CNO Financial Group, Inc.

Good morning all. Welcome to the CNO Group financial second quarter 2024 earnings call. During the conference, if you have any questions, please press star followed by one on your telephone keypad. And if you'd like to remove yourself from that line of questioning, please press star followed by two. My name is Carly and I'll be coordinating the call today. I'd now like to hand over to Adam Orville to begin.

Good morning, and thank you for joining us on C&O Financial Group's second quarter 2024 earnings conference call. Today's presentation will include remarks from Gary Bajwani, 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 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 August 7th. 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 second quarter 2024 and second quarter 2023. With that, I'll turn the call over to Gary.

Thanks, Adam. Good morning, everyone, and thank you for joining us. C&O delivered excellent financial and operating performance in the quarter. Operating earnings per diluted share were $1.05, up 94%. Our strong results were broad-based across earnings, production, and capital. Our momentum over the past several quarters is establishing a baseline of consistent and repeatable results. we are seeing the green shoots of our strong sales growth beginning to translate into earnings growth. On a consolidated basis, we posted our eighth consecutive quarter of sales production growth and our sixth consecutive quarter of growth in producing agent counts. Total new annualized premium was up 4% across the enterprise. Earnings benefited from favorable insurance product margin and strong investment results reflecting growth in the business and continued expansion of the portfolio book yield. Our new money rate exceeded 6% for a sixth consecutive quarter. Capital and liquidity remain well above target levels after returning $77 million shareholder. Book value for diluted share excluding AOCI was $36, up 11%. Each component of our business is delivering top performance as demonstrated by sales momentum in both consumer and worksite, a growing distribution force, continued solid and sustainable earnings, our excellent capital position, and raising full-year guidance on earnings and cash flow. Turning to slide five. As a reminder, last quarter we introduced an expanded growth scorecard to sharpen focus on the three key drivers of our performance, production, distribution, and investments in capital. We are pleased that all of our growth scorecard metrics are up in the quarter. I'll discuss each division in the next two slides. Paul will cover investments in capital in more detail during his remarks. Beginning with the consumer division on slide six, sales momentum continued for a seventh consecutive quarter. Solid execution and sustainable sales growth continue to drive the division's strong financial performance. Our differentiated capabilities that marry a virtual connection with our established in-person agent force to complete the critical last mile of sales and delivery service continue to be well received by our target customers. Total NAP was up 2%. NAP from field sales was up 8%. Health NAP was up 18% driven by continued momentum with new and enhanced products. Our Medicare portfolio continues to deliver strong sales growth. Medicare Supplement NAP was up 16% and Medicare Advantage sales were up 78%. As a reminder, Medicare Advantage fees and sales are not reflected in that. As we have often shared, by offering both Medicare Supplements 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. With nearly 11,000 people turning 65 every day in the United States, Medicare distribution is a year-round business for us. As consumers age into Medicare, they value trust and seek guidance to help make an informed decision about how they receive their benefits. Our thousands of dedicated field agents who can make an in-person visit to nearly every county in the United States are uniquely positioned to serve this market. Long-term CareNAP was up 88% on the continued strength of our Long-Term Care Fundamentals Plus product that we launched last year. The strong response for this product underscored the growing demand from our clients for practical long-term care solutions. Our LTC products are designed for the middle market consumer. 99% of the policies have benefit periods of two years or less, and more than 90% have benefit periods of one year or less. These plans cover essential costs for one to two years and offer a balanced affordable approach to funding care. Life production was down in the quarter, driven by lower spend on direct-to-consumer marketing. As we shared last quarter, we managed our D2C business based on advertising efficiency. In the second quarter, we reduced our television marketing spend in response to higher lead This stemmed from increased competition for television media space, which tends to spike during presidential election cycles. Meanwhile, we continue to grow our non-television direct response channels, such as web and digital, which were up 4% in the quarter and now account for approximately one quarter of our D2C live sales. Annuity collected premiums were up 9% and account values were up 5%. Our strong annuity performance was driven by a higher premium per policy, which was up 9%. We continue to experience stability in our block, which benefits from our captive distribution and the long-term relationship that our agents build with customers. Client assets in brokerage and advisory were up 24% for the quarter to a record $3.6 billion. New accounts were up 9%. This is now our fifth consecutive quarter of brokerage and advisory growth. When combined with our annuity account values, our clients now entrust us with more than $15 billion of their assets. Recruiting continues to be favorable and reflects our eighth consecutive quarter of year-over-year gains, producing agent count with up 3%, our sixth consecutive quarter of growth. Next. Slide seven and our worksite division performance. We posted our second highest quarter ever for life and health map with sales up 18%. For eight of the last nine quarters, worksite insurance sales have delivered at least 15% growth. We are very pleased with how our worksite insurance offerings are delivering sustained growth for our business and value for our clients. Fee sales were up 24%. As a reminder, this metric reflects the annual contract value of benefit services sold in the quarter and is a leading indicator of fee revenue growth. Our benefit services strategy remains a priority for 2024 and beyond. Producing agent count was up 25%, our ninth consecutive quarter of growth. First year producing agent count was up 33%. We continue to see solid agent retention across all cohorts and healthy productivity levels. New products and strategic initiatives continue to deliver sales growth for Worksite in the quarter. I'll briefly highlight three programs that are generating meaningful results. First, the new products that we introduced last year are driving sales growth. Accident insurance sales were up 27% and critical illness sales were up 16%. Second, our geographic expansion initiative accounted for 32% of our total sales growth in the quarter, the third consecutive quarter of meaningful contribution from this program. This initiative targets areas where we've identified strategic opportunities to grow our market share and footprint. Finally, in 2023, we launched an initiative to help agents cultivate and acquire new employer groups for insurance sales. We're experiencing strong momentum from this program alongside continued growth from resurfacing existing clients. New employer groups were up 8% as compared to the same period last year, and NAP from new group clients was up 90%. And with that, I'll turn it over to Paul.