GLOBE LIFE INC. REPORTS SECOND QUARTER 2024 RESULTS
HIGHLIGHTS:
- Net income as an ROE was 20.8% for the six months ended
June 30, 2024 . Net operating income as an ROE excluding accumulated other comprehensive income (AOCI) was 14.5% for the same period. - Net income increased 20% and net operating income increased 8% over the year-ago quarter.
- At the American Income Life Division, life net sales and premiums increased over the year-ago quarter by 16% and 7%, respectively. Additionally, the average producing agent count increased 13% over the year-ago quarter.
- At the Liberty National Division, the average producing agent count increased 16% over the year-ago quarter and life net sales and premiums increased 11% and 6%, respectively.
- At the Family Heritage Division, health net sales increased 7% and premiums increased 8% over the year-ago quarter.
- Total underwriting margin increased 8% over the year-ago quarter.
- Net investment income grew 9% over the year-ago quarter.
- 3.8 million shares of
Globe Life Inc. common stock were repurchased during the quarter.
Note: As used in the earnings release, "
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RESULTS OF OPERATIONS |
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Net operating income, a non-GAAP(1) financial measure, has been used consistently by |
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The following table represents |
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Operating Summary |
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Per Share |
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||||
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Three Months Ended
|
|
|
|
Three Months Ended
|
|
|
||||
|
2024 |
|
2023 |
|
% Chg. |
|
2024 |
|
2023 |
|
% Chg. |
Insurance underwriting income(2) |
$ 3.72 |
|
$ 3.28 |
|
13 |
|
$ 340,437 |
|
$ 315,356 |
|
8 |
Excess investment income(2) |
0.47 |
|
0.33 |
|
42 |
|
42,791 |
|
31,385 |
|
36 |
Interest on debt |
(0.34) |
|
(0.27) |
|
26 |
|
(31,404) |
|
(25,818) |
|
22 |
Parent company expense |
(0.03) |
|
(0.03) |
|
|
|
(3,130) |
|
(3,088) |
|
|
Income tax expense |
(0.75) |
|
(0.63) |
|
19 |
|
(68,857) |
|
(60,801) |
|
13 |
Stock compensation benefit (expense), net of tax |
(0.09) |
|
(0.06) |
|
|
|
(8,620) |
|
(5,558) |
|
|
Net operating income |
2.97 |
|
2.61 |
|
14 |
|
271,217 |
|
251,476 |
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
Realized gain (loss)—investments |
(0.11) |
|
(0.38) |
|
|
|
(9,945) |
|
(36,216) |
|
|
Non-operating expenses |
(0.01) |
|
— |
|
|
|
(993) |
|
— |
|
|
Legal proceedings |
(0.02) |
|
— |
|
|
|
(1,924) |
|
— |
|
|
Net income(3) |
$ 2.83 |
|
$ 2.24 |
|
|
|
$ 258,355 |
|
$ 215,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding |
91,441 |
|
96,251 |
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|
|
|
|
|
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(1) GAAP is defined as accounting principles generally accepted in |
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(2) Definitions included within this document. |
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(3) A GAAP-basis condensed consolidated statement of operations is included in the appendix of this report. |
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Note: Tables in this earnings release may not sum due to rounding. |
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MANAGEMENT VS. GAAP MEASURES |
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Shareholders' equity, excluding AOCI, and book value per share, excluding AOCI, are non-GAAP measures that are |
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Six Months Ended
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||
|
2024 |
|
2023 |
Net income |
$ 512,572 |
|
$ 438,870 |
Net operating income |
535,316 |
|
499,518 |
Net income as an ROE(1) |
20.8 % |
|
22.4 % |
Net operating income as an ROE (excluding AOCI)(1) |
14.5 % |
|
14.6 % |
|
|
|
|
|
|
||
|
2024 |
|
2023 |
Shareholders' equity |
$ 5,227,754 |
|
$ 3,980,306 |
Impact of adjustment to exclude AOCI |
2,189,620 |
|
2,943,897 |
Shareholders' equity, excluding AOCI |
$ 7,417,374 |
|
$ 6,924,203 |
|
|
|
|
Book value per share |
$ 58.06 |
|
$ 41.44 |
Impact of adjustment to exclude AOCI |
24.32 |
|
30.65 |
Book value per share, excluding AOCI |
$ 82.38 |
|
$ 72.09 |
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(1) Calculated using average shareholders' equity for the measurement period. |
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INSURANCE OPERATIONS:
Life insurance accounted for 76% of the Company's insurance underwriting margin for the quarter and 70% of total premium revenue.
Health insurance accounted for 24% 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 17%.
The following table summarizes
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Insurance Premium Revenue |
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Quarter Ended |
||||
|
|
|
|
|
|
|
|
|
% Chg. |
Life insurance |
|
|
|
|
$ 815,482 |
|
$ 781,733 |
|
4 |
Health insurance |
|
|
|
|
351,643 |
|
329,187 |
|
7 |
Annuity |
|
|
|
|
— |
|
— |
|
|
Total |
|
|
|
|
$ 1,167,125 |
|
$ 1,110,920 |
|
5 |
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INSURANCE UNDERWRITING INCOME |
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Insurance underwriting margin is management's measure of profitability of the Company's life, health, and annuity |
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The following table summarizes |
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Insurance Underwriting Income |
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Quarter Ended |
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|
|
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% of Premium |
|
|
|
% of Premium |
|
% Chg. |
Insurance underwriting margins: |
|
|
|
|
|
|
|
|
|
Life |
$ 320,323 |
|
39 |
|
$ 296,130 |
|
38 |
|
8 |
Health |
100,488 |
|
29 |
|
92,419 |
|
28 |
|
9 |
Annuity |
1,748 |
|
|
|
2,181 |
|
|
|
|
|
422,559 |
|
|
|
390,730 |
|
|
|
8 |
Other income |
74 |
|
|
|
85 |
|
|
|
|
Administrative expenses |
(82,196) |
|
|
|
(75,459) |
|
|
|
9 |
Insurance underwriting income |
$ 340,437 |
|
|
|
$ 315,356 |
|
|
|
8 |
Per share |
$ 3.72 |
|
|
|
$ 3.28 |
|
|
|
13 |
|
The ratio of administrative expenses to premium was 7.0%, compared with 6.8% for the year-ago quarter.
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LIFE INSURANCE RESULTS BY DISTRIBUTION CHANNEL |
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Our distribution channels consist of the following exclusive agencies: American Income Life Division (American |
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Total premium, underwriting margins, first-year collected premium and net sales by all distribution channels are shown |
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Life Underwriting Margin |
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|
Quarter Ended |
|
|
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|
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|
2024 |
|
2023 |
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|
||||
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Amount |
|
% of |
|
Amount |
|
% of |
|
% |
American Income |
$ 192,662 |
|
45 |
|
$ 179,537 |
|
45 |
|
7 |
Direct to Consumer |
63,848 |
|
26 |
|
56,433 |
|
23 |
|
13 |
Liberty National |
31,072 |
|
34 |
|
28,386 |
|
33 |
|
9 |
Other |
32,741 |
|
64 |
|
31,774 |
|
61 |
|
3 |
Total |
$ 320,323 |
|
39 |
|
$ 296,130 |
|
38 |
|
8 |
|
|||||||||
Life Premium |
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|
|
|
|
|
Quarter Ended |
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
2024 |
|
2023 |
|
% Chg. |
American Income |
|
|
|
|
$ 423,534 |
|
$ 394,620 |
|
7 |
Direct to Consumer |
|
|
|
|
248,839 |
|
248,607 |
|
— |
Liberty National |
|
|
|
|
92,197 |
|
86,634 |
|
6 |
Other |
|
|
|
|
50,912 |
|
51,872 |
|
(2) |
Total |
|
|
|
|
$ 815,482 |
|
$ 781,733 |
|
4 |
|
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Life |
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|
|
|
|
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Quarter Ended |
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
2024 |
|
2023 |
|
% Chg. |
American Income |
|
|
|
|
$ 94,668 |
|
$ 81,940 |
|
16 |
Direct to Consumer |
|
|
|
|
30,614 |
|
31,629 |
|
(3) |
Liberty National |
|
|
|
|
25,889 |
|
23,269 |
|
11 |
Other |
|
|
|
|
2,332 |
|
2,450 |
|
(5) |
Total |
|
|
|
|
$ 153,503 |
|
$ 139,288 |
|
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. |
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HEALTH INSURANCE RESULTS BY DISTRIBUTION CHANNEL |
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Health Underwriting Margin |
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|
Quarter Ended |
|
|
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|
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|
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|
2024 |
|
2023 |
|
|
||||
|
Amount |
|
% of Premium |
|
Amount |
|
% of Premium |
|
% Chg. |
United American |
$ 16,571 |
|
11 |
|
$ 14,753 |
|
11 |
|
12 |
Family Heritage |
36,611 |
|
35 |
|
32,704 |
|
33 |
|
12 |
Liberty National |
26,400 |
|
55 |
|
26,208 |
|
56 |
|
1 |
American Income |
19,092 |
|
62 |
|
18,169 |
|
62 |
|
5 |
Direct to Consumer |
1,814 |
|
10 |
|
585 |
|
3 |
|
210 |
Total |
$ 100,488 |
|
29 |
|
$ 92,419 |
|
28 |
|
9 |
|
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Health Premium |
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|
|
|
|
|
Quarter Ended |
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
2024 |
|
2023 |
|
% Chg. |
United American |
|
|
|
|
$ 149,230 |
|
$ 137,453 |
|
9 |
Family Heritage |
|
|
|
|
105,855 |
|
98,129 |
|
8 |
Liberty National |
|
|
|
|
47,705 |
|
46,903 |
|
2 |
American Income |
|
|
|
|
30,721 |
|
29,527 |
|
4 |
Direct to Consumer |
|
|
|
|
18,132 |
|
17,175 |
|
6 |
Total |
|
|
|
|
$ 351,643 |
|
$ 329,187 |
|
7 |
|
|||||||||
Health |
|||||||||
|
|
|
|
|
Quarter Ended |
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
2024 |
|
2023 |
|
% Chg. |
United American |
|
|
|
|
$ 18,228 |
|
$ 12,933 |
|
41 |
Family Heritage |
|
|
|
|
24,570 |
|
23,010 |
|
7 |
Liberty National |
|
|
|
|
8,356 |
|
8,058 |
|
4 |
American Income |
|
|
|
|
5,792 |
|
4,712 |
|
23 |
Direct to Consumer |
|
|
|
|
839 |
|
707 |
|
19 |
Total |
|
|
|
|
$ 57,785 |
|
$ 49,420 |
|
17 |
|
|
(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. |
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PRODUCING EXCLUSIVE AGENT COUNT RESULTS BY DISTRIBUTION CHANNEL |
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Quarterly Average Producing Agent Count(1) |
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|
Quarter Ended |
|
|
|
Quarter Ended |
||
|
|
|
|
|
|
||
|
2024 |
|
2023 |
|
% |
|
2024 |
American Income |
11,869 |
|
10,488 |
|
13 |
|
11,139 |
Liberty National |
3,700 |
|
3,180 |
|
16 |
|
3,419 |
Family Heritage |
1,361 |
|
1,345 |
|
1 |
|
1,295 |
|
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(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 |
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|
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Management uses excess investment income as the measure to evaluate the performance of the investment |
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The following table summarizes |
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Excess Investment Income |
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|
Quarter Ended |
||||
|
|
||||
|
2024 |
|
2023 |
|
% Chg. |
Net investment income |
$ 285,636 |
|
$ 261,244 |
|
9 |
Interest on policy liabilities(1) |
(242,845) |
|
(229,859) |
|
6 |
Excess investment income |
$ 42,791 |
|
$ 31,385 |
|
36 |
Per share |
$ 0.47 |
|
$ 0.33 |
|
42 |
|
(1) Interest on policy liabilities, at original discount rates, is a component of total policyholder benefits, a GAAP measure. |
|
Net investment income increased 9% and average invested assets increased 6%. Required interest on policy liabilities increased 6% and average policy liabilities increased 5%.
|
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|
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The composition of the investment portfolio at book value at |
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Investment Portfolio |
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As of |
||
|
|
||
|
Amount |
|
% of Total |
Fixed maturities at fair value(1) |
$ 17,613,008 |
|
89 |
Mortgage Loans |
343,492 |
|
2 |
Policy loans |
676,077 |
|
3 |
Other long-term investments(2) |
974,515 |
|
5 |
Short-term investments |
100,560 |
|
1 |
Total |
$ 19,707,652 |
|
|
|
(1) As of |
(2) Includes |
|
Fixed maturities at amortized cost, net of allowance for credit losses, by asset class as of |
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|
|||||
Fixed Maturity Portfolio by Sector |
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|
As of |
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|
||||
|
Investment |
|
Below |
|
Total |
Corporate bonds |
$ 14,884,237 |
|
$ 521,168 |
|
$ 15,405,405 |
Municipals |
3,255,829 |
|
— |
|
3,255,829 |
Government, agencies, and GSEs(1) |
443,826 |
|
— |
|
443,826 |
Collateralized debt obligations |
— |
|
36,945 |
|
36,945 |
Other asset-backed securities |
74,147 |
|
5,989 |
|
80,136 |
Total |
$ 18,658,039 |
|
$ 564,102 |
|
$ 19,222,141 |
|
(1) |
|
Below are fixed maturities available for sale by amortized cost, allowance for credit losses, and fair value at
As of |
Amortized Cost |
|
Allowance for |
|
Net Unrealized |
|
Fair Value |
|
$ 19,229,273 |
|
$ (7,132) |
|
$ (1,609,133) |
|
$ 17,613,008 |
|
|
|
|
|
|
|
|
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 5.26% during the second quarter of 2024, compared with 5.18% in the year-ago quarter.
|
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|
|||
Comparable information for acquisitions of fixed maturity investments is as follows: |
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|
|||
Fixed Maturity Acquisitions |
|||
|
Quarter Ended |
||
|
|
||
|
2024 |
|
2023 |
Amount |
$ 240,669 |
|
$ 359,487 |
Average annual effective yield |
6.2 % |
|
5.8 % |
Average rating |
A- |
|
AA- |
Average life (in years) to: |
|
|
|
Next call |
32.2 |
|
15.5 |
Maturity |
34.8 |
|
24.4 |
|
SHARE REPURCHASE:
During the quarter, the Company repurchased 3.8 million shares of
LIQUIDITY/CAPITAL:
EARNINGS GUIDANCE FOR THE YEAR ENDING
NON-GAAP MEASURES:
In this news 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
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 portfolio yield;
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'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)
Readers are also directed to consider other risks and uncertainties described in other documents on file with the
EARNINGS RELEASE CONFERENCE CALL WEBCAST:
APPENDIX |
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|
|||||||
|
|||||||
|
|||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenue: |
|
|
|
|
|
|
|
Life premium |
$ 815,482 |
|
$ 781,733 |
|
$ 1,619,747 |
|
$ 1,554,330 |
Health premium |
351,643 |
|
329,187 |
|
692,662 |
|
651,680 |
Other premium |
— |
|
— |
|
— |
|
— |
Total premium |
1,167,125 |
|
1,110,920 |
|
2,312,409 |
|
2,206,010 |
Net investment income |
285,636 |
|
261,244 |
|
568,214 |
|
518,349 |
Realized gains (losses) |
(12,589) |
|
(45,843) |
|
(24,388) |
|
(76,770) |
Other income |
74 |
|
85 |
|
150 |
|
135 |
Total revenue |
1,440,246 |
|
1,326,406 |
|
2,856,385 |
|
2,647,724 |
|
|
|
|
|
|
|
|
Benefits and expenses: |
|
|
|
|
|
|
|
Life policyholder benefits(1) |
518,792 |
|
512,664 |
|
1,038,663 |
|
1,020,641 |
Health policyholder benefits(2) |
205,423 |
|
195,924 |
|
407,750 |
|
386,886 |
Other policyholder benefits |
11,479 |
|
8,922 |
|
21,074 |
|
17,910 |
Total policyholder benefits |
735,694 |
|
717,510 |
|
1,467,487 |
|
1,425,437 |
Amortization of deferred acquisition costs |
101,915 |
|
94,080 |
|
201,393 |
|
186,402 |
Commissions, premium taxes, and non-deferred acquisition costs |
149,802 |
|
138,459 |
|
297,912 |
|
276,256 |
Other operating expense |
99,108 |
|
86,033 |
|
192,322 |
|
170,204 |
Interest expense |
31,404 |
|
25,818 |
|
60,025 |
|
50,685 |
Total benefits and expenses |
1,117,923 |
|
1,061,900 |
|
2,219,139 |
|
2,108,984 |
|
|
|
|
|
|
|
|
Income before income taxes |
322,323 |
|
264,506 |
|
637,246 |
|
538,740 |
Income tax benefit (expense) |
(63,968) |
|
(49,246) |
|
(124,674) |
|
(99,870) |
Net income |
$ 258,355 |
|
$ 215,260 |
|
$ 512,572 |
|
$ 438,870 |
|
|
|
|
|
|
|
|
Basic net income per common share |
$ 2.83 |
|
$ 2.26 |
|
$ 5.53 |
|
$ 4.58 |
|
|
|
|
|
|
|
|
Diluted net income per common share |
$ 2.83 |
|
$ 2.24 |
|
$ 5.51 |
|
$ 4.52 |
|
|
(1) |
Net of a remeasurement gain of |
(2) |
Net of a remeasurement gain of |
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SOURCE