CNO Provides Historical Financial Information Related to Two New Reporting Segments

CARMEL, Ind., Oct. 29 /PRNewswire-FirstCall/ — CNO Financial Group, Inc. (NYSE:
CNO) is providing additional financial information to reflect its new reporting
segments, designed to give a sharpened focus and greater visibility about
business line performance. Recently, the Company split its former Conseco
Insurance Group segment into two new segments – Washington National and Other
CNO Business (“OCB”). This change did not have any impact on CNO’s historical
consolidated results, nor on the historical reported earnings for Bankers Life,
Colonial Penn and the Corporate segments. CEO Jim Prieur said “Splitting the
Conseco Insurance Group segment into these two segments is another step toward
increased transparency. Not only will it provide greater visibility into the
performance of our actively sold lines of business, but it will also sharpen our
focus on improving the results of the closed blocks of business.”

Commencing July 1, 2010, management has changed the manner in which it
disaggregates the Company’s operations for making operating decisions and
assessing performance. As a result, the Company manages its business through the
following operating segments: Bankers Life, Colonial Penn and Washington
National, which are defined on the basis of product distribution; OCB, comprised
primarily of closed blocks; and corporate operations, comprised of holding
company activities and certain noninsurance company businesses. All prior period
segment disclosures have been restated to conform to management’s current view
of the Company’s operating segments. The Company’s segments are described below:

— Bankers Life, which markets and distributes Medicare supplement
insurance, interest-sensitive life insurance, traditional life
insurance, fixed annuities and long-term care insurance products to the
middle-income senior market through a dedicated field force of career
agents and sales managers supported by a network of community-based
branch offices. The Bankers Life segment includes primarily the business
of Bankers Life and Casualty Company. Bankers Life also markets and
distributes Medicare Advantage plans primarily through a distribution
arrangement with Humana Inc. and Medicare Part D prescription drug plans
through a distribution and reinsurance arrangement with Coventry Health
Care.
— Washington National, which markets and distributes supplemental health
(including specified disease, accident and hospital indemnity insurance
products) and traditional life insurance 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 Washington National are underwritten by
Washington National Insurance Company.
— Colonial Penn, which markets primarily graded benefit and simplified
issue life insurance directly to customers through television
advertising, direct mail, the internet and telemarketing. The Colonial
Penn segment includes primarily the business of Colonial Penn Life
Insurance Company.
— OCB, which consists of blocks of interest-sensitive life insurance,
traditional life insurance, annuities, long-term care insurance and
other supplemental health products. These blocks of business are not
being actively marketed and were primarily issued or acquired by Conseco
Life Insurance Company and Washington National Insurance Company.

The following summarizes certain financial information for the Washington
National and Other CNO Business segments for the last six quarters ended June
30, 2010 (dollars in millions):

Washington National

Operating income
before taxes 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
—————- —- —- —- —- —- —-

Insurance policy
income $151.0 $150.3 $149.7 $146.9 $145.4 $144.7
Net investment
income (loss):
General account
invested assets 49.0 48.8 47.8 45.6 45.5 45.8
Trading account
income related to
reinsurer accounts (1.7) 2.8 3.7 (.6) .8 1.1
Change in value of
embedded
derivatives related
to modified
coinsurance
agreements .2 (2.7) (3.5) (.5) (.9) (1.0)
Fee revenue and
other income .7 .4 .5 (.1) .3 .2
— — — — — —

Total revenues 199.2 199.6 198.2 191.3 191.1 190.8
—– —– —– —– —– —–

Insurance policy
benefits 114.4 120.9 115.6 116.1 112.5 116.7
Amortization
related to
operations 15.9 13.3 12.9 11.8 14.8 13.1
Other operating
costs and expenses 35.3 40.2 40.6 40.4 36.2 39.9
—- —- —- —- —- —-

Total benefits and
expenses 165.6 174.4 169.1 168.3 163.5 169.7
—– —– —– —– —– —–

Operating income
before income $33.6 $25.2 $29.1 $23.0 $27.6 $21.1
taxes ===== ===== ===== ===== ===== =====

Health benefit
ratios 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
————– —- —- —- —- —- —-

Medicare
supplement:
Earned premium $47.3 $45.9 $44.8 $43.6 $41.6 $40.2
Benefit ratio 67.3% 71.2% 68.2% 66.3% 65.7% 65.8%

Supplemental
health: *
Earned premium $93.8 $94.7 $95.2 $97.9 $98.0 $99.1
Benefit ratio 76.0% 83.3% 76.6% 82.0% 82.3% 83.2%
Interest-adjusted
benefit ratio 42.2% 49.7% 42.9% 49.1% 49.4% 52.0%

Premiums collected 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
—————— —- —- —- —- —- —-

Health:
Supplemental health
* $93.0 $95.1 $96.2 $99.0 $99.6 $100.2
Medicare supplement 42.8 44.4 46.9 43.7 40.7 38.7
Other health 1.3 1.2 1.4 1.3 1.1 1.0
Life 9.0 8.4 8.4 4.3 4.4 3.8
— — — — — —

Total $146.1 $149.1 $152.9 $148.3 $145.8 $143.7
====== ====== ====== ====== ====== ======

_______________
* Includes specified disease, accident and hospital indemnity
insurance products.

Other CNO Business

Operating income (loss)
before taxes 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
———————– —- —- —- —- —- —-

Insurance policy income $93.2 $90.7 $80.8 $75.7 $74.8 $73.2
Net investment income
(loss):
General account invested
assets 94.4 89.7 86.7 86.3 87.8 88.5
Fixed index products (7.0) (.4) 11.0 3.4 3.9 (6.5)
Trading account income
related to
policyholder accounts (.6) 2.9 4.5 1.0 .9 (1.6)
— — — — — —-

Total revenues 180.0 182.9 183.0 166.4 167.4 153.6
—– —– —– —– —– —–

Insurance policy
benefits 100.2 94.5 91.0 90.9 90.3 84.3
Amounts added to
policyholder
account balances:
Annuity products and
interest-
sensitive life products
other than 35.5 35.5 35.0 32.8 32.4 31.4
fixed index products
Fixed index products (.2) 6.9 18.1 11.5 10.6 .5
Amortization related to
operations 20.9 20.5 18.9 21.3 12.2 3.6
Interest expense on
investment borrowings 5.2 5.2 5.1 5.0 5.0 5.0
Other operating costs
and expenses 20.8 24.3 22.4 34.6 18.8 20.0
—- —- —- —- —- —-

Total benefits and
expenses 182.4 186.9 190.5 196.1 169.3 144.8
—– —– —– —– —– —–

Operating income (loss)
before income $(2.4) $(4.0) $(7.5) $(29.7) $(1.9) $8.8
taxes ===== ===== ===== ====== ===== ====

Health benefit ratios 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
——————— —- —- —- —- —- —-

Long-term care:
Earned premium $8.3 $8.1 $7.9 $7.8 $7.7 $7.5
Benefit ratio 210.1% 182.2% 154.2% 199.4% 187.2% 212.9%
Interest-adjusted
benefit ratio 132.0% 103.1% 73.8% 122.1% 96.8% 128.0%

Premiums collected 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
—————— —- —- —- —- —- —-

Annuity $19.5 $22.3 $25.2 $11.4 $5.1 $4.2
Health:
Long-term care 8.4 8.0 7.6 7.4 7.7 7.5
Other health .7 .6 .8 .6 .7 .7
Life 55.4 54.0 51.9 48.9 50.2 46.9
—- —- —- —- —- —-

Total $84.0 $84.9 $85.5 $68.3 $63.7 $59.3
===== ===== ===== ===== ===== =====

Conference Call

The Company will host a conference call to discuss the split of the Conseco
Insurance Group segment into Washington National and Other CNO Business on
October 28, 2010 at 4:00 p.m. Eastern Daylight Time. The webcast can be accessed
through the investors section of the company’s website:
http//investor.CNOinc.com. Participants should go to the website at least 15
minutes before the event to register and download any necessary audio software.
During the call, we will be referring to a presentation that will be available
at the Investors section of the Company’s website the morning of the call.
During the call, the Company will discuss historical information for the
Washington National and Other CNO Business segments. Third quarter results will
be discussed on a separate call on November 3rd. In addition, the Investors
section of the Company’s website will be updated on the morning of the call to
include our 2Q2010 Quarterly Financial Supplement, revised to provide historical
information related to the two new reporting segments.

About CNO

CNO is a holding company. Our insurance subsidiaries – principally Bankers Life
and Casualty Company, Colonial Penn Life Insurance Company and Washington
National Insurance Company – serve working American families and seniors by
helping protect against financial adversity and provide for a more secure
retirement. For more information, visit CNO online at www.CNOinc.com.

Cautionary Statement Regarding Forward-Looking Statements.Our statements, trend
analyses and other information contained in this press release relative to
markets for CNO Financial’s products and trends in CNO Financial’s operations or
financial results, as well as other statements, contain forward-looking
statements within the meaning of thefederal securities laws and the Private
Securities Litigation Reform Act of 1995. Forward-looking statements typically
are identified by the use of terms such as “anticipate,” “believe,” “plan,”
“estimate,” “expect,” “project,” “intend,” “may,” “will,” “would,”
“contemplate,” “possible,” “attempt,” “seek,” “should,” “could,” “goal,”
“target,” “on track,” “comfortable with,” “optimistic” and similar words,
although some forward-looking statements are expressed differently. You should
consider statements that contain these words carefully because they describe our
expectations, plans, strategies and goals and our beliefs concerning future
business conditions, our results of operations, financial position, and our
business outlook or they state other ”forward-looking” information based on
currently available information. Assumptions and other important factors that
could cause our actual results to differ materially from those anticipated in
our forward-looking statements include, among other things: (i) changes in or
sustained low interest rates causing a reduction in investment income, the
margins of our subsidiaries’ fixed annuity and life insurance businesses and
demand for their products; (ii) general economic, market and political
conditions, including the performance and fluctuations of the financial markets
which may affect our ability to raise capital or refinance existing indebtedness
and the cost of doing so; (iii) our ability to generate sufficient liquidity to
meet our debt service obligations and other cash needs; (iv) our ability to
obtain adequate and timely rate increases on our health products, including our
long-term care business; (v) the receipt of any required regulatory approvals
for dividend and surplus debenture interest payments from our insurance
subsidiaries; (vi) mortality, morbidity, the increased cost and usage of health
care services, persistency, the adequacy of our previous reserve estimates and
other factors which may affect the profitability of our insurance products;
(vii) changes in our assumptions related to deferred acquisition costs or the
present value of future profits; (viii) the recoverability of our deferred tax
assets and the effect of potential ownership changes and tax rate changes on
their value; (ix) our assumption that the positions we take on our tax return
filings, including our position that our 7.0% convertible senior debentures due
2016 will not be treated as stock for purposes of Section 382 of the Internal
Revenue Code of 1986, as amended, and will not trigger an ownership change, will
not be successfully challenged by the Internal Revenue Service; (x) changes in
accounting principles and the interpretation thereof; (xi) our ability to
continue to satisfy the financial ratio and balance requirements and other
covenants of our debt agreements; (xii) our ability to achieve anticipated
expense reductions and levels of operational efficiencies including improvements
in claims adjudication and continued automation and rationalization of operating
systems, (xiii) performance and valuation of our investments, including the
impact of realized losses (including other-than-temporary impairment charges);
(xiv) our ability to identify products and markets in which we can compete
effectively against competitors with greater market share, higher ratings,
greater financial resources and stronger brand recognition; (xv) the ultimate
outcome of lawsuits filed against us and other legal and regulatory proceedings
to which we are subject; (xvi) our ability to complete the remediation of the
material weakness in internal controls over our actuarial reporting process and
to maintain effective controls over financial reporting; (xvii) our ability to
continue to recruit and retain productive agents and distribution partners and
customer response to new products, distribution channels and marketing
initiatives; (xviii) our ability to achieve eventual upgrades of the financial
strength ratings of CNO Financial and our insurance company subsidiaries as well
as the impact of our ratings on our business, our ability to access capital and
the cost of capital; (xix) the risk factors or uncertainties listed from time to
time in our filings with the Securities and Exchange Commission; (xx) regulatory
changes or actions, including those relating to regulation of the financial
affairs of our insurance companies, such as the payment of dividends and surplus
debenture interest to us, regulation of financial services affecting (among
other things) bank sales and underwriting of insurance products, regulation of
the sale, underwriting and pricing of products, and health care regulation
affecting health insurance products; and (xxi) changes in the Federal income tax
laws and regulations which may affect or eliminate the relative tax advantages
of some of our products. Other factors and assumptions not identified above are
also relevant to the forward-looking statements, and if they prove incorrect,
could also cause actual results to differ materially from those projected. All
forward-looking statements are expressly qualified in their entirety by the
foregoing cautionary statements. Our forward-looking statements speak only as of
the date made. We assume no obligation to update or to publicly announce the
results of any revisions to any of the forward-looking statements to reflect
actual results, future events or developments, changes in assumptions or changes
in other factors affecting the forward-looking statements.