Delaware | 001-31792 | 75-3108137 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01(d). | Financial Statements and Exhibits. |
99.1 | Press release dated April 26, 2017 related to financial results for the quarter ended March 31, 2017. |
99.2 | Quarterly Financial Supplement - 1Q2017. |
CNO Financial Group, Inc. | |||
Date: April 26, 2017 | |||
By: | /s/ John R. Kline | ||
John R. Kline | |||
Senior Vice President and Chief Accounting Officer | |||
Contact: | (News Media) Barbara Ciesemier +1.312.396.7461 |
(Investors) Adam Auvil +1.317.817.6310 |
• | First-year collected premiums: $345.3 million, up 5% from 1Q16 |
• | Total collected premiums: $940.0 million, up 5% from 1Q16 |
• | New annualized premium ("NAP") (2) for life and health products: $91.3 million, down 3% from 1Q16 |
• | Annuity collected premiums: $257.7 million, up 10% from 1Q16 |
• | Annuity account values: $8.3 billion, up 3% from 1Q16 |
• | Policies inforce of 3.5 million (including third party policies inforce), up .3% from 1Q16 |
• | Net income per diluted share: 36 cents in 1Q17 compared to 25 cents in 1Q16 |
• | Net operating income (1) per diluted share: 34 cents in 1Q17 compared to 27 cents in 1Q16 |
• | Book value per common share increased to $26.77 from $25.82 at December 31, 2016 |
• | Book value per diluted share, excluding accumulated other comprehensive income (loss) (3), increased to $22.31 from $22.02 at December 31, 2016 |
• | Unrestricted cash and investments held by our holding company were $314 million at March 31, 2017 compared to $264 million at December 31, 2016 |
• | Common stock repurchases of $43.0 million and dividends of $14.0 million in 1Q17 |
• | Consolidated risk-based capital ratio was estimated at 446% at March 31, 2017, reflecting estimated statutory operating earnings of $70 million and insurance company dividends to the holding company of $128.4 million during the first three months of 2017 |
Three months ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
(Dollars in millions, except per share data) | |||||||
Adjusted EBIT (4): | |||||||
Bankers Life | $ | 89.7 | $ | 77.6 | |||
Washington National | 23.5 | 26.3 | |||||
Colonial Penn: | |||||||
Inforce business (5) | 14.1 | 12.7 | |||||
New business (5) | (14.4 | ) | (19.5 | ) | |||
Total Colonial Penn | (.3 | ) | (6.8 | ) | |||
Long-term care in run-off | .4 | — | |||||
Adjusted EBIT from business segments | 113.3 | 97.1 | |||||
Corporate Operations, excluding corporate interest expense | (8.9 | ) | (8.1 | ) | |||
Adjusted EBIT | 104.4 | 89.0 | |||||
Corporate interest expense | (11.5 | ) | (11.4 | ) | |||
Operating earnings before taxes | 92.9 | 77.6 | |||||
Tax expense on operating income | 33.1 | 28.0 | |||||
Net operating income (1) | 59.8 | 49.6 | |||||
Net realized investment gains (losses) (net of related amortization) | 7.9 | (1.0 | ) | ||||
Fair value changes in embedded derivative liabilities (net of related amortization) | (4.4 | ) | (29.5 | ) | |||
Fair value changes related to agent deferred compensation plan | — | (6.0 | ) | ||||
Other | .3 | (.6 | ) | ||||
Non-operating income (loss) before taxes | 3.8 | (37.1 | ) | ||||
Income tax expense (benefit): | |||||||
On non-operating income (loss) | 1.3 | (13.0 | ) | ||||
Valuation allowance for deferred tax assets | — | (20.0 | ) | ||||
Net non-operating income (loss) | 2.5 | (4.1 | ) | ||||
Net income | $ | 62.3 | $ | 45.5 | |||
Per diluted share: | |||||||
Net operating income | $ | .34 | $ | .27 | |||
Net realized investment gains (losses) (net of related amortization and taxes) | .03 | — | |||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | (.01 | ) | (.11 | ) | |||
Fair value changes related to agent deferred compensation plan (net of taxes) | — | (.02 | ) | ||||
Valuation allowance for deferred tax assets | — | .11 | |||||
Other | — | — | |||||
Net income | $ | .36 | $ | .25 |
Three months ended | |||||||||||
March 31, 2017* | |||||||||||
Actual results | Significant items | Excluding significant items | |||||||||
Net Operating Income (1): | |||||||||||
Bankers Life | $ | 89.7 | $ | 1.7 | $ | 91.4 | |||||
Washington National | 23.5 | 1.3 | 24.8 | ||||||||
Colonial Penn | (.3 | ) | — | (.3 | ) | ||||||
Long-term care in run-off | .4 | — | .4 | ||||||||
Adjusted EBIT from business segments | 113.3 | 3.0 | 116.3 | ||||||||
Corporate Operations, excluding corporate interest expense | (8.9 | ) | — | (8.9 | ) | ||||||
Adjusted EBIT (4) | 104.4 | 3.0 | 107.4 | ||||||||
Corporate interest expense | (11.5 | ) | — | (11.5 | ) | ||||||
Operating earnings before taxes | 92.9 | 3.0 | 95.9 | ||||||||
Tax expense on operating income | 33.1 | 1.1 | 34.2 | ||||||||
Net operating income | $ | 59.8 | $ | 1.9 | $ | 61.7 | |||||
Net operating income per diluted share | $ | .34 | $ | .01 | $ | .35 |
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Investments: | |||||||
Fixed maturities, available for sale, at fair value (amortized cost: March 31, 2017 - $19,880.3; December 31, 2016 - $19,803.1) | $ | 21,378.4 | $ | 21,096.2 | |||
Equity securities at fair value (cost: March 31, 2017 - $571.3; December 31, 2016 - $580.7) | 587.8 | 584.2 | |||||
Mortgage loans | 1,788.5 | 1,768.0 | |||||
Policy loans | 112.4 | 112.0 | |||||
Trading securities | 341.1 | 363.4 | |||||
Investments held by variable interest entities | 1,514.5 | 1,724.3 | |||||
Other invested assets | 665.2 | 589.5 | |||||
Total investments | 26,387.9 | 26,237.6 | |||||
Cash and cash equivalents - unrestricted | 530.2 | 478.9 | |||||
Cash and cash equivalents held by variable interest entities | 354.5 | 189.3 | |||||
Accrued investment income | 258.2 | 239.6 | |||||
Present value of future profits | 388.8 | 401.8 | |||||
Deferred acquisition costs | 1,028.5 | 1,044.7 | |||||
Reinsurance receivables | 2,241.1 | 2,260.4 | |||||
Income tax assets, net | 697.8 | 789.7 | |||||
Assets held in separate accounts | 4.6 | 4.7 | |||||
Other assets | 535.8 | 328.5 | |||||
Total assets | $ | 32,427.4 | $ | 31,975.2 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Liabilities for insurance products: | |||||||
Policyholder account balances | $ | 10,975.1 | $ | 10,912.7 | |||
Future policy benefits | 11,057.2 | 10,953.3 | |||||
Liability for policy and contract claims | 498.1 | 500.6 | |||||
Unearned and advanced premiums | 292.8 | 282.5 | |||||
Liabilities related to separate accounts | 4.6 | 4.7 | |||||
Other liabilities | 798.0 | 611.4 | |||||
Investment borrowings | 1,647.2 | 1,647.4 | |||||
Borrowings related to variable interest entities | 1,634.2 | 1,662.8 | |||||
Notes payable – direct corporate obligations | 913.4 | 912.9 | |||||
Total liabilities | 27,820.6 | 27,488.3 | |||||
Commitments and Contingencies | |||||||
Shareholders' equity: | |||||||
Common stock ($0.01 par value, 8,000,000,000 shares authorized, shares issued and outstanding: March 31, 2017 – 172,103,802; December 31, 2016 – 173,753,614) | 1.7 | 1.7 | |||||
Additional paid-in capital | 3,177.1 | 3,212.1 | |||||
Accumulated other comprehensive income | 729.6 | 622.4 | |||||
Retained earnings | 698.4 | 650.7 | |||||
Total shareholders' equity | 4,606.8 | 4,486.9 | |||||
Total liabilities and shareholders' equity | $ | 32,427.4 | $ | 31,975.2 |
Three months ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Insurance policy income | $ | 663.8 | $ | 644.4 | |||
Net investment income: | |||||||
General account assets | 312.0 | 291.0 | |||||
Policyholder and other special-purpose portfolios | 75.2 | 11.7 | |||||
Realized investment gains (losses): | |||||||
Net realized investment gains (losses), excluding impairment losses | 16.3 | 9.1 | |||||
Impairment losses recognized (a) | (8.4 | ) | (10.0 | ) | |||
Total realized gains (losses) | 7.9 | (.9 | ) | ||||
Fee revenue and other income | 11.8 | 14.2 | |||||
Total revenues | 1,070.7 | 960.4 | |||||
Benefits and expenses: | |||||||
Insurance policy benefits | 669.3 | 619.0 | |||||
Interest expense | 30.8 | 27.7 | |||||
Amortization | 63.5 | 62.1 | |||||
Other operating costs and expenses | 210.4 | 211.1 | |||||
Total benefits and expenses | 974.0 | 919.9 | |||||
Income before income taxes | 96.7 | 40.5 | |||||
Income tax expense (benefit): | |||||||
Tax expense on period income | 34.4 | 15.0 | |||||
Valuation allowance for deferred tax assets | — | (20.0 | ) | ||||
Net income | $ | 62.3 | $ | 45.5 | |||
Earnings per common share: | |||||||
Basic: | |||||||
Weighted average shares outstanding | 173,431,000 | 180,350,000 | |||||
Net income | $ | .36 | $ | .25 | |||
Diluted: | |||||||
Weighted average shares outstanding | 175,065,000 | 182,128,000 | |||||
Net income | $ | .36 | $ | .25 |
(a) | No portion of the other-than-temporary impairments recognized in the periods was included in accumulated other comprehensive income. |
Three months ended | |||||||||||
March 31, 2016* | |||||||||||
Actual results | Significant items | Excluding significant items | |||||||||
Net Operating Income (1): | |||||||||||
Bankers Life | $ | 77.6 | $ | (7.7 | ) | $ | 69.9 | ||||
Washington National | 26.3 | — | 26.3 | ||||||||
Colonial Penn | (6.8 | ) | — | (6.8 | ) | ||||||
Adjusted EBIT from business segments | 97.1 | (7.7 | ) | 89.4 | |||||||
Corporate Operations, excluding corporate interest expense | (8.1 | ) | 3.0 | (5.1 | ) | ||||||
Adjusted EBIT (4) | 89.0 | (4.7 | ) | 84.3 | |||||||
Corporate interest expense | (11.4 | ) | — | (11.4 | ) | ||||||
Operating earnings before taxes | 77.6 | (4.7 | ) | 72.9 | |||||||
Tax expense on operating income | 28.0 | (1.7 | ) | 26.3 | |||||||
Net operating income | $ | 49.6 | $ | (3.0 | ) | $ | 46.6 | ||||
Net operating income per diluted share | $ | .27 | $ | (.01 | ) | $ | .26 |
Three months ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Bankers Life: | |||||||
Medicare supplement | $ | 17.5 | $ | 18.4 | |||
Long-term care | 4.2 | 4.4 | |||||
Supplemental health | 1.4 | 1.3 | |||||
Other health | .2 | — | |||||
Life | 31.9 | 38.6 | |||||
Annuity | 255.9 | 231.8 | |||||
Total | 311.1 | 294.5 | |||||
Washington National: | |||||||
Supplemental health and other health | 19.1 | 18.5 | |||||
Life | 1.4 | 1.6 | |||||
Annuity | — | — | |||||
Total | 20.5 | 20.1 | |||||
Colonial Penn: | |||||||
Life | 13.7 | 14.0 | |||||
Total | 13.7 | 14.0 | |||||
Total first-year collected premiums from segments | $ | 345.3 | $ | 328.6 |
Three months ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Bankers Life: | |||||||
Medicare supplement | $ | 191.7 | $ | 186.9 | |||
Long-term care | 117.0 | 119.6 | |||||
Supplemental health | 5.7 | 5.0 | |||||
Other health | 1.6 | 1.6 | |||||
Life | 114.3 | 114.0 | |||||
Annuity | 257.5 | 233.6 | |||||
Total | 687.8 | 660.7 | |||||
Washington National: | |||||||
Supplemental health and other health | 150.6 | 141.6 | |||||
Medicare supplement | 14.4 | 16.4 | |||||
Life | 7.9 | 7.2 | |||||
Annuity | .2 | .3 | |||||
Total | 173.1 | 165.5 | |||||
Colonial Penn: | |||||||
Life | 74.0 | 69.5 | |||||
Medicare supplement and other health | .5 | .6 | |||||
Total | 74.5 | 70.1 | |||||
Long-term care in run-off: | |||||||
Long-term care | 4.6 | N/A | |||||
Total | 4.6 | N/A | |||||
Total collected premiums from segments | $ | 940.0 | $ | 896.3 |
Three months ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Bankers Life: | |||||||
Medicare supplement | $ | 17.7 | $ | 16.4 | |||
Long-term care | 6.9 | 6.1 | |||||
Supplemental health and other health | 1.9 | 1.5 | |||||
Life | 18.4 | 22.4 | |||||
Total | 44.9 | 46.4 | |||||
Washington National: | |||||||
Supplemental health | 22.9 | 22.0 | |||||
Life | 1.7 | 1.4 | |||||
Total | 24.6 | 23.4 | |||||
Colonial Penn: | |||||||
Life | 21.8 | 24.1 | |||||
Total | 21.8 | 24.1 | |||||
Total new annualized premiums | $ | 91.3 | $ | 93.9 |
March 31, | |||||||
2017 | 2016 | ||||||
Bankers Life | $ | 7,869.7 | $ | 7,586.1 | |||
Washington National | 404.5 | 454.2 | |||||
Total | $ | 8,274.2 | $ | 8,040.3 |
Three months ended | |||||
March 31, | |||||
2017 | 2016 | ||||
Bankers Life: | |||||
Medicare supplement: | |||||
Earned premium | $196 million | $193 million | |||
Benefit ratio (7) | 70.0 | % | 71.1 | % | |
Long-term care: | |||||
Earned premium | $116 million | $118 million | |||
Benefit ratio (7) | 132.6 | % | 132.9 | % | |
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 72.5 | % | 75.3 | % | |
Washington National: | |||||
Medicare supplement: | |||||
Earned premium | $14 million | $16 million | |||
Benefit ratio (7) | 66.8 | % | 65.1 | % | |
Supplemental health: | |||||
Earned premium | $146 million | $139 million | |||
Benefit ratio (7) | 84.6 | % | 81.2 | % | |
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 60.6 | % | 57.7 | % | |
Long-term care in run-off: | |||||
Long-term care: | |||||
Earned premium | $5 million | N/A | |||
Benefit ratio (7) | 286.5 | % | N/A | ||
Interest-adjusted benefit ratio (a non-GAAP measure) (8) | 128.1 | % | N/A |
(1) | Management believes that an analysis of Net income applicable to common stock before: (i) net realized investment gains or losses, net of related amortization and taxes; (ii) 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; (iii) fair value changes related to the agent deferred compensation plan, net of taxes, (iv) changes in the valuation allowance for deferred tax assets; and (v) other non-operating items consisting primarily of 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 table on page 2. 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 for life and health products, which includes 10% of single premium whole life deposits and 100% of all other premiums (excluding annuities). Medicare Advantage sales are not comparable to other sales and are therefore excluded in all periods. |
(3) | Book value per diluted share reflects the potential dilution that could occur if outstanding stock options were exercised, restricted stock and performance units were vested and convertible securities were converted. The dilution from options, 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 (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. |
(4) | Management believes that an analysis of earnings before 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, fair value changes related to the agent deferred compensation plan, other non-operating items, corporate interest expense and taxes ("Adjusted 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 Adjusted EBIT to Net Income applicable to common stock is provided in the table on page 2. |
(5) | Management believes that an analysis of Adjusted EBIT for Colonial Penn, separated between inforce and new business, provides increased clarity for this segment as the vast majority of the costs to generate new business in this segment are not deferrable and Adjusted EBIT will fluctuate based on management’s decisions on how much marketing costs to incur in each period. Adjusted 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. Adjusted EBIT from inforce 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 inforce business is based on estimates, which we believe are reasonable. |
(6) | 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. |
(7) | The benefit ratio is calculated by dividing the related product's insurance policy benefits by insurance policy income. |
(8) | 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. |
Contact: | (News Media) Barbara Ciesemier +1.312.396.7461 |
(Investors) Adam Auvil +1.317.817.6310 |
Quarterly Financial Supplement - 1Q2017 | |||||
April 26, 2017 | |||||
Table of Contents | Page | |||
Consolidated balance sheet | 3 | |||
Consolidated statement of operations | 4 | |||
Operating results | 5 | |||
Computation of weighted average shares outstanding | 6 | |||
Analyses of income before taxes and selected data: | ||||
Bankers Life | 7-9 | |||
Washington National | 10-12 | |||
Colonial Penn | 13-14 | |||
Long-term care in run-off | 15 | |||
Corporate Operations | 16 | |||
Premiums collected on insurance products: | ||||
Bankers Life | 17 | |||
Washington National | 18 | |||
Colonial Penn | 19 | |||
Long-term care in run-off | 19 | |||
First-Year Collected Premiums, New Annualized Premiums and Total Policies Inforce | 20 | |||
Statutory information | 21 | |||
Notes | 22 |
CNO Financial Group, Inc. | |||||||||||||||
Consolidated balance sheet (in millions) | Mar-16 | Jun-16 | Sep-16 | Dec-16 | Mar-17 | ||||||||||
Assets | |||||||||||||||
Investments: | |||||||||||||||
Fixed maturities, available for sale, at fair value | $ | 20,105.1 | $ | 20,989.8 | $ | 21,822.2 | $ | 21,096.2 | $ | 21,378.4 | |||||
Equity securities at fair value | 610.7 | 541.2 | 331.3 | 584.2 | 587.8 | ||||||||||
Mortgage loans | 1,700.8 | 1,732.9 | 1,749.5 | 1,768.0 | 1,788.5 | ||||||||||
Policy loans | 110.1 | 110.3 | 110.8 | 112.0 | 112.4 | ||||||||||
Trading securities | 285.2 | 289.3 | 307.2 | 363.4 | 341.1 | ||||||||||
Investments held by variable interest entities | 1,691.0 | 1,807.8 | 1,794.4 | 1,724.3 | 1,514.5 | ||||||||||
Other invested assets | 433.4 | 525.7 | 607.2 | 589.5 | 665.2 | ||||||||||
Total investments | 24,936.3 | 25,997.0 | 26,722.6 | 26,237.6 | 26,387.9 | ||||||||||
Cash and cash equivalents - unrestricted | 635.7 | 437.2 | 706.0 | 478.9 | 530.2 | ||||||||||
Cash and cash equivalents held by variable interest entities | 190.1 | 160.0 | 147.7 | 189.3 | 354.5 | ||||||||||
Accrued investment income | 247.7 | 228.7 | 255.3 | 239.6 | 258.2 | ||||||||||
Present value of future profits | 432.2 | 417.5 | 407.7 | 401.8 | 388.8 | ||||||||||
Deferred acquisition costs | 954.8 | 911.3 | 909.7 | 1,044.7 | 1,028.5 | ||||||||||
Reinsurance receivables | 2,839.4 | 2,820.4 | 2,290.1 | 2,260.4 | 2,241.1 | ||||||||||
Income tax assets, net | 828.8 | 677.7 | 606.9 | 789.7 | 697.8 | ||||||||||
Assets held in separate accounts | 4.6 | 4.6 | 4.7 | 4.7 | 4.6 | ||||||||||
Other assets | 388.4 | 368.1 | 370.0 | 328.5 | 535.8 | ||||||||||
Total assets | $ | 31,458.0 | $ | 32,022.5 | $ | 32,420.7 | $ | 31,975.2 | $ | 32,427.4 | |||||
Liabilities | |||||||||||||||
Liabilities for insurance products: | |||||||||||||||
Policyholder account balances | $ | 10,772.4 | $ | 10,754.8 | $ | 10,817.2 | $ | 10,912.7 | $ | 10,975.1 | |||||
Future policy benefits | 10,768.7 | 11,127.0 | 11,354.0 | 10,953.3 | 11,057.2 | ||||||||||
Liability for policy and contract claims | 488.7 | 489.2 | 492.4 | 500.6 | 498.1 | ||||||||||
Unearned and advanced premiums | 292.0 | 284.1 | 278.2 | 282.5 | 292.8 | ||||||||||
Liabilities related to separate accounts | 4.6 | 4.6 | 4.7 | 4.7 | 4.6 | ||||||||||
Other liabilities | 788.9 | 731.0 | 730.1 | 611.4 | 798.0 | ||||||||||
Investment borrowings | 1,548.0 | 1,547.8 | 1,647.6 | 1,647.4 | 1,647.2 | ||||||||||
Borrowings related to variable interest entities | 1,656.6 | 1,715.8 | 1,690.2 | 1,662.8 | 1,634.2 | ||||||||||
Notes payable - direct corporate obligations | 911.5 | 912.0 | 912.5 | 912.9 | 913.4 | ||||||||||
Total liabilities | 27,231.4 | 27,566.3 | 27,926.9 | 27,488.3 | 27,820.6 | ||||||||||
Shareholders' equity | |||||||||||||||
Common stock | 1.8 | 1.7 | 1.7 | 1.7 | 1.7 | ||||||||||
Additional paid-in capital | 3,304.3 | 3,251.1 | 3,206.3 | 3,212.1 | 3,177.1 | ||||||||||
Retained earnings | 380.0 | 425.6 | 430.3 | 650.7 | 698.4 | ||||||||||
Total shareholders' equity before accumulated other comprehensive income | 3,686.1 | 3,678.4 | 3,638.3 | 3,864.5 | 3,877.2 | ||||||||||
Accumulated other comprehensive income | 540.5 | 777.8 | 855.5 | 622.4 | 729.6 | ||||||||||
Total shareholders' equity | 4,226.6 | 4,456.2 | 4,493.8 | 4,486.9 | 4,606.8 | ||||||||||
Total liabilities and shareholders' equity | $ | 31,458.0 | $ | 32,022.5 | $ | 32,420.7 | $ | 31,975.2 | $ | 32,427.4 | |||||
Mar-16 | Jun-16 | Sep-16 | Dec-16 | Mar-17 | |||||||||||
Book value per common share | $ | 23.60 | $ | 25.28 | $ | 25.89 | $ | 25.82 | $ | 26.77 | |||||
Book value per common share, excluding accumulated other comprehensive income (1) (2) | $ | 20.58 | $ | 20.87 | $ | 20.96 | $ | 22.24 | $ | 22.53 | |||||
Book value per diluted share (1) (3) | $ | 20.38 | $ | 20.67 | $ | 20.80 | $ | 22.02 | $ | 22.31 | |||||
CNO Financial Group, Inc. | ||||||||||||||||||
Consolidated statement of operations (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Revenues | ||||||||||||||||||
Insurance policy income | $ | 644.4 | $ | 653.6 | $ | 649.0 | $ | 654.1 | $ | 2,601.1 | $ | 663.8 | ||||||
Net investment income: | ||||||||||||||||||
General account assets | 291.0 | 295.8 | 301.7 | 315.6 | 1,204.1 | 312.0 | ||||||||||||
Policyholder and other special-purpose portfolios | 11.7 | 27.9 | 43.1 | 38.4 | 121.1 | 75.2 | ||||||||||||
Realized investment gains (losses): | ||||||||||||||||||
Net realized investment gains (losses), excluding impairment losses | 9.1 | 33.5 | 12.8 | (7.5 | ) | 47.9 | 16.3 | |||||||||||
Other-than-temporary impairments: | ||||||||||||||||||
Total other-than-temporary impairment losses | (10.0 | ) | (13.6 | ) | (1.2 | ) | (11.1 | ) | (35.9 | ) | (8.4 | ) | ||||||
Portion of other-than-temporary impairment losses recognized in accumulated other comprehensive income | — | — | — | 3.6 | 3.6 | — | ||||||||||||
Net impairment losses recognized | (10.0 | ) | (13.6 | ) | (1.2 | ) | (7.5 | ) | (32.3 | ) | (8.4 | ) | ||||||
Loss on dissolution of a variable interest entity | — | (7.3 | ) | — | — | (7.3 | ) | — | ||||||||||
Total realized gains (losses) | (0.9 | ) | 12.6 | 11.6 | (15.0 | ) | 8.3 | 7.9 | ||||||||||
Fee revenue and other income | 14.2 | 14.0 | 10.5 | 11.8 | 50.5 | 11.8 | ||||||||||||
Total revenues | 960.4 | 1,003.9 | 1,015.9 | 1,004.9 | 3,985.1 | 1,070.7 | ||||||||||||
Benefits and expenses | ||||||||||||||||||
Insurance policy benefits | 619.0 | 632.4 | 609.8 | 529.3 | 2,390.5 | 669.3 | ||||||||||||
Loss on reinsurance transaction | — | — | 75.4 | — | 75.4 | — | ||||||||||||
Interest expense | 27.7 | 28.9 | 29.4 | 30.4 | 116.4 | 30.8 | ||||||||||||
Amortization | 62.1 | 54.8 | 64.7 | 71.7 | 253.3 | 63.5 | ||||||||||||
Other operating costs and expenses | 211.1 | 205.1 | 187.3 | 192.8 | 796.3 | 210.4 | ||||||||||||
Total benefits and expenses | 919.9 | 921.2 | 966.6 | 824.2 | 3,631.9 | 974.0 | ||||||||||||
Income before income taxes | 40.5 | 82.7 | 49.3 | 180.7 | 353.2 | 96.7 | ||||||||||||
Income tax expense on period income | 15.0 | 29.8 | 16.9 | 66.1 | 127.8 | 34.4 | ||||||||||||
Valuation allowance for deferred tax assets and other tax items | (20.0 | ) | (7.0 | ) | 13.8 | (119.6 | ) | (132.8 | ) | — | ||||||||
Net income | $ | 45.5 | $ | 59.9 | $ | 18.6 | $ | 234.2 | $ | 358.2 | $ | 62.3 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Operating results ($ in millions, except per share amounts) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Adjusted EBIT (4): | ||||||||||||||||||
Bankers Life | $ | 77.6 | $ | 93.3 | $ | 88.1 | $ | 138.9 | $ | 397.9 | $ | 89.7 | ||||||
Washington National | 26.3 | 21.5 | 25.2 | 29.9 | 102.9 | 23.5 | ||||||||||||
Colonial Penn | (6.8 | ) | 3.0 | 0.9 | 4.6 | 1.7 | (0.3 | ) | ||||||||||
Long-term care in run-off | — | — | — | (3.9 | ) | (3.9 | ) | 0.4 | ||||||||||
Adjusted EBIT from business segments | 97.1 | 117.8 | 114.2 | 169.5 | 498.6 | 113.3 | ||||||||||||
Corporate operations, excluding corporate interest expense | (8.1 | ) | (7.0 | ) | (4.4 | ) | (23.0 | ) | (42.5 | ) | (8.9 | ) | ||||||
Adjusted EBIT | 89.0 | 110.8 | 109.8 | 146.5 | 456.1 | 104.4 | ||||||||||||
Corporate interest expense | (11.4 | ) | (11.4 | ) | (11.5 | ) | (11.5 | ) | (45.8 | ) | (11.5 | ) | ||||||
Operating earnings before taxes | 77.6 | 99.4 | 98.3 | 135.0 | 410.3 | 92.9 | ||||||||||||
Tax expense on operating income | 28.0 | 35.7 | 34.0 | 50.1 | 147.8 | 33.1 | ||||||||||||
Net operating income (5) | 49.6 | 63.7 | 64.3 | 84.9 | 262.5 | 59.8 | ||||||||||||
Net realized investment gains (losses) (net of related amortization) | (1.0 | ) | 12.0 | 11.4 | (14.8 | ) | 7.6 | 7.9 | ||||||||||
Fair value changes in embedded derivative liabilities (net of related amortization) | (29.5 | ) | (16.5 | ) | 9.4 | 46.2 | 9.6 | (4.4 | ) | |||||||||
Fair value changes and amendment related to agent deferred compensation plan | (6.0 | ) | (12.3 | ) | 6.3 | 15.1 | 3.1 | — | ||||||||||
Loss on reinsurance transaction | — | — | (75.4 | ) | — | (75.4 | ) | — | ||||||||||
Other | (0.6 | ) | 0.1 | (0.7 | ) | (0.8 | ) | (2.0 | ) | 0.3 | ||||||||
Non-operating income (loss) before taxes | (37.1 | ) | (16.7 | ) | (49.0 | ) | 45.7 | (57.1 | ) | 3.8 | ||||||||
Income tax expense (benefit): | ||||||||||||||||||
On non-operating income (loss) | (13.0 | ) | (5.9 | ) | (17.1 | ) | 16.0 | (20.0 | ) | 1.3 | ||||||||
Valuation allowance for deferred tax assets and other tax items | (20.0 | ) | (7.0 | ) | 13.8 | (119.6 | ) | (132.8 | ) | — | ||||||||
Net non-operating income (loss) | (4.1 | ) | (3.8 | ) | (45.7 | ) | 149.3 | 95.7 | 2.5 | |||||||||
Net income | $ | 45.5 | $ | 59.9 | $ | 18.6 | $ | 234.2 | $ | 358.2 | $ | 62.3 | ||||||
Per diluted share: | ||||||||||||||||||
Net operating income | $ | .27 | $ | .35 | $ | .37 | $ | .49 | $ | 1.47 | $ | .34 | ||||||
Net realized investment gains (losses) (net of related amortization and taxes) | — | .04 | .04 | (.06 | ) | .03 | .03 | |||||||||||
Fair value changes in embedded derivative liabilities (net of related amortization and taxes) | (.11 | ) | (.06 | ) | .04 | .17 | .04 | (.01 | ) | |||||||||
Fair value changes and amendment related to agent deferred compensation plan (net of taxes) | (.02 | ) | (.04 | ) | .02 | .06 | .01 | — | ||||||||||
Loss on reinsurance transaction (net of taxes) | — | — | (.28 | ) | — | (.27 | ) | — | ||||||||||
Valuation allowance for deferred tax assets and other tax items | .11 | .04 | (.08 | ) | .68 | .74 | — | |||||||||||
Other | — | — | — | — | (.01 | ) | — | |||||||||||
Net income | $ | .25 | $ | .33 | $ | .11 | $ | 1.34 | $ | 2.01 | $ | .36 | ||||||
CNO Financial Group, Inc. | ||||||||||||
Computation of weighted average shares outstanding | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||
(000s) | ||||||||||||
Basic | ||||||||||||
Shares outstanding, beginning of period | 184,028.5 | 179,098.4 | 176,240.6 | 173,544.0 | 184,028.5 | 173,753.6 | ||||||
Weighted average shares issued during the period: | ||||||||||||
Shares repurchased | (3,839.6 | ) | (980.0 | ) | (2,351.4 | ) | — | (8,195.5 | ) | (513.6 | ) | |
Stock options exercised and vested restricted and performance stock | 233.9 | 205.3 | 359.9 | 90.0 | 963.1 | 213.3 | ||||||
Shares withheld for the payment of taxes on the vesting of restricted stock | (72.5 | ) | (0.7 | ) | (2.1 | ) | (0.4 | ) | (157.6 | ) | (22.6 | ) |
Weighted average basic shares outstanding during the period | 180,350.3 | 178,323.0 | 174,247.0 | 173,633.6 | 176,638.5 | 173,430.7 | ||||||
Basic shares outstanding, end of period | 179,098.4 | 176,240.6 | 173,544.0 | 173,753.6 | 173,753.6 | 172,103.8 | ||||||
Diluted | ||||||||||||
Weighted average basic shares outstanding | 180,350.3 | 178,323.0 | 174,247.0 | 173,633.6 | 176,638.5 | 173,430.7 | ||||||
Common stock equivalent shares related to: | ||||||||||||
Stock options, restricted stock and performance units | 1,777.8 | 1,943.9 | 1,476.3 | 1,538.9 | 1,684.2 | 1,634.7 | ||||||
Weighted average diluted shares outstanding during the period | 182,128.1 | 180,266.9 | 175,723.3 | 175,172.5 | 178,322.7 | 175,065.4 | ||||||
Diluted shares outstanding, end of period | 180,902.3 | 177,985.1 | 174,893.2 | 175,475.5 | 175,475.5 | 173,818.0 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Bankers Life | ||||||||||||||||||
Analysis of income before taxes (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Insurance policy income | $ | 413.2 | $ | 419.6 | $ | 413.7 | $ | 412.6 | $ | 1,659.1 | $ | 419.1 | ||||||
Net investment income (loss): | ||||||||||||||||||
General account invested assets | 222.0 | 225.1 | 229.1 | 233.3 | 909.5 | 231.1 | ||||||||||||
Fixed index products | (7.8 | ) | 2.8 | 15.6 | 16.7 | 27.3 | 41.8 | |||||||||||
Fee revenue and other income | 6.6 | 7.3 | 9.6 | 10.9 | 34.4 | 10.6 | ||||||||||||
Total revenues | 634.0 | 654.8 | 668.0 | 673.5 | 2,630.3 | 702.6 | ||||||||||||
Insurance policy benefits | 360.2 | 370.1 | 368.4 | 318.7 | 1,417.4 | 367.6 | ||||||||||||
Amounts added to policyholder account balances: | ||||||||||||||||||
Cost of interest credited to policyholders | 28.1 | 27.5 | 27.7 | 27.5 | 110.8 | 26.5 | ||||||||||||
Cost of options to fund index credits, net of forfeitures | 16.9 | 16.6 | 15.7 | 16.9 | 66.1 | 14.9 | ||||||||||||
Market value changes credited to policyholders | (8.2 | ) | 2.6 | 15.3 | 16.6 | 26.3 | 42.2 | |||||||||||
Amortization related to operations | 51.5 | 40.0 | 43.8 | 41.2 | 176.5 | 46.3 | ||||||||||||
Interest expense on investment borrowings | 2.9 | 3.0 | 3.5 | 3.8 | 13.2 | 4.2 | ||||||||||||
Other operating costs and expenses | 105.0 | 101.7 | 105.5 | 109.9 | 422.1 | 111.2 | ||||||||||||
Total benefits and expenses | 556.4 | 561.5 | 579.9 | 534.6 | 2,232.4 | 612.9 | ||||||||||||
Adjusted EBIT (4) | $ | 77.6 | $ | 93.3 | $ | 88.1 | $ | 138.9 | $ | 397.9 | $ | 89.7 | ||||||
Health underwriting margins (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Medicare supplement: | ||||||||||||||||||
Earned premium | $ | 192.7 | $ | 193.5 | $ | 193.7 | $ | 193.0 | $ | 772.9 | $ | 196.0 | ||||||
Benefit ratio | 71.1 | % | 73.0 | % | 72.5 | % | 71.2 | % | 71.9 | % | 70.0 | % | ||||||
Underwriting margin (earned premium less policy benefits) | $ | 55.7 | $ | 52.3 | $ | 53.2 | $ | 55.5 | $ | 216.7 | $ | 58.8 | ||||||
Long-term care: | ||||||||||||||||||
Earned premium | $ | 118.5 | $ | 118.3 | $ | 116.6 | $ | 117.8 | $ | 471.2 | $ | 115.6 | ||||||
Benefit ratio before interest income on reserves | 132.9 | % | 134.7 | % | 137.7 | % | 134.7 | % | 135.0 | % | 132.6 | % | ||||||
Interest-adjusted benefit ratio | 75.3 | % | 77.9 | % | 77.7 | % | 76.0 | % | 76.7 | % | 72.5 | % | ||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | 29.3 | $ | 26.2 | $ | 26.0 | $ | 28.3 | $ | 109.8 | $ | 31.8 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Bankers Life | ||||||||||||||||||
Average liabilities for insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Fixed index annuities | $ | 4,327.5 | $ | 4,461.1 | $ | 4,597.1 | $ | 4,725.6 | $ | 4,527.8 | $ | 4,871.4 | ||||||
Fixed interest annuities | 3,297.5 | 3,221.1 | 3,149.7 | 3,084.4 | 3,188.2 | 3,012.3 | ||||||||||||
SPIAs and supplemental contracts: | ||||||||||||||||||
Mortality based | 181.4 | 177.1 | 172.7 | 168.3 | 174.9 | 164.9 | ||||||||||||
Deposit based | 155.3 | 153.8 | 152.9 | 152.6 | 153.7 | 151.6 | ||||||||||||
Health: | ||||||||||||||||||
Long-term care | 4,814.2 | 4,980.8 | 5,161.2 | 5,036.0 | 4,998.0 | 4,866.1 | ||||||||||||
Medicare supplement | 339.3 | 335.4 | 333.0 | 339.5 | 336.8 | 343.4 | ||||||||||||
Other health | 48.7 | 49.7 | 50.8 | 52.1 | 50.3 | 54.1 | ||||||||||||
Life: | ||||||||||||||||||
Interest sensitive | 689.2 | 706.6 | 722.7 | 740.0 | 714.6 | 757.3 | ||||||||||||
Non-interest sensitive | 989.7 | 1,009.6 | 1,027.9 | 1,044.8 | 1,018.0 | 1,062.2 | ||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 14,842.8 | $ | 15,095.2 | $ | 15,368.0 | $ | 15,343.3 | $ | 15,162.3 | $ | 15,283.3 | ||||||
Annuities - account value rollforwards (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Fixed index annuities | ||||||||||||||||||
Balance as of the beginning of the period | $ | 4,220.2 | $ | 4,325.5 | $ | 4,410.5 | $ | 4,558.3 | $ | 4,220.2 | $ | 4,740.2 | ||||||
Gross deposits | 199.9 | 179.3 | 218.3 | 270.5 | 868.0 | 235.3 | ||||||||||||
Withdrawals | (97.4 | ) | (96.2 | ) | (87.0 | ) | (98.9 | ) | (379.5 | ) | (112.0 | ) | ||||||
Returns reinvested | 2.8 | 1.9 | 16.5 | 10.3 | 31.5 | 32.8 | ||||||||||||
Balance as of the end of the period | $ | 4,325.5 | $ | 4,410.5 | $ | 4,558.3 | $ | 4,740.2 | $ | 4,740.2 | $ | 4,896.3 | ||||||
Fixed interest annuities | ||||||||||||||||||
Balance as of the beginning of the period | $ | 3,331.9 | $ | 3,260.6 | $ | 3,178.9 | $ | 3,117.6 | $ | 3,331.9 | $ | 3,048.3 | ||||||
Gross deposits | 30.7 | 24.5 | 20.8 | 12.1 | 88.1 | 18.6 | ||||||||||||
Withdrawals | (123.2 | ) | (126.8 | ) | (102.8 | ) | (101.8 | ) | (454.6 | ) | (112.9 | ) | ||||||
Returns reinvested | 21.2 | 20.6 | 20.7 | 20.4 | 82.9 | 19.4 | ||||||||||||
Balance as of the end of the period | $ | 3,260.6 | $ | 3,178.9 | $ | 3,117.6 | $ | 3,048.3 | $ | 3,048.3 | $ | 2,973.4 | ||||||
Total annuities | ||||||||||||||||||
Balance as of the beginning of the period | $ | 7,552.1 | $ | 7,586.1 | $ | 7,589.4 | $ | 7,675.9 | $ | 7,552.1 | $ | 7,788.5 | ||||||
Gross deposits | 230.6 | 203.8 | 239.1 | 282.6 | 956.1 | 253.9 | ||||||||||||
Withdrawals | (220.6 | ) | (223.0 | ) | (189.8 | ) | (200.7 | ) | (834.1 | ) | (224.9 | ) | ||||||
Returns reinvested | 24.0 | 22.5 | 37.2 | 30.7 | 114.4 | 52.2 | ||||||||||||
Balance as of the end of the period | $ | 7,586.1 | $ | 7,589.4 | $ | 7,675.9 | $ | 7,788.5 | $ | 7,788.5 | $ | 7,869.7 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Bankers Life | ||||||||||||||||||
Present value of future profits (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Balance, beginning of period | $ | 114.9 | $ | 106.2 | $ | 101.8 | $ | 98.2 | $ | 114.9 | $ | 95.5 | ||||||
Amortization related to operations | (9.9 | ) | (8.1 | ) | (7.6 | ) | (8.8 | ) | (34.4 | ) | (7.9 | ) | ||||||
Amortization related to net realized investment (gains) losses | — | — | — | — | — | — | ||||||||||||
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | 1.2 | 3.7 | 4.0 | 6.1 | 15.0 | 3.7 | ||||||||||||
Balance, end of period | $ | 106.2 | $ | 101.8 | $ | 98.2 | $ | 95.5 | $ | 95.5 | $ | 91.3 | ||||||
Deferred acquisition costs (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Balance, beginning of period | $ | 718.2 | $ | 582.4 | $ | 533.5 | $ | 525.2 | $ | 718.2 | $ | 646.2 | ||||||
Deferred acquisition expenses | 40.3 | 36.9 | 40.6 | 44.9 | 162.7 | 41.7 | ||||||||||||
Amortization related to operations | (41.6 | ) | (31.9 | ) | (36.2 | ) | (32.4 | ) | (142.1 | ) | (38.4 | ) | ||||||
Amortization related to net realized investment (gains) losses | 0.1 | (0.5 | ) | (0.2 | ) | 0.2 | (0.4 | ) | — | |||||||||
Amortization related to fair value changes in embedded derivative liabilities | 7.6 | 4.2 | (2.3 | ) | (10.8 | ) | (1.3 | ) | 1.0 | |||||||||
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | (142.2 | ) | (57.6 | ) | (10.2 | ) | 119.1 | (90.9 | ) | (28.7 | ) | |||||||
Balance, end of period | $ | 582.4 | $ | 533.5 | $ | 525.2 | $ | 646.2 | $ | 646.2 | $ | 621.8 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Washington National | ||||||||||||||||||
Analysis of income before taxes (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Insurance policy income | $ | 162.1 | $ | 163.5 | $ | 164.4 | $ | 165.8 | $ | 655.8 | $ | 167.1 | ||||||
Net investment income (loss): | ||||||||||||||||||
General account invested assets | 61.7 | 62.6 | 66.0 | 65.9 | 256.2 | 63.4 | ||||||||||||
Fixed index products | (1.2 | ) | — | 1.5 | 1.6 | 1.9 | 2.6 | |||||||||||
Trading account income related to policyholder accounts | 0.1 | 1.0 | (0.4 | ) | 0.5 | 1.2 | 1.4 | |||||||||||
Fee revenue and other income | 0.3 | 0.3 | 0.4 | 0.3 | 1.3 | 0.3 | ||||||||||||
Total revenues | 223.0 | 227.4 | 231.9 | 234.1 | 916.4 | 234.8 | ||||||||||||
Insurance policy benefits | 129.1 | 137.8 | 138.7 | 132.6 | 538.2 | 137.8 | ||||||||||||
Amounts added to policyholder account balances: | ||||||||||||||||||
Cost of interest credited to policyholders | 3.5 | 3.5 | 3.3 | 3.5 | 13.8 | 3.3 | ||||||||||||
Cost of options to fund index credits, net of forfeitures | 1.7 | 1.5 | 1.2 | 1.4 | 5.8 | 1.0 | ||||||||||||
Market value changes credited to policyholders | (0.8 | ) | 1.2 | 1.3 | 2.2 | 3.9 | 4.6 | |||||||||||
Amortization related to operations | 15.1 | 15.1 | 14.3 | 14.6 | 59.1 | 14.3 | ||||||||||||
Interest expense on investment borrowings | 0.8 | 0.8 | 0.9 | 1.2 | 3.7 | 1.3 | ||||||||||||
Other operating costs and expenses | 47.3 | 46.0 | 47.0 | 48.7 | 189.0 | 49.0 | ||||||||||||
Total benefits and expenses | 196.7 | 205.9 | 206.7 | 204.2 | 813.5 | 211.3 | ||||||||||||
Adjusted EBIT (4) | $ | 26.3 | $ | 21.5 | $ | 25.2 | $ | 29.9 | $ | 102.9 | $ | 23.5 | ||||||
Health underwriting margins (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Medicare supplement: | ||||||||||||||||||
Earned premium | $ | 16.3 | $ | 15.8 | $ | 15.4 | $ | 15.0 | $ | 62.5 | $ | 14.3 | ||||||
Benefit ratio | 65.1 | % | 74.0 | % | 69.5 | % | 64.8 | % | 68.4 | % | 66.8 | % | ||||||
Underwriting margin (earned premium less policy benefits) | $ | 5.7 | $ | 4.1 | $ | 4.7 | $ | 5.3 | $ | 19.8 | $ | 4.8 | ||||||
Supplemental health and other: | ||||||||||||||||||
Earned premium | $ | 139.2 | $ | 140.9 | $ | 141.4 | $ | 144.0 | $ | 565.5 | $ | 145.6 | ||||||
Benefit ratio before interest income on reserves | 81.2 | % | 85.7 | % | 84.0 | % | 81.0 | % | 83.0 | % | 84.6 | % | ||||||
Interest-adjusted benefit ratio | 57.7 | % | 61.6 | % | 59.8 | % | 57.0 | % | 59.0 | % | 60.6 | % | ||||||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | 58.9 | $ | 54.0 | $ | 56.9 | $ | 62.0 | $ | 231.8 | $ | 57.3 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Washington National | ||||||||||||||||||
Average liabilities for insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Fixed index annuities | $ | 363.5 | $ | 355.7 | $ | 346.0 | $ | 335.5 | $ | 350.2 | $ | 326.1 | ||||||
Fixed interest annuities | 111.2 | 108.5 | 105.6 | 102.6 | 107.0 | 100.8 | ||||||||||||
SPIAs and supplemental contracts: | ||||||||||||||||||
Mortality based | 248.5 | 250.9 | 251.9 | 243.2 | 248.6 | 233.5 | ||||||||||||
Deposit based | 265.5 | 266.8 | 267.1 | 269.6 | 267.2 | 271.9 | ||||||||||||
Separate Accounts | 4.7 | 4.6 | 4.7 | 4.7 | 4.7 | 4.6 | ||||||||||||
Health: | ||||||||||||||||||
Supplemental health | 2,558.0 | 2,587.5 | 2,621.7 | 2,650.3 | 2,604.4 | 2,680.2 | ||||||||||||
Medicare supplement | 29.5 | 28.4 | 27.8 | 27.5 | 28.3 | 26.9 | ||||||||||||
Other health | 14.3 | 14.3 | 14.1 | 13.9 | 14.1 | 13.8 | ||||||||||||
Life: | ||||||||||||||||||
Interest sensitive | 150.5 | 150.6 | 150.3 | 149.7 | 150.3 | 149.2 | ||||||||||||
Non-interest sensitive | 182.3 | 180.5 | 178.9 | 177.5 | 179.8 | 175.3 | ||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 3,928.0 | $ | 3,947.8 | $ | 3,968.1 | $ | 3,974.5 | $ | 3,954.6 | $ | 3,982.3 | ||||||
Annuities - account value rollforwards (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Fixed index annuities | ||||||||||||||||||
Balance as of the beginning of the period | $ | 354.0 | $ | 345.9 | $ | 334.5 | $ | 324.0 | $ | 354.0 | $ | 313.4 | ||||||
Gross deposits | 0.2 | 0.3 | 0.2 | 0.5 | 1.2 | 0.2 | ||||||||||||
Withdrawals | (9.2 | ) | (12.6 | ) | (12.9 | ) | (13.0 | ) | (47.7 | ) | (11.6 | ) | ||||||
Returns reinvested | 0.9 | 0.9 | 2.2 | 1.9 | 5.9 | 2.8 | ||||||||||||
Balance as of the end of the period | $ | 345.9 | $ | 334.5 | $ | 324.0 | $ | 313.4 | $ | 313.4 | $ | 304.8 | ||||||
Fixed interest annuities | ||||||||||||||||||
Balance as of the beginning of the period | $ | 111.4 | $ | 108.3 | $ | 105.9 | $ | 103.1 | $ | 111.4 | $ | 100.3 | ||||||
Gross deposits | 0.1 | 0.1 | 0.1 | — | 0.3 | 0.1 | ||||||||||||
Withdrawals | (4.2 | ) | (4.3 | ) | (3.3 | ) | (4.2 | ) | (16.0 | ) | (2.9 | ) | ||||||
Returns reinvested | 1.0 | 1.8 | 0.4 | 1.4 | 4.6 | 2.2 | ||||||||||||
Balance as of the end of the period | $ | 108.3 | $ | 105.9 | $ | 103.1 | $ | 100.3 | $ | 100.3 | $ | 99.7 | ||||||
Total annuities | ||||||||||||||||||
Balance as of the beginning of the period | $ | 465.4 | $ | 454.2 | $ | 440.4 | $ | 427.1 | $ | 465.4 | $ | 413.7 | ||||||
Gross deposits | 0.3 | 0.4 | 0.3 | 0.5 | 1.5 | 0.3 | ||||||||||||
Withdrawals | (13.4 | ) | (16.9 | ) | (16.2 | ) | (17.2 | ) | (63.7 | ) | (14.5 | ) | ||||||
Returns reinvested | 1.9 | 2.7 | 2.6 | 3.3 | 10.5 | 5.0 | ||||||||||||
Balance as of the end of the period | $ | 454.2 | $ | 440.4 | $ | 427.1 | $ | 413.7 | $ | 413.7 | $ | 404.5 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Washington National | ||||||||||||||||||
Present value of future profits (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Balance, beginning of period | $ | 290.2 | $ | 283.4 | $ | 274.1 | $ | 269.0 | $ | 290.2 | $ | 266.8 | ||||||
Amortization related to operations | (6.5 | ) | (6.3 | ) | (5.2 | ) | (5.4 | ) | (23.4 | ) | (5.3 | ) | ||||||
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | (0.3 | ) | (3.0 | ) | 0.1 | 3.2 | — | (2.4 | ) | |||||||||
Balance, end of period | $ | 283.4 | $ | 274.1 | $ | 269.0 | $ | 266.8 | $ | 266.8 | $ | 259.1 | ||||||
Deferred acquisition costs (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Balance, beginning of period | $ | 280.0 | $ | 282.3 | $ | 284.7 | $ | 287.8 | $ | 280.0 | $ | 299.9 | ||||||
Deferred acquisition expenses | 14.3 | 14.0 | 13.8 | 13.5 | 55.6 | 14.6 | ||||||||||||
Amortization related to operations | (8.6 | ) | (8.8 | ) | (9.1 | ) | (9.2 | ) | (35.7 | ) | (9.0 | ) | ||||||
Amortization related to net realized investment (gains) losses | (0.2 | ) | (0.1 | ) | — | — | (0.3 | ) | — | |||||||||
Amortization related to fair value changes in embedded derivative liabilities | 0.9 | 0.4 | (0.4 | ) | (1.3 | ) | (0.4 | ) | 0.1 | |||||||||
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | (4.1 | ) | (3.1 | ) | (1.2 | ) | 9.1 | 0.7 | (1.5 | ) | ||||||||
Balance, end of period | $ | 282.3 | $ | 284.7 | $ | 287.8 | $ | 299.9 | $ | 299.9 | $ | 304.1 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Colonial Penn | ||||||||||||||||||
Analysis of income (loss) before taxes (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Insurance policy income | $ | 69.1 | $ | 70.5 | $ | 70.9 | $ | 70.9 | $ | 281.4 | $ | 73.0 | ||||||
Net investment income on general account invested assets | 11.0 | 10.9 | 11.1 | 11.2 | 44.2 | 10.9 | ||||||||||||
Fee revenue and other income | 0.4 | 0.2 | 0.2 | 0.3 | 1.1 | 0.2 | ||||||||||||
Total revenues | 80.5 | 81.6 | 82.2 | 82.4 | 326.7 | 84.1 | ||||||||||||
Insurance policy benefits | 50.4 | 50.3 | 50.1 | 50.4 | 201.2 | 52.6 | ||||||||||||
Amounts added to annuity and interest-sensitive life product account balances | 0.1 | 0.2 | 0.2 | 0.2 | 0.7 | 0.1 | ||||||||||||
Amortization related to operations | 3.9 | 3.7 | 3.7 | 4.0 | 15.3 | 4.0 | ||||||||||||
Interest expense on investment borrowings | 0.1 | 0.2 | 0.1 | 0.2 | 0.6 | 0.2 | ||||||||||||
Other operating costs and expenses | 32.8 | 24.2 | 27.2 | 23.0 | 107.2 | 27.5 | ||||||||||||
Total benefits and expenses | 87.3 | 78.6 | 81.3 | 77.8 | 325.0 | 84.4 | ||||||||||||
Adjusted EBIT (4) | $ | (6.8 | ) | $ | 3.0 | $ | 0.9 | $ | 4.6 | $ | 1.7 | $ | (0.3 | ) | ||||
Average liabilities for insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
SPIAs - mortality based | $ | 71.2 | $ | 74.3 | $ | 76.1 | $ | 74.8 | $ | 74.1 | $ | 72.6 | ||||||
Health: | ||||||||||||||||||
Medicare supplement | 6.8 | 6.6 | 6.4 | 6.2 | 6.5 | 6.0 | ||||||||||||
Other health | 4.3 | 4.3 | 4.2 | 4.2 | 4.2 | 4.1 | ||||||||||||
Life: | ||||||||||||||||||
Interest sensitive | 16.2 | 16.2 | 16.3 | 16.0 | 16.2 | 15.8 | ||||||||||||
Non-interest sensitive | 680.6 | 684.7 | 691.9 | 700.3 | 689.4 | 708.0 | ||||||||||||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 779.1 | $ | 786.1 | $ | 794.9 | $ | 801.5 | $ | 790.4 | $ | 806.5 | ||||||
Present value of future profits (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Balance, beginning of period | $ | 43.9 | $ | 42.6 | $ | 41.6 | $ | 40.5 | $ | 43.9 | $ | 39.5 | ||||||
Amortization related to operations | (1.3 | ) | (1.0 | ) | (1.1 | ) | (1.0 | ) | (4.4 | ) | (1.1 | ) | ||||||
Amounts related to changes in unrealized investment gains (losses) on fixed maturities, available for sale | — | — | $ | — | — | — | — | |||||||||||
Balance, end of period | $ | 42.6 | $ | 41.6 | $ | 40.5 | $ | 39.5 | $ | 39.5 | $ | 38.4 | ||||||
Deferred acquisition costs (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Balance, beginning of period | $ | 85.1 | $ | 90.1 | $ | 93.1 | $ | 96.7 | $ | 85.1 | $ | 98.6 | ||||||
Deferred acquisition expenses | 7.6 | 5.7 | 6.2 | 4.9 | 24.4 | 6.9 | ||||||||||||
Amortization related to operations | (2.6 | ) | (2.7 | ) | (2.6 | ) | (3.0 | ) | (10.9 | ) | (2.9 | ) | ||||||
Balance, end of period | $ | 90.1 | $ | 93.1 | $ | 96.7 | $ | 98.6 | $ | 98.6 | $ | 102.6 | ||||||
Colonial Penn Segment Adjusted EBIT | ||||||||||||||||||
Summarized by Inforce and New Business (6) | ||||||||||||||||||
(in millions) | ||||||||||||||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Adjusted EBIT from Inforce Business | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Revenues | ||||||||||||||||||
Insurance policy income | $ | 55.3 | $ | 56.5 | $ | 57.2 | $ | 57.5 | $ | 226.5 | $ | 59.6 | ||||||
Net investment income | 11.0 | 10.9 | 11.1 | 11.2 | 44.2 | 10.9 | ||||||||||||
Fee revenue and other income | 0.4 | 0.2 | 0.2 | 0.3 | 1.1 | 0.2 | ||||||||||||
Total revenues | 66.7 | 67.6 | 68.5 | 69.0 | 271.8 | 70.7 | ||||||||||||
Benefits and expenses | ||||||||||||||||||
Insurance policy benefits | 42.1 | 42.0 | 41.9 | 42.5 | 168.5 | 44.6 | ||||||||||||
Interest expense | 0.1 | 0.2 | 0.1 | 0.2 | 0.6 | 0.2 | ||||||||||||
Amortization | 3.7 | 3.5 | 3.5 | 3.8 | 14.5 | 3.8 | ||||||||||||
Other operating costs and expenses | 8.1 | 7.8 | 8.8 | 9.1 | 33.8 | 8.0 | ||||||||||||
Total benefits and expenses | 54.0 | 53.5 | 54.3 | 55.6 | 217.4 | 56.6 | ||||||||||||
Adjusted EBIT from Inforce Business | $ | 12.7 | $ | 14.1 | $ | 14.2 | $ | 13.4 | $ | 54.4 | $ | 14.1 | ||||||
Adjusted EBIT from New Business | ||||||||||||||||||
Revenues | ||||||||||||||||||
Insurance policy income | $ | 13.8 | $ | 14.0 | $ | 13.7 | $ | 13.4 | $ | 54.9 | $ | 13.4 | ||||||
Net investment income | — | — | — | — | — | — | ||||||||||||
Fee revenue and other income | — | — | — | — | — | — | ||||||||||||
Total revenues | 13.8 | 14.0 | 13.7 | 13.4 | 54.9 | 13.4 | ||||||||||||
Benefits and expenses | ||||||||||||||||||
Insurance policy benefits | 8.4 | 8.5 | 8.4 | 8.1 | 33.4 | 8.1 | ||||||||||||
Interest expense | — | — | — | — | — | — | ||||||||||||
Amortization | 0.2 | 0.2 | 0.2 | 0.2 | 0.8 | 0.2 | ||||||||||||
Other operating costs and expenses | 24.7 | 16.4 | 18.4 | 13.9 | 73.4 | 19.5 | ||||||||||||
Total benefits and expenses | 33.3 | 25.1 | 27.0 | 22.2 | 107.6 | 27.8 | ||||||||||||
Adjusted EBIT from New Business | $ | (19.5 | ) | $ | (11.1 | ) | $ | (13.3 | ) | $ | (8.8 | ) | $ | (52.7 | ) | $ | (14.4 | ) |
Adjusted EBIT from Inforce and New Business | ||||||||||||||||||
Revenues | ||||||||||||||||||
Insurance policy income | $ | 69.1 | $ | 70.5 | $ | 70.9 | $ | 70.9 | $ | 281.4 | $ | 73.0 | ||||||
Net investment income | 11.0 | 10.9 | 11.1 | 11.2 | 44.2 | 10.9 | ||||||||||||
Fee revenue and other income | 0.4 | 0.2 | 0.2 | 0.3 | 1.1 | 0.2 | ||||||||||||
Total revenues | 80.5 | 81.6 | 82.2 | 82.4 | 326.7 | 84.1 | ||||||||||||
Benefits and expenses | ||||||||||||||||||
Insurance policy benefits | 50.5 | 50.5 | 50.3 | 50.6 | 201.9 | 52.7 | ||||||||||||
Interest expense | 0.1 | 0.2 | 0.1 | 0.2 | 0.6 | 0.2 | ||||||||||||
Amortization | 3.9 | 3.7 | 3.7 | 4.0 | 15.3 | 4.0 | ||||||||||||
Other operating costs and expenses | 32.8 | 24.2 | 27.2 | 23.0 | 107.2 | 27.5 | ||||||||||||
Total benefits and expenses | 87.3 | 78.6 | 81.3 | 77.8 | 325.0 | 84.4 | ||||||||||||
Adjusted EBIT from Inforce and New Business | $ | (6.8 | ) | $ | 3.0 | $ | 0.9 | $ | 4.6 | $ | 1.7 | $ | (0.3 | ) | ||||
CNO Financial Group, Inc. | |||||||||
Long-term care in run-off | |||||||||
Analysis of income (loss) before taxes (in millions) | 4Q16 | 2016 | 1Q17 | ||||||
Insurance policy income | $ | 4.8 | $ | 4.8 | $ | 4.6 | |||
Net investment income on general account invested assets | 9.4 | 9.4 | 9.7 | ||||||
Total revenues | 14.2 | 14.2 | 14.3 | ||||||
Insurance policy benefits | 17.6 | 17.6 | 13.2 | ||||||
Other operating costs and expenses | 0.5 | 0.5 | 0.7 | ||||||
Total benefits and expenses | 18.1 | 18.1 | 13.9 | ||||||
Adjusted EBIT (4) | $ | (3.9 | ) | $ | (3.9 | ) | $ | 0.4 | |
Health underwriting margins (in millions) | 4Q16 | 2016 | 1Q17 | ||||||
Long-term care: | |||||||||
Earned premium | $ | 4.8 | $ | 4.8 | $ | 4.6 | |||
Benefit ratio before interest income on reserves | 365.8 | % | 365.8 | % | 286.5 | % | |||
Interest-adjusted benefit ratio | 213.5 | % | 213.5 | % | 128.1 | % | |||
Underwriting margin (earned premium plus interest income on reserves less policy benefits) | $ | (5.5 | ) | $ | (5.5 | ) | $ | (1.3 | ) |
Average liabilities for insurance products (in millions) | 4Q16 | 2016 | 1Q17 | ||||||
Health: | |||||||||
Long-term care | $ | 553.6 | $ | 138.4 | $ | 560.7 | |||
Total average liabilities for insurance products, net of reinsurance ceded | $ | 553.6 | $ | 138.4 | $ | 560.7 | |||
Investments not included in scope of audit | ||||||||||||||||
Investments included in initial scope of audit | Investments included in additional scope of audit | Cash, fixed maturities and other invested assets | Total investments | |||||||||||||
September 30, 2016 values | $ | 62.2 | $ | 62.6 | $ | 379.8 | $ | 504.6 | ||||||||
Net cash flows (1) | (13.5 | ) | (11.6 | ) | (359.5 | ) | (384.6 | ) | ||||||||
Realized losses and impairments (2) | .4 | (1.7 | ) | (4.0 | ) | (5.3 | ) | |||||||||
Other activity (4) | 3.9 | 1.9 | .6 | 6.4 | ||||||||||||
December 31, 2016 values | 53.0 | 51.2 | 16.9 | 121.1 | ||||||||||||
Net cash flows (1) | (16.7 | ) | (5.5 | ) | (8.7 | ) | (30.9 | ) | ||||||||
Realized losses and impairments (3) | 3.2 | (4.5 | ) | 1.0 | (.3 | ) | ||||||||||
Other activity (4) | (1.8 | ) | 1.3 | (1.4 | ) | (1.9 | ) | |||||||||
March 31, 2017 values | $ | 37.7 | $ | 42.5 | $ | 7.8 | $ | 88.0 |
(1) | Net cash inflows from sales and redemptions of investments during the period. |
(2) | Includes $4.6 million of impairment charges and $.7 million of net realized losses recognized on the sale of transferred investments. |
(3) | Includes $8.4 million of impairment charges; partially offset by $8.1 million of net realized gains recognized on the sale of transferred investments. |
(4) | Includes amortization of discount and premium and changes in estimated fair values of investments during the period. |
CNO Financial Group, Inc. | ||||||||||||||||||
Corporate Operations | ||||||||||||||||||
Analysis of loss before taxes (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Net investment income (loss): | ||||||||||||||||||
General investment portfolio | $ | 1.3 | $ | 1.6 | $ | 1.5 | $ | 0.4 | $ | 4.8 | $ | 0.9 | ||||||
Other special-purpose portfolios | 2.7 | 4.3 | 5.2 | (0.4 | ) | 11.8 | 9.5 | |||||||||||
Fee revenue and other income | 2.5 | 2.6 | 2.5 | 2.4 | 10.0 | 2.4 | ||||||||||||
Interest expense on investment borrowings | — | — | — | — | — | — | ||||||||||||
Other operating costs and expenses | (14.6 | ) | (15.5 | ) | (13.6 | ) | (25.4 | ) | (69.1 | ) | (21.7 | ) | ||||||
Corporate operations, excluding corporate interest expense | (8.1 | ) | (7.0 | ) | (4.4 | ) | (23.0 | ) | (42.5 | ) | (8.9 | ) | ||||||
Interest expense on corporate debt | (11.4 | ) | (11.4 | ) | (11.5 | ) | (11.5 | ) | (45.8 | ) | (11.5 | ) | ||||||
Operating loss before taxes | $ | (19.5 | ) | $ | (18.4 | ) | $ | (15.9 | ) | $ | (34.5 | ) | $ | (88.3 | ) | $ | (20.4 | ) |
CNO Financial Group, Inc. | ||||||||||||||||||
Bankers Life | ||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Annuities | ||||||||||||||||||
Fixed index (first-year) | $ | 199.9 | $ | 179.6 | $ | 218.1 | $ | 270.5 | $ | 868.1 | $ | 235.3 | ||||||
Other fixed interest (first-year) | 31.9 | 25.5 | 25.4 | 12.9 | 95.7 | 20.6 | ||||||||||||
Other fixed interest (renewal) | 1.8 | 1.3 | 1.6 | 1.5 | 6.2 | 1.6 | ||||||||||||
Subtotal - other fixed interest annuities | 33.7 | 26.8 | 27.0 | 14.4 | 101.9 | 22.2 | ||||||||||||
Total annuities | 233.6 | 206.4 | 245.1 | 284.9 | 970.0 | 257.5 | ||||||||||||
Health | ||||||||||||||||||
Medicare supplement (first-year) | 18.4 | 19.1 | 18.8 | 19.3 | 75.6 | 17.5 | ||||||||||||
Medicare supplement (renewal) | 168.5 | 159.9 | 163.4 | 171.9 | 663.7 | 174.2 | ||||||||||||
Subtotal - Medicare supplement | 186.9 | 179.0 | 182.2 | 191.2 | 739.3 | 191.7 | ||||||||||||
Long-term care (first-year) | 4.4 | 4.4 | 4.4 | 4.2 | 17.4 | 4.2 | ||||||||||||
Long-term care (renewal) | 115.2 | 113.6 | 111.9 | 110.5 | 451.2 | 112.8 | ||||||||||||
Subtotal - long-term care | 119.6 | 118.0 | 116.3 | 114.7 | 468.6 | 117.0 | ||||||||||||
Supplemental health (first-year) | 1.3 | 1.4 | 1.4 | 1.4 | 5.5 | 1.4 | ||||||||||||
Supplemental health (renewal) | 3.7 | 3.9 | 4.0 | 4.1 | 15.7 | 4.3 | ||||||||||||
Subtotal - supplemental health | 5.0 | 5.3 | 5.4 | 5.5 | 21.2 | 5.7 | ||||||||||||
Other health (first-year) | — | — | — | 0.1 | 0.1 | 0.2 | ||||||||||||
Other health (renewal) | 1.6 | 1.6 | 1.5 | 1.4 | 6.1 | 1.4 | ||||||||||||
Subtotal - other health | 1.6 | 1.6 | 1.5 | 1.5 | 6.2 | 1.6 | ||||||||||||
Total health | 313.1 | 303.9 | 305.4 | 312.9 | 1,235.3 | 316.0 | ||||||||||||
Life insurance | ||||||||||||||||||
Traditional (first-year) | 20.8 | 22.2 | 18.8 | 17.0 | 78.8 | 20.2 | ||||||||||||
Traditional (renewal) | 50.2 | 52.0 | 52.3 | 52.8 | 207.3 | 54.1 | ||||||||||||
Subtotal - traditional | 71.0 | 74.2 | 71.1 | 69.8 | 286.1 | 74.3 | ||||||||||||
Interest-sensitive (first-year) | 17.8 | 18.2 | 17.9 | 16.7 | 70.6 | 11.7 | ||||||||||||
Interest-sensitive (renewal) | 25.2 | 25.5 | 26.4 | 27.3 | 104.4 | 28.3 | ||||||||||||
Subtotal - interest-sensitive | 43.0 | 43.7 | 44.3 | 44.0 | 175.0 | 40.0 | ||||||||||||
Total life insurance | 114.0 | 117.9 | 115.4 | 113.8 | 461.1 | 114.3 | ||||||||||||
Collections on insurance products | ||||||||||||||||||
Total first-year premium collections on insurance products | 294.5 | 270.4 | 304.8 | 342.1 | 1,211.8 | 311.1 | ||||||||||||
Total renewal premium collections on insurance products | 366.2 | 357.8 | 361.1 | 369.5 | 1,454.6 | 376.7 | ||||||||||||
Total collections on insurance products | $ | 660.7 | $ | 628.2 | $ | 665.9 | $ | 711.6 | $ | 2,666.4 | $ | 687.8 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Washington National | ||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Health | ||||||||||||||||||
Medicare supplement (renewal) | $ | 16.4 | $ | 15.1 | $ | 14.6 | $ | 14.9 | $ | 61.0 | $ | 14.4 | ||||||
Supplemental health (first-year) | 18.5 | 18.3 | 17.7 | 17.7 | 72.2 | 19.0 | ||||||||||||
Supplemental health (renewal) | 122.6 | 123.5 | 123.3 | 123.9 | 493.3 | 131.1 | ||||||||||||
Subtotal - supplemental health | 141.1 | 141.8 | 141.0 | 141.6 | 565.5 | 150.1 | ||||||||||||
Other health (first-year) | — | 0.1 | 0.1 | — | 0.2 | 0.1 | ||||||||||||
Other health (renewal) | 0.5 | 0.3 | 0.4 | 0.5 | 1.7 | 0.4 | ||||||||||||
Subtotal - other health | 0.5 | 0.4 | 0.5 | 0.5 | 1.9 | 0.5 | ||||||||||||
Total health | 158.0 | 157.3 | 156.1 | 157.0 | 628.4 | 165.0 | ||||||||||||
Life insurance | ||||||||||||||||||
Traditional (first-year) | 0.2 | 0.2 | 0.2 | 0.3 | 0.9 | 0.2 | ||||||||||||
Traditional (renewal) | 2.6 | 2.8 | 2.6 | 2.5 | 10.5 | 2.6 | ||||||||||||
Subtotal - traditional | 2.8 | 3.0 | 2.8 | 2.8 | 11.4 | 2.8 | ||||||||||||
Interest-sensitive (first-year) | 1.4 | 1.2 | 1.0 | 1.1 | 4.7 | 1.2 | ||||||||||||
Interest-sensitive (renewal) | 3.0 | 3.2 | 3.3 | 3.8 | 13.3 | 3.9 | ||||||||||||
Subtotal - interest-sensitive | 4.4 | 4.4 | 4.3 | 4.9 | 18.0 | 5.1 | ||||||||||||
Total life insurance | 7.2 | 7.4 | 7.1 | 7.7 | 29.4 | 7.9 | ||||||||||||
Annuities | ||||||||||||||||||
Fixed index (first-year) | — | — | — | 0.2 | 0.2 | — | ||||||||||||
Fixed index (renewal) | 0.2 | 0.4 | 0.2 | 0.2 | 1.0 | 0.2 | ||||||||||||
Subtotal - fixed index annuities | 0.2 | 0.4 | 0.2 | 0.4 | 1.2 | 0.2 | ||||||||||||
Other fixed interest (renewal) | 0.1 | 0.1 | — | 0.1 | 0.3 | — | ||||||||||||
Total annuities | 0.3 | 0.5 | 0.2 | 0.5 | 1.5 | 0.2 | ||||||||||||
Collections on insurance products | ||||||||||||||||||
Total first-year premium collections on insurance products | 20.1 | 19.8 | 19.0 | 19.3 | 78.2 | 20.5 | ||||||||||||
Total renewal premium collections on insurance products | 145.4 | 145.4 | 144.4 | 145.9 | 581.1 | 152.6 | ||||||||||||
Total collections on insurance products | $ | 165.5 | $ | 165.2 | $ | 163.4 | $ | 165.2 | $ | 659.3 | $ | 173.1 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Colonial Penn | ||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Life insurance | ||||||||||||||||||
Traditional (first-year) | $ | 14.0 | $ | 13.8 | $ | 13.8 | $ | 13.2 | $ | 54.8 | $ | 13.7 | ||||||
Traditional (renewal) | 55.4 | 55.1 | 56.2 | 56.0 | 222.7 | 60.2 | ||||||||||||
Subtotal - traditional | 69.4 | 68.9 | 70.0 | 69.2 | 277.5 | 73.9 | ||||||||||||
Interest-sensitive (all renewal) | 0.1 | 0.1 | 0.1 | — | 0.3 | 0.1 | ||||||||||||
Total life insurance | 69.5 | 69.0 | 70.1 | 69.2 | 277.8 | 74.0 | ||||||||||||
Health (all renewal) | ||||||||||||||||||
Medicare supplement | 0.5 | 0.6 | 0.6 | 0.6 | 2.3 | 0.5 | ||||||||||||
Other health | 0.1 | — | — | — | 0.1 | — | ||||||||||||
Total health | 0.6 | 0.6 | 0.6 | 0.6 | 2.4 | 0.5 | ||||||||||||
Collections on insurance products | ||||||||||||||||||
Total first-year premium collections on insurance products | 14.0 | 13.8 | 13.8 | 13.2 | 54.8 | 13.7 | ||||||||||||
Total renewal premium collections on insurance products | 56.1 | 55.8 | 56.9 | 56.6 | 225.4 | 60.8 | ||||||||||||
Total collections on insurance products | $ | 70.1 | $ | 69.6 | $ | 70.7 | $ | 69.8 | $ | 280.2 | $ | 74.5 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Long-term care in run-off | ||||||||||||||||||
Premiums collected on insurance products (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Long-term care (renewal) | — | — | — | 4.7 | 4.7 | 4.6 | ||||||||||||
Total collections on insurance products | $ | — | $ | — | $ | — | $ | 4.7 | $ | 4.7 | $ | 4.6 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
First-year collected premiums (in millions) | ||||||||||||||||||
Bankers Life | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Medicare supplement | $ | 18.4 | $ | 19.1 | $ | 18.8 | $ | 19.3 | $ | 75.6 | $ | 17.5 | ||||||
Long-term care | 4.4 | 4.4 | 4.4 | 4.2 | 17.4 | 4.2 | ||||||||||||
Supplemental health and other health | 1.3 | 1.4 | 1.4 | 1.5 | 5.6 | 1.6 | ||||||||||||
Life | 38.6 | 40.4 | 36.7 | 33.7 | 149.4 | 31.9 | ||||||||||||
Annuity | 231.8 | 205.1 | 243.5 | 283.4 | 963.8 | 255.9 | ||||||||||||
Subtotal Bankers Life | 294.5 | 270.4 | 304.8 | 342.1 | 1,211.8 | 311.1 | ||||||||||||
Washington National | ||||||||||||||||||
Supplemental health and other health | 18.5 | 18.4 | 17.8 | 17.7 | 72.4 | 19.1 | ||||||||||||
Life | 1.6 | 1.4 | 1.2 | 1.4 | 5.6 | 1.4 | ||||||||||||
Annuity | — | — | — | 0.2 | 0.2 | — | ||||||||||||
Subtotal Washington National | 20.1 | 19.8 | 19.0 | 19.3 | 78.2 | 20.5 | ||||||||||||
Colonial Penn | ||||||||||||||||||
Life | 14.0 | 13.8 | 13.8 | 13.2 | 54.8 | 13.7 | ||||||||||||
Total first-year collected premiums | $ | 328.6 | $ | 304.0 | $ | 337.6 | $ | 374.6 | $ | 1,344.8 | $ | 345.3 | ||||||
CNO Financial Group, Inc. | ||||||||||||||||||
Life and Health New Annualized Premiums ("NAP") (in millions) | ||||||||||||||||||
Bankers Life | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17 | ||||||||||||
Medicare supplement | $ | 16.4 | $ | 16.7 | $ | 15.9 | $ | 23.9 | $ | 72.9 | $ | 17.7 | ||||||
Long-term care | 6.1 | 6.0 | 5.2 | 5.5 | 22.8 | 6.9 | ||||||||||||
Supplemental health and other health | 1.5 | 1.7 | 1.7 | 1.6 | 6.5 | 1.9 | ||||||||||||
Life | 22.4 | 21.8 | 19.8 | 17.0 | 81.0 | 18.4 | ||||||||||||
Subtotal Bankers Life | 46.4 | 46.2 | 42.6 | 48.0 | 183.2 | 44.9 | ||||||||||||
Washington National | ||||||||||||||||||
Supplemental health | 22.0 | 22.4 | 22.9 | 25.2 | 92.5 | 22.9 | ||||||||||||
Life | 1.4 | 1.8 | 1.7 | 1.8 | 6.7 | 1.7 | ||||||||||||
Subtotal Washington National | 23.4 | 24.2 | 24.6 | 27.0 | 99.2 | 24.6 | ||||||||||||
Colonial Penn | ||||||||||||||||||
Life | 24.1 | 19.2 | 18.4 | 14.7 | 76.4 | 21.8 | ||||||||||||
Total NAP | $ | 93.9 | $ | 89.6 | $ | 85.6 | $ | 89.7 | $ | 358.8 | $ | 91.3 | ||||||
CNO Financial Group, Inc. | ||||||||||
Total Policies Inforce | ||||||||||
1Q16 | 2Q16 | 3Q16 | 4Q16 | 1Q17 | ||||||
Policies inforce: | ||||||||||
Bankers Life | 1,531,842 | 1,533,894 | 1,531,204 | 1,526,344 | 1,519,474 | |||||
Washington National | 958,833 | 961,003 | 959,867 | 961,689 | 964,642 | |||||
Colonial Penn | 851,138 | 851,789 | 852,305 | 846,372 | 853,307 | |||||
Long-term care in run-off | — | — | 10,480 | 10,260 | 10,068 | |||||
Total policies inforce | 3,341,813 | 3,346,686 | 3,353,856 | 3,344,665 | 3,347,491 | |||||
Third party policies inforce sold by | ||||||||||
Bankers Life agents | 147,838 | 148,718 | 149,255 | 160,548 | 154,005 | |||||
Total policies inforce and third party policies | ||||||||||
inforce sold by Bankers Life agents | 3,489,651 | 3,495,404 | 3,503,111 | 3,505,213 | 3,501,496 | |||||
CNO Financial Group, Inc. | ||||||||||||||||||
Statutory information - consolidated basis (7) (in millions) | 1Q16 | 2Q16 | 3Q16 | 4Q16 | 2016 | 1Q17(a) | ||||||||||||
Net gain (loss) from operations before interest expense and federal income taxes | $ | 91.4 | $ | 101.5 | $ | (11.0 | ) | $ | 83.0 | $ | 264.9 | $ | 93.9 | |||||
Interest expense on surplus debentures held by parent company | 12.1 | 12.1 | 12.3 | 19.5 | 56.0 | 12.0 | ||||||||||||
Net gain (loss) from operations before federal income taxes | 79.3 | 89.4 | (23.3 | ) | 63.5 | 208.9 | 81.9 | |||||||||||
Federal income tax expense (benefit) | (0.6 | ) | (5.0 | ) | (10.7 | ) | (61.1 | ) | (77.4 | ) | 11.3 | |||||||
Net gain (loss) from operations before net realized capital losses | 79.9 | 94.4 | (12.6 | ) | 124.6 | 286.3 | 70.6 | |||||||||||
Net realized capital losses | (10.5 | ) | (8.6 | ) | (0.4 | ) | (10.2 | ) | (29.7 | ) | (8.6 | ) | ||||||
Net income (loss) | $ | 69.4 | $ | 85.8 | $ | (13.0 | ) | $ | 114.4 | $ | 256.6 | $ | 62.0 | |||||
Capital and surplus | $ | 1,717.4 | $ | 1,763.4 | $ | 1,914.5 | $ | 1,956.8 | $ | 1,956.8 | $ | 1,904.7 | ||||||
Asset valuation reserve (AVR) | 201.7 | 214.1 | 241.5 | 253.3 | 253.3 | 258.0 | ||||||||||||
Capital, surplus and AVR | 1,919.1 | 1,977.5 | 2,156.0 | 2,210.1 | 2,210.1 | 2,162.7 | ||||||||||||
Interest maintenance reserve (IMR) | 491.6 | 501.5 | 496.5 | 486.9 | 486.9 | 481.8 | ||||||||||||
Total statutory capital, surplus, AVR & IMR | $ | 2,410.7 | $ | 2,479.0 | $ | 2,652.5 | $ | 2,697.0 | $ | 2,697.0 | $ | 2,644.5 | ||||||
(7) | Based on statutory accounting practices prescribed or permitted by regulatory authorities for CNO Financial's insurance subsidiaries after appropriate elimination of intercompany accounts among such subsidiaries. Such accounting practices differ from GAAP. |
&UP1SIT>7!E/2)04D]#15-3(B!X;7!'.G)E
M9#TB-C B('AM<$ &UP1SIG
NDQ65Q*(9R?
MNH_\$H_V2",GT.>U7_C]S\2-!(_Y]8__ $:U=K\;O '_ D6B'7=.A_XF>GH
M3(%',T(Y(]RO)'XCTKP34/$UUXCN?#RWQ+3Z?&EKYIZN@D)4GW ./PH ^H_B
M1XY@\"^&C>F-9KR=O*M86/#-C))_V0.OX#O7ED47QDU;P\?%B:X((FB-S%9J
M0C-&!G(3;MY'(!.34O[2D4_F^'I<'R LZ^P?Y#_+^57M!^$]QKGAVROK+XB:
ML;6XMU*I'N*J".4QYG;ICVH DTSXD:[XK^$NL7VGW"VOB'1]LDSQ1J1+'U+;
M2"!E0V?=?>NB^#OC>\\4^#[VXUJ[\Z]L9V$LI55_=E=RG ']X?A1\./AOI/
MA5M96UUQ=7CNE%I