AM Best Revises Outlooks to Positive for CNO Financial Group, Inc. and Its Life/Health Subsidiaries
AM Best has upgraded the outlooks for CNO Financial Group, Inc. (CNO) from stable to positive and affirmed its Financial Strength Rating (FSR) of A- and Long-Term Issuer Credit Ratings (ICR) of 'a-'. This reflects CNO's strong balance sheet, characterized by very strong risk-adjusted capitalization and good liquidity. The revised outlook is attributed to positive earnings trends and stable premium and investment income, while the company's diversified product offerings and effective risk management enhance its competitive position.
- Outlook upgraded from stable to positive by AM Best.
- Affirmed FSR of A- and Long-Term ICR of 'a-'.
- Very strong balance sheet supported by high quality investments.
- Positive trends in earnings, premiums, and investment income.
- Well-diversified product range in retirement, life, and health insurance.
- High competition in the insurance market may impact margins.
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of the life/health insurance 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 revised the outlook to positive from stable and affirmed the Long-Term ICR of “bbb-” and the Long-Term Issue Credit Ratings (Long-Term IR) of CNO Financial Group, Inc. (See below for a detailed listing of the companies and Long-Term IRs.)
The ratings reflect CNO’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The change in outlooks reflect the group’s favorable trends and absolute level of earnings. The change in outlooks also reflect good core trends on premiums and investment income. Additionally, the group’s 2018 long-term care (LTC) transaction is expected to decrease volatility in earnings going forward, also contributing to positive operating performance strength.
The balance sheet continues to show positive signs as AM Best considers CNO’s balance sheet strength to be very strong, supported by a very strong level of risk adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), a high quality investment portfolio and a very good liquidity profile.
While the degree of competition is high across the product set offered by the core companies, CNO maintains a strong position within its market niches.
The business profile is supported by a well-diversified array of retirement, life and accident/health products, and CNO markets through a broad set of distribution channels, including direct to consumer, career agents and worksite marketing. CNO has been able to mitigate its LTC business risk partially through a co-insurance agreement in 2018 with a highly rated reinsurer.
CNO has a formal ERM program that encourages a strong risk culture and governance, ongoing discipline and risk identification and regular reporting with the group’s senior management and board of directors.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have been affirmed with the outlooks revised to positive from stable 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 affirmed with the outlook revised to positive from stable:
CNO Financial Group, Inc.—
-- “bbb-” on
-- “bbb-” on
-- “bb+” on
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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FAQ
What did AM Best announce for CNO Financial Group on January 28, 2021?
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What ratings were affirmed for CNO Financial Group by AM Best?
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What factors led to the positive rating outlook for CNO Financial Group?
