CNO Financial Group Inc (CNO) 2017 Q2 法說會逐字稿

Good morning, everyone, my name is Jess and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Second Quarter 2017 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Mr. Adam Auvil, you may begin your conference.

Good morning and thank you for joining us on CNO Financial Group's Second Quarter 2017 Earnings Conference Call. Today's presentation will include remarks from Ed Bonach, Chief Executive Officer; Gary Bhojwani, President and CEO Successor; and Erik Helding, Chief Financial Officer. Following the presentation, we will also have several other business leaders available for the question and answer period.

During this conference call, we will be referring to information contained in yesterday's press release. You can obtain the release by visiting the media section of our website at www.CNOinc.com. This morning's presentation is also available in the investor section of our website and was filed in a Form 8-K earlier today. We expect to file our Form 10-Q and post it on our website on or about August 4.

Let me remind you that any forward-looking statements we make today are subject to a number of factors, which may cause actual results to be materially different than those contemplated by the forward-looking statements.

Today's presentation contains a number of non-GAAP measures, which should not be considered as substitutes for the most directly comparable GAAP measures. You'll find a reconciliation of the non-GAAP measures to the corresponding GAAP measures in the appendix. Throughout this presentation, we will be making performance comparisons and unless otherwise specified, any comparisons made will be referring to changes between second quarter 2016 and second quarter 2017. And with that, I'll turn the call over to Ed.

Thanks, Adam and good morning. CNO posted another quarter of strong results as the diversity of our franchise and sound business management continue to drive consistent profitable growth. Our disciplined approach to pricing, underwriting, business priorities, and investments has produced gains in both revenues and earnings while maintaining a strong balance sheet.

Highlights for the quarter include a 7% increase in total collected premiums and a 16% increase in first-year collected premium. Annuity account values grew 4% as we continue to benefit from the success of our guaranteed lifetime income annuity coupled with strong persistency.

Gary will touch on the primary drivers of our growth in a few minutes.

Operating earnings per share increased 29% driven by favorable underwriting margins, investment income, and capital management. We returned $84 million to shareholders in the quarter and $141 million year-to-date while maintaining strong capital and liquidity. And with that, I'll now turn the call over to Gary to discuss our segment results. Gary?

Thanks, Ed.

Moving to Slide 6, Bankers Life collected premiums increased 8% primarily due to annuities being up 28%. Annuity account values increased 5% and are just below $8 billion. Health new annualized premium or NAP decreased 10% compared to the prior year driven primarily by lower Medicare supplement sales. NAP from life products decreased 17% continuing the shift in purchases we have recently seen from life policies to annuity contracts with living benefits. Customer asset values and register advisor accounts continue to grow at our broker/dealer and registered investment advisor. The last 12 months average first and second year producing agents decreased 10% compared to the prior year while average producing agents in their third year or later were flat. As mentioned last quarter, we continue piloting various enhancements to our agent recruiting and retention models with the primary goal of increasing veteran agent counts.

Turning to Washington National, total collected premiums were up 1% with a 4% increase in supplemental health, partially offset by the continued run-off of the closed Medicare supplement block. First-year collected premiums were flat primarily due to timing differences between reported NAP and actual cash receipts. This lag is more pronounced with respect to worksite sales, which posted strong results in the quarter. Total NAP was up 6% driven by strong worksite NAP, which was up 15%. PMA's worksite sales were up 28% as this channel continues to benefit from initiatives to drive stronger recruiting and improved productivity. Individual NAP was flat as strong heart sales were offset by lower cancer product sales.

In an effort to standardize our reporting metrics, PMA producing agents counts have been restated in 2Q '17. The new count defined as the number of agents that have submitted at least one policy in the month now aligns with the Bankers Life definition. We will continue to report the 12 month trailing average producing agent count to remove any short-term or seasonal volatility that might be caused by reporting only end of period or quarterly averages. On that basis, PMA average producing agents were flat in the quarter.

Moving on to Slide 8 and to Colonial Penn, total collected premiums were up 4% due to prior year sales growth and stable persistency. First-year collected premiums were down 8% and NAP was down 16% as high demand for television advertising continued in the quarter. This resulted in continued limited inventory of cost effective TV spots leading to reduced marketing spend and ultimately lower sales. We remain both disciplined and opportunistic with our marketing expenses and will invest as attractive advertising opportunities become available.

Partially offsetting the decline in TV lead volume is our continued progress in diversifying lead generation activity towards web, digital, and direct mail marketing activities. Given the reduced television marketing spend year-to-date along with favorable mortality experienced in the first half of 2017, we are increasing the full year EBIT guidance range to $15 million to $20 million from $5 million to $15 million for Colonial Penn.

I will now turn the call over to Eric to discuss our financial results, Eric?

Thanks, Gary.

CNO posted another strong quarter on the earnings and capital fronts. We reported net income of $0.48 per share, up 45% from the prior year. Operating earnings per share were $0.45, up 29% from the prior year. Second quarter 2017 results were impacted by favorable underwriting margins and investment results, partially offset by higher corporate segment expenses. Excluding significant items, net operating earnings per share were $0.42, up 24% from the prior year. Lastly, operating return on equity was 9.1%.

Turning to Slide 10 and our segment results, CNO posted combined EBIT excluding significant items of $123 million, up 16% from the prior year. Results in the quarter reflect favorable annuity and long-term care margins and higher call/prepayment income at Bankers Life, higher supplemental health margins and higher call/prepayment income at Washington National, favorable mortality and lower direct marketing spend at Colonial Penn. Our closed block LTC business reported positive earnings slightly better than expectations due to favorable incurred claims. Lastly, corporate segment results were impacted by higher expenses partially offset by higher investment income.

Turning to Slide 11 and our key health benefit ratios, Bankers Life Medicare supplement benefit ratio was 70.4% in the quarter, slightly better than expectations due to favorable incurred claims. As a result of the favorability we have seen in the first half of the year, we are lowering our benefit ratio guidance from the 71% to 74% range to the 70% to 73% range for the remainder of 2017.

Bankers Life long-term care interest adjusted benefit ratio excluding the impact of rate increases and one-time items was 74.4%, better than expectations due to lower persistency and favorable incurred claims. As a reminder, the 2017 interest adjusted benefit ratio reflects no additional future loss reserve accrual as a result of year end 2016 loss recognition testing results. Due to the favorability we have seen in the first half of the year, we are lowering our guidance on the LTC interest adjusted benefit ratio from the 77% to 82% range to the 75% to 80% range for the remainder of 2017.

Washington National's supplemental health interest adjusted benefit ratio was 60.4%, consistent with first quarter of 2017 results and in line with our expectations. We continue to expect this ratio to be in the 58% to 61% range for the remainder of 2017.

Turning to Slide 12 and our investment results for the quarter. We put money to work at 4.64%, somewhat lower than in recent periods and primarily due to lower overall rates in the quarter. Call prepayment activity was heavy in the quarter due to an increase in refinancing activity after a quiet first quarter. We continue to experience solid alternative investment results as we are benefiting from higher overall equity markets. Realized gains, losses, and impairments continue to be moderate and we continue to make progress in repositioning the recaptured assets. As of June 30, we had approximately $75 million of assets remaining, down from $88 million at the end of the first quarter.

Turning to Slide 13 and our capital position, estimated consolidated risk-based capital was 458%, up 12 points from the first quarter of 2017. Results reflect approximately $95 million of statutory income and dividends to the holding company of $49 million. Leverage was steady at 19%. Book value per diluted share was $22.74, up 10% over the prior year. Holding company cash and investments was $278 million, down from $314 million at the end of the first quarter due primarily to the lower level of statutory dividends paid in the quarter.

We repurchased $69 million of common stock in the quarter at an average price of $20.61. Through the second quarter, we have repurchased $112 million of common stock. For 2017, we continue to expect to repurchase $200 million to $275 million of common stock absent compelling alternatives. And with that, I'll turn the call back over to Ed.

Thanks, Erik.

Our previously announced CEO succession is proceeding on track for the end of year changeover. This transition is a natural evolution of the company and I would like to reiterate that CNO's strategic priorities remain unchanged. We are committed to serving the middle income market, to continuing franchise growth and diversification, maintaining business discipline, and reducing our relative LTC exposure.

As discussed in detail at our recent Investor Day, our focus on serving middle income America, diversity of distribution, and breadth of product offerings including both health and wealth and insurance and security solutions is unique to the industry and the foundation of our sustainable competitive advantage. This differentiated business model combined with management's track record of solid execution should continue to produce strong cash flows and deliver long-term shareholder value. And with that, I'll now open it up for questions. Operator?

(Operator Instructions) Your first question comes from the line of Erik Bass.

In Bankers long-term care, can you just comment a little bit more on what's driven the favorable variance in the margin year-to-date and what gives you the confidence to project some of that continuing?

Hey Erik, this is Erik and operator, we heard a little bit of background noise there. So if you can make sure all the other lines are muted, we'd all appreciate that.

Really, there's nothing really specific to point to in terms of the LTC experience in the first half of the year, again excluding some of the one-time items that we detailed. Really, we're just seeing slightly favorable incurred claims and slightly lower persistency, which I believe as you know when you have lower persistency, you tend to have more reserve releases, which favorably impacts the benefit ratio. So going forward, it's just really a continuation of the experience that we have seen.

Got it and I realize we're only half way through the year, but does this suggest also that your reserves are trending favorably versus what's assumed in your margin?

Well, again it's only half way through the year and still 6 months to go and a lot can happen in those 6 months. So it's a little too early to make the call on where we expect year end testing results to come in, but certainly to the extent that we've seen favorability here in the first half of the year, that certainly gives me comfort that we're moving in the right direction.

Thanks and if I can ask one on Colonial Penn, just could you provide any more details on the sales contribution from non-TV lead generation? I mean I guess if the TV ad pricing environment doesn't improve, do you expect to be able to continue growing the in-force EBIT?

The lead sources are roughly 1/3 non-television, 2/3 television. We'd like to continue to grow that and in terms of the actual television advertising, we will continue to look at that every quarter, frankly every month and when and where it makes sense, we will resume a heavier advertising pace.

And Erik, this is Ed. Let me add to that to your comment on profitability. You're seeing it in the first half of the year when we spend marginally less on advertising, our earnings grow we think -- the collected premiums in total -- as that grows, that should lead to EBIT growth of the in-force.

Erik, and this is Erik, I think more to the heart of your second question is can you continue to grow in-force EBIT with lower levels of sales. The answer is yes albeit at a slower pace and so you can take a look at what happened here in the first 2 quarters of the year where sales were down, but sales as defined as NAP, but then look at collected premiums in total and see that those actually went up about $3 million in the quarter. So the answer is yes albeit at a slower rate.

Your next question comes from the line of Mr. Randy Binner.

So I'm actually going to ask just a couple on RBC and liquidity. Erik, in your comments, did you say that the dividend upstream in the quarter was lower because that looked -- the upstream from the insurance companies -- the holdco because that actually looked in line, but the management fees was a little bit higher than we've seen in the second quarter. Is there any timing issues and did I hear you right on characterizing that as a lower dividend upstream to the holdco?

Hey Randy, yes, this is Erik. So with respect to the management fees, yes, there is always an element of timing there between when the expenses are incurred and then actually billed and then reimbursed. So yes absolutely, element of timing there. Dividends are a little bit lower than we would have normally expected largely due because at the end of the first quarter, we were at 446% consolidated RBC and we wanted to nudge that back up above 450% and so our dividend plan was tied to getting RBC back up to 450%. Now we ended at 458% largely because of the outperformance in income and then the required capital actually cooperated a little bit as well and so that contributed to sort of outperformance on RBC.

All right, so yes then the timing issue on management fees was that -- did some things that usually would be in the first quarter end up in the second quarter or were they things that usually be in the third quarter that ended up in the second quarter?

It's more the first quarter, second quarter dynamic.

Okay and what cooperated on the denominator there for RBC?

It was really -- it was largely on the investment side I believe where just net-net, we just had lower sort of C1 related to upgrades and downgrades and it was just a couple of million dollars, but when you're targeting 450% RBC, that moves the needle pretty well.

Okay, so yes, so you're above 450% and cash looks pretty good up at the holdco and so obviously buybacks are a potential use of the cash, but any update on what compelling alternatives might look like these days?

Yes, Randy, Ed. One of the main compelling alternatives is to reduce risk and exposure on LTC where I think we've said in several different ways, if we're going to reduce the risk, it's going to involve parts of the business that have future losses and that would most likely require a charge and a cash outlay.

Okay, so is that kind of the most probable thing you're planning for with that extra cash, does that mean you are working towards something?

Well, as we've commented on before, we are actively engaged with different counterparties, reinsurers to reduce our LTC risk, but that doesn't mean it's our sole focus. We continue to look at investing back in the business whether that be organically or non-organically as well.

Your next question comes from the line of Sean Dargan.

If I could maybe carry Randy's line of questioning a bit further. So if we look at the holding company liquidity and then I look back at the slide in your Investor Day in which you call out what the margin sensitivity, if one assumes more adverse morbidity and a lower interest rate level, if a counterparty wanted -- maybe assumed those things and wanted more capital, that's more cash than you have currently. What kind of debt to total capital level would you feel comfortable going to if you were to raise debt to fund such a capital contribution?

Yes, Sean, thanks for the question. I think generally what we have been talking about is, we run right now at about 19%. We've been targeting in terms of leverage, we've been targeting about 20%. So we're running a little bit below that. I'd say optimally for an investment grade company at the end of the day that has reduced LTC exposure, optimally I think it's somewhere between 22.5% and 25%. Exactly where in that range depends on a lot of factors, but it's probably in that range.

Okay, thanks and it looks like the first quarter sales results were restated. I'm just wondering what drove the update?

Sean, sorry, can you repeat the question?

Yes, so there was a footnote in the supplement, it looked like first quarter sales results were restated, I'm just wondering if there's something that we should know about that?

Not really Sean. Again, this is Erik, it was just -- we implemented a new commission system at the beginning of the year. And so as data was being passed from our administrative systems to that commission system, there was just a glitch in the calculation of the new annualized premiums and so we actually found that out here in the second quarter, remediated that and updated what we reported in the first quarter. So, there was really nothing more than that. It didn't impact anything as far as we know anyway with respect to earnings or capital or any other sort of financial metrics.

Your next question comes from the line of Humphrey Lee.

Looking at the LTC reserve releases, there's a component of shock lapses and then the other one is the in-force management. And my understanding is you have a better, the way you look at the DMF and have a better success rate in terms of coming through the policies. Like what are you doing differently than what you did in the past and how much did that kind of in-force management help you in the current quarter?

Yes Humphrey, this is Erik. Thanks for the question. So there were really three components of the $9.4 million that we called out.

About $1.1 million of that was the shock lapse impact related to the rate increases that you noted. About $1.7 million was related to really just a reserve related to sort of correction of an administrative error that we had uncovered in the quarter and then the balance, which was about $6.5 million was tied to what you noted which is just what I call sort of in-force cleanup.

So what we do is, every year we go through a process to identify our debts related or terminations related to debt and as you know, sometimes those are not recorded and so we started that process in the first quarter looking at our life and annuity policies and then made our way into the second quarter with health policy. So what you see there is largely related to terminations related to long-term care policies and it was a little bit bigger in the second quarter because we had a little bit of a buildup in inventory in the first quarter because of the work we were doing on life and annuity. So it's a little bit outsized this quarter.

To answer your question a little bit more specifically then in terms of what we're doing, we started this process a couple of years ago and this process has evolved. We've done more things and the rest of the industry is actually doing a lot more to get at this, and so we're using more data that's out there and we're also using more tools and frankly doing some manual work on our own to do some more intense matching. So that's basically it.

Okay, but then kind of going forward even though with the refined process that you have, probably the, did the benefits in future years is not going to be as big as this year?

Well, it's difficult to say. I think one thing that we're looking at is sort of the frequency of when we do these reviews. Right now, it's annual, it's kind of a heavy lift for the organization. So we're looking to see if we can do this a little bit more frequently, but not ready to kind of make the call on that quite yet.

Okay and then maybe a question for Gary. So in the press release, you mentioned that you've made some progress on several of the key initiatives. Can you maybe elaborate on that in terms of what you started in terms of the pilot program and where do you stand in terms of the -- or when do we expect to see some tangible results?

Hi Humphrey, this is Gary.

The bulk of where we put our efforts in terms of pilots and initiatives and so on has to do with Bankers Life and we see some very early results and I want to emphasize the very early, they pertain primarily to the tools we're using to recruit and retain agents. As we've stated a number of times, what we really want to do is drive that retention of the more productive longer-tenured agents and you can see that this quarter, that number held flat. I wouldn't exactly call that an achievement, but I would tell you that, that represents progress and we're continuing to run those pilots. I would say we still need at least 3 to 4 more quarters before we'll see meaningful results that I'd be comfortable calling a trend.

Just on that note, so it's definitely a positive sign to see some stabilization on the experienced agent count, but the new agents or at least the young -- the more junior agents, the 1 to 2 years still declined notably. Like at some point that's going to be a negative to your -- the buildup of your experienced agent count. So I guess that the pilots that you're working on will help soften the attrition there or is there anything else that you're planning to do to accelerate the efforts or the efficiency of your recruiting?

Yes, I think the easiest way to explain it in terms of what is the most likely strategy that's going to work for us is to change the yield. In other words, I don't think that we are realistically going to see a material increase in the pipeline of new candidates that want to become agents. I don't expect to see a gigantic spike in that number. Rather, what we need to continue to experiment with and find better ways to do is bring in agents that are more likely to make it past first that 90 day mark, then that 180 day mark and so on. So rather than bringing in 7,000 agents a year, perhaps we'll only bring in 4,000 agents a year or 3,000 agents a year and have the yield go up on that. That's what we need to be able to achieve and by definition, that's going to take time to bear itself out.

So, just to circle back to give you a simple answer, I don't expect to see an increase in the number -- the raw number that we're bringing in as new potential agents. I do expect to see an increase in the yield. In other words, how many of those stick around.

Your next question comes from the line of Dan Bergman.

Annuity growth was strong again in the quarter. I just want to see if you could talk about how much of this is coming from your newer lifetime income product. And then I guess, as we are further out from that product launch as the DOL rule is now partially into effect, I just wanted to see if you had any thoughts around how we should expect annuity sales to trend going forward. I guess how much runway is left for additional incremental growth from current levels?

This is Gary, couple of general comments and then I'll try and speak more specifically. First of all, I'd remind everybody that we don't want to be a specific product focused company. What we really want to do is build products, whatever they are whether they are annuities or life products or what have you, whatever products our middle market needs, that's what we want to build and offer. So we've tapped into something here with annuities and I'll talk about that in a moment.

The second thing I want to just make sure I remind everybody, when we look at CNO holistically, please remember that the DOL rule really isn't that much of a factor for us. We had to spend money and do certain things particularly as respects to our broker/dealer that we recently established, but if we look at the aggregate business of CNO, the DOL rule doesn't have an impact.

Now speaking specifically to annuities, I think we've tapped into something here if we look at what this middle market consumer needs. We've obviously posted very strong sales growth. We've been very pleased with it. We're still only about 3 quarters in, I'd like to have another 3 or 4 quarters under our belt to really call it a trend, but we feel very good about what we've seen and I think that the reality of what we've seen is a middle market consumer that historically hasn't been called on to provide products or to receive products that can provide a guaranteed lifetime income and we're benefiting from that right now.

The vast majority of the growth has come from the new product, the fixed-indexed annuity that we launched in Q3 of last year with our first product with lifetime income benefits and that's where the growth has come from. We expect to continue to see that and we expect to continue to see that growth, I don't know if it'll be of this magnitude growing at this rate every quarter becomes a pretty tall feat particularly when the comparables catch up with us, but I do expect to see continued strong demand because that's what this consumer base needs. They need products that protect for income accumulation and longevity.

We have plans to continue to develop products that go after that particular need. So I would expect to see continued growth there. I'm not in a position to give you a specific forecast. Did we answer your question, Dan?

Yes, that's very helpful, thanks and maybe if I could just switching gears really quick to Bankers Medicare supplement, I just want to see if you could provide a little more color on what's caused the recent favorability there and really what's changed or different from your thinking going into the year that's given you the confidence that the current trends are going to persist and caused you to lower the second half benefit ratio guidance?

Yes, Dan, this is Erik, thanks for the question. Really nothing specific to point to you in terms of our first half favorability, we just have seen lower incurred claims.

I think what's changed is over the past couple of years, so thinking back to kind of 2015 and 2016, we did see an uptick in incurred claims; it wasn't necessarily unexpected, but if you go back even before that, we were experiencing sort of outsized favorability in our margins there and so we were taking less by way of premium rate increases in 2015, 2016. And so naturally the benefit ratio was moving up a little bit more towards where we priced the product. And so as we went into 2017, we started to take a little bit more by way of our premium rate increases and so that has helped to stabilize the benefit ratio.

Now beyond that, we have seen a little bit of favorability in incurred claims. So we're doing a little bit better than expected, but that's really it.

And your next question comes from the line of Mr. Ryan Krueger.

I had a quick follow-up to Sean's question, I guess for Eric on, in a similar scenario where you were able to achieve your risk reduction target for long-term care, can you talk about where you would see I guess your kind of pro forma target for holding company liquidity and the RBC ratio I guess relative to kind of the 450% you've been targeting and I guess kind of that $250 million to $300 million holdco liquidity target that you are in now?

Sure Ryan, we can talk a little bit about that, I mean we've had an objective at the holding company to maintain at least $150 million at all times and we've talked in past quarters about more practically that we're going to run north of that just because we like to have dry powder on hand. So I don't know that I necessarily see that $150 million target changing in sort of a post LTC risk reduction scenario.

Likewise with consolidated RBC, our target currently is 450%. Arguably, you could probably run slightly lower than that, but I think to the extent we can run lower will depend on how much of the LTC risk reduction has been achieved. So certainly for only reducing it by [1/4 or 1/3], then we're probably going to run closer to that 450%. If we're reducing it by in a very extreme scenario 100% then maybe we could get comfortable running something closer to 425%. So that's kind of generally how I think about it.

Thanks, that's helpful. Just a quick follow-up on the target holdco liquidity, would you no longer feel the need though to kind of run with a buffer the above the $150 million in that scenario?

Again, I think the key is we like to have dry powder on hand at all times, dry powder that's available for sort of opportunistic deployment. I think maybe a different way to answer it is, I would feel a lot more comfortable running down to $150 million in a post-LTC risk-reduction scenario.

Next question comes from the line of Thomas Gallagher.

Just another follow-up on the long-term care risk transfer side. Ed, if the compelling alternative to buyback is long-term care risk transfer and something that could be meaningful this year, would it make more sense for you guys to not buy back stock to build capital? So just curious, how to think about that in the context of you continuing to buy back stock here with the possibility of near-term risk transfer, how are you balancing that?

I think two things: one, refer back to Erik's comments on, we've already got buffers to our targets in both RBC and liquidity. So there is some of that already. The other thing is that we do generate roughly $25 million a month of excess cash capital with our ongoing operations. So when and if we have a transaction to reduce LTC risk, we see the timing between having a deal in principle and closing that deal offering us some months in between to then add to our buffer and liquidity and/or capital.

Got you and I guess there is an NAIC initiative going on for potential long-term care risk transfer solutions. Just curious what you think of that. Is that -- is that something that you think could be the catalyst for you from a risk transfer standpoint or is that something that's still not in its infancy in terms of you being able to have that be the vehicle for you?

Yes, I think Tom, it's in our view, definitely the latter. This is very early stages of discussion. We welcome that and think it's good in general for the marketplace as there are other potential alternatives to managing LTC business, but at the same time, because of the infancy and the opportunities we believe are still there for us to work with the private markets, we're not slowing down anything because of that.

Got it and then I just want to make sure I follow kind of where the annual cash flow is going here and as that translates into your return on capital. Ed, you had mentioned that $25 million a month is how much you generate in terms of excess cash, which gets you to a little I guess under $300 million a year. Is that a pretty good run rate going forward or what percent of that still benefits from NOL, which may get used up? Like, how do I think about that as a run rate for cash generation here if I think out over the next 1, 2, 3 years? Is that going to meaningfully change or is that a pretty good run rate?

Yes, Tom, this is Erik, I'll field that one. I think the $25 million a month or $75 million per quarter, $300 million annually is a pretty good run rate here for the next couple of years.

And Erik, even if -- even considering the usage of NOL on that expiring, you'd still have that level of visibility on cash flow?

Yes, that's correct, Tom. So just remember that we utilized our life NOLs at end of 2016 and are really re-guided to the $300 million in a post-life NOL world. So we still do have meaningful non-life NOLs. Those don't expire -- the majority of them don't expire till 2023. So we've got a good 5.5 years, 6 years worth of tax shelter.

This ends the Q&A session. I'll now hand it back over to the presenters for the closing comments.

Yes, thank you, operator. Thank you all on the call and appreciate your support and interest in CNO Financial Group. This ends the call.

This ends today's conference call. You may now all disconnect.