CNO leverages its expertise in serving middle income households through a broad product portfolio, diversified distribution and technology enabled execution. At RBC’s Global Financial Institutions Conference in New York, Chief Financial Officer Paul McDonough outlined how the company is sharpening its execution, enhancing risk discipline and expanding its use of AI and analytics to deliver durable performance across the life, health and annuity markets.
Its multi channel model gives CNO reach and flexibility. “Our focus on middle income households, together with our broad product and distribution set, gives us a very differentiated business model and creates a competitive moat that is difficult to duplicate,” says McDonough.
Responding to increasing coverage needs
Shifts in consumer needs and coverage patterns continue to shape demand across CNO’s core markets. Around 11,000 Americans reach Medicare eligibility each day, heightening the need for guidance on Medicare Supplement products the company manufactures and distributes, and Medicare Advantage plans that it distributes for third party partners. RClient relationships formed through the sale of these Medicare products often later expand into broader discussions about products relating to retirement income, long term care and wider financial protection.
Additional structural shifts are reinforcing demand. High deductible health plans have increased out of pocket costs, driving interest in supplemental health insurance. As McDonough notes, “People are carrying more of the risk themselves today — whether it’s healthcare costs or retirement income — and that creates real need for the solutions we offer.”
Building structural durability through diversification and risk culture
McDonough explains that CNO’s recent performance reflects a business model built for durability rather than short-term market conditions, with diversification a key factor. By offering life, health and retirement products, CNO is exposed to three major insurance risk types — mortality, morbidity and longevity — which behave differently across economic cycles. Weakness in one area can be offset by strength in another, generating more stable margins over time.
CNO’s diversified distribution also supports resilience. Connecting with customers both at home and worksite, the company’s extensive network of career agents, independent agents, and direct to consumer channels each respond differently to changing demand, smoothing sales performance through different market environments.
“All of this comes from an enterprise risk management framework that is very mature and supported by efficient, coordinated oversight across risk, audit, compliance and legal teams,” McDonough explains. He notes that a clear risk appetite, strong governance and rigorous assessment of capital “make our performance more durable through both business and credit cycles.”
“We’ve delivered consistent quarterly sales growth and improved ROE, but that’s not attributable to one thing — it’s a combination of factors.”
Paul McDonough, CFO, CNO Financial Group
Improving ROE through growth, discipline and capital management
After several years focused on strengthening the balance sheet, the company shifted towards growth and more recently toward improving both sales and earnings. CNO is progressing toward its multi year goal of raising operating ROE from around 10% in 2024 to approximately 12% by 2027, with McDonough noting that 2025’s 11.4% operating ROE (excluding significant items) reflects steady improvement and supports the company’s longer term ambition to reach top-quartile ROE performance in the sector.
McDonough highlights that progress has come from multiple areas of the business working together. “We’ve delivered consistent quarterly sales growth and improved ROE, but that’s not attributable to one thing — it’s a combination of factors,” he says.
Sales growth supports operating leverage, cost discipline and efficiency initiatives improve margins, capital optimization strengthens returns, and product development and pricing ensure new offerings meet customer needs. The company’s experienced actuarial and investment teams also contribute to stability and help support healthy risk adjusted performance.
Driving efficiency with AI while strengthening human advice capabilities
Technology and analytics are increasingly important to CNO’s operating model, with investments in AI and robotics already improving efficiency in areas such as software development efficiency, customer service call handling and intelligent document processing.
“We think generative AI will impact every stage of the value chain, but over time it becomes table stakes. To compete effectively, you have to leverage it successfully.”
Paul McDonough, CFO, CNO Financial Group
As AI adoption accelerates, CNO is pairing innovation with discipline structured governance, prioritization and oversight. The goal is to ensure AI investments support scale and consistency, not just isolated efficiency gains.
At the same time, McDonough believes that human advisors remain central to CNO’s model. Decisions around life, health and annuity products carry emotional weight and long term implications, and customers rarely make them without trusted, professional guidance. Technology will enhance service and efficiency, but trusted relationships will remain at the heart of how CNO serves its middle-income customers.
Editor’s Note: This article contains forward-looking statements that are subject to significant risks and uncertainties, including those described in CNO’s Form 10-K on its website CNOinc.com.
