Conseco Inc.CNO

Morningstar Rating

Stock Research and Analysis

by Alan Rambaldini

Conseco attempts to differentiate itself from larger life and health insurers by focusing on the senior market. While the fast growth of this demographic makes it an attractive niche, this approach is not sufficient to provide the company with a competitive Read more

Bulls Say

Conseco's niche is the senior market, which is often overlooked by firms chasing high-net-worth individuals. This target market is one of the fastest-growing demographic groups in America.

Medicare supplement and specified disease insurance are attractive niches. Conseco is competitive in these markets, thanks to its career agents who specialize in these products.

Premium rerates on the closed long-term care block are just beginning to lead to increased revenue for Conseco, and the firm is aggressively outsourcing to reduce claims-management costs.

Conseco has hired investment bank Morgan Stanley MS to investigate possible strategic initiatives to unlock shareholder value, including potential divestitures. Read more

Bears Say

Conseco's health insurance businesses target an aging group of customers who may be more at risk of increasing claims and health-care inflation.

Conseco's prospects of establishing an economic moat are dim. The firm's business is plagued by low switching costs and few barriers to entry.

It's much easier to maintain a toehold in consumers' minds than to re-enter. Since emerging from bankruptcy in 2003, Conseco has faced an uphill battle to re-establish itself with clients as a viable competitor. Read more

Strategy

With the spin-off of Conseco's mispriced long-term care liabilities, the firm is focused on expense reductions to bring profitability in line with peers. The firm is also seeking to strengthen the balance Read more

Management

C. James Prieur has been the CEO of Conseco since 2006 and has capably led the firm through a highly tumultuous period. Before joining Conseco, Prieur held various management positions at Sun Life Financial SLF, including president and COO for seven Read more

Profile

After emerging from bankruptcy in 2003, Conseco sold its finance business and focused on insurance. Main revenue sources include Medicare supplement, fixed annuities, and Read more

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