Cno Financial Group, Inc. · NYSE:CNO
Cno Financial — Investor Presentation (May 2013)
27 slides from Cno Financial's investor presentation, May 13, 2013
Slide 1: CNO Overview
CNO Overview May 13, 2013 Exhibit 99.1
Slide 2: 13, 2013
CNO Financial Group | CNO Overview | May 13, 2013 2
Slide 3: Forward-Looking Statements
CNO Financial Group | CNO Overview | May 13, 2013 3 Forward-Looking Statements Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about future results of operations
Slide 4: Non-GAAP Measures
CNO Financial Group | CNO Overview | May 13, 2013 4 Non-GAAP Measures This presentation contains financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP). Reconciliations between those non-GAAP measures and the comparable GAAP measures are inc
Slide 5: CNO Fundamentals
CNO Financial Group | CNO Overview | May 13, 2013 5 Track record of strong execution Well positioned in the growing and underserved retirement and middle-income market Building core value drivers Well capitalized and generating significant excess capital CNO Fundamentals
Slide 6: Track Record of Execution: Total Return Since YE2009
CNO Financial Group | CNO Overview | May 13, 2013 6 123% 63% 49% CNO Peer Group S&P Life & Health Insurance Track Record of Execution Total Return Since YE2009* *As of market close on 3/29/13 Reset Business Mix Financial Foundation Return Value To Shareholders Invest in Growth Peers - AFL, AIZ, AMP,
Slide 7: What Differentiates CNO?
CNO Financial Group | CNO Overview | May 13, 2013 7 What Differentiates CNO? Focus on serving the needs of our retirement and middle- income target market, a market that is fast growing and underserved Exclusive distribution ‒ Consistent with market focus ‒ We have “pricing” influence ‒ Track reco
Slide 8: The Opportunity: Fast Growing, Underserved and Unprepared
CNO Financial Group | CNO Overview | May 13, 2013 8 0 20 40 60 80 100 120 140 160 180 200 2010 2020 2030 2040 2050 M il li on s Age 45 - 54 Age 55 - 64 Age 65+ CNO’s Target Market Source: Census Data Population Growth in Our Market The Opportunity Fast Growing, Underserved and Unprepared “Over the p
Slide 9: Investment in the Business
CNO Financial Group | CNO Overview | May 13, 2013 9 Investment in the Business CNO Investing in marketing, productivity and growth of the agent force Expanding presence by adding new locations and geographies Developing and launching new products to meet the needs of our target market Drivin
Slide 10: Segment Earnings Trend
CNO Financial Group | CNO Overview | May 13, 2013 10 $5.2 $(9.1) $3.3 $(2.7) $3.0 $(9.8) $0.6 $(2.6) $3.2 $(5.4) $17.7 $1.9 $10.4 $16.5 $3.6 $59.5 $72.5 $80.6 $77.7 $71.3 $24.7 $33.9 $33.9 $34.6 $29.4 1Q12 2Q12 3Q12 4Q12 1Q13 Corporate CP OCB BLC WN ($ millions) * A non-GAAP measure. See the Appendi
Slide 11: Capital Strategy
CNO Financial Group | CNO Overview | May 13, 2013 11 $294 $347 $423 $449 $161 $203 $294 $244 332% 358% 367% 366% 2010 2011 2012 1Q13 Capital to Holding Company from Insurance Subs Holding Company Liquidity RBC Debt to Cap xAOCI*** 21.9% 18.3% 20.7% 19.5% ($ millions) Capital Strategy Forward Capital
Slide 12: Capital Generation and Deployment
CNO Financial Group | CNO Overview | May 13, 2013 12 Interest $8 Holdco Exp & Other $7 Debt Repayment $14 Common Stock Div $4 Tender Offer $126 Capital Generation and Deployment ($ in millions) 1Q13 Sources and Uses Highlights Generated almost $500mm of capital in 2012 Deployed $159mm in capital
Slide 13: Returning Capital to our Shareholders
CNO Financial Group | CNO Overview | May 13, 2013 13 Returning Capital to our Shareholders CNO Since initiating the share buyback program, repurchased equivalent of 80 million shares, leading to a 26%* reduction in weighted average diluted shares outstanding Cumulative investment of $717mm in st
Slide 14: CNO: 2013 Initiatives Support 2015 Milestones
CNO Financial Group | CNO Overview | May 13, 2013 14 Grow sales, premium, distribution and product portfolio Drive toward efficiencies in operations and leveraging expertise across the enterprise Expand ROE through increased earnings and effective use of capital while reducing volatility Con
Slide 15: Q&A
CNO Financial Group | CNO Overview | May 13, 2013 15 Q&A
Slide 16: Appendix
CNO Financial Group | CNO Overview | May 13, 2013 16 Appendix
Slide 17: Loss Recognition & Cash Flow Testing
CNO Financial Group | CNO Overview | May 13, 2013 17 Loss Recognition & Cash Flow Testing 2012 Statutory Cash Flow Testing 2012 GAAP Loss Recognition Testing Aggregate testing margins remain strong Testing margin increased in 2012 ↑ - ASU 2010-26 ↑ - Net growth from new business (+6%) ↓ - Lower
Slide 18: "Low-For-Long" Rates – Reserve Sensitivity
CNO Financial Group | CNO Overview | May 13, 2013 18 • Moderate Stress: 4.75% NMR held flat for 5 years then recovering • Severe Stress: 50 basis point drop in NMR to 4.25% held flat indefinitely • 3Q assumption change: OCB interest sensitive life reserve charge - $28mm (after-tax) • Stress tests im
Slide 19: Product Level Risk Management
CNO Financial Group | CNO Overview | May 13, 2013 19 Retirement Security Medicare Annuities Supplemental Health Long-Term Care Life Insurance Basic products that fit with exclusive distribution and meet the basic insurance needs of the middle market Attractive and more predictable return charact
Slide 20: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | May 13, 2013 20 The following provides additional information regarding certain non-GAAP measures used in this presentation. A non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that excludes or includes amounts
Slide 21: 1Q2012 Significant Items
CNO Financial Group | CNO Overview | May 13, 2013 21 The table below summarizes the financial impact of significant items on our 1Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). Net
Slide 22: 2Q2012 Significant Items
CNO Financial Group | CNO Overview | May 13, 2013 22 The table below summarizes the financial impact of significant items on our 2Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). Net
Slide 23: 3Q2012 Significant Items
CNO Financial Group | CNO Overview | May 13, 2013 23 The table below summarizes the financial impact of significant items on our 3Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). Net
Slide 24: 4Q2012 Significant Items
CNO Financial Group | CNO Overview | May 13, 2013 24 The table below summarizes the financial impact of significant items on our 4Q2012 net operating income. Management believes that identifying the impact of these items enhances the understanding of our operating results (dollars in millions). Net
Slide 25: 1Q2013 Significant Item
CNO Financial Group | CNO Overview | May 13, 2013 25 The table below summarizes the financial impact of the significant item on our 1Q2013 net operating income. Management believes that identifying the impact of this item enhances the understanding of our operating results (dollars in millions). Net
Slide 26: Quarterly Earnings
CNO Financial Group | CNO Overview | May 13, 2013 26 Quarterly Earnings CNO *Management believes that an analysis of earnings before net realized investment gains (losses), fair value changes in embedded derivative liabilities, equity in earnings of certain non-strategic investments and earnings att
Slide 27: Information Related to Certain Non-GAAP Financial Measures
CNO Financial Group | CNO Overview | May 13, 2013 27 Information Related to Certain Non-GAAP Financial Measures 4Q10 4Q11 4Q12 1Q13 Corporate notes payable 998.5$ 857.9$ 1,004.2$ 934.2$ Total shareholders' equity 3,811.6 4,613.8 5,049.3 5,028.6 Total capital 4,810.1$ 5,471.7$ 6,053.5$ 5,962.8$ Corpo
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