‘Critical’ to Market Beyond TV Audiences: Colonial Penn Exec

How long “Jeopardy!” host Alex Trebek continues to endorse Colonial Penn’s insurance products is anyone’s guess with the company planning to move away from television.

Colonial Penn sells guaranteed acceptance life, term and whole life direct to consumers through TV advertising, direct mail, the internet and telemarketing. But the company continues to divert marketing initiatives away from costly television, executives said recently.

If what the “press says about where people will be making buying decisions over the next 10, 20, 30 years, it's really critical that we continue to diversify away from television,” said Gary C. Bhojwani, president and CEO of CNO Financial Group.

CNO, based in Carmel, Ind., is the parent company of insurers Bankers Life, Washington National and Colonial Penn, and investment advisor 40/86 Advisors.

Together, the companies serve more than 4 million people.

Colonial Penn, whose tag line is “Making Insurance Simple,” also plans to move “to the right,” by shifting its product mix to attract slightly more affluent consumers, Bhojwani told analysts in a conference call last week.

The consumer marketing mix and the insurance product mix are “what we're working on and that will frankly take, I think, a couple of years to get that formula right,” he said.

Third-quarter net annualized premium was $16 million, down 13 percent from the year-ago period, Philadelphia-based Colonial Penn reported.

Higher earnings at Colonial Penn in the third quarter compared to a year ago were tied to lower sales and marketing spending due to the high cost of advertising, an analyst wrote.

"Excluding a $3 million prior reserve release, earnings were a penny above our model at $6 million," Keefe Bruyette & Woods analyst Ryan Krueger wrote in a research note last week.

CNO Delivers Earnings Beat

CNO Financial last week reported third-quarter net income of $100.8 million.

Bankers Life sells a variety of insurance products through a career agency force and Washington National sells supplemental health and life insurance through a wholly-owned subsidiary and independent insurance agencies.

“We are pleased with some of our metrics this quarter, and continue to see encouraging early results for agent pilots, product rollouts, and market segmentations strategies,” Bhojwani said in a news release.

Among the CNO subsidiaries, “steps are being taken to accelerate the pace of change,” he said.

On a per-share basis, CNO Financial said it had net income of 59 cents. Earnings, adjusted for non-recurring gains, came to 45 cents per share.

The results exceeded Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 39 cents per share, the Associated Press reported.

The insurance holding company posted revenue of $1.08 billion in the period.

CNO shares have climbed 30 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $24.82, a climb of 65 percent in the last 12 months.

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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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].