Conseco (NYSE: CNO), originally Security Life of Indiana, is a financial services organization based in Carmel, Indiana. Conseco's insurance subsidiaries provide life insurance, annuity and supplemental health insurance products to more than 4 million customers in the United States. These products are distributed through independent agents, career agents and direct to customers through television advertising and direct mail.
Conseco is currently ranked 503 on the Fortune 1000 with 2007 revenues of $4.5 billion.

CNO Financial Group, Inc., formerly Conseco, Inc., is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. It focuses on serving the senior and middle-income markets. The Company sells its products through three distribution channels: career agents, professional independent producers (some of whom sell one or more of its product lines exclusively) and direct marketing. It operates in three segments: Bankers Life, Colonial Penn and Conseco Insurance Group.
Bankers Life
Bankers Life consists of the business of Bankers Life and Casualty Company. It markets and distributes health and life insurance products and annuities to the middle-income senior market. Products include Medicare supplement insurance, life insurance, fixed annuities and long-term care insurance. Bankers Life also markets and distributes Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care (Coventry) and Medicare Advantage plans primarily through a distribution arrangement with Humana Inc. (Humana).
Colonial Penn
Colonial Penn, which consists of the business of Colonial Penn Life Insurance Company (Colonial Penn), markets primarily graded benefit and simplified issue life insurance directly to customers through television advertising, direct mail, the Internet and telemarketing. Colonial Penn markets its products under its own brand name.
Conseco Insurance Group
Conseco Insurance Group, which markets and distributes specified disease insurance, accident, disability, life insurance and annuities to middle-income consumers at home and at the worksite. These products are marketed through Performance Matters Associates, Inc., a wholly owned subsidiary, and through independent marketing organizations and insurance agencies. Products being marketed by Conseco Insurance Group are underwritten by Conseco Insurance Company, Conseco Health Insurance Company (Conseco Health) and Washington National Insurance Company (Washington National). This segment also includes blocks of long-term care and other insurance business, in these companies.
Conseco's CCP II. However, Conseco's headquarters remained in Carmel, and Hilbert planned to sustain his active management role there. 'This is what I love to do,' Hilbert proclaimed in the June 7, 1993, issue of the Indianapolis Business Journal. 'I think you'd hear the same thing if you were talking to Bill Gates or anyone else who has achieved success. ... It's their baby.'
Continuing on its acquisition splurge, Conseco entered into agreements to merge with Kemper Corporation, an insurance company much larger than Conseco, for about $2.6 billion. Conseco withdrew from the deal after deciding that the asking price would cause too much accumulation of debt. Termination of the agreement, however, created bank and accounting fees of about $36 million and spurred a Merrill Lynch analyst to downgrade the company's stock. Conseco subsequently severed its relationship with Merrill Lynch, which had handled Conseco's initial public offering.
In 1995 Conseco formed a new division, Conseco Global Investments, and purchased the remaining shares of CCP. CCP was then merged into Conseco, and Beneficial Standard Life Insurance and Great American Reserve Insurance, both subsidiaries of CCP, became subsidiaries of Conseco. The company also acquired additional shares of Bankers Life Holding Corp., a holding company for Bankers Life and Casualty, upping its stake to 81 percent in 1995. The following year Conseco increased its share to 90 percent.
Over the next two years Conseco continued to gobble up insurance companies--it acquired eight in 1996 and 1997. Conseco Risk Management acquired Wells & Company, which offered casualty and property insurance products. The purchase created the biggest independent casualty/property agency in the state of Indiana. In July 1996 Conseco bought Life Partners Group, Inc. for about $840 million. The purchase included Massachusetts General Life, Philadelphia Life, Lamar Life, and Wabash Life. At the end of 1996 Conseco made two more acquisitions--American Travellers Corp. for $880 million and Transport Holdings, Inc., for $228 million. American Travellers offered long term care insurance, and Transport provided cancer insurance. Another cancer insurance provider, Capitol American Financial Corp., was purchased by Conseco for $696 million in March 1997. Then, in May, Conseco paid $505 million to acquire Pioneer Financial Services, Inc., a provider of life and health insurance products. Conseco rounded out the year with two additional purchases--Colonial Penn Group, which sold life insurance to elderly American citizens, and Washington National Corp., a provider of life and health insurance and annuities.
As Conseco headed into 1998, the company had a number of accomplishments under its belt. In 1996 the company was named to the Fortune 500, and in 1997 Conseco was added to the S & P 500 Index. The company's stock had returned an average of 39 percent a year since becoming a public company in 1985. Total revenues, after dropping from $3 billion in 1993 to $2.36 billion in 1994, climbed steadily, rising to $3.56 billion in 1995 and $3.79 billion in 1996. In 1997, total revenues reached $6.85 billion, a significant increase over the previous year.
In 1998 Conseco hoped to continue its growth and strong financial performance. To meet these goals, Conseco in March agreed to acquire Green Tree Financial Corporation, a diversified financial services company that offered home equity and home improvement loans, financing packages for the purchases of recreational vehicles and equipment, and credit cards. Green Tree was best known, however, as the leading U.S. lender for mobile home purchases. Green Tree was Conseco's first acquisition not related to insurance, and it was also the largest of Conseco's acquisitions--Conseco reportedly paid about $6 billion in stock for Green Tree. Conseco claimed the acquisition was a perfect fit, as both companies served the same target market, but many industry observers were skeptical, and Conseco's stock took a plunge. Not only did the company's stock fall about 15 percent upon announcement of the acquisition agreement, but it continued to drop; from a high of $58.12 a share in April 1998, Conseco stock dropped to about $20 a share in late 1999.
The Green Tree acquisition stirred up numerous questions, including whether Conseco had too much debt and whether Green Tree, which had a past of dubious accounting practices, was growing too rapidly--25 to 30 percent a year--and providing loans to high-risk borrowers. The company's stock decline also led to a deficit of collateral on company-guaranteed loans used by Conseco executives to purchase Conseco stock. Questions persisted, and in late 1999 Conseco announced plans to pare debt and slow growth. The company said it would divest of non-core assets, and it sold seven percent of its stock to private investment firm Thomas H. Lee Company for $478 million.
Falling stock prices did not completely hinder Conseco, and in 1999 Conseco acquired three health insurance marketing companies with plans to form a new subsidiary dedicated to supplemental health insurance distribution. The companies were Consolidated Marketing Group, Inter-State Service, Inc., and TLC National Marketing Company, which sold products door-to-door. In 1998 Conseco placed additional effort on building brand awareness. Not only did Conseco launch a major advertising campaign pushing the company as the 'Wal-Mart of financial services,' but it also sponsored the Indiana Pacers basketball team and the Conseco Fieldhouse, an 18,500-seat facility that opened in late 1999. In 1999 Conseco secured a marketing partnership with the National Association for Stock Car Auto Racing (NASCAR) to become the 'Official Financial Services Provider of NASCAR' and entered the second phase of its marketing campaign. In 1998 Stephen Hilbert received about $69.7 million in compensation. Though this was significantly lower than his 1997 pay of $119 million, it was enough for Hilbert to retain his reputation as one of the highest-paid CEOs in the nation.
Conseco renamed Green Tree Conseco Finance Corp. in 1999 and moved toward the next century intent on strengthening operations. The company, after 20 years in business, had grown tremendously--Conseco's total managed financial assets expanded from $8.2 billion in 1988 to $87.2 billion a decade later. Moreover, despite the company's stock price troubles, total revenues continued to grow; for the nine months ended September 30, 1999, revenues reached $5.92 billion, up from $5.75 billion for the comparable period in 1998. Stephen Hilbert demonstrated his confidence in the company by acquiring more than 638,000 shares in October 1999, pushing his total stake in Conseco to 10.4 million shares. Hilbert could not understand why industry insiders continued to hold reservations about Conseco. Hilbert told the Indianapolis Star and News, 'Everything at Conseco is hitting on all cylinders except the stock price. ... I hate where our stock price is, but I cannot control the market. What's somewhat baffling is we haven't missed a [earnings] number. But my net worth's in Conseco. All I can say is, I'm buying more.' As the company approached its 21st year of operations, Conseco remained confident that it could successfully attain its goals&mdashø provide middle America with a wide array of financial and insurance products and services.
Principal Subsidiaries: Bankers Life and Casualty Company; Conseco Annuity Assurance Company; Conseco Direct Life Insurance Company; Conseco Health Insurance Company; Conseco Life Insurance Company; Conseco Life Insurance Company of New York; Conseco Medical Insurance Company; Conseco Risk Management, Inc.; Conseco Senior Health Insurance Company; Manhattan National Life Insurance Company; Pioneer Life Insurance Company; United Presidential Life Insurance Company; Washington National Insurance Company; Conseco Capital Management, Inc.; Conseco Variable Insurance Company; Conseco Fund Group; Conseco Finance Corp.
Principal Competitors: Metropolitan Life Insurance Company; New York Life Insurance Company; The Prudential Insurance Company of America.


OVERALL
Beta: 2.56
Market Cap (Mil.): $2,004.70
Shares Outstanding (Mil.): 253.12
Annual Dividend: --
Yield (%): --
FINANCIALS
CNO Industry Sector
P/E (TTM): 7.58 11.79 26.21
EPS (TTM): 131.78 -- --
ROI: -- 0.01 4.63
ROE: 7.50 3.28 9.08

Key Dates:

1979: Stephen C. Hilbert forms Security National of Indiana Corp.
1982: Security National begins operations.
1983: Company changes name to Conseco, Inc.
1985: Conseco goes public.
1990: Conseco forms Conseco Capital Partners.
1992: Company establishes Conseco Capital Management, Inc.
1998: Conseco acquires Green Tree Financial Corporation and expands into the financial services sector.
Statistics:
Public Company
Incorporated: 1979 as Security National of Indiana Corp.
Employees: 17,187
Total Assets: $98.4 billion (1999)
Stock Exchanges: New York
Ticker Symbol: CNC
NAIC: 524113 Direct Life Insurance Carriers; 524114 Direct Health and Medical Insurance Carriers; 524126 Direct Property and Casualty Insurance Carriers; 551112 Offices of Other Holding Companies; 52222 Sales Financing

Name Age Since Current Position
Hilliard, R. Glenn 68 2005 Non-Executive Chairman of the Board
Prieur, C. James 59 2006 Chief Executive Officer, Director
Bonach, Edward 57 2007 Chief Financial Officer, Executive Vice President
Perry, Scott 48 2006 President of Bankers Life
Stecher, Steven 50 2008 President of Washington National
Zimpfer, Matthew 43 2008 Executive Vice President, General Counsel
Menzel, Susan 45 2005 Executive Vice President - Human Resources
Nickele, Christopher 54 2010 Executive Vice President - Product Management, President - Other CNO Business
Kline, John 53 2002 Senior Vice President, Chief Accounting Officer
Johnson, Eric 50 2003 Chief Investment Officer
Perry, Debra 59 2004 Director
James, Donna 53 2007 Director
Zwiener, David 2010 Director
Schneider, Neal 66 2003 Independent Director
Tokarz, Michael 61 2003 Independent Director
Turner, John 71 2003 Independent Director
Long, R. Keith 62 2009 Independent Director
Murphy, Charles 50 2010 Independent Director

Address:
11825 North Pennsylvania Street
Carmel, Indiana 46032
U.S.A.
 
Last edited:
Top