CARMEL, Ind., Oct. 29, 2026 /PRNewswire/ -- CNO Financial Group, Inc. (NYSE: CNO) today reported its third quarter 2026 financial results:

- Raising 2026 operating earnings per share (EPS) guidance with the midpoint up 9% from our prior guidance.

- Net income was $161 million, or $1.71 per diluted share, and net operating income(1)  was $179 million, or $1.90 per diluted share. Significant items related to the comprehensive annual actuarial review had a $44.9 million net favorable impact on both net income and net operating income.

- Operating EPS grew 47% in the quarter and 43% year-to-date.

- Return on equity (ROE) of 16.4%; Operating ROE(5) of 14.1%, excluding significant items(5).

- Book value per share of $25.34; Book value per diluted share, excluding accumulated other comprehensive loss,(2) of $41.29, up 8%.

- Total new annualized premiums (NAP)(4) up for a 17th consecutive quarter; Continued growth in asset accumulation products.

- Consumer and Worksite delivered their 15th and 17th consecutive quarters of producing agent count growth, respectively.

- On October 1, 2026, closed a 3rd reinsurance transaction with CNO's wholly owned Bermuda affiliate, reinsuring approximately $270 million of inforce graded benefit life statutory reserves from Colonial Penn.

"CNO delivered an excellent quarter, with operating earnings per share up 47% and our 17th consecutive quarter of sales growth," said Gary C. Bhojwani, chief executive officer.

"Our momentum reflects disciplined execution across the business and continued improvement in profitability. Based on these results, we are raising our full-year operating earnings per share guidance. We also executed our 3rd reinsurance transaction with our Bermuda affiliate, supporting our focus on serving middle-income households. We remain committed to driving sustained, profitable growth and creating long-term value for our shareholders."

FINANCIAL SUMMARY

Quarter End

(Amounts in millions, except per share data)

(Unaudited)

Net operating income, a non-GAAP(a) financial measure, is used consistently by CNO's management to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes the non-operating items as defined in note (1), which are primarily non-economic accounting impacts and other non-operating items.  Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company's business.  Net income is the most directly comparable GAAP measure.

Significant items positively impacted both net income and net operating income(1) by $44.9 million, or $0.48 per diluted share, in 3Q26 compared to $32.2 million, or $0.33 per diluted share, in 3Q25.  Significant items are detailed in note (6).

FINANCIAL SUMMARY (continued)

Management vs. GAAP Measures

(Dollars in millions, except per share data)

(Unaudited)

Shareholders' equity, excluding accumulated other comprehensive income (loss), and book value per share, excluding accumulated other comprehensive income (loss), are non-GAAP measures that are utilized by management to view the business without the effect of accumulated other comprehensive income (loss) which is primarily attributable to fluctuations in interest rates associated with fixed maturities, available for sale.  Management views the business in this manner because the Company has the ability and generally, the intent, to hold investments to maturity and meaningful trends can be more easily identified without the fluctuations.  In addition, shareholders' equity excludes net operating loss carryforwards in our non-GAAP return on equity measures as such assets are not discounted and, accordingly, will not provide a return to shareholders until after it is realized as a reduction to taxes that would otherwise be paid.  Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns.

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Non-Operating Items

Net realized investment losses in 3Q26 were $48.3 million, including the unfavorable change in the allowance for credit losses of $5.4 million. Net realized investment losses in 3Q25 were $8.8 million, including the favorable change in the allowance for credit losses of $8.0 million.

During 3Q26 and 3Q25, we recognized a decrease in earnings of $16.4 million and an increase of $5.8 million, respectively, due to the net change in market value of investments.

During 3Q26 and 3Q25, we recognized an increase in earnings of $69.7 million and a decrease of $18.1 million, respectively, resulting from changes in the estimated fair value of embedded derivative liabilities and market risk benefits related to our fixed indexed annuities.  Such amounts include the impacts of changes in market interest rates and equity impacts used to determine the estimated fair values of the embedded derivatives and market risk benefits and the unfavorable impact resulting from our comprehensive annual actuarial review of $11.2 million and $14.3 million in 3Q26 and 3Q25, respectively.

During 3Q26 and 3Q25, we incurred $10.1 million and $7.2 million, respectively, of expense related to TechMod, our technology modernization initiative that began in 2025.

During 3Q26, other non-operating items primarily included a $10.0 million mark-to-market change in the agent deferred compensation plan liability, which was impacted by changes in the underlying actuarial assumptions used to value the liability.  We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change.

During 3Q25, we recognized a $96.7 million non-operating charge for the impairment of goodwill and other assets related to the acquisitions of Web Benefits Design and DirectPath in 2019 and 2021, respectively. This reflected macroeconomic uncertainty and market conditions including the decline in the value of comparable publicly traded companies and revised financial projections for the business.

During 3Q26, we recognized a $22.1 million valuation allowance on deferred tax assets associated with capital loss carryforwards. The valuation allowance reflects realized capital losses generated primarily from asset sales in anticipation of executing the internal reinsurance transaction on October 1, 2026, portfolio optimization activities, and from capital loss allocations from partnership investments together with a reduction in unrealized capital gains available to support realization of those losses as interest rates increased.

Statutory (based on non-GAAP measures) and GAAP Capital Information

The consolidated statutory risk-based capital ratio of our U.S. based insurance subsidiaries was estimated at 374% at September 30, 2026, reflecting estimated 3Q26 statutory operating gain of $21.9 million.  There were no company dividends paid to the holding company during 3Q26.

During 3Q26, we repurchased $60.0 million of common stock under our securities repurchase program.  We repurchased 1.1 million common shares at an average cost of $54.52 per share.  As of September 30, 2026, we had 91.7 million shares outstanding and had authority to repurchase up to an additional $240.4 million of our common stock.  During 3Q26, dividends paid on common stock totaled $16.5 million.

Unrestricted cash and investments held by our holding company were $230.7 million at September 30, 2026 compared to $351.4 million at December 31, 2025.

Book value per common share was $25.34 at September 30, 2026 compared to $27.92 at December 31, 2025.  Book value per diluted share, excluding accumulated other comprehensive income (loss) (2), was $41.29 at September 30, 2026 compared to $38.81 at December 31, 2025. 

The debt-to-capital ratio was 36.5% and 33.6% at September 30, 2026 and December 31, 2025, respectively.  Our debt-to-total capital ratio, excluding accumulated other comprehensive income (loss)(3), was 25.7% and 26.2% at September 30, 2026 and December 31, 2025, respectively. 

Return on equity for the trailing four quarters ended September 30, 2026 and 2025 was 16.4% and 12.5%, respectively.  Operating return on equity, excluding significant items(5), for the trailing four quarters ended September 30, 2026 and 2025 was 14.1% and 11.2%, respectively.

In this news release, CNO includes non-GAAP measures to enhance investors' understanding of management's view of the business.  The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing a broader perspective.  CNO's definitions of non-GAAP measures may differ from other companies' definitions.  More detailed information including various GAAP and non-GAAP measurements are located at CNOinc.com in the Investors section under SEC Filings.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking statements within the meaning of federal securities laws.  These prospective statements reflect management's current expectations, but are not guarantees of future performance.  Accordingly, please refer to CNO's cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company's Form 10-K for the year ended December 31, 2025 and any subsequent Form 10-Q or Form 10-K on file with the Securities and Exchange Commission and on the Company's website at CNOinc.com in the Investors section.  CNO specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.

EARNINGS RELEASE CONFERENCE CALL WEBCAST:

The Company will host a conference call to discuss results on October 30, 2026 at 11:00 a.m. Eastern Time.