CNO Financial Group, Inc. (CNO): PESTLE Analysis [Nov-2025 Updated]

You're watching CNO Financial Group, Inc. (CNO) and wondering how their 10.5% Return on Equity target holds up against today's market realities. The short answer is they're making a calculated bet: pouring $60 million into AI and cloud solutions this year to capture the massive middle-income demographic opportunity, but they are defintely not immune to the $2.3 billion in unrealized fixed maturity losses and the persistent interest rate drag. This PESTLE analysis cuts through the noise to show you exactly where the political, economic, and technological shifts are creating near-term risks and clear-cut opportunities for CNO Financial Group, Inc. right now.

You're looking for a clear, no-nonsense breakdown of the external forces shaping CNO Financial Group, Inc. (CNO) right now, and honestly, the landscape is a mix of tailwinds from demographics and headwinds from market volatility. We need to map these six blocks to understand the near-term risk and opportunity.

Political Factors: Regulatory and Tax Headwinds

The core political risk for CNO Financial Group, Inc. is the ongoing debate over federal involvement in insurance regulation. While regulation is historically state-based, federal policy on retirement security and entitlement reform-pushed by CNO Financial Group, Inc.'s PAC and trade associations-will directly impact their annuity and Medicare Supplement products. Also, shareholders approved a Replacement Net Operating Loss (NOL) Protective Amendment to preserve tax net operating losses, a smart defensive move against potential corporate tax adjustments that are creating uncertainty in the 2025 economic outlook.

Here's the quick math: Preserving NOLs helps shield future earnings from higher taxes, but the uncertainty itself chills long-term capital planning. Your action is to monitor legislative proposals on corporate tax adjustments; a shift could change the value of that NOL preservation instantly.

• Monitor federal insurance regulation debates.
• Assess impact of entitlement reform on product demand.
• Value the NOL preservation against tax policy shifts.

Economic Factors: Interest Rate Drag vs. ROE Target

CNO Financial Group, Inc. is targeting a full-year 2025 operating Return on Equity (ROE) of 10.5%, a solid benchmark for the sector. Still, the interest rate environment is a major headwind. The firm saw a $79.7 million drag on Q1 2025 earnings specifically from fixed indexed annuities (FIAs)-a product sensitive to rate movements. This drag is compounded by the fixed maturity portfolio carrying $2.3 billion in unrealized losses as of mid-2025. That's a significant paper loss that ties up capital and limits investment flexibility.

To be fair, the Q3 2025 net operating income was strong at $127.2 million, or $1.29 per diluted share, showing the core business is performing. What this estimate hides is how quickly those unrealized losses could become realized if CNO Financial Group, Inc. is forced to sell assets. The near-term action is managing that portfolio risk.

Sociological Factors: The Middle-Income Demographic Tailwinds

The core strategy of CNO Financial Group, Inc. is securing the future of the underpenetrated middle-income America market, and this is a massive tailwind. Favorable demographic trends, specifically the aging of the US population, are driving sustained growth in Medicare Supplement and annuity products. They have a huge distribution network to capitalize on this, employing 3,400 associates and over 10,900 agents (both exclusive and independent partners). That agent count is a key competitive advantage in a high-touch market segment.

The company also builds trust through community focus, like their 2022 donation of $50,000 to diverse nonprofits. That kind of social capital is defintely important when selling retirement and health security products. The opportunity here is clear: keep simplifying products for the middle-income buyer.

Technological Factors: The $170 Million Modernization Bet

CNO Financial Group, Inc. is making a massive, three-year, $170 million bet on technology with its TechMod modernization program, which started in Q2 2025. A substantial $60 million is allocated in 2025 alone for investments in Artificial Intelligence (AI) and cloud solutions. This isn't just maintenance; this is a strategic push to cut costs and improve the customer experience.

The results are already showing: accelerated underwriting delivered an 89% instant decision rate on simplified life products in Q2 2025. That speed is a game-changer for agent productivity and customer satisfaction. Plus, the new Customer Relationship Management (CRM) platform launch will boost agent productivity, which is critical when you rely on over 10,900 agents. Tech is the firm's biggest near-term opportunity.

Legal Factors: Capital Strength and Compliance

The legal environment is tied directly to capital strength, and CNO Financial Group, Inc. looks well-fortified. Their estimated consolidated statutory Risk-Based Capital (RBC) ratio was a strong 380% in Q3 2025. This ratio, which measures a company's capital adequacy relative to its risk profile, is well above regulatory requirements and provides a huge buffer against market shocks. They also executed a second reinsurance transaction with their Bermuda affiliate in October 2025, which is a common way to manage risk exposure and capital efficiency.

The governance structure includes specific board oversight for legal, regulatory, and cybersecurity risks, showing they take compliance seriously. They maintain conservative compliance guidelines in their investment strategy, so you can trust their risk management framework is robust. Maintain that high RBC ratio; it's your license to operate.

Environmental Factors: Early Goal Achievement and Impact Investing

CNO Financial Group, Inc. has demonstrated strong commitment to Environmental, Social, and Governance (ESG) factors by achieving its goal to reduce greenhouse gas (GHG) emissions by 25% eight years early. This is a clear win for operational efficiency and reputation. They have also funded $300 million in impact investments supporting the United Nations Sustainable Development Goals (SDGs), signaling a commitment to sustainable finance.

They adopted the Task Force on Climate-related Financial Disclosures (TCFD) reporting framework, which means they are formally assessing and reporting on climate-related financial risks. Internal operations focus on reducing paper consumption and monitoring investment portfolio GHG emissions. This focus on internal and external environmental stewardship reduces regulatory risk and appeals to ESG-focused investors.

Finance: Draft a 13-week cash view by Friday, explicitly modeling the impact of realizing $500 million of the unrealized fixed maturity losses.

CNO Financial Group, Inc. (CNO) - PESTLE Analysis: Political factors

Federal role in insurance regulation remains a key policy priority.

You're operating in a highly regulated industry, so the political debate over the federal versus state role in insurance regulation (market conduct and solvency) is a constant, high-stakes factor for CNO Financial Group. The company's public policy efforts, conducted through trade associations, are actively focused on preserving the state-based system. A key political priority in 2025 is the National Association of Insurance Commissioners (NAIC) push to eliminate the Federal Insurance Office (FIO) within the U.S. Treasury Department, arguing it conflicts with the states' primary regulatory role.

Still, federal agencies like the Centers for Medicare & Medicaid Services (CMS) directly impact CNO's health and retirement products. For instance, the 2025 Marketplace Integrity and Affordability Final Rule introduced significant changes. This rule, among other things, made the Special Enrollment Period for low-income applicants, defined as those with incomes at or below 150% of the Federal Poverty Level, permanent, which is a structural change to the individual health insurance market. This directly affects CNO's health segment, which serves middle-income America.

• Preserve state-based regulation: A core advocacy goal.
• Monitor CMS rules: Critical for health and Medicare Advantage offerings.
• New SEC rules: Potential for increased trading costs and liquidity impact.

Debates over corporate tax adjustments and tariffs create 2025 economic uncertainty.

The major political uncertainty in 2025 centers on the expiration of numerous individual and business provisions from the 2017 Tax Cuts and Jobs Act (TCJA) at the end of the year. While the 21% corporate income tax rate is technically permanent, the political environment has led to debates over further reductions, with proposals ranging from 20% down to 15%. This uncertainty complicates CNO's long-term tax planning, even with a projected 2025 effective tax rate of around 23%.

The debate is not just about the rate. The tax legislation signed on July 4, 2025, addressed many expiring TCJA provisions and corporate international tax rules, but the overall tax landscape remains fluid. Plus, broader political issues like the threat of new tariffs and federal budget disagreements contribute to market volatility, which can negatively impact CNO's investment portfolio and overall business costs. Here's the quick math: a shift in the corporate rate, even by a few points, has a massive impact on net income for a company with core Net Operating Income of $429.3 million in 2024.

Shareholders approved a Replacement NOL Protective Amendment to preserve tax net operating losses.

To protect a valuable tax asset from potential political or corporate changes, CNO Financial Group's shareholders approved an Amended and Restated Certificate of Incorporation to include a Replacement Net Operating Loss (NOL) Protective Amendment on May 8, 2025. This action is a direct political-financial defense mechanism.

The amendment's purpose is to preserve the value of the company's significant tax net operating losses (NOLs) and certain other tax losses by deterring an 'ownership change' as defined under Section 382 of the Internal Revenue Code. An ownership change would severely limit CNO's ability to use these losses to offset future taxable income. The NOLs represent deferred tax assets of approximately $77.1 million. This is a smart, defensive move.

Advocacy focuses on retirement security and entitlement reform via a PAC and trade associations.

CNO's political advocacy is tightly aligned with its mission to serve middle-income America, prioritizing issues that affect its core life, health, and annuity products. Their public policy priorities explicitly include 'retirement security' and 'entitlement reform'. This focus is timely, given the high-level political discussions around Social Security and Medicare solvency in 2025.

The company engages in the political process primarily through two channels: its own Political Action Committee (PAC) and industry trade associations. The CNO PAC is funded entirely by voluntary contributions from eligible CNO associates and limits its giving to federal congressional candidates. Corporate contributions are limited to political organizations organized under Section 527 of the Internal Revenue Code and trade association dues, which are then used by the associations to advocate for common business interests. This dual approach ensures both direct and collective influence on legislation that affects their customers' financial futures.

CNO Financial Group, Inc. (CNO) - PESTLE Analysis: Economic factors

Full-year 2025 operating Return on Equity (ROE) is targeted at $\mathbf{10.5\%}$

You are right to focus on Return on Equity (ROE); it's the clearest measure of how effectively CNO Financial Group is using shareholder capital to generate profit. The management's full-year 2025 operating ROE target is set at 10.5\%, a deliberate step up from the 2024 run rate of 10.0\%. This target reflects confidence in their strategic initiatives, particularly the technology modernization program and disciplined expense management. To be fair, CNO's operating ROE for the trailing twelve months ended September 30, 2025, actually hit 11.2\%, suggesting they are already outperforming their initial full-year guidance. That's a strong signal.

This ROE improvement is critical because it underpins the company's ability to return capital to you, the shareholder. CNO is focused on a long-term goal of improving its run-rate operating ROE by 200 basis points through 2027, driven in part by strategic moves like the second reinsurance transaction with its Bermuda affiliate and the exit of the Worksite fee services business.

Q3 2025 net operating income hit $\mathbf{\$127.2}$ million, or $\mathbf{\$1.29}$ per diluted share

The core business performance remains robust, which is what matters most in a volatile economic climate. CNO's net operating income for the third quarter of 2025 (3Q25) reached \$127.2 million, translating to \$1.29 per diluted share. This figure is a 16\% increase compared to the prior year, demonstrating consistent, repeatable results across both the Consumer and Worksite Divisions.

This operating income strength is fueled by double-digit growth in key areas. For instance, total new annualized premiums (NAP) surged 26\% in Q3 2025, with Life NAP up 32\% and Health NAP rising 20\%. This sales momentum provides an essential counter-balance to the challenges faced in the investment portfolio.

Here's a quick snapshot of the Q3 2025 performance drivers:

• Total New Annualized Premiums (NAP) up 26\%.
• Annuity Account Value increased by 8\%.
• Client assets in brokerage and advisory services grew 28\%.

Interest rate sensitivity caused a $\mathbf{\$79.7}$ million drag on Q1 2025 earnings from fixed indexed annuities

The high interest rate environment of 2025 is a double-edged sword for CNO. While higher rates generally boost net investment income over time, they create immediate, non-cash accounting volatility in the fixed indexed annuities (FIA) portfolio. This is due to the mark-to-market accounting for embedded derivatives (a financial instrument whose value is tied to an underlying asset).

In the first quarter of 2025 (Q1 2025), changes in the estimated fair value of these embedded derivative liabilities and market risk benefits resulted in a significant decrease in earnings of \$79.7 million. This is a structural vulnerability, as it highlights how rising rates-or even the expectation of rising rates-can erode the value of these derivatives, creating a substantial drag on reported GAAP earnings.

The good news is that this is often a non-economic accounting impact, meaning it doesn't necessarily affect the long-term cash flows, but it definitely makes the quarterly earnings reports look messy.

The fixed maturity portfolio carries $\mathbf{\$2.3}$ billion in unrealized losses as of mid-2025

The sustained high interest rate environment has created a substantial headwind for CNO's investment portfolio, a common issue across the insurance sector. As of mid-2025 (specifically, March 31, 2025), the company's available for sale fixed maturity portfolio carried gross unrealized losses of \$2.3 billion.

This large unrealized loss figure is a direct consequence of rising rates depressing the market value of existing, lower-coupon bonds held in the portfolio. The amortized cost of the portfolio was \$25.5 billion at that time, meaning the fair value was notably lower. While these losses are not realized unless the securities are sold, they put pressure on the company's book value and are a stark reminder of mark-to-market risks in a high-rate world.

Here is a summary of the investment portfolio's fair value and loss position as of the end of Q1 2025:

What this estimate hides is the fact that CNO has the ability and, generally, the intent to hold these investments to maturity, which would allow them to recover the amortized cost. Still, the sheer size of the unrealized loss is a key economic risk factor to monitor, especially if CNO were to face unexpected liquidity needs.

CNO Financial Group, Inc. (CNO) - PESTLE Analysis: Social factors

The social factors influencing CNO Financial Group's (CNO) performance are overwhelmingly favorable, primarily driven by the aging US population and the company's deliberate focus on an underserved market segment. This demographic tailwind is a core strength, translating directly into sustained sales momentum for their key product lines.

Core strategy is securing the future of the underpenetrated middle-income America market.

CNO's entire business model is anchored on serving the middle-income American market-a demographic often overlooked by larger financial institutions. This target customer is defined as a household with an average income between $50,000 and $100,000 and investible assets typically ranging from $100,000 to $500,000. They need basic financial security products like life insurance and annuities but often require personal guidance to navigate complex decisions, especially around retirement and healthcare.

The company addresses this need with a hybrid distribution model that blends digital convenience with human interaction. Honestly, that face-to-face agent model, where someone sits at your kitchen table to explain Medicare Supplement insurance, is a key differentiator for this segment. It builds trust, which is defintely a non-negotiable for retirement planning.

Favorable demographic trends are driving sustained growth in Medicare Supplement and annuity products.

The massive wave of Baby Boomers aging into Medicare eligibility is the most significant social factor driving CNO's growth. This demographic shift provides a clear, structural demand for health and retirement products, which CNO is uniquely positioned to capture. The numbers from the 2025 fiscal year clearly show this momentum:

• Medicare Supplement New Annualized Premiums (NAP) jumped 24% in the first quarter of 2025 compared to the prior year.
• Annuity collected premiums surged 19% in the second quarter of 2025.
• Total Health NAP increased by 20% in the third quarter of 2025.

Here's the quick math: The demand for guaranteed income (annuities) and supplemental health coverage (Medicare Supplement) is rising faster than the general market because of this aging population. This sustained, profitable growth is a direct result of the social environment.

The company employs 3,300 associates and over 11,400 agents (exclusive and independent partners).

The sheer scale of CNO's distribution network is a critical social asset. As of November 2025, the company employs approximately 3,300 full-time associates who handle product development and back-office operations.

The real market-facing power comes from the distribution force, which totaled over 11,400 agents nationwide as of November 2025. This high agent count is essential because the middle-income market prefers and requires in-person consultation for complex financial products. This massive, local footprint is a competitive advantage that directly impacts sales and customer retention.

• Full-Time Associates: Approximately 3,300
• Exclusive Agents: 4,900
• Independent Partner Agents: More than 6,500
• Total Agents: Over 11,400

Community focus includes an annual giving program and significant recent donations.

CNO's community involvement is a key part of its social license to operate, particularly its focus on health and financial wellness for its target demographic. The company's philanthropic efforts are substantial and tie directly to the needs of their customer base, which is smart business and good citizenship.

Their total community impact value for 2024 reached $2.7 million, supporting 88 community organizations. This impact includes corporate donations, associate giving, and volunteer hours. For example, in August 2025, CNO Financial Group and Bankers Life announced a contribution of more than $376,000 to the Alzheimer's Association, continuing a 23-year partnership. Also, CNO associates volunteered 8,750 hours in 2023 alone. That level of community engagement is a strong positive for their brand reputation among middle-income families.

CNO Financial Group, Inc. (CNO) - PESTLE Analysis: Technological factors

You're looking at CNO Financial Group, Inc. (CNO) and wondering where the real growth engine is, and honestly, it's buried in their technology spend. The company is making a decisive shift from legacy systems to a modern, digital-first infrastructure, and the near-term results are already clear in their sales efficiency.

This isn't just about keeping the lights on; it's a major capital allocation decision that directly impacts customer acquisition and agent productivity. They are moving fast to simplify the middle-income insurance buying experience, and that's a smart move in a market that demands speed.

A three-year, $170 million TechMod modernization program started in Q2 2025.

CNO is undertaking a massive, three-year technology modernization (TechMod) program, kicking off in Q2 2025. This initiative represents a total commitment of $170 million to overhaul core systems and digital capabilities, showing that the company views technology as a strategic asset, not just a cost center.

This investment is designed to create a leaner, more agile operating environment. Here's the quick math on the near-term capital commitment:

The success of this $170 million program is defintely a key metric to watch, as it will determine CNO's ability to scale operations and reduce its expense ratio over the next three years.

$60 million is allocated in 2025 for investments in AI and cloud solutions.

Out of the larger modernization budget, a significant portion-$60 million-is specifically earmarked for Artificial Intelligence (AI) and cloud solutions in the 2025 fiscal year. This allocation is crucial because it focuses on process automation and data analytics, which are the primary drivers of efficiency in the insurance sector right now.

Moving to the cloud provides the scalability and flexibility needed to handle the significant data volume that AI models require. This investment is directly tied to improving underwriting accuracy, personalizing customer interactions, and reducing manual processing costs across the board.

Accelerated underwriting delivered an 89% instant decision rate on simplified life products in Q2 2025.

The impact of this digital focus is already visible in their underwriting performance. CNO's accelerated underwriting process-which uses data and algorithms to assess risk instantly-delivered an 89% instant decision rate on simplified life products in Q2 2025.

This is a powerful metric. It means nearly nine out of ten applicants for these products get an immediate answer, cutting the typical weeks-long process down to seconds. This speed dramatically improves the customer experience and boosts the closing rate for agents. It's a competitive advantage in the middle-income market where convenience is everything.

New customer relationship management (CRM) platform launched to boost agent productivity.

To complement the instant underwriting, CNO has rolled out a new customer relationship management (CRM) platform. This technology is the backbone for their agents, giving them a single, comprehensive view of the customer and streamlining the sales workflow.

The goal is simple: make the agent's job easier so they can sell more. The digital acceleration efforts, including the CRM rollout, contributed to a 39% year-over-year growth in web and digital channels in Q2 2025, showing that the investments are already translating into stronger distribution throughput. This platform is what enables the company to effectively manage its 4,800 exclusive agents and over 5,500 independent partner agents.

• Boost agent efficiency with streamlined data.
• Enhance throughput for life sales recovery.
• Drive digital-to-consumer (D2C) sales growth.

The immediate action here is monitoring the sales per agent metric for the next two quarters; that will be the true test of the CRM's return on investment.

CNO Financial Group, Inc. (CNO) - PESTLE Analysis: Legal factors

Estimated consolidated statutory Risk-Based Capital (RBC) ratio was 380% in Q3 2025.

The core legal and regulatory foundation for any insurer is its capital adequacy, which the National Association of Insurance Commissioners (NAIC) measures using the Risk-Based Capital (RBC) ratio. You need to know CNO Financial Group's position is strong, which gives them regulatory flexibility. The estimated consolidated statutory RBC ratio for CNO's U.S.-based insurance subsidiaries stood at a robust 380% as of September 30, 2025. This capital level is well above the typical regulatory action level of 200%, showing a significant buffer against unexpected losses and regulatory scrutiny. This strong capital position is crucial for maintaining favorable financial strength ratings, which directly impacts the company's ability to sell products and manage policyholder trust.

Here's the quick math: a 380% RBC means their total adjusted capital is nearly four times the minimum capital required by regulators. This is defintely a key indicator of financial stability in a highly regulated sector.

Executed a second reinsurance transaction with its Bermuda affiliate in October 2025.

CNO is actively using legal and regulatory arbitrage-in a compliant way-to optimize capital efficiency through its Bermuda-based captive reinsurer, CNO Bermuda Re. Effective October 1, 2025, the company executed a second major reinsurance transaction. This deal involved ceding approximately $1.8 billion of Supplemental Health U.S. statutory reserves from its Washington National Insurance Company, an Indiana-domiciled entity, to the Bermuda affiliate. It also commits to cede 50% of new Supplemental Health business going forward.

This legal structure is a powerful tool for capital management. The immediate financial impact is significant: management raised the excess holding-company cash flow guidance for the year to a range of $365 million to $385 million, a sharp increase from the previous range of $200 million to $250 million. This freed-up capital can be deployed for share repurchases, dividends, or strategic investments, all while remaining compliant with U.S. statutory requirements.

Governance structure includes specific board oversight for legal, regulatory, and cybersecurity risks.

The complexity of the financial and insurance regulatory environment, plus the rising threat of cyber-attacks, demands a highly structured governance framework. CNO's Board of Directors directly addresses this through its standing committees. The primary oversight for these critical areas falls under the Audit and Enterprise Risk Committee. Their charter requires regular oversight of the enterprise risk management (ERM) process, which specifically includes reviews of legal, regulatory, compliance, strategic, competitive, and other risks.

Cybersecurity is also integrated into this legal-regulatory framework. The company aligns its cybersecurity program with the National Institute of Standards and Technology's Cybersecurity Framework (NIST CSF), a recognized standard. Furthermore, the legal team is directly involved in risk mitigation by ensuring that specific protections, including confidentiality and security provisions, are included in contracts with critical third-party vendors.

The company maintains conservative compliance guidelines in its investment strategy.

For an insurance company, the investment portfolio is the engine that funds long-term policyholder obligations, making its compliance with regulatory guidelines paramount. CNO's strategy is explicitly anchored by what they term 'Conservative compliance guidelines' as part of their integrated Asset/Liability Management (ALM) discipline. This focus translates into a high-quality portfolio, where approximately 97% of the general account is classified as Investment Grade (I.G.).

Beyond traditional credit risk, their Responsible Investment Policy, which aligns with the Principles for Responsible Investment (PRI) since 2020, formally integrates Environmental, Social, and Governance (ESG) considerations. This is a forward-looking compliance move to mitigate future legal and reputational risks. Specifically, they evaluate investment-related risks associated with:

• Compliance, governance, oversight, and cybersecurity at the issuer level.
• Exposure to ethical scandals, corruption, or integrity concerns.
• Prospective liabilities from environmental impacts, like penalties or litigation.

This dual focus-high credit quality and proactive ESG compliance-helps shield the balance sheet from unexpected regulatory or litigation costs, which is smart business.

CNO Financial Group, Inc. (CNO) - PESTLE Analysis: Environmental factors

The environmental (E) factors for CNO Financial Group, Inc. are less about direct industrial pollution and more about climate-related financial risk (transition risk) and operational efficiency. As a financial services firm, CNO's most material environmental impact comes from its massive investment portfolio, but its operational achievements are also noteworthy. The firm is positioned in the top quartile of its domestic life insurance peers based on sustainability ratings, confirming its progress.

Achieved the goal to reduce greenhouse gas (GHG) emissions by $\mathbf{25\%}$ eight years early

CNO has already hit and surpassed its primary operational climate target, demonstrating a strong commitment to efficiency and a hybrid work model. The company's 2020 goal was to reduce its Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 25% on an absolute basis by 2030, using 2019 levels as a baseline.

Here's the quick math: CNO successfully achieved this target in 2022, reducing its GHG emissions by 27%-a full eight years ahead of the original 2030 schedule. This early success, plus significant changes to their real estate footprint in 2023 and 2024, including moving their corporate headquarters to a newer, more energy-efficient space, means they are now working to establish a new, more ambitious GHG emission reduction goal in 2024. That's a clear signal of continued environmental focus.

Funded $\mathbf{\$300}$ million in impact investments supporting United Nations Sustainable Development Goals

The company views its investment strategy as a key lever for environmental and social impact. CNO's investment manager, 40|86 Advisors, Inc., actively manages this strategy. The firm has funded \$300 million in impact investments that align with the United Nations Sustainable Development Goals (UN SDGs).

This is a material commitment, especially since the Responsible Investment Policy earmarks \$100 million per year for new impact investments. These investments are channeled into areas that directly address environmental issues and community well-being, such as municipal bonds, green/sustainable bonds, and impact funds focusing on:

• Affordable and clean energy.
• Sustainable cities and communities.
• Climate action and health.

Adopted the TCFD (Task Force on Climate-related Financial Disclosures) reporting framework

CNO has adopted the TCFD framework, which is a crucial step for managing climate risk (physical and transition risk) in a financial institution. This adoption, which began in 2021, means the company systematically identifies, assesses, and manages climate-related risks and opportunities across its business, strategy, and financial planning.

The management of climate risk is integrated directly into the Enterprise Risk Management (ERM) framework, ensuring the Board and its committees are regularly updated on progress and risks. This governance focus is recognized externally; in May 2024, CNO's MSCI ESG rating was upgraded from A to AA, placing it as a leader in its peer group for governance and responsible investment practices. That's a defintely strong signal to the market.

Internal operations focus on reducing paper consumption and monitoring investment portfolio GHG emissions

Beyond the corporate-level GHG reduction, CNO focuses on granular, day-to-day operational efficiency, primarily through paper reduction and digitalization. This shift mitigates environmental impact and drives down administrative costs, which is a win-win.

The focus on paper reduction has delivered substantial results, mostly through encouraging policyholders and shareholders to 'go paperless' and digitizing internal processes. Plus, the company has an explicit strategy to monitor the carbon footprint of its investment portfolio, which was approximately \$29 billion in invested assets as of December 31, 2024, using third-party vendor data.

Here is a snapshot of CNO's operational efficiency metrics: