CNO Financial : 2024 Annual Meeting of Shareholders Transcript

	CNO FINANCIAL GROUP, INC. Annual Meeting
Conference Title: CNO FINANCIAL GROUP, INC. Annual Meeting
Date:	Thursday, 9th May 2024
Operator:	Welcome to the CNO Financial Group, Inc. Annual Meeting of shareholders. I will now

turn the call over to Dan Maurer, Chair of the Board of CNO Financial Group. Please go ahead.

Daniel Maurer: Good morning. I'm Dan Maurer, Chair of the Board of the CNO Financial Group. I'm pleased to welcome you to our 2024 annual meeting of Shareholders, which is being held in an all-virtual format again this year. We will strive to make the meeting as inclusive as possible by offering our shareholders the same opportunities to participate as provided at our past meetings. In addition to authenticated shareholders having the opportunity to vote online during the meeting, we welcome shareholders to submit questions live by entering questions in the designated Ask a Question text box on your screen.

We will address questions related to the four proposals during the formal business portion of the meeting. For questions directed at a given proposal, please clearly note the specific proposal in your submission to assist us in identifying your question. After the formal meeting has adjourned, we will provide time for general Q&A.

In a few minutes, we'll conduct the business portion of the meeting, and then I'll introduce Gary Bhojwani, our Chief Executive Officer, for an update on the company. Following Gary's presentation, we will move to Q&A.

First, however, I would like to introduce our director nominees who are standing with me for election, all of whom are joining us virtually today. Gary Bhojwani, Archie Brown, Dave Foss, Nina Henderson, Adrianne Lee, Chet Ragavan, and Steve Shebik.

Steve David is also joining us and will retire from the board at the conclusion of today's meeting. I want to take this opportunity to recognize and thank Steve for his outstanding service and

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meaningful contributions to CNO. Speaking on behalf of the entire board, we will miss his insights, leadership, and collaboration. And we thank him very much for his service.

Also with us today is Gabriel Alejandro, a representative of our independent registered public accounting firm, PricewaterhouseCoopers. Mr. Alejandro has informed me that he does not wish to make a statement, and he will be available during the Q&A session to respond to any shareholder questions.

This meeting is now called to order, and we will turn to the business portion of our meeting. Richard Kretz has been sworn in to act as the Independent Inspector of Elections for today's meeting. If you have not yet voted or if you wish to change your vote, the polls are now open and will remain open throughout our discussion of the four proposals. After the discussion concludes, the polls will be closed and we will announce the voting results.

The meeting notice, proxy statement, and other proxy materials were timely sent on March 27th, 2024, to all holders of record of CNO's common stock as of the close of business on March 11th, 2024, which was the record date for the meeting.

Those facts are established by the affidavit of the company's distribution agent. On the record date for the annual meeting, CNO had 108,644,555 shares of common stock outstanding and entitled to vote at this meeting. Each share of common stock entitles the holder to one vote on each director nominee, and each proposal presented at this meeting as an item of business.

I have been informed by our Inspector of Elections that a majority of our outstanding shares are present in person, or by proxies returned prior to the meeting. This represents the majority of the votes entitled to be cast at this annual meeting, and accordingly, we have a quorum present. Because one, notice of the meeting has been appropriately given and two, a quorum is present. This meeting is duly constituted.

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We have four items to be voted upon today. Information about each item is contained in the company's proxy statement. As indicated in the proxy statement, the Board of Directors recommends the approval of all four proposals. Questions directed at a specific proposal will be addressed during the formal business portion of the meeting. If you have not voted or if you wish to change your prior vote, I encourage you to vote now online. Shareholders who have already sent in proxies or voted by telephone or online and do not want to change their vote, do not need to take any further action.

Proposal one is the election of eight directors nominated by the CNO's Board of Directors, each for a one-year term expiring at the 2025 Annual Meeting of Shareholders, or until their successors have been duly elected and qualified. The eight director nominees are Gary Bhojwani, Archie Brown, Dave Foss, Nina Henderson, Adrianne Lee, Chet Ragavan, Steve Shebik, and me, Dan Maurer. The board recommends that you vote for each of the director nominees.

Proposal two is the approval, by non-binding advisory vote of the executive compensation of the company's named executive officers disclosed in the proxy statement. The board recommends that you vote in favor of proposal two.

Proposal three is the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31st, 2024. The board recommends that you vote in favor of proposal three.

The next item is the proposal four. The approval of the adoption of the Amended and Restated Section 382 Shareholder Rights Plan. The board recommends that you vote in favor of proposal four. Now we will pause for any questions on these proposals. Adam Auvil, Vice President of Investor Relations & Sustainability, will lead today's questions. Adam, do we have any questions on these proposals?

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Adam Auvil: Thanks, Dan. At this time, there is one question in the queue which I'll read now. The

company has in place a director resignation bylaw that provides the board post-election discretion to determine whether to accept or reject the resignation of an incumbent director who fails to be

re-elected. Does the bylaw undermine the voting rights of shareholders by allowing the board to have the final say on the unelected director's status?

We are looking into the response right now. One second please. So compiling a response. Management still coordinating internally. Thank you to the investor for the question, we should be back to you in just one second. Still assessing the question internally. One more minute.

Daniel Maurer: Thank you for that question. The Governance and Nominating Committee has established procedures that govern the resignation process for a director who has failed to be elected in accordance with the requirements of section two. Such directors shall offer to tender his or her resignation to the Board of Directors, which will then act on the recommendation of the Governance and Nominating Committee, whether to accept or reject the resignation.

The Board of Directors will publicly disclose its decision rationale within 90 days of the Certificate of Election results. So in that way, being very responsive to shareholders. That we feel that we have duly constituted bylaws and we do not believe this impacts our shareholders' rights. Of course, we will further review the question. Thank you. Adam, are there any other questions?

Adam Auvil:

Thanks, Dan. At this time, there are no further questions in the queue.

Daniel Maurer: Discussion of the matters for shareholders' consideration is now closed. We will now proceed with voting. If there are any shareholders who have not already voted their shares or who wish to change their vote, please do so now as the polls are about to close. The polls are now closed.

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The Inspector of Elections has delivered the preliminary voting results. I am pleased to report that based on these results, on proposal one, each of the director nominees has been elected. On proposal two, the executive compensation of the named executive officers has been approved. On proposal three, the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for 2024 has been ratified. And on proposal four, the Amended and Restated Section 382 shareholders Rights Plan has been approved.

We will report the final voting results in a form 8-K to be filed with the SEC within four business days of today's meeting. That concludes the business portion of our meeting, and I formally declare that the 2024 annual meeting of shareholders is now adjourned. It's now time for the company presentation. Before we begin, I'd like to ask Adam Auvil to provide us with an opening statement. Adam.

Adam Auvil: Thanks, Dan. Let me remind the audience that any forward-looking statements we make

today are subject to a number of factors that could cause actual results to be materially different than those contemplated by the company's forward-looking statements. Today's presentation includes certain non-GAAP financial measures, which should not be construed as substitutes for the most directly comparable GAAP measures. Please refer to the reconciliation tables of the non-GAAP measures corresponding to the directly comparable GAAP measures provided in our quarterly earnings releases and financial reports filed with the SEC.

Daniel Maurer: Thank you. Adam. I will now turn this meeting over to Gary Bhojwani to review CNO's business. Gary.

Gary Bhojwani: Thanks, Dan. Good morning and thank you for joining us. As I reflect on our year, I begin by recognizing our dedicated team of associates, agents, and independent partners. When

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asked what sets CNO apart and drives our success, the answer always starts and ends with our people. They are our most valuable assets.

When I speak with our associates at our company wide town halls, there's one message that I share at every meeting. What we do matters. Our business has important real-world implications for working families, retirees, and businesses. Our purpose is to secure the future of middle- income America. We meet with and speak to thousands of people across the country every day, often assisting during the most challenging times in their lives.

During regular employee surveys, more than nine in ten of our associates share that they understand our purpose, our values, and our goals. Their commitment to our customers and the work we do forms the foundation of our company, and their talents delivered our strong performance in 2023.

I'm proud to serve alongside this team. Middle income consumers need the financial security provided by our product, services and expert guidance. I thank our customers for placing their trust in us every day.

Turning to our year in review. In 2023, CNO delivered strong earnings and exceptional operating performance, underscoring the health and strength of our business. We continued our focus on sustainable profitable growth and executing on our strategic priorities. Highlights of our full year performance include four quarters of sustained sales momentum, improvement in virtually all agent metrics across both our consumer and worksite divisions, strong net investment income results, continued strong capital position and free cash flow generation, and our share price reached an all-time high.

In our consumer division, we delivered a strong production year, showcasing the value and attractiveness of our business model and approach to serving our market. By deepening the

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integration between our agent force and direct to consumer channel, we are enhancing the customer experience and generating unique and sustainable lead sharing capabilities. CNO is one of the only companies in the industry blending D to C with exclusive agents to better serve customers.

Notable highlights of the consumer division performance in 2023 were we generated strong sales across multiple product lines with total new annualized premium up 6%. Our new product pipeline contributed meaningfully to growth in 2023. And we delivered growth in our distribution force metrics with producing agent count up 9%.

In our worksite division, 2023 marked our first full selling cycle under the optimized brand. Through optimize, we offer a single source for employers and employees to access voluntary benefit insurance products and fee-based benefit services. We serve a wide range of clients and industries with our diversified distribution through exclusive agents, brokers, and independent partners.

Notable highlights of the worksite division performance in 2023 include we continued our insurance sales momentum with all four quarters of the year posting growth of 20% or more. Initiatives to grow our worksite agent force generated significant gains in recruiting with producing agent count up 27%, and our geographic expansion initiative generated approximately one fourth of worksites total sales growth for the year.

In both divisions, our unique capabilities to marry a virtual connection with our established in- person agent force who complete the important last mile of sales and service, continued to set us apart from our peers. Our strong capital position remains a differentiator for CNO. Notable highlights of our year include our capital and liquidity ended the year well above target levels. We established a Bermuda affiliate and executed its first reinsurance transaction and fitch upgraded our financial strength rating from A minus to A.

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We returned $233 million to our shareholders in the year, including $165 million in share buybacks. We again raised our quarterly common stock dividend, the 11th straight annual increase.

Turning to our financial performance. For the full year, we reported operating earnings per diluted share of $3.09. Driven by stable underlying insurance product margins bolstered by our diversified product suite, strong net investment income results on new money rates exceeding 6% for all four quarters, and solid fee income. Sales production and agent force results were strong in both divisions as we posted record sales levels in multiple product categories. Total new annualized premium was up 9% for the year, producing agent counts were up 10%.

A robust calendar of successful product launches in 2023 accelerated our gross - growth. Producing agent counts were up sharply driven by recruiting and retention initiatives. Our risk- based capital ratio and liquidity ended the year above target levels. At year-end 2023, we had a consolidated RBC ratio of 402% and $256 million of liquidity at the holding company. Book value per diluted share, excluding AOCI increased 6% to nearly $34. Our business model is unique and valuable, and we back our commitments with a track record of execution.

As we look to the remainder of 2024 and beyond, we remain confident in our position to continue to execute on our strategy to serve middle-income America, build on our strong operating performance, drive profitable growth, and deliver shareholder value. Now I will turn the meeting to Adam to moderate the question-and-answer session. Adam.

Adam Auvil:	Thanks, Gary.	Welcome to the Q&A session. As a reminder, if you are an authenticated
shareholder and have	a question, please submit your question in a designated Ask a Question

text box on your screen. At this time, there are no questions in the queue. I'll now turn the meeting back to Gary.

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Gary Bhojwani: Thanks, Adam. To all of our shareholders, thank you for your continued support of CNO Financial Group.

Operator:

This concludes today's call. You may now disconnect.

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