CNO Financial Group’s second quarter saw a negative market reaction after the company missed Wall Street’s revenue expectations, despite reporting modest year-on-year sales growth. Management attributed the quarter’s underperformance to margin compression, which stemmed primarily from lower yields on alternative investments and some uptick in claims within the Medicare Supplement portfolio. CEO Gary Bhojwani pointed out that direct-to-consumer sales, especially through digital channels, delivered notable gains, but also emphasized that the annuity and Medicare businesses faced evolving competitive and regulatory dynamics.

Is now the time to buy CNO? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From CNO Financial Group’s Q2 Earnings Call

• Ryan Joel Krueger (Keefe, Bruyette, & Woods) asked about the sustainability of digital D2C momentum. CEO Gary Bhojwani said the company expects continued growth but cautioned results will vary quarter to quarter, emphasizing long-term trends over short-term volatility.
• John Bakewell Barnidge (Piper Sandler) questioned the impact of technology on expenses. CFO Paul McDonough noted operating leverage improvements due to business growth and affirmed that automation contributed to a better expense ratio.
• Wesley Collin Carmichael (Autonomous) sought clarity on Medicare Supplement repricing and margin impact. McDonough explained average requested rate filings are around 10%, effective mainly in the first quarter of next year, to address higher claims.
• Suneet Laxman L. Kamath (Jefferies) inquired about annuity competition and sales sustainability. Bhojwani explained that while competition is intense in the broader market, CNO’s focus on smaller average account sizes reduces direct competition from large asset managers.
• Wilma Carter Jackson Burdis (Raymond James) asked about investment opportunities and agent recruiting. Eric Johnson (Chief Investment Officer) highlighted continued focus on high-quality, diversified assets, while Bhojwani described ongoing strong agent productivity and recruitment.

Catalysts in Upcoming Quarters

In tracking CNO’s execution over the coming quarters, the StockStory team will focus on (1) continued growth in digital and web-based sales channels, (2) the company’s ability to manage operating margins through expense controls and repricing in Medicare Supplement, and (3) progress in expanding agent productivity and geographic reach in the Worksite division. We will also monitor any regulatory developments around the Bermuda operation that could affect capital efficiency.

CNO Financial Group currently trades at $37.72, in line with $37.63 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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