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7 Things CNO Told Investors About Insurance and the Middle Market

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Gary Bhojwani, the chief executive officer of CNO Financial Group Inc., got to ring the opening bell for the New York Stock Exchange Tuesday — a day the NYSE Composite Index fell 2.88%, due to fears about the effects of the new coronavirus.

Bhojwani told investors Wednesday, during the company’s investor day conference, that he talked to his father about the market downturn later in the day. He said his father told him, “‘So, what’s the big deal? Isn’t that why you guys do what you do? Isn’t the very thing you’re supposed to do is to make a difference in that setting, so that clients like me don’t have to worry about that?’”

Bhojwani said he realized that what his father was saying is true.

“At its core, we help middle class people,” Bhojwani said. “We help people navigate through the kinds of challenges we’re seeing.”


  • A copy of CNO’s investor day presentation and its latest earnings data supplement are available here.
  • A link to a video of the investor day presentation is available here.
  • Links to earlier ThinkAdvisor articles about CNO are available here.

CNO sells life insurance, health insurance and annuities to moderate-income individuals and small businesses through television ads, direct mail, the Internet, independent agents, and exclusive agents.

CNO is just one of many companies that’s courting investors with investor day events this month. Bhojwani and other company executives faced many questions from investors and securities analysts about the effects of falling interest rates, efforts to cut company expenses, and how much the company might return to shareholders in the form of dividends and stock buybacks.

The executives also tried to share their vision of the company’s market.

Here are seven things company executives told investors and analysts about the company’s world, drawn from the investor day presentation, which was streamed live on the web, and from the presentation slidedeck.

1. CNO sees individual consumers’ needs as fitting on a grid.

The company has a row at the top of the grid showing consumers in four life stages: a 45-year-old, a 55-year-old, a 65-year-old, and a 70-year-old.

Down the side of the chart, the company shows six key needs: paying for basic necessities; maintaining security and safety; accumulating assets; enhancing life; striving for financial independence; and leaving a legacy.

2. CNO sees efforts to reach people online as fitting in with other methods for reaching people.

The company’s Colonial Penn life insurance unit ran more than 200,000 TV commercials for life insurance in 2019, but its agents also knocked on 1 million doors in rural areas, according to company data.

3. CNO sees each type of distribution as having its own value and its own purpose.

Direct-to-consumer methods are great for selling simple products, and independent agents are great for selling products such as accident insurance and critical illness insurance, the company says.

Exclusive agents are great for providing expert advice and wealth solutions, the company said.

The company noted that it has about 5,850 people in its exclusive distribution organization, including 475 field managers, 425 traveling agents, 250 telesales agents, and 4,700 local agents.

4. CNO loves it when the exclusive agents get licensed to sell securities.

About 30% of the agents with more than two years of experience, and about 13% of all producing agents, are registered to sell securities.

The agent-advisors who are licensed to sell securities have average income that’s about 2.5 times as high as the average income of agents who are licensed solely to sell insurance, according to company data.

The registered agent-advisors get more income from selling insurance, on top of the income they get from selling securities, according to CNO.

Bhojwani said his personal experience is that selling clients annuities or other asset-based products changes the client’s relationship with the financial professional.

“You’re no longer an expense to be minimized,” Bhojwani said. “You’re an asset to be grown.”

5. CNO still sells stand-alone long-term care insurance.

The company that it uses many strategies to reduce product risk, such as using reinsurance, and keeping maximum benefits periods short.

But “LTC is a top retirement concern,” the company said.

CNO believes it can still meet this deep-rooted need and generate profit, especially given the current low level of competition in the LTCI market.

6. CNO has noticed that falling rates can affect the profitability of annuities.

“We actively manage credited rates,” according to the slidedeck. “While some credited rates are at guarantees, particularly on the fixed interest block, we have room to maneuver on credited rates on roughly 76% of our total annuity account value.”

7. CNO thinks the middle market is still offers many sales opportunities.

If advisors enjoy calling $2 million clients, “they don’t want to focus on the $100,000 client,” Bhojwani said. “That’s just simple human nature.”

— Read CNO to Change Corporate Structureon ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.