First quarter performance reflects disciplined execution and the strength of our diversified products and distribution.
Net income was $38 million, or $0.39 per diluted share, and net operating income(1) was $101 million, or $1.05 per diluted share.
Return on equity (ROE) of 9.5%; Operating ROE(5) of 12.2%, excluding significant items(5).
Book value per share of $26.64 and book value per diluted share, excluding accumulated other comprehensive loss,(2) of $38.98.
Operating earnings per share grew 33%, as continued sales momentum drove earnings growth.
Total new annualized premiums (NAP)(4) up 11%, demonstrating consistent, sustained growth following a strong 2025.
Total Medicare policies sold increased 24%, underscoring the strength of these products in expanding our household reach.
Consumer and Worksite continued their producing agent count growth streak to 13 and 15 consecutive quarters, respectively.
"CNO is off to a strong start to 2026, building on the momentum from our excellent performance in 2025," said Gary C. Bhojwani, chief executive officer. "With 15 consecutive quarters of sales growth, we're pleased with the consistent results we're generating as we continue to grow earnings, improve profitability and reinvest in the business."
"Operating earnings per share grew 33% in the quarter, supported by strong performance across all areas of our business, including insurance product margin, investment results, fee income and capital management. Our results reflect the strength and resilience of our business model and our focus on the middle‑income market. Disciplined execution will continue to drive our growth and create meaningful value for customers, associates and shareholders."
FINANCIAL SUMMARYQuarter End(Amounts in millions, except per share data)(Unaudited)
Net income decreased in 1Q26 and 1Q25, primarily due to non-economic accounting impacts resulting from market volatility and investment losses. Additionally, 1Q26 net income was impacted by expenses related to our TechMod initiative.
Net operating income, a non-GAAP(a) financial measure, excludes these non-economic accounting impacts as well as other non-operating items. Net operating income is used consistently by CNO's management to evaluate the operating performance of the Company and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes the non-operating items as defined in note (1). Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company's business. Net income is the most directly comparable GAAP measure.
In 1Q26, net income and net operating income(1) were unaffected by significant items, compared to favorable impacts in 1Q25 of $5.3 million or $0.05 per diluted share. Significant items are detailed in note (6).
Per diluted share
Quarter ended
Quarter ended
March 31,
March 31,
2026
2025
% change
2026
2025
% change
Income from insurance products (b)
$ 1.01
$ 0.85
19 %
$ 97.0
$ 87.7
11 %
Fee income
0.11
(0.01)
n/m
10.6
(0.8)
n/m
Investment income not allocated to product lines (c)
0.43
0.37
16
41.7
38.0
10
Expenses not allocated to product lines
(0.20)
(0.20)
—
(19.4)
(20.3)
(4)
Operating earnings before taxes
1.35
1.01
129.9
104.6
Income tax expense on operating income
(0.30)
(0.23)
30
(28.6)
(23.5)
22
Net operating income (1)
1.05
0.79
33
101.3
81.1
25
Net realized investment losses from disposals, impairments and change in allowance for credit losses
(0.16)
(0.13)
(15.2)
(13.2)
Net change in market value of investments recognized in earnings
(0.08)
0.06
(7.5)
6.4
Changes in fair value of embedded derivative liabilities and market risk benefits
(0.44)
(0.68)
(42.4)
(69.6)
Expenses related to TechMod initiative
(0.14)
—
(13.7)
—
Net loss related to divested business
(0.02)
—
(1.9)
—
Other
(0.01)
—
(0.8)
(0.4)
Non-operating income before taxes
(0.85)
(0.75)
(81.5)
(76.8)
Income tax expense on non-operating income
0.19
0.17
17.9
17.2
Net non-operating income
(0.66)
(0.58)
(63.6)
(59.6)
Net income
$ 0.39
$ 0.21
$ 37.7
$ 21.5
Weighted average diluted shares outstanding
96.1
103.1
(a)
GAAP is defined as accounting principles generally accepted in the United States of America.
(b)
Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Insurance product margin is management's measure of the profitability of its annuity, health and life product lines' performance and consists of insurance policy income plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs.
(c)
Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the funding agreement-backed notes ("FABN") program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our federal home loan bank ("FHLB") investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from company-owned life insurance ("COLI") and alternative investment income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program.
FINANCIAL SUMMARY (continued)Management vs. GAAP Measures(Dollars in millions, except per share data)(Unaudited)
Shareholders' equity, excluding accumulated other comprehensive income (loss), and book value per share, excluding accumulated other comprehensive income (loss), are non-GAAP measures that are utilized by management to view the business without the effect of accumulated other comprehensive income (loss) which is primarily attributable to fluctuations in interest rates associated with fixed maturities, available for sale. Management views the business in this manner because the Company has the ability and generally, the intent, to hold investments to maturity and meaningful trends can be more easily identified without the fluctuations. In addition, shareholders' equity excludes net operating loss carryforwards in our non-GAAP return on equity measures as such assets are not discounted and, accordingly, will not provide a return to shareholders until after it is realized as a reduction to taxes that would otherwise be paid. Management believes that excluding this value from the equity component of this measure enhances the understanding of the effect these non-discounted assets have on operating returns.
Quarter ended
March 31,
2026
2025
Trailing four quarters:
Net Income
$ 245.5
$ 330.0
Net operating income (a non-GAAP financial measure)
459.4
452.9
Net operating income, excluding significant items
427.2
428.8
Average of each of the trailing four quarters average:
Shareholders' equity
$ 2,574.7
$ 2,523.3
Accumulated other comprehensive loss
1,178.7
1,327.9
Shareholders' equity, excluding accumulated other comprehensive loss
3,753.4
3,851.2
Net operating loss carryforwards
(258.9)
(237.6)
Shareholders' equity, excluding accumulated other comprehensive loss and net operating loss carryforwards
$ 3,494.5
$ 3,613.6
Ratios:
Return on equity
9.5 %
13.1 %
Operating return on equity (a non-GAAP financial measure) (5)
13.1 %
12.5 %
Operating return on equity, excluding significant items (a non-GAAP financial measure) (5)
12.2 %
11.9 %
Shareholders' equity
$ 2,498.4
$ 2,555.1
Accumulated other comprehensive loss
1,217.6
1,239.1
Shareholders' equity, excluding accumulated other comprehensive loss
$ 3,716.0
$ 3,794.2
Basic shares outstanding
93,795,306
99,893,923
Diluted shares outstanding
95,323,466
101,796,131
Book value per share
$ 26.64
$ 25.58
