fixed
index annuities, loss on extinguishment or modification of debt,
other non-operating items, corporate interest expense and taxes
("EBIT," a non-GAAP financial measure) provides a clearer
comparison of the operating results of the company
quarter-over-quarter because these items are unrelated to the
company's underlying fundamentals. A reconciliation of EBIT
to Net Income applicable to common stock is provided in the tables
on pages 3 and 11.
|
(6)
|
Book value per
diluted share reflects the potential dilution that could occur if
outstanding stock options and warrants were exercised, restricted
stock and performance units were vested and convertible securities
were converted. The dilution from options, warrants,
restricted shares and performance units is calculated using the
treasury stock method. Under this method, we assume the
proceeds from the exercise of the options and warrants (or the
unrecognized compensation expense with respect to restricted stock
and performance units) will be used to purchase shares of our
common stock at the closing market price on the last day of the
period. The dilution from convertible securities is
calculated assuming the securities were converted on the last day
of the period. In addition, the calculation of this non-GAAP
measure differs from the corresponding GAAP measure because
accumulated other comprehensive income (loss) has been excluded
from the value of capital used to determine this measure.
Management believes this non-GAAP measure is useful because it
removes the volatility that arises from changes in the unrealized
appreciation (depreciation) of our investments. The
corresponding GAAP measures for book value per common share were
$23.06 and $22.49 at December 31, 2014 and 2013,
respectively.
|
(7)
|
Management believes
that an analysis of EBIT, separated between in-force and new
business provides increased clarity around the value drivers of our
business, particularly since the new business results are
significantly impacted by the rate of sales, mix of business and
the distribution channel through which new sales are made.
EBIT from new business includes pre-tax revenues and expenses
associated with new sales of our insurance products during the
first year after the sale is completed. EBIT from in-force
business includes all pre-tax revenues and expenses associated with
sales of insurance products that were completed more than one year
before the end of the reporting period. The allocation of
certain revenues and expenses between new and in-force business is
based on estimates, which we believe are reasonable.
|
(8)
|
The benefit ratio is
calculated by dividing the related product's insurance policy
benefits by insurance policy income.
|
(9)
|
The interest-adjusted
benefit ratio (a non-GAAP measure) is calculated by dividing the
product's insurance policy benefits less imputed interest income on
the accumulated assets backing the insurance liabilities by
insurance policy income. Interest income is an important
factor in measuring the performance of longer duration health
products. The net cash flows generally cause an accumulation
of amounts in the early years of a policy (accounted for as reserve
increases), which will be paid out as benefits in later policy
years (accounted for as reserve decreases). Accordingly, as
the policies age, the benefit ratio will typically increase, but
the increase in the change in reserve will be partially offset by
the imputed interest income earned on the accumulated assets.
The interest-adjusted benefit ratio reflects the effects of such
interest income offset (which is equal to the tabular interest on
the related insurance liabilities). Since interest income is
an important factor in measuring the performance of these products,
management believes a benefit ratio, which includes the effect of
interest income, is useful in analyzing product performance.
Additional information concerning this non-GAAP measure is included
in our periodic filings with the Securities and Exchange Commission
that are available in the "Investors - SEC Filings" section of CNO
Financial's website, www.CNOinc.com.
|
(10)
|
We have consolidated
a small block of health related business with this supplemental
health block for simplicity of reporting. All prior periods
have been revised to conform to the current
presentation.
|
|
|
Cautionary Statement Regarding Forward-Looking
Statements. Our statements, trend analyses
and other information contained in this press release relative to
markets for CNO Financial's products and trends in CNO Financial's
operations or financial results, as well as other statements,
contain forward-looking statements within the meaning of the
federal securities laws and the Private Securities Litigation
Reform Act of 1995. Forward-looking statements typically are
identified by the use of terms such as "anticipate," "believe,"
"plan," "estimate," "expect," "project," "intend," "may," "will,"
"would," "contemplate," "possible," "attempt," "seek," "should,"
"could," "goal," "target," "on track," "comfortable with,"
"optimistic," "guidance," "outlook" and similar words, although
some forward-looking statements are expressed differently. You
should consider statements that contain these words carefully
because they describe our expectations, plans, strategies and goals
and our beliefs concerning future business conditions, our results
of operations, financial position, and our business outlook or they
state other ''forward-looking'' information based on currently
available information. Assumptions and other important factors that
could cause our actual results to differ materially from those
anticipated in our forward-looking statements include, among other
things: (i) changes in or sustained low interest rates causing
reductions in investment income, the margins of our fixed annuity
and life insurance businesses, and sales of, and demand for, our
products; (ii) expectations of lower future investment earnings may
cause us to accelerate amortization, write down the balance of
insurance acquisition costs or establish additional liabilities for
insurance products; (iii) general economic, market and political
conditions, including the performance and fluctuations of the
financial markets which may affect the value of our investments as
well as our ability to raise capital or refinance existing
indebtedness and the cost of doing so; (iv) the ultimate outcome of
lawsuits filed against us and other legal and regulatory
proceedings to which we are subject; (v) our ability to make
anticipated changes to certain non-guaranteed elements of our life
insurance products; (vi) our ability to obtain adequate and timely
rate increases on our health products, including our long-term care
business; (vii) the receipt of any required regulatory approvals
for dividend and surplus debenture interest payments from our
insurance subsidiaries; (viii) mortality, morbidity, the increased
cost and usage of health care services, persistency, the adequacy
of our previous reserve estimates and other factors which may
affect the profitability of our insurance products; (ix) changes in
our assumptions related to deferred acquisition costs or the
present value of future profits; (x) the recoverability of our
deferred tax assets and the effect of potential ownership changes
and tax rate changes on their value; (xi) our assumption that the
positions we take on our tax return filings will not be
successfully challenged by the Internal Revenue Service; (xii)
changes in accounting principles and the interpretation thereof;
(xiii) our ability to continue to satisfy the financial ratio and
balance requirements and other covenants of our debt agreements;
(xiv) our ability to achieve anticipated expense reductions and
levels of operational efficiencies including improvements in claims
adjudication and continued automation and rationalization of
operating systems, (xv) performance and valuation of our
investments, including the impact of realized losses (including
other-than-temporary impairment charges); (xvi) our ability to
identify products and markets in which we can compete effectively
against competitors with greater market share, higher ratings,
greater financial resources and stronger brand recognition; (xvii)
our ability to generate sufficient liquidity to meet our debt
service obligations and other cash needs; (xviii) our ability to
maintain effective controls over financial reporting; (xix) our
ability to continue to recruit and retain productive agents and
distribution partners and customer response to new products,
distribution channels and marketing initiatives; (xx) our ability
to achieve additional upgrades of the financial strength
ratings of CNO Financial and our insurance company subsidiaries as
well as the impact of our ratings on our business, our ability to
access capital and the cost of capital; (xxi) regulatory changes or
actions, including those relating to regulation of the financial
affairs of our insurance companies, such as the payment of
dividends and surplus debenture interest to us, regulation of the
sale, underwriting and pricing of products, and health care
regulation affecting health insurance products; (xxii) changes in
the Federal income tax laws and regulations which may affect or
eliminate the relative tax advantages of some of our products or
affect the value of our deferred tax assets; (xxiii) availability
and effectiveness of reinsurance arrangements, as well as any
defaults or failure of reinsurers to perform; (xxiv) the
performance of third party service providers and potential
difficulties arising from outsourcing arrangements; (xxv) the
growth rate of sales, collected premiums, annuity deposits and
assets; (xxvi) interruption in telecommunication, information
technology or other operational systems or failure to maintain the
security, confidentiality or privacy of sensitive data on such
systems; (xxvii) events of terrorism, cyber attacks, natural
disasters or other catastrophic events, including losses from a
disease pandemic; (xxviii) ineffectiveness of risk management
policies and procedures in identifying, monitoring and managing
risks; and (xxix) the risk factors or uncertainties listed from
time to time in our filings with the Securities and Exchange
Commission. Other factors and assumptions not identified
above are also relevant to the forward-looking statements, and if
they prove incorrect, could also cause actual results to differ
materially from those projected. All forward-looking statements are
expressly qualified in their entirety by the foregoing cautionary
statements. Our forward-looking statements speak only as of
the date made. We assume no obligation to update or to
publicly announce the results of any revisions to any of the
forward-looking statements to reflect actual results, future events
or developments, changes in assumptions or changes in other factors
affecting the forward-looking
statements.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cno-financial-group-reports-fourth-quarter-and-full-year-2014-results-300034022.html
SOURCE CNO Financial Group, Inc.