U.S. markets open in 8 hours 30 minutes
  • S&P Futures

    4,271.50
    -9.50 (-0.22%)
     
  • Dow Futures

    33,648.00
    -70.00 (-0.21%)
     
  • Nasdaq Futures

    13,544.00
    -33.75 (-0.25%)
     
  • Russell 2000 Futures

    2,011.30
    -5.60 (-0.28%)
     
  • Crude Oil

    91.20
    -0.89 (-0.97%)
     
  • Gold

    1,809.30
    -6.20 (-0.34%)
     
  • Silver

    20.61
    -0.08 (-0.40%)
     
  • EUR/USD

    1.0253
    -0.0004 (-0.04%)
     
  • 10-Yr Bond

    2.8490
    0.0000 (0.00%)
     
  • Vix

    19.53
    -0.67 (-3.32%)
     
  • GBP/USD

    1.2117
    -0.0022 (-0.18%)
     
  • USD/JPY

    133.1970
    -0.2830 (-0.21%)
     
  • BTC-USD

    24,848.43
    +285.79 (+1.16%)
     
  • CMC Crypto 200

    592.23
    +20.95 (+3.67%)
     
  • FTSE 100

    7,500.89
    +34.98 (+0.47%)
     
  • Nikkei 225

    28,891.48
    +344.50 (+1.21%)
     

GLOBE LIFE INC. REPORTS SECOND QUARTER 2022 RESULTS

  • Oops!
    Something went wrong.
    Please try again later.
·19 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

MCKINNEY, Texas, July 27, 2022 /PRNewswire/ -- Globe Life Inc. (NYSE: GL) reported today that for the quarter ended June 30, 2022, net income was $1.79 per diluted common share, compared with $1.92 per diluted common share for the year-ago quarter. Net operating income for the quarter was $2.07 per diluted common share, compared with $1.85 per diluted common share for the year-ago quarter.

Globe Life (PRNewsfoto/Globe Life)
Globe Life (PRNewsfoto/Globe Life)

HIGHLIGHTS:

  • Net income as an ROE was 9.8% for the six months ended June 30, 2022. Net operating income as an ROE excluding net unrealized gains or losses on fixed maturities was 12.6% for the same period.

  • Life premiums increased 8% at the American Income Life Division and 5% at the Liberty National Division over the year-ago quarter.

  • Total health premiums increased over the year-ago quarter by 8%.

  • Life net sales increased 16% at the American Income Life Division and 7% at the Liberty National Division over the year-ago quarter.

  • 1.4 million shares of Globe Life Inc. common stock were repurchased during the quarter.

COVID-19 Update: COVID life claims expense for the quarter ended June 30, 2022 was not significant. Year to date through June 30, we incurred $45 million of COVID life claims. For the full year, we expect to incur approximately $62 million of COVID life claims at the mid-point of our guidance, based on a range of $2.4 million to $2.6 million of COVID life claims per 10,000 U.S. deaths and total U.S. COVID deaths of 215,000 to 275,000.

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—Q2 2022
(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 June 30, 2022 and 2021:

Operating Summary


Per Share








Three Months Ended

June 30,




Three Months Ended

June 30,




2022


2021


%

Chg.


2022


2021


%

Chg.

Insurance underwriting income(2)

$              2.08


$              1.81


15


$       205,962


$       188,277


9

Excess investment income(2)

0.58


0.58



57,438


59,959


(4)

Parent company expense

(0.03)


(0.03)




(2,893)


(2,757)



Income tax expense

(0.50)


(0.45)


11


(49,720)


(47,323)


5

Stock compensation benefit (expense), net of tax

(0.06)


(0.05)




(6,083)


(5,173)



Net operating income

2.07


1.85


12


204,704


192,983


6













Reconciling items, net of tax:












Realized gain (loss)—investments

(0.24)


0.07




(24,052)


6,841



Non-operating expenses

(0.04)





(3,648)




Legal proceedings






(206)



Net income(3)

$              1.79


$              1.92




$       177,004


$       199,618















Weighted average diluted shares outstanding

98,941


104,233











(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—Q2 2022
(Dollar amounts in thousands, except share and per share data)
(Unaudited)

MANAGEMENT VS. GAAP MEASURES

Shareholders' equity, excluding net unrealized gains or losses on fixed maturities, and book value per share, excluding net unrealized gains or losses on fixed maturities, are non-GAAP measures that are utilized by management to view the business without the effect of unrealized gains or losses which are primarily attributable to fluctuation in interest rates associated with the available-for-sale portfolio. Management views the business in this manner because the Company does not intend to sell, nor is it likely that management will be required to sell, the fixed maturities prior to their maturity. It also 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.


Six Months Ended

June 30,


2022


2021

Net income as an ROE(1)

9.8 %


9.0 %

Net operating income as an ROE (excluding net unrealized gains or losses on fixed maturities)

12.6 %


12.4 %






June 30,


2022


2021

Shareholders' equity

$     5,323,110


$     8,616,922

Impact of adjustment to exclude net unrealized gains or losses on fixed maturities

641,710


(2,879,292)

Shareholders' equity, excluding net unrealized gains or losses on fixed maturities

$     5,964,820


$     5,737,630





Book value per share

$            54.18


$            83.59

Impact of adjustment to exclude net unrealized gains or losses on fixed maturities

6.53


(27.93)

Book value per share, excluding net unrealized gains or losses on fixed maturities

$            60.71


$            55.66



(1)

Calculated using average shareholders' equity for the measurement period.

 

INSURANCE OPERATIONS—comparing Q2 2022 with Q2 2021: 

Life insurance accounted for 71% of the Company's insurance underwriting margin for the quarter and 70% of total premium revenue.

Health insurance accounted for 29% of the Company's insurance underwriting margin for the quarter and 30% of total premium revenue.

Net sales of life insurance increased 2% for the quarter and net health sales increased 3%.

The following table summarizes Globe Life's premium revenue by product type for the three months ended June 30, 2022 and 2021:

 

GLOBE LIFE INC.
Earnings Release—Q2 2022
(Dollar amounts in thousands, except share and per share data)
(Unaudited)

Insurance Premium Revenue


Quarter Ended


June 30, 2022


June 30, 2021


%

Chg.

Life insurance

$           759,924


$           728,170


4

Health insurance

319,189


295,586


8

Annuity




Total

$        1,079,113


$        1,023,756


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, 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 insurance administrative expenses. It excludes the investment segment, 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 June 30, 2022 and 2021:

Insurance Underwriting Income


Quarter Ended


June 30, 2022


% of

Premium


June 30, 2021


% of

Premium


%

Chg.

Insurance underwriting margins:










Life

$           197,550


26


$           178,755


25


11

Health

79,723


25


74,461


25


7

Annuity

2,090




2,176






279,363




255,392




9

Other income

299




388





Administrative expenses

(73,700)




(67,503)




9

Insurance underwriting income

$           205,962




$           188,277




9

Per share

$                  2.08




$                  1.81




15

The ratio of administrative expenses to premium was 6.8%, compared with 6.6% for the year-ago quarter.

 

GLOBE LIFE INC.
Earnings Release—Q2 2022
(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.

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




June 30,




2022


2021




Amount


% of
Premium


Amount


% of
Premium


%
Chg.

American Income

$       128,310


34


$       108,005


31


19

Direct to Consumer

29,052


12


34,430


14


(16)

Liberty National

17,809


22


15,875


20


12

Other

22,379


42


20,445


38


9

Total

$       197,550


26


$       178,755


25


11


Life Premium


Quarter Ended




June 30,




2022


2021


%

Chg.

American Income

$       376,419


$       347,696


8

Direct to Consumer

249,365


249,440


Liberty National

81,451


77,853


5

Other

52,689


53,181


(1)

Total

$       759,924


$       728,170


4


Life Net Sales(1)


Quarter Ended




June 30,




2022


2021


%

Chg.

American Income

$         85,164


$         73,233


16

Direct to Consumer

32,616


42,281


(23)

Liberty National

19,260


17,923


7

Other

2,580


2,947


(12)

Total

$       139,620


$       136,384


2



(1)

Net sales, a statistical performance measure, 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 has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued.

 

GLOBE LIFE INC.
Earnings Release—Q2 2022
(Dollar amounts in thousands, except share and per share data)
(Unaudited)

HEALTH INSURANCE RESULTS BY DISTRIBUTION CHANNEL

Health Underwriting Margin


Quarter Ended




June 30,




2022


2021




Amount


% of
Premium


Amount


% of
Premium


%
Chg.

United American

$         19,161


14


$         17,763


15


8

Family Heritage

24,135


27


22,235


26


9

Liberty National

16,517


35


14,941


32


11

American Income

17,375


59


16,717


58


4

Direct to Consumer

2,535


14


2,805


15


(10)

Total

$         79,723


25


$         74,461


25


7


Health Premium


Quarter Ended




June 30,




2022


2021


%

Chg.

United American

$       134,793


$       116,217


16

Family Heritage

90,758


85,012


7

Liberty National

46,655


47,118


(1)

American Income

29,392


28,789


2

Direct to Consumer

17,591


18,450


(5)

Total

$       319,189


$       295,586


8


Health Net Sales(1)


Quarter Ended




June 30,




2022


2021


%

Chg.

United American

$         12,377


$         12,082


2

Family Heritage

19,405


19,165


1

Liberty National

6,823


6,214


10

American Income

4,807


4,666


3

Direct to Consumer

642


584


10

Total

$         44,054


$         42,711


3



(1)

Net sales, a statistical performance measure, 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 has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued.

 

GLOBE LIFE INC.
Earnings Release—Q2 2022
(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)


End of Quarter

 Agent Count


Quarter Ended




Quarter Ended








June 30,




March 31,


June 30,




March 31,


2022


2021


%
Chg.


2022


2022


2021


%
Chg.


2022

American Income

9,670


10,478


(8)


9,385


9,637


10,406


(7)


9,543

Liberty National

2,713


2,700



2,656


2,782


2,700


3


2,687

Family Heritage

1,173


1,220


(4)


1,100


1,201


1,171


3


1,130



(1)

The quarterly average producing agent count is based on the actual count at the 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 both the required interest attributable to net policy liabilities and the interest on debt. 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


June 30,


2022


2021


%

Chg.

Net investment income

$       243,642


$       238,308


2

Required interest:






Interest on net policy liabilities(1)

(164,376)


(156,580)


5

Interest on debt

(21,828)


(21,769)


Total required interest

(186,204)


(178,349)


4

Excess investment income

$         57,438


$         59,959


(4)

Per share

$              0.58


$             0.58




(1)

Interest on net policy liabilities is a component of total policyholder benefits, a GAAP measure.

Net investment income increased 2.2%, and average invested assets increased 4.1%. Required interest on net policy liabilities increased 5.0%, and average net policy liabilities increased 4.0%. The weighted average discount rate for the net policy liabilities was 5.8% and was in line with the year-ago quarter.

 

GLOBE LIFE INC.
Earnings Release—Q2 2022
(Dollar amounts in thousands, except share and per share data)
(Unaudited)

The composition of the investment portfolio at book value at June 30, 2022 is as follows:

Investment Portfolio


As of


June 30, 2022


Amount


% of Total

Fixed maturities at fair value(1)

$      17,181,967


91

Policy loans

597,187


3

Other long-term investments(2)

898,955


5

Short-term investments

115,824


1

Total

$      18,793,933





(1)

As of June 30, 2022, fixed maturities at amortized cost were $18.0 billion, net of $0 of allowance for credit losses.

(2)

Includes $740 million of investments accounted for under the fair value option which have a cost of $711 million as of June 30, 2022.

Fixed maturities at amortized cost, net of allowance for credit losses, by asset class as of June 30, 2022 are as follows:

Fixed Maturity Portfolio by Sector


As of


June 30, 2022


Investment
Grade


Below
Investment
Grade


Total
Amortized

Cost, net

Corporate bonds

$    14,279,054


$         534,654


$    14,813,708

Municipals

2,614,124



2,614,124

Government, agencies and GSEs

442,107



442,107

Collateralized debt obligations


36,762


36,762

Other asset-backed securities

76,575


13,110


89,685

Total

$    17,411,860


$         584,526


$    17,996,386

Below are fixed maturities available for sale by amortized cost, allowance for credit losses, and fair value at June 30, 2022 and the corresponding amounts of net unrealized gains or losses recognized in accumulated other comprehensive income (loss).

As of

Amortized

Cost


Allowance for
Credit Losses


Net Unrealized
Gains
(Losses)


Fair

 Value

June 30, 2022

$                 17,996,386


$                      —


$          (814,419)


$      17,181,967

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 5.16% during the second quarter of 2022, compared with 5.24% 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—Q2 2022
(Dollar amounts in thousands, except share and per share data)
(Unaudited)

Comparable information for acquisitions of fixed maturity investments is as follows:

Fixed Maturity Acquisitions


Quarter Ended


June 30,


2022


2021

Amount

$      399,581


$      116,284

Average annual effective yield

5.3 %


3.7 %

Average rating

A+


A

Average life (in years) to:




Next call

11.3


29.2

Maturity

25.7


35.4

 

SHARE REPURCHASE:

During the quarter, the Company repurchased 1.4 million shares of Globe Life Inc. common stock at a total cost of $134 million and an average share price of $96.64.

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. During the second quarter, the Company issued $400 million of 4.800% Senior Notes due 2032. Proceeds from the issuance will be used to fund $300 million of 3.800% Senior Notes maturing in September of 2022, with the remaining net proceeds to be used for general corporate purposes. Refer to recent SEC filings for further information. Liquidity at the Parent Company is sufficient to meet additional capital needs of the insurance companies.

EARNINGS GUIDANCE FOR THE YEAR ENDING DECEMBER 31, 2022:

Globe Life projects that net operating income per share will be in the range of $7.90 to $8.30 for the year ending December 31, 2022.

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, including statements related to the expected impact of the COVID-19 outbreak on our business operations, financial results and financial condition. 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 COVID-19 pandemic and its impact 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 and/or investment portfolio yield;

5) General economic, industry sector or individual debt issuers' financial conditions (including developments and volatility arising from the COVID-19 pandemic, particularly in certain industries that may comprise 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 pricing competition;

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 operating during the COVID-19 pandemic);

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 severity, magnitude and impact of the COVID-19 pandemic, including effects of the pandemic and the effects of the U.S. government's and other businesses' response to the pandemic, on our operations and personnel, and on commercial activity and demand for our products; and

14) Globe Life's ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period as a result of the COVID-19 pandemic.

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 second quarter 2022 earnings release conference call with financial analysts at 12:00 pm (Eastern) tomorrow, July 28, 2022. 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."

 

 

APPENDIX


GLOBE LIFE INC.

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended

June 30,


Six Months Ended

June 30,


2022


2021


2022


2021

Revenue:








Life premium

$         759,924


$         728,170


$      1,514,526


$      1,436,289

Health premium

319,189


295,586


636,189


589,759

Other premium




1

Total premium

1,079,113


1,023,756


2,150,715


2,026,049

Net investment income

243,642


238,308


487,476


474,128

Realized gains (losses)

(30,446)


8,659


(37,690)


36,811

Other income

299


388


463


683

Total revenue

1,292,608


1,271,111


2,600,964


2,537,671









Benefits and expenses:








Life policyholder benefits

511,034


498,471


1,060,377


1,016,102

Health policyholder benefits

197,218


188,854


394,073


376,683

Other policyholder benefits

7,074


7,286


14,124


14,545

Total policyholder benefits

715,326


694,611


1,468,574


1,407,330

Amortization of deferred acquisition costs

155,205


148,021


313,589


301,014

Commissions, premium taxes, and non-deferred acquisition costs

93,595


82,312


184,408


161,978

Other operating expense

89,658


79,155


174,010


160,365

Interest expense

21,828


21,769


41,772


42,947

Total benefits and expenses

1,075,612


1,025,868


2,182,353


2,073,634









Income before income taxes

216,996


245,243


418,611


464,037

Income tax benefit (expense)

(39,992)


(45,625)


(77,246)


(85,902)

Net income

$         177,004


$         199,618


$         341,365


$         378,135









Total basic net income per common share

$                1.80


$                1.94


$                3.46


$                3.66









Total diluted net income per common share

$                1.79


$                1.92


$                3.43


$                3.62

 

Cision
Cision

View original content to download multimedia:https://www.prnewswire.com/news-releases/globe-life-inc-reports-second-quarter-2022-results-301594683.html

SOURCE Globe Life Inc.