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Globe Life Inc

GLOBE LIFE INC. REPORTS THIRD QUARTER 2024 RESULTS

MCKINNEY, Texas , Oct. 23, 2024 /PRNewswire/ -- Globe Life Inc. (NYSE: GL) reported today that for the quarter ended September 30, 2024, net income was $3.44 per diluted common share, compared with $2.68 per diluted common share for the year-ago quarter. Net operating income for the quarter was $3.49 per diluted common share, compared with $2.71 per diluted common share for the year-ago quarter.

HIGHLIGHTS:

  • Net income as an ROE(1) was 22.4% for the nine months ended September 30, 2024. Net operating income as an ROE(1) excluding accumulated other comprehensive income (AOCI) was 15.3% for the same period.
  • Net income(1) increased 18% and net operating income increased 19% over the year-ago quarter.
  • At the American Income Life Division, life net sales and life premiums increased over the year-ago quarter by 19% and 7%, respectively. Additionally, the average producing agent count increased 10% over the year-ago quarter.
  • At the Liberty National Division, the average producing agent count increased 14% over the year-ago quarter and life premiums increased 6%.
  • At the Family Heritage Division, health net sales increased 16% and health premiums increased 8% over the year-ago quarter. Additionally, the average producing agent count increased 8% over the year-ago quarter.
  • Total underwriting margin(1) increased 19% over the year-ago quarter.
  • Net investment income grew 7% over the year-ago quarter.
  • 5.8 million shares of Globe Life Inc. common stock at a total cost of $580 million were repurchased during the quarter.

(1) Includes a $46.3 million remeasurement gain due to the unlocking of assumptions in the third quarter of 2024, as compared to a $3.2 million remeasurement gain due to the unlocking of assumptions in the year-ago quarter. These amounts, along with the experience-related adjustments, are included within the remeasurement gain or loss in the Consolidated Statement of Operations.

Note: As used in the earnings release, "Globe Life," the "Company," "we," "our," and "us" refer to Globe Life Inc., a Delaware corporation incorporated in 1979, its subsidiaries and affiliates.

 

GLOBE LIFE INC.

Earnings Release—Q3 2024

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

 


RESULTS OF OPERATIONS


Net operating income, a non-GAAP(1) financial measure, has been used consistently by Globe Life's management for many years to evaluate the operating performance of the Company, and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes certain non-operating items such as realized investment gains and losses and certain significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company's business. Net income is the most directly comparable GAAP measure.

 

The following table represents Globe Life's operating summary for the three months ended September 30, 2024 and 2023:


Operating Summary


Per Share








Three Months Ended

September 30,




Three Months Ended

September 30,




2024


2023


%

Chg.


2024


2023


%

Chg.

Insurance underwriting income(2)

$           4.40


$           3.38


30


$     387,444


$     324,330


19

Excess investment income(2)

0.45


0.35


29


39,503


33,918


16

Interest on debt

(0.36)


(0.27)


33


(31,388)


(25,955)


21

Parent company expense

(0.04)


(0.03)




(3,210)


(2,581)



Income tax expense

(0.87)


(0.67)


30


(76,887)


(63,903)


20

Stock compensation benefit (expense), net of tax

(0.09)


(0.06)




(7,603)


(6,096)



Net operating income

3.49


2.71


29


307,859


259,713


19













Reconciling items, net of tax:












Realized gain (loss)—investments

(0.02)


(0.02)




(1,732)


(1,732)



Non-operating expenses

(0.01)


(0.01)




(503)


(898)



Legal costs and proceedings

(0.03)


—




(2,630)


—



Net income(3)

$           3.44


$           2.68




$     302,994


$     257,083















Weighted average diluted shares outstanding

88,087


95,818









(1)  GAAP is defined as accounting principles generally accepted in the United States of America.
(2)  Definitions included within this document.
(3)  A GAAP-basis condensed consolidated statement of operations is included in the appendix of this report.

 

Note: Tables in this earnings release may not sum due to rounding.

 

GLOBE LIFE INC.

Earnings Release—Q3 2024

(Dollar amounts in thousands, except share and per share data)

(Unaudited)


MANAGEMENT VS. GAAP MEASURES


Shareholders' equity, excluding AOCI, and book value per share, excluding AOCI, are non-GAAP measures that are utilized by management to view the business without the effect of changes in AOCI, which are primarily attributable to fluctuation in interest rates. Management views the business in this manner because it creates more meaningful and easily identifiable trends, as we exclude fluctuations resulting from changes in interest rates. Shareholders' equity and book value per share are the most directly comparable GAAP measures. 



Nine Months Ended

September 30,


2024


2023

Net income

$        815,566


$        695,953

Net operating income

843,175


759,231

Net income as an ROE(1)

22.4 %


22.6 %

Net operating income as an ROE (excluding AOCI)(1)

15.3 %


14.7 %






September 30,


2024


2023

Shareholders' equity

$     4,638,625


$     4,623,131

Impact of adjustment to exclude AOCI

2,484,743


2,458,974

Shareholders' equity, excluding AOCI

$     7,123,368


$     7,082,105





Book value per share

$            54.65


$            48.51

Impact of adjustment to exclude AOCI

29.27


25.80

Book value per share, excluding AOCI

$            83.92


$            74.31

(1) Calculated using average shareholders' equity for the measurement period. 

 

INSURANCE OPERATIONS: 

Life insurance accounted for 81% of the Company's insurance underwriting margin for the quarter and 70% of total premium revenue. 

Health insurance accounted for 18% of the Company's insurance underwriting margin for the quarter and 30% of total premium revenue.

Net sales of life insurance increased 10% for the quarter, and net health sales increased 8%. 

The following table summarizes Globe Life's premium revenue by product type for the three months ended September 30, 2024 and 2023:

GLOBE LIFE INC.

Earnings Release—Q3 2024

(Dollar amounts in thousands, except share and per share data)  

(Unaudited)


Insurance Premium Revenue


Quarter Ended


September 30,
2024


September 30,
2023


%

Chg.

Life insurance

$           818,638


$           788,099


4

Health insurance

353,955


331,236


7

Annuity

—


—



Total

$        1,172,593


$        1,119,335


5

 

INSURANCE UNDERWRITING INCOME

 

Insurance underwriting margin is management's measure of profitability of the Company's life, health, and annuity segments' underwriting performance, and consists of premiums less policy obligations (excluding interest on policy liabilities), commissions and other acquisition expenses. Insurance underwriting income is the sum of the insurance underwriting margins of the life, health, and annuity segments, plus other income, less administrative expenses. It excludes the investment segment, interest on debt, Parent Company expense, stock compensation expense and income taxes. Management believes this information helps provide a better understanding of the business and a more meaningful analysis of underwriting results by distribution channel. Insurance underwriting income, a non-GAAP measure, is a component of net operating income, which is reconciled to net income in the Results of Operations section above.

 

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. 

 

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.

 

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.

 

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%.

 

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.

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."

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;

4) Interest rate changes that affect product sales, financing costs, and/or investment yields;

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.

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."  

 

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.

 

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SOURCE Globe Life Inc.