CNO Financial Group Inc. says it will be changing the structure it uses to run its business, and changing the way how it tells shareholders about its performance.
The Carmel, Indiana-based insurer announced Tuesday that, starting with the first quarter of 2020, it will have just two business divisions: a consumer division, and the rest in a worksite division.
In recent years, the company has had three operating segments: the Bankers Life segment, the Washington National segment, and the Colonial Penn segment.
CNO sells products such as life insurance, Medicare supplement insurance, annuities, and supplemental health insurance products. Its Bankers Life unit continues to write some long-term care insurance and short-term care insurance.
CNO will keep the Bankers Life, Washington National and Colonial Penn brands, policies and contracts the same, but, inside the company, CNO will consolidate operations in ways that could cut spending by about $22 million per year, the company says.
CNO says Joel Schwartz, the president of Colonial Penn, will leave the company April 10 as a result of the changes.
Gary Bhojwani, CNO’s chief executive officer, said in a comment on Joel Schwartz’s departure, which was included in the realignment announcement, that Schwartz is a highly respected and valuable business leader who has contributed significantly to the growth and success of CNO.
“He was a driving force in developing our direct-to-consumer business and building our web and digital platform,” Bhojwani said. “We thank him for his many contributions and wish him continued success in his future endeavors.”
Scott Goldberg, who has been president of Bankers Life and Casualty, will be president of the new consumer division at CNO.
Mike Heard, who has been president of CNO’s Washington National unit, will be president of the worksite division.
CNO will work to centralize how it handles activities such as marketing, agent recruiting, and agent sales in support. Today, each of the three operating segment handles those activities itself, the company says.
The company says the realignment will also change how its quarterly financial reports look, starting with the reports for the first quarter of 2020. The first quarter of 2020 ends March 31.
Bhojwani said CNO believes the changes will make CNO a leaner, more agile company.
“Consumer purchasing behaviors are rapidly changing across all industries, including insurance,” Bhojwani said.” Consumers increasingly want to choose how to be served-whether to meet with an agent face-to-face, speak with an agent over the phone or at work, or shop online. Our new structure will capitalize on the strengths of our top five captive agent force and our top five direct-to-consumer business to enable our middle-market consumers to better access our products, irrespective of distribution or brand.”
CNO hopes to invest $11 million in savings from the realignment in technology and growth initiatives.
— Read CNO to Give Up Indianapolis Arena Naming Rights, on ThinkAdvisor.