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A recent announcement in the insurance space that is making headlines is the closure of the sale of Conseco Life Insurance Company (CLIC) by CNO Financial Group, Inc. (CNO - Analyst Report). The company has vended the business to Wilton Reassurance Company (Wilton Re) for a net proceed of $220 million.

The deal was announced in March this year and was awaiting regulatory approval. The GAAP net loss related to the sale of CLIC was $298 million in the first quarter of 2014.

Concurrently, Bankers Life and Casualty Company ("Bankers Life"), another life insurance subsidiary of CNO Financial paid $28 million to acquire approximately $160 million of a traditional life insurance business that was reinsured to Wilton Re earlier.

CNO Financial has been focused on de-risking its legacy block of business (due to its volatility) to concentrate on core operations. As CLIC is a low-return and volatile block of business, its divestiture, along with the LTC reinsurance agreement with Wilton Re, is expected to help the company in realizing this goal. Increased attention to core businesses should help the company in capitalizing on opportunities provided by the rapidly growing and underserved middle market. Overall, the deals will reduce the risk profile of CNO Financial and increase return on equity (ROE).

Apart from boosting core operations, the divestiture is expected to free up deployable capital that can be used in inorganic growth initiatives or for efficient capital management.

CNO Financial currently has a Zacks Rank #2 (Buy). Other players in the industry that look attractive at current levels include Radian Group Inc. (RDN - Snapshot Report), Assurant Inc. (AIZ - Analyst Report) and AXA Group (AXAHY). While Radian Group sports a Zacks Rank #1 (Strong Buy), Assurant and AXA Group have the same Zacks Rank as CNO Financial.

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