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CNO Financial (CNO) Q4 Earnings Beat on Lower Benefits & Expenses

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·4 min read
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CNO Financial Group, Inc. CNO reported fourth-quarter 2021 adjusted earnings per share of 87 cents, which beat the Zacks Consensus Estimate by 47.5%. The bottom line surged 43% year over year.

The better-than-expected quarterly results reflect better net investment income, reduced benefits and expenses, higher annuity collected premiums and better insurance margin.

Total revenues amounted to $1.1 billion, which dipped 0.1% year over year in the fourth quarter due to lower general account assets. However, the downside was partly mitigated by sound insurance policy income, the policyholder and other special-purpose portfolios, and fee revenues and other income.

CNO Financial Group, Inc. Price, Consensus and EPS Surprise

CNO Financial Group, Inc. Price, Consensus and EPS Surprise
CNO Financial Group, Inc. Price, Consensus and EPS Surprise

CNO Financial Group, Inc. price-consensus-eps-surprise-chart | CNO Financial Group, Inc. Quote

Quarterly Operational Update

Total insurance policy income remained almost flat year over year to $629.9 million in the quarter under review.

Net investment income inched up 1.2% year over year.

Annuity collected premiums of $397.4 million climbed 15% year over year in the fourth quarter.

New annualized premiums for life and health products rose 2% year over year to $87.5 million.

Total benefits and expenses of $926.7 million declined 0.6% year over year due to reduced insurance policy benefits.

Financial Update

CNO Financial exited the fourth quarter with unrestricted cash and cash equivalents of $632.1 million, which plunged 32.6% from the 2020-end level.

Total assets amounted to $36.2 billion, which grew 2.4% from the figure as of Dec 31, 2020.

Total shareholders’ equity slipped 4.1% from the 2020-end level to $5.3 billion.

Book value per share was $43.69, which rose 8% year over year.

As of Dec 31, 2021, the debt-to-capital ratio of 17.8% improved 60 basis points (bps) year over year.

Share Repurchase and Dividend Update

CNO Financial rewarded $115.7 million to its shareholders with share buybacks to the tune of $100 million and dividends worth $15.7 million in the fourth quarter.

Full-Year Update

For 2021, adjusted earnings of $2.79 per share outpaced the Zacks Consensus Estimate of $2.53. The bottom line improved 10% year over year.

Total revenues climbed 7.9% year over year to $4.1 billion in the year.

Adjusted operating return on equity for 2021 was 12.1%.

During the year, CNO Financial returned capital worth $468.1 million to shareholders (via $402.4 million in share buybacks and $65.7 million through dividends).

Zacks Rank

CNO Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Insurers

Of the insurance industry players that have reported fourth-quarter results so far, RLI Corp. RLI, W.R. Berkley Corporation WRB and Selective Insurance Group, Inc. SIGI beat the Zacks Consensus Estimate for earnings.

RLI’s fourth-quarter 2021 operating earnings of $1.26 per share beat the Zacks Consensus Estimate by 35.9% and improved 38% from the prior-year quarter. Operating revenues of RLI for the reported quarter were $275.9 million, up 14.2% year over year but missed the consensus mark by a whisker. Gross premiums written increased 12.2% year over year to $337.2 million. RLI’s combined ratio improved 730 bps year over year to 80.7.

W.R. Berkley’s fourth-quarter 2021 operating income of $1.53 per share beat the Zacks Consensus Estimate of $1.21 by 26.5%. The bottom-line surged 66.3% year over year. Operating revenues of WRB were $2.6 billion, up 19.4% year over year. The top line beat the consensus estimate by 9.2%. W.R. Berkley’s net premiums written were $2.3 billion, up 26.6% year over year.

Selective Insurance reported fourth-quarter 2021 operating income of $1.56 per share, which beat the Zacks Consensus Estimate by 7.8% but declined 15.2% from the year-ago quarter. Total revenues of SIGI amounted to $867 million, which increased 11.4% from the year-ago quarter’s figure and outpaced the Zacks Consensus Estimate by 0.2%. On a year-over-year basis, Selective Insurance’s net premiums written increased 9% to $745.4 million.


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