Coping with a “near-death experience” at Conseco Inc. was more than Jim Prieur bargained for when he agreed to become CEO five years ago, but he says now that the company has recovered, it’s time to move on.
Prieur announced Wednesday that he will retire from CNO Financial Group Inc., formerly known as Conseco, at the end of September. Ed Bonach, CNO’s chief financial officer, will become the new CEO.
Prieur, 60, became CEO of the Carmel-based life and health insurer in September 2006, leaving a job as the No. 2 man at Toronto-based Sun Life Financial Inc. He has led the company through multiple rounds of restructuring and debt-reduction, and through its name change in 2010.
When CNO’s investment assets suffered huge losses on paper in late 2008 and early 2009, even as the recession set in and debt payments loomed, the company’s auditor said it might have to issue a “going-concern warning,” casting doubt on the company’s ability to stay in business.
Such a warning would have put CNO into default on its bank loans—and possibly into bankruptcy.
The crisis hit bottom in March 2009, with CNO’s share price falling to a measly 26 cents. But Prieur, Bonach and their management team were able to negotiate new terms on loans with bankers and shed some of the company's insurance policies to outside companies in exchange for cash.
The scare passed and CNO’s stock has since soared. It closed Wednesday at $8.02 per share.
“While one wouldn’t have planned for a near-death experience, surviving one is pretty cool and in that sense very satisfying,” Prieur said.
CNO has strung together nine profitable quarters in a row. And, as Prieur notes, the company’s focus on helping middle-income seniors protect their assets—when most life insurers focus on high net-worth individuals—has never faced better prospects as the first of 70 million baby boomers began to hit retirement age this year.
Investors have yet to be fully convinced. Even though CNO’s stock price has recovered remarkably in the past two years, it is still more than 60 percent below where it was when Prieur started.
Prieur noted that most financial services companies still have depressed stock prices compared with before the recession.
“You always wish you had done better,” he said, “But it’s sort of undeniable that the company is in a much stronger position in pretty much every way.” With that conviction, Prieur added, “I thought it was time to move on.”
He said he didn’t feel any pressure from CNO’s board or from Bonach to step aside for him. “He’s certainly ready to take over,” Prieur said of Bonach.
Bonach, 57, came to CNO in 2007 from Vermont-based National Life Group, where he was also CFO. He also served as CFO for Minneapolis-based Allianz Life as part of his 23-year career there. He is trained as an actuary.
Bonach, who lives in Carmel, was named one of the area's top CFOs in 2010 as part of IBJ's annual CFO of the Year program.
CNO also said it is promoting Scott Perry, the head of its largest subsidiary, Bankers Life, to be chief operating officer of the entire company. However, Perry, 48, will retain his duties overseeing Banker, which is based in Chicago.
Prieur, who resides in Chicago, said he has no definite plans for a new gig in business, other than to sit on some corporate boards and perhaps join in short-term corporate turnaround work, if such an opounrtity comes his way.
His main goal now is to travel with his wife Karen, especially to Asia, where Prieur served a stint for Sun Life. Priuer said he’s looking forward to more leisurely trips than the 36-hour fly-ins his corporate schedule typically allowed in the past.
“We’ve sort of mastered the three-day vacation,” Prieur said. “Now, there’s a whole bunch of cities in Europe that I’d like to go back to.”