AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) for the life/health subsidiaries of CNO Financial Group, Inc. (headquartered in Carmel, IN) [NYSE: CNO]. These subsidiaries are referred to collectively as CNO Financial Group (CNO). Concurrently, AM Best has upgraded the Long-Term ICR to “bbb” (Good) from “bbb-” (Good) and the Long-Term Issue Credit Ratings (Long-Term IRs) of CNO Financial Group, Inc. The outlook of these Credit Ratings (ratings) has been revised to stable from positive. (See below for a detailed listing of the companies and Long-Term IRs.)

The ratings reflect CNO’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating upgrades reflect the group’s improved earnings profile. More precisely, the group’s quality and diversification of earnings have improved over the years and it has consistently delivered favorable and diversified operating results on a statutory and GAAP basis. The long-term care reinsurance transaction with Wilton Reassurance Company in 2018 has lowered pressure on earnings and capital. The company’s future earnings’ profile has improved as a result of this transaction. CNO’s annuity operations, consisting primarily of deferred and fixed indexed annuities, have produced favorable earnings results for the group. With recent success in sales growth, improved persistency and lower crediting rates, this block of business should continue to produce strong results. Despite the low interest rate environment, net investment income within CNO has increased in the past few years, although the company remains challenged to increase margins in the current macro-economic environment.

CNO has a high quality investment portfolio, a good liquidity profile and good financial flexibility. The company estimates its risk-based capital to be 388% as of the third quarter of 2021. While the degree of competition is high across the product set offered by its core companies, CNO maintains a strong position within its market niches. The group is well-diversified and offers a wide array of retirement, life and accident/health products, and markets through a broad set of distribution channels, including direct to consumer, exclusive agents and worksite marketing. CNO continues to nurture its formal ERM program and encourage a strong risk culture.

The FSR has been upgraded to A (Excellent) from A- (Excellent) and the Long-Term ICRs to “a” (Excellent) from “a-” (Excellent) with outlooks revised to stable from positive for the following key life/health subsidiaries of CNO Financial Group, Inc.:

• Bankers Life and Casualty Company
• Colonial Penn Life Insurance Company
• Bankers Conseco Life Insurance Company
• Washington National Insurance Company

The following Long-Term IRs have been upgraded with outlooks revised to stable from positive:

CNO Financial Group, Inc.-

-to “bbb-” (Good) from “bb+” (Fair) on $150 million 5.125% subordinated debentures, due 2060

-to “bbb” (Good) from “bbb-” (Good) on $500 million 5.25% senior unsecured notes, due 2025

-to “bbb” (Good) from “bbb-” (Good) on $500 million 5.25% senior unsecured notes, due 2029

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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