Conseco mum on Bankers Life leaders

Conseco Inc. has done little to remove the mystery surrounding February's management shakeup at Bankers Life and Casualty Co., but the company and analysts expect no hangover from the departure of three executives.

Conseco President and CEO William Shea is still pinchhitting for Edward M. Berube,

The company reassigned the duties of Snow-Godfrey and Horton, a veteran financial services lawyer who started working there last August.

None of the three could be reached for comment.

Shea told analysts during Conseco's fourth-quarter conference call in March that Berube resigned for "personal reasons." Shea offered no elaboration.

Conseco spokesman Jim Rosensteele declined to say why Horton and SnowGodfrey left or whether their departure was connected to Berube's.

Heacox said she had no idea why the two left, but added that one could assume their departures were tied to Berube's because they happened on the same day.

Berube, 56, joined Conseco in 1999 and became president of Conseco Insurance Group the following September. He took over at Bankers Life in October 2000. He ranked among the top-paid executives at Conseco, and collected more than $1.3 million in salary and bonuses each year for the past three years.

Bankers Life and Conseco Insurance Group make up the two main operating segments through which Carmel-based Conseco does business.

Bankers Life sells Medicare supplement insurance, life insurance, longterm-care coverage and fixed annuities through 4,000 agents and managers.

Conseco executives have pointed to the performance of Bankers Life as a critical element in the company's postbankruptcy recovery. Shea noted during the conference call that Bankers Life has maintained a stable level of premiums despite ratings downgrades.

"We are very pleased with the progress which Bankers Life has made to date, and we do not expect Ed's resignation to have any significant effect on Bankers' current or future operations or strategy," Shea said.

Shea will run Bankers Life for now with help from a team of managers already in place, Rosensteele said. The Conseco CEO has made trips to Chicago every week since Berube's departure.

"I think over time he will be replaced, but right now the priority is on maximizing Bankers' business:' Rosensteele said.

Whether that replacement will come from within the company isn't clear, said Shea, who told analysts the topic is under discussion. "But in the near term, we believe we have the management team to move the company forward," he said.

Shea added Bankers Life has built a "very strong career distribution force" in recent years, and Conseco remains confident management can grow the business.

Rosensteele agreed. "It's a 125-year-old organization with a strong work ethic, a strong record of performance, and that hasn't changed," he said.

Wall Street has paid little attention to the Bankers Life departures. The price of Conseco shares dipped below $22 the last week in February but rebounded in early March and has since climbed past $23.

Analysts generally avoid changing a company's rating based on senior management shifts, said Jon Reichert of New Yorkbased Standard & Poor's.

"Management is a very important factor, but it is one of several factors we look at in coming up with a rating," he said.

The Bankers Life changes haven't affected the outlook for Conseco at San Francisco's Hahn Capital Management. Analyst John Goldberg thinks the company's shares are undervalued

However, Goldberg said he would like to learn more about what happened with Berube and why, because that might shed some light on the company's direction.