Gary C. Bhojwani, CEO of CNO Financial, has been at the company for nearly two years. In those two years, agent numbers at subsidiary Bankers Life have dropped as the mix has tilted in favor of more experienced agents and advisors.
That’s no accident.
Bhojwani, a former president and CEO of Allianz Life, wants to push Bankers Life agents “to the right” to sell a broader range of financial products to a slightly more affluent clientele still in the underserved middle market.
Agents typically derive more profit doing so as they move into more of an advisory capacity.
Average first-year producing agent count fell 19 percent to 1,845 agents on Dec. 31, 2017, compared to Dec. 31, 2015, and the number of second-year agents fell 24 percent to 463 agents over the two-year period, CNO Financial said.
Producing agents with three or more years on the job fell only 1 percent to 1,863 agents over the two-year period, company reports show.
Total agent count at Chicago-based Bankers Life dropped 12 percent to 4,171 at the end of last year compared to Dec. 31, 2015, the company reported.
CEO Remains Undeterred
Wall Street analysts fret over stagnant and declining agent numbers, but Bhojwani remains undeterred.
He allows that it will take a couple of years of experimentation to find an ideal ratio between rookie and veteran agents.
But there seems no doubt in his mind that keeping more experienced agents rather than loading up on first-years with higher washout ratios is the way to go.
Pilot programs, which Bhojwani seems reluctant to talk about for now, are in the works and new digital distribution initiatives should also factor into getting the mix just right.
Bankers Life agents work out of more than 275 branch offices and satellite locations selling Medicare supplement and long-term care policies, life insurance and annuities.
Bhojwani was president of CNO from April 2016 to December 2017 reporting to Ed Bonach, who retired at the end of last year.
He came to CNO in 2016 after serving as a consultant at McKinsey and was with Allianz before that.
Agent Count Stable at Washington National
At another CNO subsidiary, Washington National, which sells supplemental health and life insurance, agent count has remained more stable. The agent count there rose just 3 percent to 687 agents over the past two years, CNO said.
Likewise, experienced agents with three years or more in the industry have seen higher growth rates than first-year agents.
Washington National finished 2017 with 288 first-year producing agents, up a hair from the 282 agents on Dec. 31, 2015, while second-year agents fell to 85 producing agents at the end of last year from 92 at the end of 2015.
Third-year average producing agent count rose to 314 on Dec. 31, 2017, from 292 on Dec. 31, 2015.
Total agent count at Washington National was 687 at the end of last year compared with 666 at the end of 2015, CNO reported.
Washington National sells through the wholly-owned marketing organization Performance Matters Associates, independent agents and brokers and marketing organizations.
CNO reported a fourth-quarter loss of $70.9 million, after reporting a profit in the same period a year earlier.
The loss was 42 cents per share. Earnings, adjusted for pretax expenses, were 61 cents per share. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 41 cents per share.
For the year, the company reported profit of $175.6 million, or $1.02 per share. CNO reported revenue of $4.3 billion.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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