CNO Financial's (CNO) Q1 Earnings, Revenues Beat Estimates

CNO Financial Group, Inc.’s (NYSE:CNO) first-quarter 2017 net operating earnings of 34 cents per share surpassed the Zacks Consensus Estimate by 9.7%. The bottom line also improved 26% year over year on higher revenues.

CNO Financial’s total revenue increased 11.4% year over year to $1 billion. The top line also topped the Zacks Consensus Estimate by 10.1%.

Total collected premiums were $940.0 million, up 5% from the prior-year quarter. New annualized premiums for life and health products amounted to $91.3 million, down 3% from the year-ago quarter.

Quarterly Segment Update

Bankers Life

Total collected premiums were $687.8 million, up 4% year over year. This was primarily due to an increase in premiums from annuity products.

New annualized premiums decreased 3% year over year to $44.9 million due to lower sales of life products.

Pre-tax operating earnings grew 16% over the last-year quarter on the back of higher spread income on annuities, favorable margins on the long-term care and Medicare supplement blocks.

WashingtonNational

Total collected premiums were $173.1 million, up 5% year over year. This was primarily due to higher sales of supplemental health products.

New Annualized premiums from life and health products were $24.6 million, up 5% from the last-year quarter.

Pre-tax operating earnings were down 11% year over year due to lower margins on the supplemental health block than the last-year quarter.

Colonial Penn

Total collected premiums were $74.5 million, up 6.3% year over year. This was primarily due to recent sales activity and steady persistency.

New annualized premiums were $21.8 million, down 10% from the year-ago quarter. Lower lead volume, primarily due to reduced marketing expenses, resulted in the deterioration.

The pre-tax operating loss was $0.3 million, narrower than a loss of $6.8 million in first-quarter 2016. The improvement was driven by reduced marketing expenses.

Corporate Operations

The segment includes performance of the investment advisory subsidiary and corporate expenses.

Pre-tax loss was $8.9 million, wider than a loss of $8.1 million in the year-ago quarter. This was primarily due to higher expenses, partially offset by favorable investment returns.

Financial Update

Unrestricted cash and investments held by CNO Financial’sholding company were $314 million at Mar 31, 2016, up 19% over year-end 2016.

Book value per common share increased to $26.77 from $25.82 at year-end 2016. Book value per diluted share, excluding accumulated other comprehensive income, increased to $22.31 from $22.02 as of Dec 31, 2016

Consolidated risk-based capital ratio was 446% as of Mar 31, 2016. This reflects estimated statutory operating earnings of $70 millionand insurance company dividends to the holding company of $128.4 million during the first three months of 2017.

Securities Repurchase and Divided Update

During the quarter, CNO Financial repurchased shares worth $43 millionand paid dividends of $14 million.

Zacks Rank and Performance of Other Multiline Insurers

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 Other Insurers

Among other players from the insurance space that have reported their first-quarter earnings so far, the bottom line at The Progressive Corporation (NYSE:PGR) , The Travelers Companies, Inc. (NYSE:TRV) and RLI Corp. (NYSE:RLI) missed their respective Zacks Consensus Estimate.

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