CNO Financial Group, Inc. reported second-quarter 2025 net income of $91.8 million, or $0.91 per diluted share, down from $116.3 million, or $1.06 per diluted share, in the same period a year earlier.
The decline in net income follows similar non-economic accounting impacts related to market volatility in both quarters, the company said.
Net operating income, which excludes those accounting impacts, was $87.5 million, or $0.87 per diluted share, compared to $114.6 million, or $1.05 per diluted share, in the second quarter of 2024.
Income from insurance products totaled $103.0 million, down 15% from $120.5 million in the prior-year period. On a per-share basis, this represented $1.03 versus $1.10 a year ago, a 6% decline. Fee income remained flat at $0.8 million, or $0.01 per diluted share.
Investment income not allocated to specific product lines fell to $33.8 million from $44.8 million, a 25% decrease. Per diluted share, that figure declined 20%, from $0.41 to $0.33. Expenses not allocated to product lines increased 45%, rising from $17.5 million to $25.3 million, or from $0.16 to $0.25 per diluted share, marking a 56% increase.
Operating earnings before income taxes were $112.3 million, compared to $148.6 million in the second quarter of 2024. Income tax expense on operating income fell 27% year over year, from $34.0 million to $24.8 million. On a per-share basis, tax expense declined from $0.31 to $0.25, a 19% drop.
CNO reported net non-operating income of $4.3 million, or $0.04 per diluted share, compared to $1.7 million, or $0.01 per diluted share, a year ago. The company recorded net realized investment losses of $21.8 million, slightly below the $21.9 million reported in the second quarter of 2024.
In the first quarter of 2025, the company reported a statutory risk-based capital (RBC) ratio estimated at 379%. That figure, while not updated for the second quarter in the current release, was presented previously as an indicator of capital strength and balance sheet resilience.
The most recent results continue a trend seen in the prior quarter, when non-economic accounting items also weighed on bottom-line figures. At that time, the company reported lower net income despite relatively stable operating income, attributing the discrepancy to market-driven changes in investment valuations and fair-value adjustments.
The net change in the market value of investments recognized in earnings totaled $3.4 million, down from $4.7 million, while changes in the fair value of embedded derivative liabilities and market risk benefits rose to $25.2 million from $16.8 million. Other non-operating items amounted to a loss of $1.1 million, reversing a $2.4 million gain in the prior-year quarter.
CNO's weighted average diluted shares outstanding for the quarter were 100.4 million, down from 109.3 million in the second quarter of 2024.
"CNO remains uniquely positioned to serve the growing needs of the middle-income market with our diverse products and distribution. With considerable momentum and favorable demographic tailwinds, we are well-equipped to navigate the evolving economic environment and continue to drive improved profitability,” said CEO Gary C. Bhojwani (pictured above).
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