Conseco Issues Memo No. 15.

Business Editors

INDIANAPOLIS--(BUSINESS WIRE)--Aug. 13, 2001

The attached "NEW Conseco Memo No. 15" from Conseco (NYSE:CNC) CEO Gary C. Wendt was posted on Conseco's web site for shareholders and/or electronically distributed to them today.

                           NEW Conseco Memo
                                No. 15

To:     Conseco Shareholders
From:   Gary C. Wendt, Chairman & CEO
Date:   August 13, 2001

This is a follow-up note to last week's earnings release, and the subsequent decline in our stock price.

I thought the market's first-day reaction to our earnings release was predictable; the stock price adjusted by about the same amount as we adjusted our 2001 earnings guidance. The decline since has been exaggerated by short selling that has artificially increased the number of sellers.

It is clear to us from the feedback we got last week that the overwhelming majority of our investors understand the NEW Conseco story. Most important, it is clear that they understand that nothing has changed in our strategy and long-term expectations.

The value proposition of Conseco's turnaround is $2 to $3 in earnings per share in 2004. That guidance, given last December remains unchanged. It is based on three elements of value creation:

        1.  Reduced interest expense from debt reduction in 2001, 2002
            and 2003.

        2.  Rapid growth in on-balance-sheet receivables in the
            Finance company. (Since our change from gain-on-sale
            accounting isn't even 2 years old, our base of
            on-balance-sheet receivables is small compared to our
            origination capacity.)

        3.  Managing the insurance businesses better and more
            conservatively to produce operating earnings (before tax
            and goodwill charge) that will exceed $1 billion by 2004.

These factors remain in place. And, hence, our assessment of the economics of achieving $2 to $3 in EPS by 2004 remains unchanged.

The first stepping-stones along this path are already in place: The debt we have reduced this year combined with the cost reductions that are already being implemented should, by themselves, result in 20 cents per share in net addition to earnings in 2002 (calculated on 380 million shares). And that's before any plans for top line growth or the effect of productivity gains implemented in the second half of this year.

Cleaning up the more volatile balance sheet items (e.g. I/O, TLCP, Major Medical) may continue for a while longer. BUT, in time, the mess will be gone. And certainly before 2004.

We will continue to keep you informed about the businesses. To that end, and as promised, we have scheduled a daylong investor briefing about the Finance Company on Thursday, September 20. To maximize attendance, we will hold the meeting in New York, location to be announced. For those of you who have a question or curiosity about this excellent business, this will be a great opportunity to delve into the operations and financial fundamentals.

World Wide Web        http://www.conseco.com
Investor Hotline      800.4.CONSECO
Fax-on-Demand         800.344.6452

Note on forward-looking statements: All statements, trend analyses and other information contained in this release and elsewhere (such as in filings by Conseco with the Securities and Exchange Commission, press releases, presentations by Conseco or its management or oral statements) relative to markets for Conseco's products and trends in Conseco's operations or financial results, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic" and other similar expressions, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those contemplated by the forward-looking statements. Such factors include, among other things: (1) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) Conseco's ability to sell its products, its ability to make loans and access capital resources and the costs associated therewith, the market value of Conseco's investments, the lapse rate and profitability of policies, and the level of defaults and prepayments of loans made by Conseco; (2) Conseco's ability to achieve anticipated synergies and levels of operational efficiencies; (3) customer response to new products, distribution channels and marketing initiatives; (4) mortality, morbidity, usage of health care services and other factors which may affect the profitability of Conseco's insurance products; (5) performance of our investments; (6) changes in the Federal income tax laws and regulations which may affect the relative tax advantages of some of Conseco's products; (7) increasing competition in the sale of insurance and annuities and in the finance business; (8) regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) bank sales and underwriting of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products; (9) the outcome of Conseco's efforts to sell assets and reduce, refinance or modify indebtedness and the availability and cost of capital in connection with this process; (10) actions by rating agencies and the effects of past or future actions by these agencies on Conseco's business; and (11) the risk factors or uncertainties listed from time to time in Conseco's filings with the Securities and Exchange Commission.