CNO Financial Group, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the CNO Financial Group first quarter 2024 earnings call. All lines have been placed on mute during the presentation portion of the call with an opportunity for question and answer at the end. If you'd like to ask a question, please press star followed by one on your telephone keypad. I would now like to hand this conference call over to our host, Adam Orville. Please go ahead.

Good morning, and thank you for joining us on C&O Financial Group's first quarter 2024 earnings conference call. Today's presentation will include remarks from Gary Bujwani, 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 could obtain the release by visiting the media section of our website at cnoinc.com. This morning's presentation is also available in the Investors section of our website and was filed in a Form 8K yesterday. We expect to file our Form 10Q and post it on our website on or before May 6th. 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 presentation contains a number of non-GAAP measures, which should not be considered as substitutes for the most directly comparable GAAP measures. You'll find a reconciliation of the non-GAAP measures to the corresponding GAAP measures in the appendix. Throughout the presentations, we'll be making performance comparisons, and unless otherwise specified, any comparisons made will refer to changes between first quarter 2024 and first quarter 2023. And with that, I'll turn the call over to Gary.

Thanks, Adam. Good morning, everyone, and thank you for joining us. CNO delivered another strong quarter of operating performance, building on our 2023 momentum and track record of sustainable growth. Our first quarter results were among the best operating metrics we've generated in the past several years with respect to consumer and worksite sales, our distribution force, and new products. Our consumer and worksite businesses posted our seventh consecutive quarter of sales production growth and our fifth consecutive quarter in producing agent counts. Total new annualized premium was up 8%, benefiting from successful distribution force metrics in both divisions. Our dedicated teams delivered sales growth in nearly all product categories. We posted solid and sustainable earnings with operating earnings per share of 52 cents. results benefited from favorable insurance product margin reflecting growth in the business and continued expansion of the portfolio book yield, which continues to benefit from higher interest rates. The new money rate exceeded 6% for a fifth consecutive quarter. The only material item that offset our strong operating results in the quarter was $24.3 million of unfavorable mark-to-market pre-tax impacts on real estate partnerships within our alternative investments. Despite these impacts, total net investment income was up in the quarter. Capital and liquidity remain well above target levels after returning $57 million to shareholders. Book value per diluted share excluding AOCI was $34.97, up 10%. The underlying fundamentals of our business are sound as demonstrated by sales momentum in both consumer and worksite, a growing distribution force, continued solid and sustainable earnings, our excellent capital position, and no change to our full year guidance. Turning to slide five. This quarter we introduced an expanded growth scorecard. This is our first significant change to this document since 2018. As we continue to enhance our focus on sustainable, profitable growth, the Refresh Scorecard focuses on the three key drivers of our performance, production, distribution, and investments and capital. We are pleased that nearly all metrics are up in the quarter. I especially want to draw your attention to our consistent growth in book value per share. I'll discuss each division in the next two slides, Paul will cover investments and capital in more detail during his remarks. Beginning with the consumer division on slide six, our consumer business posted a very strong start to the year. We continue to be pleased with the solid execution and sustainable sales growth. Our unique capabilities marry a virtual connection with our established in-person agent force to complete the critical last mile of sales and service delivery. These capabilities remain a key differentiator and driver of our growth. Life and health NAP was up 7%. Health NAP was up 22%, bolstered by a positive reception from consumers to our new health products. Our Medicare portfolio delivered impressive results during the quarter. Medicare supplement NAP was up 24%, and Medicare Advantage sales were up 38%. As a reminder, Medicare Advantage fees and sales are not reflected in NAP. By offering both Medicare Supplement and Medicare Advantage products, we provide more coverage options for customers. The balance and diversification of our Medicare portfolio is an important part of how we serve the middle-income market. While interest in Medicare products peaks in the fourth quarter during the annual enrollment period, Medicare distribution is a year-round business for CNO. With nearly 11,000 people turning age 65 every day in the United States, first-time customers who are new to Medicare are most in need of the service and expertise provided by our field agents. We are uniquely positioned to help them make an educated choice for their coverage. Long-term care NAP was up 71% on the continued strength of our recently launched Long-Term Care Fundamental Plus product. 99% of these policies have benefit periods of two years or less, and more than 90% had benefit periods of one year or less. These plans cover essential costs for one to two years and provide a balanced and affordable approach to funding care for our clients. Life production was down slightly the prior year as direct-to-consumer life NAF moderated in the quarter due to our decision to proactively reduce television marketing spend. Agents sold life nap was flat due to a challenging comfortable. Our DTC advertising is rooted in a price discipline and measured strategy built on decades of market experience. We maintain an opportunistic approach, scaling our marketing expenditure up or down based on advertising market. As a reminder, television advertising costs are not capitalized and typically fluctuate during presidential election years. We expect 2024 to follow a similar pattern. Our web and digital DSE capabilities are also instrumental in generating sales. Our teams are working hard to ensure that these channels continue to reach more customers. Life nap from web and digital channels was up 13% in the quarter and now accounts for approximately 25% of all DSE life sales. Our diverse lead generation and distribution capabilities enable us to adapt to changing market environments and provide balance and stability to our results. Annuity collected premiums in the quarter were up 6% and account values were up 4%. As I shared last quarter, our captive distribution model and the long-term relationships that our agents build with customers provide stability to this block. Persistency remains within expected levels in light of the current interest rate environment. Client assets in brokerage and advisory were up 32% for the quarter to a record $3.4 billion. New accounts were up 8%. Four consecutive quarters of brokerage and advisory growth reflect an agent force that is building enduring relationships with clients. When combined with our annuity account values, our clients now entrust us with more than $15 billion of their assets. Successful agent recruiting and retention fuel our sales momentum. Recruiting was up 12%, our seventh consecutive quarter of agent force gains. Producing agent count was up 8%, the fifth consecutive quarter of growth. Our proprietary agent referral and retention programs drove strong recruiting results. AgentMetrics also benefited from new initiatives that are leveraging technology to increase the effectiveness and efficiency of our online recruiting presence. Next, slide seven in our worksite division performance. Our worksite division is also off to a strong start. Life and health insurance sales were up 19%. In seven of the past eight quarters, worksite insurance sales have delivered at least 15% growth. As I shared last quarter, this level of sustained growth underscores the significant value that our worksite insurance offerings bring to employers and their employees. Services fee sales were up 9%. This metric reflects the annual contract value of benefit services sold in the first quarter and is a leading indicator of fee revenue growth. Advancing our benefit services strategy remains a priority for 2024 and beyond. Producing agent count was up 28%, our eighth consecutive quarter of growth. First year producing agent count was up 36%. We are seeing solid agent retention across all cohorts and are experiencing healthy productivity levels. Recruiting was up 32% year over year, driven by agent referrals that were up 50% in the quarter. Our results underscore the attractiveness of our agent opportunity with Optivite. As a reminder, agents who are recommended to us through our proprietary personal referral program typically stay with the company longer and are more productive. Ongoing enhancements to our agent training and onboarding programs continue to support growth in producing agent counts and agent productivity. Recent investments in a new learning management system and other digital tools are improving both the personalization and flexibility of how we deliver education to our agents. This quarter, we continue to advance several initiatives designed to accelerate worksite sales growth, add customer value, and expand our market reach. First, new product offerings continue to be well received by both employers and employees. A refreshed accident insurance product, which launched last June, was up 43 percent in the quarter our new critical illness product which was introduced in the fourth quarter was up five percent second our geographic expansion initiative accounted for 40 percent of our total sales growth in the quarter this program targets areas where we've identified strategic opportunities to grow our market share and footprint Lastly, we rolled out a client acquisition program to help agents cultivate and add value to new worksite group clients. The program launched late last year and we're already experiencing early success. New group clients were up 65% for the quarter. And with that, I'll turn it over to Paul.