CNO Financial Q1 2025 slides: Operating EPS surges 52%, maintains growth momentum

CNO Financial Group Inc (NYSE:CNO) reported strong first-quarter 2025 results on April 28, showcasing significant earnings growth and continued momentum across key business segments. The company’s presentation highlighted a 52% year-over-year increase in operating earnings per share, robust sales growth, and strong capital position.

Quarterly Performance Highlights

CNO Financial delivered impressive financial results for the first quarter of 2025, with operating earnings per share reaching $0.79, a 52% increase from the same period last year. Excluding significant items, operating EPS was $0.74, up 42% year-over-year, reflecting strong underlying performance in the company’s core business.

The company maintained its growth trajectory with the 11th consecutive quarter of strong sales momentum. Total (EPA:TTEF) new annualized premiums (NAP) increased by 1% year-over-year, while total health NAP rose by 9%. The company also reported its 9th consecutive quarter of growth in producing agent count, which increased by 3% compared to Q1 2024.

As shown in the following comprehensive overview of the quarter’s key achievements:

The growth scorecard further illustrates CNO’s consistent performance across multiple metrics. Annuity collected premiums grew by 12.4% to $442.0 million, while policyholder and client assets increased by 9.4% to $16,591 million. Book value per diluted share excluding accumulated other comprehensive income (AOCI) reached $37.03, up 5.9% from the prior year.

The following detailed growth scorecard provides a comprehensive view of CNO’s performance metrics:

Detailed Financial Analysis

CNO’s financial performance was driven by strong underwriting results and improved net investment income. The company’s earnings growth is clearly illustrated in the following chart, showing the significant year-over-year improvement in operating earnings per share:

Insurance product margins remained robust across all segments. The company reported total insurance product margin of $242.1 million for Q1 2025, with strong contributions from annuity, health, and life insurance lines. Growth in fixed indexed annuities, supplemental health, and traditional life insurance all contributed to the solid performance.

The following table shows the consistent insurance product margin across recent quarters:

Investment performance was another key driver of CNO’s strong results. Total net investment income increased to $298.7 million in Q1 2025, up from $257.6 million in Q1 2024. This growth was supported by higher yields on invested assets and an increase in the average book value of investments.

The investment income growth is clearly illustrated in the following charts:

Strategic Initiatives & Business Segments

CNO’s Consumer Division reported its 10th consecutive quarter of sustained growth, with annuity collected premiums up 12% and client assets in brokerage and advisory up 16%. Health NAP increased by 9%, with supplemental health up 8% and Medicare Supplement up 24%. The division also saw a 42% increase in Medicare Advantage policies sold.

The Worksite Division achieved its 12th consecutive quarter of NAP growth, with Life and Health NAP up 11%. Critical Illness NAP increased by 37%, Life by 17%, and Accident by 4%. The division also reported that NAP from new group clients was up 134%, demonstrating strong new business acquisition.

Investment Performance & Portfolio Composition

CNO maintained a diversified investment portfolio with a continued emphasis on quality and liquidity. The portfolio composition reflects a conservative approach designed to weather market volatility, with 40.8% allocated to investment-grade corporate bonds and significant allocations to municipals, mortgage loans, and structured securities.

The following chart illustrates CNO’s balanced portfolio composition:

The company reported a new money rate of 6.43% in Q1 2025, marking the 9th consecutive quarter with rates above 6%. This strong investment performance has contributed to the growth in net investment income and overall profitability.

Capital Management & Outlook

CNO’s capital position remained strong, with a consolidated risk-based capital (RBC) ratio of 379% and holding company liquidity of $250 million. The company’s debt-to-capital ratio stood at 32.7%, positioning it well for future growth and shareholder returns.

The following charts illustrate CNO’s solid capital and liquidity position:

During the quarter, CNO returned $117 million to shareholders, including $100 million in share repurchases. The company reaffirmed its full-year 2025 guidance of $3.70-$3.90 operating EPS and its three-year goal to improve run-rate operating ROE by 150 basis points through 2027.

The company highlighted its investment thesis, emphasizing its exclusive focus on the underserved middle-income market, significant demographic tailwinds, diverse distribution model, and track record of execution. CNO’s strategy continues to deliver growth while improving return on equity, supported by a strong balance sheet and robust free cash flow.

CNO Financial’s stock closed at $39.58 on April 28, 2025, up 0.86% for the day. However, in after-hours trading, the stock was down 2.13% to $39.07, suggesting some mixed reaction to the earnings report despite the strong performance metrics.

Full presentation:

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