Security for middle-income America
Last year CNO Financial Group held 3.2 million policies for its customers, generally households from the underserved middle-income market. These are more than commercial transactions, says CEO Gary C. Bhojwani: he sees the company’s work as a noble calling.
As pensions dissipate and government benefits are stretched, Americans need to find financial products that provide a safety net. That is where CNO’s mission comes in: it aims to “secure the future of middle-income America”.
In the case of life insurance products, in particular, CNO’s agents can be talking to customers “sometimes when they’ve just had the worst days of their lives and we’re there to help,” Bhojwani points out.
“We’re here to help people. We make a difference, and we focus on a market that is traditionally underserved. We consider it a great privilege to do that.”
“We make a difference, and we focus on a market that is traditionally underserved. We consider it a great privilege to do that.”
Gary C. Bhojwani, CEO, CNO Financial Group
Back on the growth track
CNO’s unique proposition is partly based on its focus on that market segment, and partly on its unique and diverse distribution channels. Alongside its own dedicated agents, it also uses direct-to-consumer including digital and tele-sales, along with independent agents.
Success in serving a notoriously tough market is also down to longevity, Bhojwani admits: “It’s only because we’ve been doing it for so long and have scale that we’re able to do this in a cost-effective way.”
As Bhojwani points out, CNO has delivered 10 consecutive quarters of sales growth. The next phase, he says, is to deliver operating leverage, meaning higher gross margin with lower variable costs.
Targeting the boomer pipeline
At the same time, the target audience is growing. The baby boomer generation is reaching its mid-60s and becoming eligible for Medicare, the point of life at which many of CNO’s customers first make contact.
Their concerns are typically the risk of dying young, leading to enquiries about life insurance, or of outliving their money, which may trigger discussion about health insurance or retirement products, such as annuities.
The pipeline of potential customers is extensive. “There are 11,000 folks turning 65 every day, and that trend is expected to continue until roughly 2027 before tapering off a bit,” says Bhojwani. “Even then, there’s going to be a ton of Americans going into retirement, and they need help preparing for it.”
“There are 11,000 folks turning 65 every day, and that trend is expected to continue until roughly 2027 before tapering off a bit.”
Gary C. Bhojwani, CEO, CNO Financial Group
Human touch with tech back-up
A touchstone for Bhojwani’s thinking is the experience of his own father, who represents CNO’s target consumer. While Bhojwani’s father carries out some financial transactions online, “what he really values, what really helps him in decisions, is when he has that human interaction.”
While providing his agents with great technological back-up, Bhojwani wants CNO’s customers to feel they are always able to interact with a real person.
“Medicare can be very difficult to understand, and it really takes someone coming in and sitting down at the kitchen table to walk you through that. We view that as a differentiating characteristic for us,” he says.
CNO will remain focused on the middle market in a way that “blends technology and human interaction,” Bhojwani concludes. “Finding the right mix and perfecting it – that’s our mission.”
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.
