CNO Financial Reports Strong Q4 2025 Results and Outlook
CNO Financial Group, Inc. unveiled its fourth-quarter 2025 results, showcasing noteworthy achievements with adjusted earnings per share hitting $1.47. This figure exceeded analyst expectations by 22.5% and marked a significant rise from the prior year's $1.31. The insurance firm boasted operating revenues of $1.2 billion, reflecting a robust 2.6% growth year over year, and surpassing market forecasts by 17.7%.
Growth Drivers and Financial Performance
The quarter's remarkable performance was driven by increased collected premiums across annuity, life, and health insurance products, alongside a rise in new annualized premiums and enhanced fee revenues. However, CNO Financial navigated challenges posed by elevated total benefits and expenses, notably due to higher insurance policy benefits and additional operational costs.
Insurance policy income rose 2.9% to $662.2 million, surpassing expectations of $655.4 million, propelled by premium growth in annuity, life, and health segments. CNO's general account assets ascended by 1.7% to $406.1 million year over year, while policyholder and other special-purpose portfolios surged an impressive 31% to $22.4 million.
Premium and Revenue Breakdown
Income from fees and other sources exhibited a slight rise of 0.3% to $78.9 million. Annuity premiums climbed to $508.3 million, marking a 3.1% increase, while health premiums rose 3.8% to $435.7 million. Life insurance premiums saw a 3.3% uptick to $247.6 million, contributing to an overall premium growth of 3.4% year over year to $1.2 billion.
New annualized premiums for health products skyrocketed by 30.7%, with a modest 0.9% rise in life product premiums. The distribution of the insurance margin favored health at 52.4%, followed by annuities at 21.2%, and life products at 26.4%. Total benefits and expenses experienced a 19.3% increase to $1 billion, driven by higher costs associated with policy benefits and operational activities.
Financial Health and Outlook
By the end of 2025, CNO Financial's cash and cash equivalents saw a decrease of 42.3%, totaling $956.1 million. Nevertheless, total assets improved by 2.5% to $38.8 billion. The debt-to-capital ratio improved, falling to 33.6%, a decrease of 860 basis points from the previous year, while shareholders' equity rose 4.9% to $2.6 billion. The book value per share appreciated by 12.8% to $27.92, maintaining a stable operating return on equity at 11.4%.
In terms of shareholder returns, CNO Financial repurchased $60 million worth of its shares and distributed $16.2 million in dividends during the fourth quarter, leaving a remaining repurchase capacity of $420.4 million. Looking towards 2026, CNO Financial anticipates operating EPS in the range of $4.25 to $4.45. However, the midpoint suggests a slight decline of 1.1% from 2025. Expected excess cash flow is projected at $200-$250 million, with the expense ratio anticipated between 18.8% and 19.2%, and an effective tax rate of about 22.5%. The company targets a leverage range of 25-28%.
CNO Financial holds a Zacks Rank #3 (Hold). Competitors like Skyward Specialty Insurance Group, Inc., Hagerty, Inc., and Trupanion, Inc. are currently excelling with higher Zacks ranks, showcasing strong earnings performances and positive growth forecasts in the finance industry.