CNO Financial Group (CNO) risk factors, FY2024 10-K

Other

1. 01There are risks to our business associated with broad economic conditions
2. 02A return to a prolonged low interest rate environment may negatively impact our results of operations, financial position and cash flows
3. 03Our investment portfolio is subject to several risks that may diminish the value of our invested assets and negatively impact our profitability, our financial condition and our liquidity
4. 04We use derivatives in an effort to hedge higher potential returns to our fixed indexed annuity policyholders based on the increase in the value of a particular index. For derivative positions we hold that are in-the-money, we are exposed to credit risk in the event of default of our counterparty
5. 05The determination of the allowance for credit losses related to our investments is highly subjective and could have a material adverse effect on our operating results and financial condition
6. 06The determination of fair value of our fixed maturity securities results in unrealized investment gains and losses and is, in some cases, highly subjective and could materially impact our operating results and financial condition
7. 07The results of operations of our insurance business will decline if our premium rates are not adequate or if we are unable to increase rates
8. 08Our business, financial condition, results of operations, liquidity and cash flows depend on the accuracy of our models and assumptions, and we could experience significant gains or losses if the models and assumptions differ significantly from actual results
9. 09Our liabilities for insurance products may prove to be inadequate, requiring us to increase liabilities which results in reduced net income and shareholders' equity
10. 10Our operating results may suffer if policyholder surrender levels differ significantly from our assumptions
11. 11We face risk with respect to our reinsurance agreements
12. 12issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,869.8 million at December 31, 2024 compared to the minimum requirement of $2,698.8 million)
13. 13CNO is a holding company and its liquidity and ability to meet its obligations may be constrained by the ability of CNO's insurance subsidiaries to distribute cash to it
14. 14A decline in our current credit ratings may adversely affect our ability to access capital and the cost of such capital, which could have a material adverse effect on our financial condition and results of operations
15. 15Our ability to use our existing NOLs may be limited by certain transactions, and an impairment of existing NOLs could result in a significant writedown in the value of our deferred tax assets
16. 16The value of our deferred tax assets may be reduced to the extent our future profits are less than we have projected or the current corporate income tax rate is reduced, and such reductions in value may have a material adverse effect on our results of operations and our financial condition
17. 17Changes in tax laws could increase our tax costs and reduce sales of our insurance and annuity products
18. 18From time to time we may become subject to tax audits, tax litigation or similar proceedings, and as a result we may owe additional taxes, interest and penalties, or our NOLs may be reduced, in amounts that may be material
19. 19Our business is subject to extensive regulation, which limits our operating flexibility and could result in our insurance subsidiaries being placed under regulatory control or otherwise negatively impact our financial results
20. 20Litigation and regulatory investigations are inherent in our business, may harm our financial condition and reputation, and may negatively impact our financial results
21. 21Federal and state legislation could adversely affect the financial performance of our insurance operations
22. 22Our insurance subsidiaries may be required to pay assessments to fund other companies' policyholder losses or liabilities and this may negatively impact our financial results
23. 23Managing operational risks may not be effective in mitigating risk and loss to us
24. 24Major public health issues could have an adverse impact on our financial condition, results of operations, liquidity, cash flows and other aspects of our business
25. 25activity or unavailability of information, in each case, arising from major public health issues may impact the key inputs used to derive certain estimates and assumptions made in connection with financial reporting or otherwise
26. 26The occurrence of natural or man-made disasters or climate change could adversely affect our financial condition and results of operations
27. 27Interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems, could harm our business
28. 28parties, may increase the operational risks discussed above, or create new or unanticipated operational risks
29. 29Our business could be interrupted or compromised if we experience difficulties arising from outsourcing relationships
30. 30A decline in the current financial strength rating of our insurance subsidiaries could cause us to experience decreased sales, increased agent attrition and increased policyholder lapses and other policy withdrawals
31. 31The supplemental health insurance, annuity and individual life insurance markets are highly competitive. Competitors include other life and accident and health insurers, commercial banks, thrifts, mutual funds and broker-dealers
32. 32If we are unable to attract and retain agents and marketing organizations, or otherwise attract and retain key personnel, sales of our products may be reduced and our operations may be adversely impacted
33. 33We may not be able to protect our intellectual property and may be subject to infringement claims