CNO Financial Group, Inc.

Good morning or good afternoon all and welcome to the C&O Financial Group last quarter 2023 earnings results call. My name is Adam and I'll be your operator for today. If you'd like to ask a question at the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I'll now hand the floor over to Adam Orville to begin. So Adam, please go ahead when you're ready.

Good morning and thank you for joining us on C&O Financial Group's first quarter 2023 earnings conference call. Today's presentation will include remarks from Gary Bagiwani, Chief Executive Officer, and Paul McDonough, Chief Financial Officer. Following the presentation, we will also have other business leaders available for the question and answer period. During this conference call, we will be referring to information contained in yesterday's press release. You can obtain the release by visiting the media section of our website at cnoinc.com. This morning's presentation is also available in the investor section of our website and was filed in the form 8K yesterday. We expect to file our Form 10-Q and post it on our website on or before May 10. Let me remind you that any forward-looking statements we make today are subject to a number of factors which may cause actual results to be materially different than those contemplated by the forward-looking statements. Today's presentations contain a number of gap measures which should not be considered as substitutes for the most directly comparable gap measures. You'll find a reconciliation of the non-gap measures to the corresponding gap measures in the appendix. Throughout the presentation, we'll be making performance comparisons, and unless otherwise specified, any comparisons made will be referring to changes between first quarter 2023 and first quarter 2022. And with that, I'll turn the call over to Gary.

Thanks, Adam. Good morning, everyone, and thank you for joining us. We're off to a positive start in 2023, posting solid operating earnings, production, and capital results. Operating earnings per share were 51 cents, Our balanced business model lends strength, stability, and resilience to our earnings results. The fundamental health of the business is solid, as demonstrated by strong insurance product margins, growth in fee income, increasing new money rates, and solid overall investment results, even as alternative results underperformed compared to the prior year period. Sales production and agent recruiting delivered strong balanced results across both our consumer and worksite divisions. Total new annualized premium was up 7%. We posted sales growth in nearly all product categories, including direct-to-consumer and field-agent sold life, Medicare products, including both Medicare Supplement and Medicare Advantage, supplemental health, annuities, and worksite insurance sales. Capital ratios and liquidity remained above target levels, underscoring our resilient capital position and disciplined capital management. Our high-quality investment portfolio remains well-positioned to weather market turmoil and to deliver consistent investment income. Book value per diluted share excluding AOCI was up 13% to over $31. Effective January 1, we adopted LDTI, the new GAAP accounting standard for long-duration insurance contracts. This transition represents the culmination of a significant multi-year initiative. We thank and recognize the many C&O associates from across our organization for their hard work and dedication to implementing LDTI. Turning to slide five and our growth scorecard. Four of our five growth scorecard metrics were up for the quarter, demonstrating the value of our broad product portfolio and diverse integrated distribution model. I'll discuss each division in the next two slides. beginning with the consumer division on slide six. We are very pleased with sales performance in the quarter. We saw year-over-year sales growth in nearly all of our product lines in the consumer division. Life and health NAP was up 4% for the quarter. Life production was up nicely. Life sales in the banker's life agent channel were up 5%. Our direct-to-consumer channel generated record life sales, up 1% against a strong comparable. This is the seventh consecutive quarter of sales growth for D2C Life. Efficient advertising spend, enhanced distribution, and solid policy conversion rates continue to deliver growth for this business. Supplemental health sales were up 12%, the third quarter of double-digit growth for these products. Our Medicare business posted record growth in the quarter, building on sales momentum from the fourth quarter Medicare annual enrollment period. As a reminder, our approach to Medicare business includes Medicare supplement products that we manufacture and a broad offering of third-party Medicare Advantage and Part B prescription drug plans for which we collect fees. Medicare supplement NAF was up 20% for the quarter. The new, more efficient, excuse me, the new, more competitive Medicare supplement plans that we launched last year continue to be well-received by consumers in this important market. Medicare Advantage sales were up 55% for the quarter. This contributed to third-party fee revenue growth of 57%. As a reminder, MA policies drive fee revenue and are not reflected in that. Enhancements to our Medicare portfolio are enabling double-digit growth. We continue to add Medicare Advantage carrier plans that are available through our My Health Policy platform and make strategic technology investments in the platform's capabilities. With branch offices in more than 230 communities, we operate a national footprint of knowledgeable local agents ready to help with Medicare enrollments. Our agents build personal relationships with our customers, earning the opportunity to assist with future needs and develop potential cross-sales. These strong relationships allow us to mitigate the churn prevalence in so much of the industry. Our unique ability to marry a virtual connection with our established in-person agent force who complete the important last mile of sales and service remains a key differentiator. Annuity collected premiums were up 1%, our 10th consecutive quarter of comparable period growth. Annuity persistency remains within expected ranges. This is primarily due to our model of distributing annuity products exclusively through our captive agents. Client assets in brokerage and advisory were down 8% year over year to $2.6 billion due to ongoing market volatility and declining equity values. More importantly, net inflows and new accounts were up, continuing this positive trend from prior quarters. Combined with our annuity account values, our clients entrust us with nearly $14 billion of their assets. Agent recruiting continued to accelerate and was up 22%. our fifth consecutive quarter of recruiting gains. As a result of this sustained recruiting success, we achieved an inflection point in our producing agent count, which ended up 1% for the quarter. As I've shared in previous calls, it takes time for new agents to meet production levels to be counted as a producing agent. We're pleased to see meaningful increases in agent recruiting begin to translate into increases in producing agent count. We remain bullish on our agent force prospects for the balance of the year. Our recruiting strategies support a return to continued agent force growth. These include our proven agent referral program and recent enhancements to our online recruiting approaches. A softer labor market has traditionally resulted in more successful recruiting environments. Veteran agent retention and productivity remain solid. Our registered agent count increased 5% from prior year, expanding the number of securities professionals available to assist our customers in today's challenging economic environment. Turning to slide seven and our worksite division performance. Insurance sales were up 28% this quarter. This is the eighth consecutive quarter of growth. Three of the last four quarters had growth of 20% or more, albeit off a small base. Leading indicators of the health of the business continue to trend positively. Retention of our existing employer customers remains strong. Employee persistency within these employer groups is stable. Producing agent counts were up 38% and recruiting was up 48%. We remain squarely focused on deepening the integration of our worksite capabilities under our Optivise brand, advancing our strategic worksite priorities in both the national and regional employer markets, and accelerating agent recruiting momentum. We also continue to invest in our ability to serve customers through service and product offerings. In the second half of last year, we introduced our hybrid enrollment platform, Optivise Now. The platform gives our agents greater flexibility to connect with employees wherever they are, including by video meeting or over the phone. It continues to be well received by employers and employees, and we have experienced an uptick in attendance rates as a result of the technology. And with that, I'll turn it over to Paul.