AM Best Upgrades Credit Ratings of CNO Financial Group, Inc. and Its Life/Health Subsidiaries
January 26 2022 - 8:51AM
Business Wire
AM Best has upgraded the Financial Strength Rating to A
(Excellent) from A- (Excellent) and the Long-Term Issuer Credit
Rating to “a” (Excellent) from “a-” (Excellent) for the life/health
subsidiaries of CNO Financial Group, Inc. (headquartered in Carmel,
IN) [NYSE: CNO]. These subsidiaries are referred to collectively as
CNO Financial Group (CNO). Concurrently, AM Best has upgraded the
Long-Term ICR to “bbb” (Good) from “bbb-” (Good) and the Long-Term
Issue Credit Ratings (Long-Term IRs) of CNO Financial Group, Inc.
The outlook of these Credit Ratings (ratings) has been revised to
stable from positive. (See below for a detailed listing of the
companies and Long-Term IRs.)
The ratings reflect CNO’s balance sheet strength, which AM Best
assesses as very strong, as well as its strong operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
The rating upgrades reflect the group’s improved earnings
profile. More precisely, the group’s quality and diversification of
earnings have improved over the years and it has consistently
delivered favorable and diversified operating results on a
statutory and GAAP basis. The long-term care reinsurance
transaction with Wilton Reassurance Company in 2018 has lowered
pressure on earnings and capital. The company’s future earnings’
profile has improved as a result of this transaction. CNO’s annuity
operations, consisting primarily of deferred and fixed indexed
annuities, have produced favorable earnings results for the group.
With recent success in sales growth, improved persistency and lower
crediting rates, this block of business should continue to produce
strong results. Despite the low interest rate environment, net
investment income within CNO has increased in the past few years,
although the company remains challenged to increase margins in the
current macro-economic environment.
CNO has a high quality investment portfolio, a good liquidity
profile and good financial flexibility. The company estimates its
risk-based capital to be 388% as of the third quarter of 2021.
While the degree of competition is high across the product set
offered by its core companies, CNO maintains a strong position
within its market niches. The group is well-diversified and offers
a wide array of retirement, life and accident/health products, and
markets through a broad set of distribution channels, including
direct to consumer, exclusive agents and worksite marketing. CNO
continues to nurture its formal ERM program and encourage a strong
risk culture.
The FSR has been upgraded to A (Excellent) from A- (Excellent)
and the Long-Term ICRs to “a” (Excellent) from “a-” (Excellent)
with outlooks revised to stable from positive for the following key
life/health subsidiaries of CNO Financial Group, Inc.:
- Bankers Life and Casualty Company
- Colonial Penn Life Insurance Company
- Bankers Conseco Life Insurance Company
- Washington National Insurance Company
The following Long-Term IRs have been upgraded with outlooks
revised to stable from positive:
CNO Financial Group, Inc.- -to “bbb-” (Good) from “bb+” (Fair)
on $150 million 5.125% subordinated debentures, due 2060 -to “bbb”
(Good) from “bbb-” (Good) on $500 million 5.25% senior unsecured
notes, due 2025 -to “bbb” (Good) from “bbb-” (Good) on $500 million
5.25% senior unsecured notes, due 2029
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual
ratings referenced in this release, please see AM Best’s Recent
Rating Activity web page. For additional information regarding the
use and limitations of Credit Rating opinions, please view Guide to
Best's Credit Ratings. For information on the proper use of Best’s
Credit Ratings, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s Ratings
& Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2022 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Bruno Caron Associate Director +1 908 439 2200,
ext. 5144 bruno.caron@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Edward Kohlberg Director +1 908 439 2200, ext.
5664 edward.kohlberg@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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