Bankers Life Faces Sophomore Agent Slump

Problems with hanging on to new agents may be hurting sales at Bankers Life, a major unit of CNO Financial Group Inc.

Bankers Life managed to keep most agents with three or more years of experience in the fourth quarter of 2017. The unit had 1,863 three-year agents in that quarter, down just 0.6% from the number it had a year earlier.

The number of first-year agents fell 9.4%, to 1,845.

The number of second-year agents plunged 18%, to 463.

CNO, a Carmel, Indiana-based company, included the Bankers Life agent count numbers in an earnings presentation for the fourth quarter.

Earnings

The company as a whole is reporting a $71 million net loss for the quarter on $1.1 billion in revenue, compared with $234 million in net income on $1 billion in revenue for the first quarter of 2016.

The new federal tax law, the Tax Cuts and Jobs Act, led to a $173 million one-time charge. Income before income taxes fell to $125 million, from $181 million.

Agents

Although Bankers Life had trouble keeping second-year agents, another Bankers Life unit, Washington National, reported better agent-retention numbers. That unit's total number of agents increased, to 687, from 677 in the fourth quarter of 2016.

Washington National's second-year agent count fell 5.6%, to 85.

Products

Stand-alone long-term care insurance (LTCI) makes up a relatively modest share of CNO's total sales, but the Bankers Life unit is known as a small but active seller of new LTCI and short-term care insurance coverage.

The unit is reporting $5.1 million in new annualized premiums for LTCI sales for the latest quarter on $109 million in LTCI premium revenue, compared with $5.5 million in new annualized premiums for sales and $115 million in premium revenue for the year-earlier quarter.

The interest-adjusted ratio of benefits to revenue fell to 73.1%, from 76%.

Bankers Life gets more of its revenue from the sale of Medicare supplement (Medigap insurance) and life insurance. Medigap sales fell to $20 million, from $24 million, and life sales fell to $16.5 million, from $17 million.

At Washington National, supplemental health sales fell to $24.8 million, from $25.2 million. That unit's life sales increased to $2.3 million, from $1.8 million.

Resources

CNO has posted links to earnings-related materials here.

— Read 7 Peeks Into Long-Term Care Insurance Issuers' Thinking on ThinkAdvisor.

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