CNO Financial Group, Inc. · NYSE:CNO

CNO Financial — Conseco — Q4 2007 Earnings Presentation

87 slides from CNO Financial's earnings presentation, March 2008

1. Slide 1: Fourth Quarter 2007 Financial and Operating Results

   Fourth Quarter 2007 Financial and Operating Results For the period ended December 31, 2007 Conseco, Inc.

2. Slide 2: Forward-Looking Statements

   Forward-Looking Statements Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend analyses and other information contained in these materials relative to markets for Conseco’s products and trends in Conseco’s operations or financial results, as well as other statements, con

3. Slide 3: Non-GAAP Measures

   Non-GAAP Measures This presentation contains the following financial measures that differ from the comparable measures under Generally Accepted Accounting Principles (GAAP): operating earnings measures; book value excluding accumulated other comprehensive income (loss) per diluted share; operating r

4. Slide 4: Updates since March 17 release

   Updates since March 17 release CNO ƒ Q4 and full-year 2007 net income (loss) and income (loss) before realized losses improved from preliminary results, in line with indicated range 2007 Q407 ($ millions, except per share amounts) 2007 (Preliminary) Q407 (Preliminary) Net loss applicable to common s

5. Slide 5: Q4 2007 Summary

   Q4 2007 Summary CNO ƒ Reiterating from March 17: • BLC and CP continue to have strong new business and underlying results • CP results negatively impacted by cost of extending the brand into the PFFS marketplace • CIG results negatively affected by unlocking adjustment in interest-sensitive life blo

6. Slide 6: Q4 2007 Summary of Results

   Q4 2007 Summary of Results CNO ($ millions, except per share amounts) Pre-Tax After Tax* EPS* Bankers Life $58.3 Colonial Penn (0.2) Conseco Insurance Group 7.7 LTC Run-off Block (10.0) Corporate and interest expense (22.0) Income before net realized investment losses** 33.8 $(48.5) $(0.26) Net real

7. Slide 7: 2007 Full Year Summary of Results

   2007 Full Year Summary of Results CNO ($ millions, except per share amounts) Pre-Tax After Tax* EPS* Bankers Life $241.8 Colonial Penn 18.1 Conseco Insurance Group 102.7 LTC Run-off Block (185.9) Corporate and interest expense (89.1) Cost related to litigation settlement (64.4) Loss related to coins

8. Slide 8: Restatement Impact

   Restatement Impact CNO ($ millions, except per share amounts) Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 Q1 2007 Q2 2007 Q3 2007 Operating income (loss) As previously reported $55.8 $(31.7) $52.8 $5.7 $82.6 $14.6 $(54.4) $(25.6) Restated $51.0 $(30.1) $56.1 $15.1 $92.1 $3.7 $(49.7) $(21.7) Net income (

9. Slide 9: Restatement Walk

   Restatement Walk CNO ($ millions, except per share amounts) Q1 2006 Q2 2006 Q3 2006 Q4 2006 FY 2006 Q1 2007 Q2 2007 Q3 2007 Income (loss) before income taxes – as previously reported $101.1 $(34.9) $76.7 $9.4 $152.3 $16.2 $(92.7) $(86.8) Remediation procedures (3.7) (0.9) (0.6) 9.2 4.0 (20.2) 1.7 1.

10. Slide 10: Restatement Walk (cont.)

    Restatement Walk (cont.) CNO ($ millions) 12/31/06 9/30/07 Shareholders equity – as previously reported $4,713.1 $4,303.7 Remediation procedures (20.6) (31.8) Accounting for LTC premium rate increases 9.0 16.6 Previously identified errors (1.4) (3.0) Shareholders equity – as restated $4,700.1 $4,285

11. Slide 11: Operating ROE

    Operating ROE CNO ƒ Conseco has set a goal of improving its Operating ROE to 11% in 2009 Operating ROE*, Trailing 4 Quarters Operating ROE (Before Litigation Settlement Charges, Coinsurance Transaction and Valuation Allowance)**, Trailing 4 Quarters Q4 2006 6.7% Q1 2007 Q4 2006 5.5% 3.8% Q1 2007 Q2

12. Slide 12: Operating EPS (Diluted)

    Operating EPS (Diluted) CNO Operating EPS* Operating EPS (Before Litigation Settlement Charges, Coinsurance Transaction and Tax Valuation Allowance)** Q3 2007 $0.21 Q4 2007 Q4 2006 Q4 2006 Q1 2007 $0.11 $0.10 Q1 2007 $0.10 $0.08 $0.02 Q3 2007 ($0.12) Q2 2007 Q2 2007 Q4 2007 ($0.16) ($0.29) ($0.26) *

13. Slide 13: Expenses

    Expenses CNO ($ millions) Adjusted Operating Expenses*, Trailing 4 Quarters ƒ Back-office consolidation completed; to produce run-rate savings of $25 million Q4 2006 Q1 2007 Q2 2007 annually by 2008 $411.1 $410.8 $410.7 Q4 2007 $409.0 • Approximately $11 million in savings realized Q3 2007 $404.6 in

14. Slide 14: Financial Indicators

    Financial Indicators* CNO ƒ Book value per diluted share (excluding accumulated other comprehensive loss) • $24.41 at 12/31/07 vs $25.57 (restated) at YE 2006 ƒ Debt and preferred stock to total capital ratio (excluding accumulated other comprehensive loss) • 21% at 12/31/07 vs 29% (restated) at YE

15. Slide 15: Holding Company Sources and Uses of Funds

    Holding Company Sources and Uses of Funds CNO ($ millions) ƒ Corporate liquidity • Available holding company liquidity exceeds $90 million at 12/31/07, plus $80 million revolver ƒ Sources and uses of funds, excluding insurance subsidiary dividends 2007 Amounts Expected Continuing Sources: Interest o

16. Slide 16: Q4 2007 Normalization of Earnings

    Q4 2007 Normalization of Earnings CNO ($ millions) LTC BLC CP CIG Run-Off Corp. Consol. Q4 2007 pre-tax income (loss) – as reported* $58.3 $(0.2) $7.7 $(10.0) $(22.0) $33.8 Hedging inefficiencies on equity-indexed products 11.0 - - - - 11.0 Cost of initial marketing of PFFS product through direct di

17. Slide 17: CNO Recap

    CNO Recap ƒ Core businesses • Bankers Life and Colonial Penn – continued strong results, focused on profitable growth • CIG • Greater focus on distinctive capabilities • Producing more economic value from refocused sales efforts ƒ Run-off LTC block • Claims reserve volatility reduced • Run rate loss

18. Slide 18: CNO Recap (cont.)

    CNO Recap (cont.) ƒ Changing the portfolios of the business • Annuity coinsurance deal with Swiss Re closed; released capital from low-return business • Recapture of Colonial Penn life block from Swiss Re; higher- return core business for CNO ƒ Operations • Bulk of organizational realignment complet

19. Slide 19: Questions and Answers

    S CONSECO. Questions and Answers 19

20. Slide 20: Slides Carried Over from March 17, 2008 Presentation

    Slides Carried Over from March 17, 2008 Presentation 20

21. Slide 21: Q4 2007 Summary of Other Issues

    Q4 2007 Summary of Other Issues CNO ƒ Long-Term Care Reserves • Overall reserve adequacy (Gross Premium Valuation is positive) • Prospective unlocking: reserve pivot • Relates to additional Active Life Reserves which were set up corresponding to LTC rate increases • SEC staff has indicated that pivo

22. Slide 22: Q4 2007 Summary of Other Issues (cont.)

    Q4 2007 Summary of Other Issues (cont.) CNO ƒ Remediation • Material control weakness first disclosed in 2006 Form 10-K • 2007 plan has been completed, plus additional items from scope expansion • Examined more than 2,400 policy forms: Specified Disease, LTC, Life • Adjustments have been pushed back

23. Slide 23: Collected Premiums

    Collected Premiums CNO ($ millions) 2007 2006 $4,286.5 $4,314.1 2004 2005 ƒ Strong, consistent $3,881.4 $3,925.9 growth in Bankers Run-Off and Colonial Penn CIG ƒ Less consistent growth in CIG due to CP focus on more profitable business BLC 23

24. Slide 24: Investment Quality

    Investment Quality* CNO Actively Managed Fixed Maturities by Rating at 12/31/07 (Market Value) ƒ Below-investment grade and below securities represent 6% of BBB- 8% 6% total portfolio AAA 28% ƒ Limited new money BBB allocation to below- 12% investment grade securities BBB+ 10% AA 8% A 28% 12/31/06 3

25. Slide 25: Structured Securities at 12/31/07

    Structured Securities at 12/31/07 CNO (Market value in millions) ƒ Structured securities and Other asset-backed securities Planned amortization class, target amortization class, and accretion- $58.5 1.1% represent 25% of total Commercial directed bonds $1,596.1 mortgage-backed actively managed fixed

26. Slide 26: Sub-Prime Home Equity ABS

    Sub-Prime Home Equity ABS CNO Exposure by Vintage Year (Book Value in millions) 9/30/2007 12/31/2007 $90.2 $88.2 $47.4 $36.5 $27.1 $16.5 $15.8 $10.0 $0.0 $0.0 2003 2004 2005 2006 2007 ƒ Market value represents 0.52% of invested assets at 12/31/07, compared to 0.57% at 9/30/07 and 0.70% at 12/31/06 ƒ

27. Slide 27: Sub-Prime Home Equity ABS at 12/31/07

    Sub-Prime Home Equity ABS at 12/31/07 CNO Market Book % of Avg. Avg. Avg. 60+ % of Rating Value (mil.) Value (mil.) Subprime* FICO Support Delinq. Portfolio* AAA $39.9 $42.5 32.4% 646 41.6% 9.2% 0.17% AA $40.8 $48.9 33.1% 641 28.6% 9.0% 0.17% A $41.9 $58.6 34.0% 643 19.4% 7.1% 0.18% BBB $0.5 $0.5 0.

28. Slide 28: Sub-Prime Home Equity ABS and Structured Credit

    Sub-Prime Home Equity ABS and Structured Credit CNO ƒ No ABS CDO investments ƒ No hedge fund investments ƒ No “mark to model” structured securities ƒ No NIM securities ƒ No CDO Squared Investments ƒ Nominal (<$10 million par) third-party CLO/structured credit exposure ƒ Highly developed cashflow and

29. Slide 29: CMBS Exposure Summary at 12/31/07

    CMBS Exposure Summary at 12/31/07 CNO Exposure by Rating Category (in millions) $628 $628 Market Value $995 Book Value $1,023 $180 $159 $117 $122 $68 $69 $23 $24 AAA AA A BBB BB 29

30. Slide 30: Q4 Summary Bankers

    Q4 Summary Bankers ƒ Q4 2007 New Annualized Premium (NAP) of $58.3 million, 4% above Q4 2006, total year NAP up 10% ƒ Earnings driven by improved spreads and higher PDP/PFFS income ƒ Effective July 1, 2007, entered into a quota-share reinsurance agreement related to certain group PFFS business sold

31. Slide 31: 2007 Strong Distribution Results: Growth in Key Metrics

    2007 Strong Distribution Results: Growth in Key Metrics Bankers ƒ $294 million NAP = 10% growth • Strong Med Advantage and Life sales • Flat LTC • Lower Med Supp and Annuities ƒ Improved agent productivity while growing quantity • 4,480 agents at 12/31/07, up 10% vs 12/31/06 • 13% growth in new agen

32. Slide 32: NAP Growth: 2003-2007

    NAP Growth: 2003-2007 Bankers ($ millions) ƒ 10% compound annual growth since 2003 • Annual NAP up $90 million during period • Increases driven by agent productivity and growth plus new product offerings (primarily Life/PDP/PFFS) 2007 2006 $294 $269 2005 2004 $234 2003 $218 $203 32

33. Slide 33: Q4 Summary Colonial Penn

    Q4 Summary Colonial Penn ƒ Q4 2007 NAP of $9.3 million, 25% above Q4 2006, total year NAP up 27% ƒ Extended brand into PFFS market in Q4 2007 • $8.4 million of expenses charged to income ƒ Agreement to recapture block of life insurance business previously reinsured, effective 10/1/07 • Recapture fee

34. Slide 34: Q4 Summary CIG

    Q4 Summary CIG ƒ Q4 2007 NAP of $19.7 million, 18% less than Q4 2006, total year NAP down 21% • Decreases in Medicare supplement and annuities, consistent with CIG’s focus on more profitable business • Higher value from new business compared to Q4 2006 and full year 2006, despite lower sales • Stron

35. Slide 35: NAP: Q4 2006 vs Q4 2007 CIG

    NAP: Q4 2006 vs Q4 2007 CIG ($ millions) Q4 2006 Q4 2007 $11.3 $8.7 $7.2 $6.4 $3.7 $3.5 $1.7 $1.2 Life Annuities Med Sup Spec Dis 35

36. Slide 36: Q4 Summary LTC Closed Block

    Q4 Summary LTC Closed Block ƒ Significant reserve strengthening in Q2 2007 has stabilized results ƒ Active rate management, improved claims-paying practices and expense efficiency improvements have contributed to reduced losses ƒ Earnings are approaching breakeven ƒ Migration to LTCG system and proc

37. Slide 37: Verified Incurred Development LTC Closed Block

    Verified Incurred Development* LTC Closed Block Developed ($ millions) Deficiencies in Periods Prior to 2004 2004 2005 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Reported Claims $0.0 $370.8 $396.0 $433.3 $119.7 $212.0 $100.7 $104.7 Prior Period Development 0 (44.2) (58.9) (72.2) (34.9) (109.7) 3.3 1.8 Ver

38. Slide 38: Operating Data LTC Closed Block

    Operating Data LTC Closed Block Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Claims Paid (mils.) $83.1 $90.4 $101.2 $96.1 $81.64 $102.0 $96.8 $99.1 $104.9 Open Claimant Counts 12,290 11,805 12,536 12,228 12,048 11,870 12,424 12,121 12,338 In Force Policy Counts 201,649 197

39. Slide 39: Premium Re-rates (as of 3/13/08)

    Premium Re-rates (as of 3/13/08) LTC Closed Block ƒ Round 1 - exceeded each goal: • Re-rates submitted: $64.0 million (115% of goal) • Re-rates approved: $45.8 million (110% of goal) • Re-rates implemented: $44.4 million (106% of goal) • Re-rates financial impact: $37.3 million (106% of goal) ƒ Roun

40. Slide 40: What We Have Left to Do

    What We Have Left to Do LTC Closed Block ƒ Continue working within the regulatory environment to achieve equitable and actuarially justified rate increases ƒ Continue progress on claims-paying improvements and expense efficiencies ƒ Reduce future exposure and volatility of this block 40

41. Slide 41: Before Effect of Future Loss Reserve

    Before Effect of Future Loss Reserve CNO Illustrative Example Profit Breakeven Loss 1 2 3 4 5 6 7 8 Policy Year 41

42. Slide 42: Pivoting

    Pivoting CNO Illustrative Example Profit Breakeven Loss 1 2 3 4 5 6 7 8 Policy Year 42

43. Slide 43: After Effect of Future Loss Reserve

    After Effect of Future Loss Reserve CNO Illustrative Example Profit Breakeven Loss 1 2 3 4 5 6 7 8 Policy Year 43

44. Slide 44: Pivot vs Future Loss Reserve

    Pivot vs Future Loss Reserve CNO Illustrative Example Profit Pivot FLR Breakeven Loss 1 2 3 4 5 6 7 8 Policy Year 44

45. Slide 45: Appendix

    S CONSECO. Appendix 45

46. Slide 46: Q4 Earnings CNO Consolidated

    Q4 Earnings CNO Consolidated ($ millions) Q4 2006 (restated) Q4 2007 Bankers Life $67.5 $58.3 Colonial Penn 5.4 (0.2) Conseco Insurance Group 27.9 7.7 Other Business in Run-Off (45.1) (10.0) Corporate operations, excluding interest expense (0.4) (2.9) Total EBIT* 55.3 52.9 Corporate interest expense

47. Slide 47: Book Value Per Diluted Share

    Book Value Per Diluted Share* CNO ƒ Decrease in Q4 2007 reflects Q4 2006 $25.57 Q1 2007 $25.12 Q2 2007 $24.80 Q3 2007 $24.68 Q4 2007 $24.41 net loss for quarter, offset by common share repurchases *Book value excludes accumulated other comprehensive income (loss). Shares outstanding assumes: (1) con

48. Slide 48: Ratio of Debt and Preferred Stock to Total Capital

    Ratio of Debt and Preferred Stock to Total Capital* CNO ƒ Increase in Q4 2007 Q4 2006 Q1 2007 28.9% 29.0% reflects net loss for quarter and effect of common Preferred Q2 2007 Q3 2007 Q4 2007 share repurchases Stock 20.4% 20.6% 20.9% 20.3% 20.6% 20.9% Debt 17.3% 17.4% *Excludes accumulated other comp

49. Slide 49: Consolidated RBC Ratio

    Consolidated RBC Ratio* CNO Q4 2006 Q1 2007 Q3 2007 Q2 2007 ƒ Continued strong RBC 357% 344% 336% 330% Q4 2007 296% ƒ Decrease due primarily to: • LTC reserve strengthening • Statutory reserve pivoting • Realized losses • R-Factor litigation expenses *Risk-Based Capital (“RBC”) requirements provide

50. Slide 50: Net Investment Income

    Net Investment Income CNO ($ millions) General Account Investment Income, Excluding Corporate Segment ƒ Yield up 23 bps from Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2006 $389.9 Q4 2007 $376.8 $381.5 $364.3 $362.7 Net investment income from the prepayment of securities: $1.0 $5.0 $1.1 $0.6 $5.0 Yield: 5.7

51. Slide 51: Q4 Earnings Bankers

    Q4 Earnings Bankers ($ millions) Q4 2006 (Restated) Q4 2007 Insurance policy income $387.8 $470.4 Net investment income 145.3 132.1 Fee revenue and other income 1.2 4.3 Total revenues 534.3 606.8 Insurance policy benefits 309.1 394.9 Amounts added to policyholder account balances 56.4 43.5 Amortizat

52. Slide 52: Premiums – Medicare Supplement Bankers

    Premiums – Medicare Supplement Bankers Medicare Supplement – First-Year Premiums (in millions) Q4 2006 $25.3 Q1 2007 ƒ Growth in first-year $22.2 Q2 2007 Q3 2007 Q4 2007 $21.0 $20.0 $19.3 premiums as competition from PFFS slows Med. Supp. First-Year Prems.-Tr. 4 Qtrs: $97.8 $95.2 $90.7 $86.8 $82.5 M

53. Slide 53: Premiums – PDP/PFFS Bankers

    Premiums – PDP/PFFS Bankers PDP/PFFS – First-Year Premiums (in millions) Q4 2007 ƒ Significant increase in Q3 2007 $78.5 $86.0 PDP/PFFS premiums as result of addition of large group PFFS quota-share contract with Coventry $84.0 PFFS $76.2 Q2 2007 $25.9 Q4 2006 Q1 2007 $17.8 $16.0 $23.8 $17.8 $11.5 $

54. Slide 54: Premiums – Long-Term Care Bankers

    Premiums – Long-Term Care Bankers Long-Term Care – First-Year Premiums ($ millions) ƒ Sales have stabilized Q4 2006 Q2 2007 Q1 2007 Q3 2007 Q4 2007 $11.9 $12.2 $11.6 $11.7 $11.5 First-Year Prems.-Tr. 4 Qtrs: $51.2 $48.6 $47.7 $47.4 $47.0 Total Premiums-Quarterly: $150.2 $158.2 $155.4 $154.5 $154.3 N

55. Slide 55: Premiums – Life Insurance Bankers

    Premiums – Life Insurance Bankers Life – First-Year Premiums ($ millions) Q2 2007 $25.3 ƒ First-year premiums in line Q4 2006 $21.9 Q1 2007 Q3 2007 Q4 2007 $21.4 $21.2 $21.3 with Q3 2007 ƒ Trailing 4-quarter sales continue to increase First-Year Prems.-Tr. 4 Qtrs: $90.3 $91.0 $93.0 $89.8 $89.2 Total

56. Slide 56: Premiums – Annuity Bankers

    Premiums – Annuity Bankers Annuity – First-Year Premiums ($ millions) Q3 2007 ƒ Decrease in first-year Q4 2006 $247.5 $250.5 Q4 2007 Q1 2007 premiums from Q3 2007 $211.4 Q2 2007 $221.2 $199.6 reflects lower sales First-Year Prems.-Tr. 4 Qtrs: $994.6 $973.5 $935.8 $909.0 $882.7 Total Premiums-Quarter

57. Slide 57: Benefit Ratio – Medicare Supplement Bankers

    Benefit Ratio* – Medicare Supplement Bankers Q3 2007 Q2 2007 Q4 2007 Q4 2006 Q1 2007 69.4% 67.4% 67.6% 65.3% 64.6% ƒ Benefit ratio is consistent with our expectations Trailing 4 Quarter Avg.: 66.6% 65.8% 65.7% 66.6% 67.2% *We calculate benefit ratios by dividing insurance policy benefits by insuranc

58. Slide 58: Benefit Ratio – PDP and PFFS Business Bankers

    Benefit Ratio* – PDP and PFFS Business Bankers ƒ PDP and PFFS continue to Q1 2007 93.3% Q3 2007 trend as expected Q2 2007 85.4% Q4 2007 83.6% 80.9% ƒ Seasonality drives fluctuations ƒ Q3/Q4 includes large group case premiums/losses, which Q4 2006 42.5% has a higher loss ratio ƒ No PFFS in Q4 2006 ra

59. Slide 59: Interest-Adjusted Benefit Ratio – Long Term Care Bankers

    Interest-Adjusted Benefit Ratio* – Long Term Care Bankers ƒ Q4 2007 positively impacted by: Q3 2007 Q4 2006 Q1 2007 Q4 2007 75.2% • Lower persistency compared to Q3 2007 72.0% 72.1% Q2 2007 64.6% 71.2% ƒ Began implementation of premium re-rates in Q3 2007 on more recent business not previously re-ra

60. Slide 60: Segment Performance Bankers

    Segment Performance Bankers ($ millions) Pre-Tax Operating Income* ƒ Higher earnings driven by: Q4 2006 $67.5 Q2 2007 $70.5 Q3 2007 $67.5 • Higher margins on LTC as a result Q4 2007 $58.3 Q1 2007 of lower persistency and higher $45.5 claim terminations • Higher life margins as a result of change in

61. Slide 61: Q4 Earnings Colonial Penn

    Q4 Earnings Colonial Penn ($ millions) Q4 2006 Q4 2007 Insurance policy income $31.0 $34.6 Net investment income 10.2 9.5 Fee revenue and other income 0.2 0.2 Total revenues 41.4 44.3 Insurance policy benefits 26.4 25.2 Amounts added to policyholder account balances 0.3 0.3 Amortization related to o

62. Slide 62: Premiums – Life Insurance Colonial Penn

    Premiums – Life Insurance Colonial Penn Life – First-Year Premiums ($ millions) Q3 2007 Q4 2007 Q2 2007 $7.4 $7.6 Q1 2007 ƒ Continued strong sales growth Q4 2006 $6.7 $7.0 ƒ Trailing four quarters data: $5.9 • NAP grew 27% • First-year premium grew 25% (average of 5-6% per quarter) First-Year Prems.

63. Slide 63: Segment Performance Colonial Penn

    Segment Performance Colonial Penn ($ millions) Pre-Tax Operating Income* Q3 2007 Q2 2007 ƒ Consistent and positive $6.7 $7.0 business trends Q4 2006 $5.4 Q1 2007 ƒ Expansion into PFFS market $4.6 drove Q4 2007 earnings gap Q4 2007 -$0.2 PTOI-Trailing 4 Quarters: $21.6 $21.1 $21.3 $23.7 $18.1 Revenue

64. Slide 64: Q4 Earnings CIG

    Q4 Earnings CIG ($ millions) Q4 2006 (Restated) Q4 2007 Insurance policy income $245.1 $232.4 Net investment income 200.7 130.1 Fee revenue and other income (0.1) 0.2 Total revenues 445.7 362.7 Insurance policy benefits 205.8 180.3 Amounts added to policyholder account balances 98.4 47.7 Amortizatio

65. Slide 65: Premiums - Medicare Supplement CIG

    Premiums - Medicare Supplement CIG Medicare Supplement – First-Year Premiums ($ millions) Q4 2006 $7.9 ƒ Sales down 45% from Q4 2006: Q1 2007 $6.6 • Our goal is to focus on the Q2 2007 profitability of this business $5.2 Q3 2007 $4.2 Q4 2007 $3.4 First-Year Prems.-Tr. 4 Qtrs: $30.6 $28.9 $26.2 $23.9

66. Slide 66: Premiums – Specified Disease CIG

    Premiums – Specified Disease CIG Specified Disease – First-Year Premiums ($ millions) Q4 2007 $8.7 ƒ Sales up 30% from Q4 2006: Q4 2006 Q1 2007 Q2 2007 $7.7 Q3 2007 $7.7 $7.3 • New products $7.1 • Increased focus within PMA • Recruitment of Health IMOs First-Year Prems.-Tr. 4 Qtrs: $28.1 $28.2 $28.9

67. Slide 67: Premiums – Annuity CIG

    Premiums – Annuity CIG ($ millions) Annuity – First-Year Premiums ƒ Sales down 49% from Q4 2006: • Impact of ratings downgrade Q4 2006 Q1 2007 • Discontinuance of products $118.1 $116.3 Q2 2007 $108.3 due to coinsurance transaction Q3 2007 $73.2 • Focus on profitable products Q4 2007 $56.6 First-Yea

68. Slide 68: Benefit Ratio – Medicare Supplement CIG

    Benefit Ratio* – Medicare Supplement CIG Q2 2007 Q3 2007 Q1 2007 ƒ Consistent with expectations 68.9% 68.6% Q4 2007 Q4 2006 66.9% 66.0% 64.1% ƒ Higher persistency in Q4 2007 compared to Q4 2006 resulted in slightly higher benefit ratio Trailing 4 Quarter Avg.: 61.9% 63.6% 66.6% 67.1% 67.6% *We calcu

69. Slide 69: Interest-Adjusted Benefit Ratio – Specified Disease CIG

    Interest-Adjusted Benefit Ratio* – Specified Disease CIG ƒ Benefit ratio was favorable compared to Q3 2007 Q3 2007 Q4 2007 49.1% Q1 2007 46.5% Q4 2006 Q2 2007 42.8% 40.7% 40.4% Trailing 4 Quarter Avg.: 45.4% 44.2% 41.8% 43.2% 44.7% Qtrly. non-int. adjusted: 73.1% 75.7% 73.2% 81.9% 80.6% *We calculat

70. Slide 70: Segment Performance CIG

    Segment Performance CIG ($ millions) Pre-Tax Operating Income* ƒ Q4 2007 includes: • Unlocking adjustment on interest- Q2 2007 sensitive life block of $14.8 million Q1 2007 $43.3 • Earnings impacted by various other Q4 2006 $27.9 $33.5 items Q3 2007 $18.2 Q4 2007 $7.7 PTOI-Trailing 4 Quarters: $198.

71. Slide 71: Q4 Earnings LTC Closed Block

    Q4 Earnings LTC Closed Block ($ millions) Q4 2006 (Restated) Q4 2007 Insurance policy income $82.2 $77.3 Net investment income 45.6 50.5 Fee revenue and other income 0.1 0.1 Total revenues 127.9 127.9 Insurance policy benefits 150.2 113.3 Amortization related to operations 5.6 5.2 Other operating co

72. Slide 72: Balance Sheet Detail LTC Closed Block

    Balance Sheet Detail LTC Closed Block ($ millions) Insurance Liabilities and Intangible Assets, Net of Reinsurance Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Reserve for Future Benefits $2,403.9 $2,398.4 $2,392.1 $2,401.7 $2,392.7 Claim Reserve 815.3 828.8 952.2 953.9 962.1 Insurance Acquisition Costs

73. Slide 73: Segment Performance LTC Closed Block

    Segment Performance LTC Closed Block ($ millions) Pre-Tax Operating Income* ƒ Stable prior-period claim development Q4 2007 ƒ Meaningful impact from Q1 2007 Q3 2007 -$19.5 -$10.0 -$26.1 improvement initiatives Q4 2006 -$45.1 Q2 2007 -$130.3 PTOI-Trailing 4 Quarters: $(34.5) $(76.2) $(213.3) $(221.0)

74. Slide 74: Benefit Detail LTC Closed Block

    Benefit Detail LTC Closed Block ($ millions) Total Benefits ƒ Q2 2007 total benefits and incurred Q2 2007 $228.4 claims reflect $110 million claim reserve strengthening Q4 2006 $150.2 Q1 2007 Q3 2007 $124.9 $122.3 Q4 2007 $113.3 Incurred Claims $148.6 $130.4 $234.7 $112.9 $119.8 Increase in Reserves

75. Slide 75: Interest-Adjusted Benefit Ratio LTC Closed Block

    Interest-Adjusted Benefit Ratio* LTC Closed Block Q2 2007 ƒ Q2 2007 benefit ratio reflects 232.6% $110 million claim reserve strengthening Q4 2006 128.3% Q1 2007 Q3 2007 98.9% 96.2% Q4 2007 82.2% Trailing 4 Quarter Avg.: 80.7% 92.3% 134.1% 138.8% 127.5% Qtrly. non-int. adjusted: 182.7% 157.1% 292.4%

76. Slide 76: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures The following provides additional information regarding certain non-GAAP measures used in this presentation. A non-GAAP measure is a numerical measure of a company’s performance, financial position, or cash flows that excludes or includes am

77. Slide 77: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures A reconciliation of net income applicable to common stock to the net operating income, excluding: (i) Q2 2006 charge related to the litigation settlement and refinements to such estimates recognized in subsequent periods; (ii) a Q3 2007 char

78. Slide 78: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures Book value, excluding accumulated other comprehensive income, per diluted share This non-GAAP financial measure differs from book value per diluted share because accumulated other comprehensive income has been excluded from the book value us

79. Slide 79: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures A reconciliation from book value per diluted share to book value per diluted share, excluding accumulated other comprehensive income (loss) is as follows (dollars in millions, except per share amounts): Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Total sh

80. Slide 80: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures Operating return measures Management believes that an analysis of return before net realized gains or losses (“net operating income”, a non-GAAP financial measure) is important to evaluate the performance of the Company and is a key measure

81. Slide 81: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures A reconciliation of return on common equity to operating return (less: (i) Q2 2006 charge related to the litigation settlement and refinements to such estimates recognized in subsequent periods; (ii) a Q3 2007 charge related to a coinsurance

82. Slide 82: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures (continued from previous page) Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Average common shareholders' equity 4,027.4 4,032.3 4,194.2 4,320.8 4,260.7 Average common shareholder's equity, excluding accumulated other comprehensive income (loss) (a non-GAAP

83. Slide 83: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures A reconciliation of pretax operating earnings (a non-GAAP financial measure) to segment operating income (loss) and consolidated net income (loss) for the year ended Dec. 31, 2007, is as follows (dollars in millions): Other Business CIG Bank

84. Slide 84: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures A reconciliation of common shareholders’ equity, excluding accumulated other comprehensive income (loss), the Q2 2006 charge related to the litigation settlement and refinements to such estimates recognized in subsequent periods, the Q3 2007

85. Slide 85: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures A reconciliation of average common shareholders’ equity, excluding accumulated other comprehensive income (loss), the Q2 2006 charge related to the litigation settlement and refinements to such estimates recognized in subsequent periods, the

86. Slide 86: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures Debt to capital ratio, excluding accumulated other comprehensive income (loss) This non-GAAP financial measure differs from the debt to capital ratio because accumulated other comprehensive income has been excluded from the value of capital

87. Slide 87: Information Related to Certain Non-GAAP Financial Measures

    Information Related to Certain Non-GAAP Financial Measures Reconciliations of the: (i) debt to capital ratio to debt to capital, excluding accumulated other comprehensive loss; and (ii) debt and preferred stock to capital ratio to debt and preferred stock to capital, excluding accumulated other comp

Conseco — Q4 2007 Earnings Presentation on 6ix