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GLOBE LIFE INC. REPORTS FOURTH QUARTER 2022 RESULTS
Press Releases

GLOBE LIFE INC. REPORTS FOURTH QUARTER 2022 RESULTS

MCKINNEY, Texas, Feb. 1, 2023 /PRNewswire/ — Globe Life Inc. (NYSE: GL) reported today that for the quarter ended December 31, 2022, net income was $2.14 per diluted common share, compared with $1.76 per diluted common share for the year-ago quarter. Net operating income for the quarter was $2.24 per diluted common share, compared with $1.70 per diluted common share for the year-ago quarter.

Net income for the year ended December 31, 2022 was $7.47 per diluted common share, compared with $7.22 per diluted common share for the year-ago period. Net operating income for the year ended December 31, 2022 was $8.15 per diluted common share compared with $6.86 per diluted common share for the year-ago period.

HIGHLIGHTS:

  • Net income as an ROE was 12.3% for the twelve months ended December 31, 2022. Net operating income as an ROE excluding net unrealized gains or losses on fixed maturities was 13.4% for the same period.
  • Life premiums increased 5% at the American Income Life Division and 4% at the Liberty National Division over the year-ago quarter.
  • Health premiums increased 7% and average producing agent count increased 12% at the Family Heritage Division over the year-ago quarter.
  • Life net sales and health net sales increased over the year-ago quarter by 24% and 14%, respectively, at the Liberty National Division.
  • 489,708 shares of Globe Life Inc. common stock were repurchased during the quarter.

COVID-19 Update: In the fourth quarter of 2022, the Company incurred approximately $5 million of COVID life claims as compared to $58 million for the same period last year. The Company finished the year ended December 31, 2022, with $49 million in COVID life claims, down from $140 million for the year ended December 31, 2021. For 2023, at the mid-point of our guidance, we anticipate approximately $45 million excess life claims from both COVID and non-COVID causes. We estimate total reported US deaths from COVID will be approximately 105,000 at the mid-point of our guidance. 

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—Q4 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 December 31, 2022 and 2021:

Operating Summary


Per Share








Three Months Ended

December 31,




Three Months Ended

December 31,




2022


2021


%

Chg.


2022


2021


%

Chg.

Insurance underwriting income(2)

$              2.21


$              1.57


41


$       218,370


$       159,422


37

Excess investment income(2)

0.64


0.58


10


62,826


58,791


7

Parent company expense

(0.03)


(0.02)




(3,067)


(2,302)



Income tax expense

(0.54)


(0.40)


35


(53,534)


(40,283)


33

Stock compensation benefit (expense), net of tax

(0.04)


(0.04)




(4,057)


(3,695)



Net operating income

2.24


1.70


32


220,538


171,933


28













Reconciling items, net of tax:












Realized gain (loss)—investments

(0.08)


0.09




(7,665)


9,506



Administrative settlements


(0.01)





(1,047)



Non-operating expenses





(460)


(29)



Legal proceedings

(0.01)


(0.02)




(853)


(2,410)



Net income(3)

$              2.14


$              1.76




$       211,560


$       177,953















Weighted average diluted shares outstanding

98,640


101,343











(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—Q4 2022  

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

(Unaudited)

The following table represents Globe Life’s operating summary for the year ended December 31, 2022 and 2021:

Operating Summary


Per Share








Year Ended December 31,




Year Ended December 31,




2022


2021


%

Chg.


2022


2021


%

Chg.

Insurance underwriting income

$              8.08


$              6.46


25


$       799,389


$       666,266


20

Excess investment income

2.41


2.31


4


238,083


238,528


Parent company expense

(0.11)


(0.09)




(11,156)


(9,553)



Income tax expense

(1.99)


(1.64)


21


(197,059)


(169,426)


16

Stock compensation benefit (expense), net of tax

(0.23)


(0.18)




(22,912)


(18,318)



Net operating income

8.15


6.86


19


806,345


707,497


14













Reconciling items, net of tax:












Realized gain (loss)—investments

(0.61)


0.53




(60,473)


54,220



Realized gain (loss)—redemption of debt


(0.07)





(7,358)



Administrative settlements


(0.01)





(1,047)



Non-operating expenses

(0.04)


(0.02)




(4,196)


(1,923)



Legal proceedings

(0.02)


(0.06)




(1,972)


(6,430)



Net income

$              7.47


$              7.22




$       739,704


$       744,959















Weighted average diluted shares outstanding

98,985


103,170









GLOBE LIFE INC.  

Earnings Release—Q4 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. 


Year Ended

December 31,


2022


2021

Net income as an ROE(1)

12.3 %


8.8 %

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

13.4 %


12.3 %






December 31,


2022


2021

Shareholders’ equity

$     4,895,861


$     8,642,806

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

1,416,428


(2,761,870)

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

$     6,312,289


$     5,880,936





Book value per share

$            49.65


$            85.97

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

14.36


(27.47)

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

$            64.01


$            58.50


(1)

Calculated using average shareholders’ equity for the measurement period. 

INSURANCE OPERATIONS: 

Life insurance accounted for 72% of the Company’s insurance underwriting margin for the quarter and 70% of total premium revenue. 

Health insurance accounted for 28% of the Company’s insurance underwriting margin for the quarter and 30% of total premium revenue.

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

The following table summarizes Globe Life’s premium revenue by product type for the three months ended December 31, 2022 and 2021:

Insurance Premium Revenue



Quarter Ended



December 31,

2022


December 31,

2021


%

Chg.


Life insurance

$           753,655


$           732,997


3


Health insurance

323,934


312,774


4


Annuity





Total

$        1,077,589


$        1,045,771


3


GLOBE LIFE INC. 

Earnings Release—Q4 2022 

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

(Unaudited)

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 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 December 31, 2022 and 2021:

Insurance Underwriting Income


Quarter Ended


December 31,

2022


% of

Premium


December 31,

2021


% of

Premium


%

Chg.

Insurance underwriting margins:










Life

$           212,387


28


$           146,280


20


45

Health

81,668


25


80,683


26


1

Annuity

1,958




2,163






296,013




229,126




29

Other income

385




212





Administrative expenses

(78,028)




(69,916)




12

Insurance underwriting income

$            218,370




$            159,422




37

Per share

$                  2.21




$                  1.57




41

The ratio of administrative expenses to premium was 7.2%, compared with 6.7% for the year-ago quarter.

GLOBE LIFE INC. 

Earnings Release—Q4 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 (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




December 31,




2022


2021




Amount


% of

Premium


Amount


% of

Premium


% Chg.

American Income

$       129,563


34


$       101,945


28


27

Direct to Consumer

38,575


16


12,000


5


221

Liberty National

20,853


25


11,997


15


74

Other

23,396


45


20,338


39


15

Total

$       212,387


28


$       146,280


20


45

 

Life Premium


Quarter Ended




December 31,




2022


2021


%

Chg.

American Income

$       380,713


$       363,831


5

Direct to Consumer

238,476


237,415


Liberty National

82,400


78,963


4

Other

52,066


52,788


(1)

Total

$       753,655


$       732,997


3

 

Life Net Sales(1)


Quarter Ended




December 31,




2022


2021


%

Chg.

American Income

$         69,796


$         74,007


(6)

Direct to Consumer

30,676


33,805


(9)

Liberty National

23,252


18,827


24

Other

2,568


2,694


(5)

Total

$       126,292


$       129,333


(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—Q4 2022 

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

(Unaudited)

HEALTH INSURANCE RESULTS BY DISTRIBUTION CHANNEL

Health Underwriting Margin


Quarter Ended




December 31,




2022


2021




Amount


% of

Premium


Amount


% of

Premium


%

Chg.

United American

$         20,154


15


$         19,870


15


1

Family Heritage

25,834


27


25,442


29


2

Liberty National

15,869


34


15,041


32


6

American Income

17,244


59


17,618


59


(2)

Direct to Consumer

2,567


15


2,712


15


(5)

Total

$         81,668


25


$         80,683


26


1

 

Health Premium


Quarter Ended




December 31,




2022


2021


%

Chg.

United American

$       136,771


$       130,070


5

Family Heritage

94,391


88,567


7

Liberty National

46,111


46,453


(1)

American Income

29,368


29,740


(1)

Direct to Consumer

17,293


17,944


(4)

Total

$       323,934


$       312,774


4

 

Health Net Sales(1)


Quarter Ended




December 31,




2022


2021


%

Chg.

United American

$         20,110


$         26,675


(25)

Family Heritage

22,432


18,489


21

Liberty National

8,612


7,569


14

American Income

3,921


4,453


(12)

Direct to Consumer

2,188


1,758


24

Total

$         57,263


$         58,944


(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—Q4 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)


Quarter Ended




Quarter Ended


December 31,




September 30,


2022


2021


%

Chg.


2022

American Income

9,243


9,530


(3)


9,477

Liberty National

2,946


2,724


8


2,784

Family Heritage

1,334


1,194


12


1,233



(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


December 31,


2022


2021


%

Chg.

Net investment income

$       254,398


$       239,344


6

Required interest:






Interest on net policy liabilities(1)

(166,914)


(160,900)


4

Interest on debt

(24,658)


(19,653)


25

Total required interest

(191,572)


(180,553)


6

Excess investment income

$          62,826


$         58,791


7

Per share

$              0.64


$             0.58


10



(1)

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

Net investment income increased 6.3%, and average invested assets increased 3.9%. Required interest on net policy liabilities increased 3.7%, and average net policy liabilities increased 3.5%. 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—Q4 2022 

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

(Unaudited)

The composition of the investment portfolio at book value at December 31, 2022 is as follows:

Investment Portfolio


As of


December 31, 2022


Amount


% of Total

Fixed maturities at fair value(1)

$      16,503,365


91

Policy loans

614,866


3

Other long-term investments(2)

976,016


5

Short-term investments

114,121


1

Total

$      18,208,368





(1)

As of December 31, 2022, fixed maturities at amortized cost were $18.3 billion, net of $0 of allowance for credit losses.

(2)

Includes $769 million of investments accounted for under the fair value option which have a cost of $765 million as of December 31, 2022.

Fixed maturities at amortized cost, net of allowance for credit losses, by asset class as of December 31, 2022 are as follows:

Fixed Maturity Portfolio by Sector


As of


December 31, 2022


Investment

Grade


Below

Investment

Grade


Total

Amortized

Cost, net

Corporate bonds

$    14,442,719


$         492,906


$    14,935,625

Municipals

2,791,030



2,791,030

Government, agencies and GSEs

449,603



449,603

Collateralized debt obligations


37,098


37,098

Other asset-backed securities

75,843


12,493


88,336

Total

$    17,759,195


$         542,497


$    18,301,692

Below are fixed maturities available for sale by amortized cost, allowance for credit losses, and fair value at December 31, 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

December 31, 2022

$                 18,301,692


$                      —


$      (1,798,327)


$      16,503,365

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 5.18% during the fourth quarter of 2022, compared with 5.17% 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—Q4 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


December 31,


2022


2021

Amount

$      238,845


$      270,959

Average annual effective yield

6.1 %


3.5 %

Average rating

A


A+

Average life (in years) to:




Next call

16.5


12.8

Maturity

20.9


31.1

SHARE REPURCHASE:

During the quarter, the Company repurchased 489,708 shares of Globe Life Inc. common stock at a total cost of $56 million and an average share price of $115.01.

For the year ended December 31, 2022, the Company repurchased 3.3 million shares of Globe Life Inc. common stock at a total cost of $335 million and an average share price of $100.90.

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, 2023:

New accounting guidance related to long-duration insurance contracts is effective January 1, 2023. Under this new requirement, Globe Life projects net operating income between $10.20 to $10.50 per diluted common share for the year ending December 31, 2023. We estimate the impact of implementing the new accounting guidance results in an increase in net operating income in the range of $105 million to $115 million, primarily as a result of lower amortization of deferred acquisition costs.

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 fourth quarter 2022 earnings release conference call with financial analysts at 10:30 am (Eastern) tomorrow, February 2, 2023. 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

December 31,


Year Ended

December 31,


2022


2021


2022


2021

Revenue:








Life premium

$         753,655


$         732,997


$      3,023,296


$      2,898,210

Health premium

323,934


312,774


1,279,412


1,201,676

Other premium



1


1

Total premium

1,077,589


1,045,771


4,302,709


4,099,887

Net investment income

254,398


239,344


987,499


952,447

Realized gains (losses)

(9,703)


12,033


(76,548)


59,319

Other income

385


212


1,246


1,216

Total revenue

1,322,669


1,297,360


5,214,906


5,112,869









Benefits and expenses:








Life policyholder benefits

490,726


539,512


2,045,730


2,071,810

Health policyholder benefits

199,321


194,156


791,809


758,745

Other policyholder benefits

6,807


7,213


27,917


29,061

Total policyholder benefits

696,854


740,881


2,865,456


2,859,616

Amortization of deferred acquisition costs

154,689


151,231


624,407


603,838

Commissions, premium taxes, and non-deferred acquisition costs

96,947


86,758


374,383


331,510

Other operating expense

91,804


81,279


353,954


322,029

Interest expense

24,658


19,653


90,395


83,486

Total benefits and expenses

1,064,952


1,079,802


4,308,595


4,200,479









Income before income taxes

257,717


217,558


906,311


912,390

Income tax benefit (expense)

(46,157)


(39,605)


(166,607)


(167,431)

Net income

$         211,560


$         177,953


$         739,704


$         744,959









Total basic net income per common share

$                2.18


$                1.77


$                7.55


$                7.30









Total diluted net income per common share

$                2.14


$                1.76


$                7.47


$                7.22

 

 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/globe-life-inc-reports-fourth-quarter-2022-results-301736441.html

SOURCE Globe Life Inc.

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