CNO Financial Group, Inc.

RESULTS OF OPERATIONS

The following tables and narratives summarize the operating results of our segments (dollars in millions):

(a)Amortization and non-deferred commissions are comprised of: (i) the amortization of deferred acquisition costs and present value of future profits; and (ii) commission expenses that are not directly related to the successful acquisition of new or renewal insurance contracts and, therefore, are not eligible to be deferred. Such non-deferred commissions are included in other operating costs and expenses on the consolidated statement of operations.

General: CNO is the top tier holding company for a group of insurance companies that develop, market and administer health insurance, annuity, individual life insurance and other insurance and financial services products. We view our operations by segments, which consist of insurance product lines. These products are distributed by our two divisions. The Consumer Division serves individual consumers, engaging with them on the phone, virtually, online, face-to-face with agents, or through a combination of sales channels. The Worksite Division focuses on the sale of voluntary benefit life and health insurance products in the workplace for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually.

Insurance product margin is management's measure of the profitability of its annuity, health and life product lines' performance and consists of insurance policy income plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs. Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products help provide an additional understanding of the business and a more meaningful analysis of the results of our insurance product lines.

Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average insurance liabilities for the block in each period. Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the FABN program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our FHLB investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from COLI and alternative investment income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program.

Summary of Operating Results: Net operating income was $87.5 million in the second quarter of 2025, compared to $114.6 million in the second quarter of 2024, and was $168.6 million in the first six months of 2025, compared to $172.1 million in the first six months of 2024.

Operating return on equity ("Operating ROE") (a non-GAAP measure) is equal to the trailing four quarters of net operating income divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards. As of June 30, 2025, our 2025 operating ROE is on target with our guidance of an approximate 50 basis point improvement from our 2024 run rate ratio of 10 percent.

Insurance product margin was $252.4 million in the second quarter of 2025, compared to $275.1 million in the second quarter of 2024, and was $501.3 million in the first six months of 2025, compared to $504.7 million in the first six months of 2024. Excluding a significant item related to traditional life in the first quarter of 2025, the insurance product margin was $494.5 million for the first six months of 2025. Fluctuations by product line are discussed in greater detail in the narratives that follow.

Total net investment income (comprised of investment income allocated and not allocated to products) increased 2 percent to $302.8 million in the second quarter of 2025, as compared to $297.1 million in the second quarter of 2024, and 8 percent to $601.5 million in the first six months of 2025, compared to $554.7 million in the first six months of 2024. Investment income allocated to products increased $16.7 million in the second quarter of 2025 as compared to second quarter of 2024, and

$32.1 million in the first six months of 2025 when compared to prior year as a result of growth in the business and higher yields. The higher yields reflect continued new money rates in excess of 6 percent over the past 10 quarters. Investment income not allocated decreased $11.0 million during the second quarter of 2025 as compared to the second quarter of 2024 and increased $14.7 million during the first six months of 2025 when compared to the prior year, including losses on alternative investments of $24.3 million during the first quarter of 2024.

Total allocated and unallocated expenses are summarized in the table below (dollars in millions):

Total allocated and unallocated expenses in the first six months of 2025 were up slightly as compared to the same period in the prior year, and were in line with our expectations. Our expense ratio was 19.4 percent and 19.8 percent for the six months ended June 30, 2025 and 2024, respectively. Expenses are seasonally higher in the first quarter of the year. The expense ratio is defined as total allocated and unallocated expenses divided by the sum of insurance policy income and net investment income allocated to products.

The fee income segment is summarized below (dollars in millions):

Net fee income remained the same in the second quarter of 2025 as compared to the second quarter of 2024 but decreased in the first six months of 2025 as compared to the first six months of 2024, primarily due to the timing of income recognition on sales of third-party products by our Consumer Division in the first quarter of 2025. In the past year, we have expanded the number of carriers and the volume of sales from newer carriers. In addition, while the percentage of policies exchanged for new policies effective in 2025 did not materially change from the prior year, exchanges from our long-tenured carriers to our newer carriers increased as a percentage of total exchanges. Most exchanges occur in the fourth and first quarters. We hold a constraint on the income from new carriers until we build some persistency experience. Net fee income decreased as a result of this constraint in addition to higher agent retention in the first quarter of 2025, as compared to the first quarter of 2024.

Investment income not allocated to product lines generally fluctuates from period to period based on the performance of our alternative investments (which are typically reported one quarter in arrears); the earnings related to the investments underlying our COLI; the spread we earn from our FHLB investment borrowing and FABN programs; the level of prepayment income (including call premiums) and trading account income; and the impact of annual option forfeitures related to fixed indexed annuity surrenders. The decrease in investment income not allocated to products in the second quarter of 2025, as compared to the second quarter of 2024, was primarily due to lower option forfeitures as a result of lower surrenders and lower in the money options, tighter spreads in the FHLB program and higher interest expense on higher average debt outstanding. The increase in investment income not allocated to products in the first six months of 2025, as compared to the first six months of 2024, was primarily due to a loss on alternative investments in the first quarter of 2024.

The effective tax rate for the first six months of 2025 was 22.3 percent.

Margin from Annuity Products (dollars in millions):

Margin from fixed indexed annuitieswas $45.4 million in the second quarter of 2025, compared to $49.9 million in the second quarter of 2024, and was $89.9 million in the first six months of 2025 compared to $93.3 million in the first six months of 2024. The margins have decreased in both the second quarter and the first six months of 2025, as compared to the same periods in 2024, primarily due to favorable movement in the MRB in the second quarter of 2024, partially offset by growth in the block. Spread income has increased due to growth in the block while the increases in yield have been partially offset by increases in credited rates. Average net insurance liabilities (policyholder account balances less: (i) amounts related to reinsured business; (ii) deferred acquisition costs; (iii) present value of future profits; and (iv) the value of unexpired options credited to insurance liabilities) were $10,543.4 million and $9,758.1 million in the second quarters of 2025 and 2024, respectively, and $10,314.6 million and $9,697.2 million in the first six months of 2025 and 2025, respectively, driven by deposits and reinvested returns in excess of withdrawals. The increase in net insurance liabilities results in higher net investment income allocated. The earned yield was 4.85 percent in the second quarter of 2025 up from 4.66 percent in the second quarter of 2024, and was 4.82 percent in the first six months of 2025 up from 4.58 percent in the first six months of 2025, reflecting higher portfolio yields.

Net investment income and interest credited exclude the change in market values of the underlying options supporting the fixed indexed annuity products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $70.4 million and $34.9 million in the second quarters of 2025 and 2024, respectively, and were $6.9 million and $163.5 million in the first six months of 2025 and 2024, respectively.

Margin from fixed interest annuitieswas $8.0 million in the second quarter of 2025, compared to $8.7 million in the second quarter of 2024, and was $16.1 million in the first six months of 2025 compared to $16.3 million in the first six months of 2024. Average net insurance liabilities were $1,591.7 million in the second quarter of 2025, compared to $1,569.4 million in the second quarter of 2024, and were $1,595.6 million in the first six months of 2025 compared to $1,578.7 million in the first six months of 2024, driven by deposits and reinvested returns in excess of withdrawals. The margins have decreased slightly in both the second quarter and the first six months of 2025, as compared to the same periods in 2024, primarily due to higher amortization. The increase in investment income resulting from the slight increase in the average net insurance liabilities and the increase in the earned yield was offset by an increase in credited interest. The earned yield was 5.48 percent in the second quarter of 2025, up from 5.38 percent in the second quarter of 2024, and was 5.44 percent in the first six months of 2025, up from 5.28 percent in the first six months of 2024, reflecting higher portfolio yields.

Margin from other annuitieswas $1.4 million in the second quarter of 2025, compared to $17.5 million in the second quarter of 2024, and was $3.3 million in the first six months of 2025 compared to $18.5 million in the first six months of 2024. The margin on this relatively small block of business is sensitive to annuitant mortality related to contracts with life contingencies. An increase in mortality in this block will result in a decrease in insurance liabilities and insurance policy benefits. In the second quarter of 2024, we experienced annuitant mortality on five large policies in a closed block of payout annuities which reduced insurance policy benefits by $15.1 million.

Margin from Health Products (dollars in millions):

Margin from supplemental health business was $68.6 million in the second quarter of 2025 compared to $65.1 million in the second quarter of 2024, and was $134.2 million in the first six months of 2025 compared to $130.5 million in the first six months of 2024, reflecting growth in the business. The margin as a percentage of insurance policy income was 37 percent in the second quarter of 2025 compared to 36 percent in the prior year period, and was 36 percent in the first six months of 2025 and 2024.

Our supplemental health products (including specified disease, accident and hospital indemnity products) generally provide fixed or limited benefits. For example, payments under cancer insurance policies are generally made directly to, or at the direction of, the policyholder following diagnosis of, or treatment for, a covered type of cancer. Approximately two-thirds of our supplemental health policies inforce (based on policy count) are sold with return of premium or cash value riders. The return of premium rider generally provides that after a policy has been inforce for a specified number of years or upon the policyholder reaching a specified age, we will pay to the policyholder, or a beneficiary under the policy, the aggregate amount of all premiums paid under the policy, without interest, less the aggregate amount of all claims incurred under the policy. The cash value rider is similar to the return of premium rider, but also provides for payment of a graded portion of the return of premium benefit if the policy terminates before the return of premium benefit is earned. Accordingly, the net cash flows from these products generally result in the accumulation of amounts in the early years of a policy (reflected in our earnings as reserve increases which is a component of insurance policy benefits) which will be paid out as benefits in later policy years (reflected in our earnings as reserve decreases which offset the recording of benefit payments). As the policies age, insurance policy benefits will typically increase, but the increase in benefits will be partially offset by investment income earned on the accumulated assets.

Margin from Medicare supplement business was $28.2 million and $35.5 million in the second quarters of 2025 and 2024, respectively, and $56.3 million and $62.0 million in the first six months of 2025 and 2024, respectively. The decrease in the Medicare supplement margin in the 2025 periods, as compared to the 2024 periods is primarily due to modestly unfavorable claims in the second quarter of 2025 compared to favorable claim experience in the second quarter of 2024. Insurance policy income was $155.9 million in the second quarter of 2025, compared to $155.8 million in the second quarter of 2024, and was $312.2 million in the first six months of 2025, compared to $307.5 million in the first six months of 2024. We continue to invest in both our Medicare supplement products and Medicare Advantage distribution to meet our customers' needs and preferences. We receive fee income when Medicare Advantage policies of other carriers are sold, which is recorded in our Fee income segment.

Medicare supplement business consists of both individual and group policies. Government regulations generally require we attain and maintain a ratio of total benefits incurred to total premiums earned (excluding changes in policy benefits reserves which is a component of Insurance policy benefits) of not less than 65 percent on individual products and not less than 75 percent on group products. The ratio is determined after three years from the original issuance of the policy and over the lifetime of the policy and measured in accordance with statutory accounting principles. Since the insurance product liabilities we establish for Medicare supplement business are subject to significant estimates, the ultimate claim liability we incur for a particular period is likely to be different than our initial estimate. Changes to our estimates are reflected in insurance policy benefits in the period the change is determined.

Margin from Long-term care products was $37.2 million and $35.3 million in the second quarters of 2025 and 2024, respectively, and $69.7 million and $66.4 million in the first six months of 2025 and 2024, respectively. The increase in margin in the 2025 periods is primarily due to growth in the business from sales of our short duration Long-Term Care Fundamental product. The average benefit period for policies sold in 2025 is 13 months and 99 percent are policies with two years or less in benefits. In addition, effective October 1, 2024, we retain 100 percent of our long-term care new business as we discontinued ceding 25 percent of long-term care new business under a reinsurance agreement (this did not impact the inforce business that we previously ceded). As a result, margins are increasing modestly in 2025 and we expect to grow more in future years as earnings emerge from the sales.

Margin from Life Products (dollars in millions):

Margin from interest-sensitive life business was $21.9 million in the second quarter of 2025, compared to $23.9 million in the second quarter of 2024, and was $46.0 million in the first six months of 2025, down from $46.4 million in the first six months of 2024. The decrease in margin in the periods of 2025, as compared to the same periods in 2024, reflects higher insurance policy benefits.

The interest margin was $0.2 million and $0.9 million in the second quarter of 2025 and 2024, respectively, and was $1.2 million in the first six months of 2025, compared to $1.8 million in the first six months of 2024. The earned yield was 5.02 percent and 4.97 percent in the second quarters of 2025 and 2024, respectively, and 5.05 percent and 4.98 percent in the first six months of 2025 and 2024, respectively. Interest credited to policyholders may be changed annually but is subject to minimum guaranteed rates and, as a result, any reduction in our earned rate may not be fully reflected in the rate credited to policyholders.

Net investment income and interest credited exclude the change in market values of the underlying options supporting the fixed indexed life products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $9.1 million and $4.0 million in the second quarter of 2025 and 2024, respectively, and were $2.4 million and $15.1 million in the first six months of 2025 and 2024, respectively.

Margin from traditional life business was $41.7 million and $39.2 million in the second quarters of 2025 and 2024, respectively, and was $85.8 million and $71.3 million in the first six months of 2025 and 2024, respectively. The first quarter of 2025 included a model refinement related to traditional life reserves, which increased margins $6.8 million. Excluding this significant item, the margin was $79.0 million in the first six months of 2025. The increase in the adjusted margin in the 2025 periods, as compared to the same periods in 2024, primarily reflects lower advertising expense.

Advertising expense was $18.7 million in the second quarter of 2025, down from $20.9 million in the comparable period in 2024, and was $39.9 million in the first six months of 2025, down from $45.5 million in the comparable period in 2024. The demand and cost of television advertising can fluctuate from period to period. We are disciplined with our marketing expenditures and will increase or decrease our marketing spend depending on the current economics of the purchase or other factors.

Collected Premiums From Annuity and Interest-Sensitive Life Products (dollars in millions):

Collected premiums from annuity and interest-sensitive products increased 16.7 percent in the second quarter of 2025 compared to the second quarter of 2024, and increased 14.1% in the first six months of 2025 compared to first six months of 2024 primarily due to higher premium collections from fixed indexed annuity products.

Investment Income Not Allocated to Product Lines (dollars in millions):

The above table reconciles net investment income to investment income not allocated to product lines. Such amounts generally fluctuate from period to period based on the performance of our alternative investments (which are typically reported one quarter in arrears); the earnings related to the investments underlying our COLI; the spread we earn from our FHLB investment borrowing and FABN programs; the level of prepayment income (including call premiums) and trading account income; and the impact of annual option forfeitures related to fixed indexed annuity surrenders. The decrease in investment income not allocated to products in the second quarter of 2025, as compared to the second quarter of 2024, was primarily due to lower option forfeitures as a result of lower surrenders and lower in the money options, tighter spreads in the FHLB program and higher interest expense on higher average debt outstanding. The increase in investment income not allocated to products in the first six months of 2025, as compared to the first six months of 2024, was primarily due to a loss on alternative investments in the first quarter of 2024.

Net Non-Operating Income (Loss):

The following summarizes our net non-operating income (loss) for the three and six months ended June 30, 2025 and 2024 (dollars in millions):

Net realized investment losses in the three and six months ended June 30, 2025 were $21.8 million and $35.0 million, including increases in the allowance for credit losses of $1.0 million and $10.5 million, respectively. Net realized investment losses in the three and six months ended June 30, 2024, were $21.9 million and $26.5 million, respectively, net of reductions in the allowance for credit losses of $4.1 million and $5.6 million, respectively.

The change in market value of investments recognized in earnings was an increase of $3.4 million and $4.7 million in the second quarters of 2025 and 2024, respectively, and $9.8 million and $17.1 million in the first six months of 2025 and 2024, respectively. The change in value will fluctuate from period to period based on market conditions.

During the first six months of 2024, we recognized an increase in earnings of $3.5 million for the mark-to-market change in the agent deferred compensation plan liability which was impacted by changes in the underlying actuarial assumptions used to value the liability. We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change.

We recognized an increase (decrease) in pre-tax earnings of $(44.4) million and $80.8 million in the first six months of 2025 and 2024, respectively, resulting from changes in the fair value of embedded derivative liabilities and MRBs related to our fixed indexed annuities. Such amounts include the impacts of changes in market interest rates and equity impacts used to determine the estimated fair values of the embedded derivatives and MRBs. Interest rates declined in the first six months of 2025 as compared to an increase in the first six months of 2024. In addition, certain amounts as of and for the three months ended December 31, 2024 and March 31, 2025 were revised to conform to the current period’s presentation for the correction of an error that is immaterial to the reported periods. The change in pre-tax earnings of $(44.4) for the first six months of 2025, includes a change of $10.1 million for the revision. In addition to non-operating income and net income, the revision impacted shareholders’ equity and the related metrics of book value per common share, and the debt-to-capital ratio for those periods. The revision did not impact our operating earnings. Refer to "Revision of Prior Period Amounts" in the note to the consolidated financial statements entitled "Business, Basis of Presentation, and Significant Accounting Policies" for additional information.

Other non-operating items in the first six months of 2025, included $3.2 million of expense related to TechMod, a three-year project to modernize certain elements of our technology. In addition, other non-operating items included a reduction in the allowance for credit losses on reinsurance of $2.0 million.