The following table summarizes Globe Life's insurance underwriting income by segment for the three months ended September 30, 2024 and 2023:
Insurance Underwriting Income
Quarter Ended
September 30, 2024
% of Premium
September 30, 2023
% of Premium
% Chg.
Insurance underwriting margins:
Life
$
387,183
47
$
300,088
38
29
Health
86,963
25
96,700
29
(10)
Annuity
1,721
2,077
475,867
398,865
19
Other income
42
50
Administrative expenses
(88,465)
(74,585)
Insurance underwriting income
$
387,444
$
324,330
19
Per share
$
4.40
$
3.38
30
The ratio of administrative expenses to premium was 7.5%, compared with 6.7% for the year-ago quarter.
4
GL Q3 2024 Earnings Release
GLOBE LIFE INC.
Earnings Release—Q3 2024
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
LIFE INSURANCE RESULTS BY DISTRIBUTION CHANNEL
Our distribution channels consist of the following exclusive agencies: American Income Life Division (American Income), Liberty National Division (Liberty National) and Family Heritage Division (Family Heritage); an independent agency, United American Division (United American); and our Direct to Consumer Division (Direct to Consumer).
Total premium, underwriting margins, first-year collected premium and net sales by all distribution channels are shown at https://investors.globelifeinsurance.com at "Financial Reports and Other Financial Information."
Life Underwriting Margin
Quarter Ended
September 30,
2024
2023
Amount
% of Premium
Amount
% of Premium
% Chg.
American Income
$
221,246
52
$
181,098
45
22
Direct to Consumer
88,279
36
63,058
25
40
Liberty National
44,701
48
27,426
31
63
Other
32,957
65
28,506
55
16
Total
$
387,183
47
$
300,088
38
29
Life Premium
Quarter Ended
September 30,
2024
2023
% Chg.
American Income
$
427,839
$
400,214
7
Direct to Consumer
246,425
247,858
(1)
Liberty National
93,625
88,199
6
Other
50,749
51,828
(2)
Total
$
818,638
$
788,099
4
Life Net Sales(1)
Quarter Ended
September 30,
2024
2023
% Chg.
American Income
$
96,739
$
81,066
19
Direct to Consumer
24,074
26,497
(9)
Liberty National
24,352
24,165
1
Other
2,259
2,469
(9)
Total
$
147,424
$
134,197
10
(1)Net sales is calculated as annualized premium issued, net of cancellations in the first thirty days after issue, except in the case of Direct to Consumer, where net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period (typically 1 month) has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued since annualized premium issued excludes cancellations, and cancellations do not contribute to premium income.
5
GL Q3 2024 Earnings Release
GLOBE LIFE INC.
Earnings Release—Q3 2024
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
HEALTH INSURANCE RESULTS BY DISTRIBUTION CHANNEL
Health Underwriting Margin
Quarter Ended
September 30,
2024
2023
Amount
% of Premium
Amount
% of Premium
% Chg.
United American
$
14,023
9
$
15,473
11
(9)
Family Heritage
34,032
32
35,605
36
(4)
Liberty National
26,109
55
25,082
54
4
American Income
10,840
35
19,033
62
(43)
Direct to Consumer
1,959
11
1,507
9
30
Total
$
86,963
25
$
96,700
29
(10)
Health Premium
Quarter Ended
September 30,
2024
2023
% Chg.
United American
$
149,510
$
137,077
9
Family Heritage
107,819
99,828
8
Liberty National
47,277
46,643
1
American Income
31,277
30,535
2
Direct to Consumer
18,072
17,153
5
Total
$
353,955
$
331,236
7
Health Net Sales(1)
Quarter Ended
September 30,
2024
2023
% Chg.
United American
$
15,529
$
15,740
(1)
Family Heritage
29,326
25,312
16
Liberty National
8,122
8,652
(6)
American Income
5,566
4,673
19
Direct to Consumer
663
516
28
Total
$
59,206
$
54,893
8
(1)Net sales is calculated as annualized premium issued, net of cancellations in the first thirty days after issue, except in the case of Direct to Consumer, where net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period (typically 1 month) has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued since annualized premium issued excludes cancellations, and cancellations do not contribute to premium income.
6
GL Q3 2024 Earnings Release
GLOBE LIFE INC.
Earnings Release—Q3 2024
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
PRODUCING EXCLUSIVE AGENT COUNT RESULTS BY DISTRIBUTION CHANNEL
Quarterly Average
Producing Agent Count(1)
Quarter Ended
Quarter Ended
September 30,
June 30,
2024
2023
% Chg.
2024
American Income
12,031
10,983
10
11,869
Liberty National
3,794
3,339
14
3,700
Family Heritage
1,429
1,323
8
1,361
(1) The quarterly average producing agent count is based on the actual count at the beginning and end of each week during the period.
INVESTMENTS
Management uses excess investment income as the measure to evaluate the performance of the investment segment. It is defined as net investment income less the required interest attributable to policy liabilities. We also view excess investment income per diluted common share as an important and useful measure to evaluate performance of the investment segment, since it takes into consideration our stock repurchase program.
The following table summarizes Globe Life's investment income, excess investment income, and excess investment income per diluted common share.
Excess Investment Income
Quarter Ended
September 30,
2024
2023
% Chg.
Net investment income
$
284,964
$
266,926
7
Interest on policy liabilities(1)
(245,461)
(233,008)
5
Excess investment income
$
39,503
$
33,918
16
Per share
$
0.45
$
0.35
29
(1)Interest on policy liabilities, at original discount rates, is a component of total policyholder benefits, a GAAP measure.
Net investment income increased 7% and average invested assets increased 5%. Required interest on policy liabilities increased 5% and average policy liabilities increased 5%.
7
GL Q3 2024 Earnings Release
GLOBE LIFE INC.
Earnings Release—Q3 2024
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
The composition of the investment portfolio at book value at September 30, 2024 is as follows:
Investment Portfolio
As of
September 30, 2024
Amount
% of Total
Fixed maturities at fair value(1)
$
18,334,570
88
Mortgage loans
381,315
2
Policy loans
691,072
3
Other long-term investments(2)
1,221,888
6
Short-term investments
100,501
—
Total
$
20,729,346
(1) As of September 30, 2024, fixed maturities at amortized cost were $19.1 billion, net of $7.1 million of allowance for credit losses.
(2) Includes $979 million of investments accounted for under the fair value option which have a cost of $967 million as of September 30, 2024.
Fixed maturities at amortized cost, net of allowance for credit losses, by asset class as of September 30, 2024 are as follows:
Fixed Maturity Portfolio by Sector
As of
September 30, 2024
Investment Grade
Below Investment Grade
Total Amortized Cost, net
Corporate bonds
$
14,752,056
$
511,426
$
15,263,482
Municipals
3,253,819
—
3,253,819
Government, agencies, and GSEs(1)
439,763
—
439,763
Collateralized debt obligations
—
36,685
36,685
Other asset-backed securities
75,821
7,752
83,573
Total
$
18,521,459
$
555,863
$
19,077,322
(1) Government-Sponsored Enterprises
Below are fixed maturities available for sale by amortized cost, allowance for credit losses, and fair value at September 30, 2024 and the corresponding amounts of net unrealized gains and losses recognized in accumulated other comprehensive income (loss).
As of
Amortized Cost
Allowance for Credit Losses
Net Unrealized Gains (Losses)
Fair Value
September 30, 2024
$
19,084,454
$
(7,132)
$
(742,752)
$
18,334,570
At amortized cost, net of allowance for credit losses, 97% of fixed maturities (97% at fair value) were rated “investment grade.” The fixed maturity portfolio earned an annual taxable equivalent effective yield of 5.25% during the third quarter of 2024, compared with 5.19% in the year-ago quarter.
Globe Life is not a party to any credit default swaps and does not participate in securities lending.
8
GL Q3 2024 Earnings Release
GLOBE LIFE INC.
Earnings Release—Q3 2024
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
Comparable information for acquisitions of fixed maturity and other investments is as follows:
Fixed Maturity Acquisitions
Quarter Ended
September 30,
2024
2023
Amount
$
81,569
$
426,867
Average annual effective yield
6.2
%
6.1
%
Average rating
A-
A+
Average life (in years) to:
Next call
18.3
16.6
Maturity
30.1
26.6
Other Investment Acquisitions
Quarter Ended
September 30,
2024
2023
Limited partnerships
$
77,225
$
70,008
Mortgage loans
42,500
29,559
Common stock
3,775
7,453
Company owned life insurance
200,000
—
Total
$
323,500
$
107,020
SHARE REPURCHASE:
During the quarter, the Company repurchased 5.8 million shares of Globe Life Inc. common stock at a total cost of $580 million and an average share price of $100.34.
LIQUIDITY/CAPITAL:
Globe Life's operations consist primarily of writing basic protection life and supplemental health insurance policies which generate strong and stable cash flows. These cash flows are not impacted by volatile equity markets. Liquidity at the Parent Company is sufficient to meet additional capital needs of the insurance companies.
EARNINGS GUIDANCE FOR THE YEAR ENDING DECEMBER 31, 2024 and 2025:
Globe Life projects net operating income between $12.20 to $12.40 per diluted common share for the year ending December 31, 2024. For the year ending December 31, 2025, we estimate that net operating income per share will be in the range of $13.20 to $13.90.
NON-GAAP MEASURES:
In this news release, Globe Life includes non-GAAP measures to enhance investors' understanding of management's view of the business. The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing broader perspective. Globe Life's definitions of non-GAAP measures may differ from other companies' definitions. More detailed financial information, including various GAAP and non-GAAP measurements, is located at https://investors.globelifeinsurance.com on the Investors page under “Financial Reports and Other Financial Information."
9
GL Q3 2024 Earnings Release
CAUTION REGARDING FORWARD-LOOKING STATEMENTS:
This press release may contain forward-looking statements within the meaning of the federal securities laws. These prospective statements reflect management’s current expectations, but are not guarantees of future performance. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable events or developments, which may be national in scope, related to the insurance industry generally, or applicable to the Company specifically. Such events or developments could include, but are not necessarily limited to:
1) Economic and other conditions, including the continued impact of inflation, geopolitical events, and the recent pandemic on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions;
2) Regulatory developments, including changes in accounting standards or governmental regulations (particularly those impacting taxes and changes to the Federal Medicare program that would affect Medicare Supplement);
3) Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such as Health Maintenance Organizations and other managed care or private plans) and that could affect the sales of traditional Medicare Supplement insurance;
5) General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from geopolitical events, particularly in certain industries that may compromise part of our investment portfolio) that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities;
6) Changes in the competitiveness of the Company's products and pricing;
7) Litigation results;
8) Levels of administrative and operational efficiencies that differ from our assumptions (including any reduction in efficiencies resulting from increased costs arising from the impact of higher than anticipated inflation);
9) The ability to obtain timely and appropriate premium rate increases for health insurance policies from our regulators;
10) The customer response to new products and marketing initiatives;
11) Reported amounts in the consolidated financial statements which are based on management estimates and judgments which may differ from the actual amounts ultimately realized;
12) Compromise by a malicious actor or other event that causes a loss of secure data from, or inaccessibility to, our computer and other information technology systems;
13) The impact of any reputational damage on the Company including the impact on the Company's ability to attract and retain agents;
14) The severity, magnitude, and impact of natural or man-made catastrophic events, including but not limited to pandemics, tornadoes, hurricanes, earthquakes, war and terrorism, on our operations and personnel, commercial activity and demand for our products; and
15) Globe Life’s ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period.
Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission. Globe Life specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise.
10
GL Q3 2024 Earnings Release
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
Globe Life will provide a live audio webcast of its third quarter 2024 earnings release conference call with financial analysts at 11:00 am (Eastern) tomorrow, October 24, 2024. Access to the live webcast and replay will be available at https://investors.globelifeinsurance.com on the Calls and Meetings page, at the Conference Calls on the Web icon. Immediately following this press release, supplemental financial reports will be available before the conference call on the Investors page menu of the Globe Life website at “Financial Reports.”
For additional information contact:
Mike Majors, Executive Vice President - Policy Acquisition and Chief Strategy Officer
Globe Life Inc.
3700 South Stonebridge Drive
P. O. Box 8080
McKinney, Texas 75070-8080
Phone: 972-569-3627 or email: investors@globe.life
Website: https://investors.globelifeinsurance.com
11
GL Q3 2024 Earnings Release
GLOBE LIFE INC.
Earnings Release—Q3 2024
(Dollar amounts in thousands, except share and per share data)
(Unaudited)
APPENDIX
GLOBE LIFE INC.
GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenue:
Life premium
$
818,638
$
788,099
$
2,438,385
$
2,342,429
Health premium
353,955
331,236
1,046,617
982,916
Other premium
—
—
—
—
Total premium
1,172,593
1,119,335
3,485,002
3,325,345
Net investment income
284,964
266,926
853,178
785,275
Realized gains (losses)
(2,192)
(2,193)
(26,580)
(78,963)
Other income
42
50
192
185
Total revenue
1,455,407
1,384,118
4,311,792
4,031,842
Benefits and expenses:
Life policyholder benefits(1)
454,502
515,676
1,493,165
1,536,317
Health policyholder benefits(2)
221,926
193,790
629,676
580,676
Other policyholder benefits
11,756
9,578
32,830
27,488
Total policyholder benefits
688,184
719,044
2,155,671
2,144,481
Amortization of deferred acquisition costs
104,310
95,757
305,703
282,159
Commissions, premium taxes, and non-deferred acquisition costs
149,693
138,677
447,605
414,933
Other operating expense
104,874
85,870
297,196
256,074
Interest expense
31,388
25,955
91,413
76,640
Total benefits and expenses
1,078,449
1,065,303
3,297,588
3,174,287
Income before income taxes
376,958
318,815
1,014,204
857,555
Income tax benefit (expense)
(73,964)
(61,732)
(198,638)
(161,602)
Net income
$
302,994
$
257,083
$
815,566
$
695,953
Basic net income per common share
$
3.45
$
2.72
$
8.96
$
7.29
Diluted net income per common share
$
3.44
$
2.68
$
8.93
$
7.20
(1)Net of total remeasurement including both the impact of assumption changes and the effect of actual to expected experience adjustments, resulting in a gain of $70.6 million for the three months ended September 30, 2024, and a total remeasurement gain of $11.3 million for the same period in 2023. Net of a total remeasurement gain of $87.8 million for the nine months ended September 30, 2024, and a total remeasurement gain of $16.5 million for the same period in 2023.
(2)Net of a total remeasurement, including both the impact of assumption changes and the effect of actual to expected experience adjustments, resulting in a loss of $9.6 million for the three months ended September 30, 2024, and a total remeasurement gain of $7.8 million for the same period in 2023. Net of a total remeasurement loss of $3.1 million for the nine months ended September 30, 2024, and a total remeasurement gain of $8.3 million for the same period in 2023.