CNO Financial Group raised its return-on-equity target to the mid-teens at the KBW Insurance Conference on Thursday, signaling confidence in its turnaround as broker-dealer assets reached $19 billion in the second quarter.
CEO Gary C. Bhojwani said the company now expects top-quartile profitability, up from a previous 2027 target of approximately 12% ROE. That earlier target implied roughly 200 basis points of expansion from a 2024 run rate of about 10%. Management indicated the current ROE already exceeds the prior 2027 goal.
The insurer also disclosed a $170 million, three-year technology modernization program covering about a dozen smaller systems, targeting completion by the end of 2028. Bhojwani described the project as being in its "third inning," emphasizing that execution—not capital or ideas—is the key differentiator in the insurance sector.
"I have a bias right now that capital and ideas are commodities," Bhojwani said. "The real differentiator is execution... you just got to find a way to do each one just 1% better every quarter, every month, every year."
CNO's broker-dealer platform, launched roughly a decade ago, posted $19 billion in assets as of Q2, up 24% for the quarter. Average annuity sales sit at approximately $140,000. The company's marketing mix has shifted significantly, with about 70% of direct-to-consumer sales now originating from non-television channels such as social media, online platforms, and digital advertising. Television still accounts for roughly 30%.
The firm operates two primary segments: a consumer division representing about 80% of the business and a worksite division accounting for the remainder. Exclusive agents number approximately 5,000 in the consumer division and 800 in worksite. Agent headcount has grown for 14 consecutive quarters, with the base roughly half millennial and half female.
CNO targets the middle-income segment—customers with average net worth of $100,000 or less—which comprises 60% to 70% of the U.S. population. With approximately 11,000 Americans retiring daily, Bhojwani noted the company's Medicare Supplement cross-sell ratio yields another product sale for roughly every three policies placed. Healthcare costs are rising 6% to 8% annually, he added.
CFO Paul H. McDonough and director of investor relations Adam Auvil also participated in the session moderated by KBW's Ryan Krueger.
