filings.toolsItem 1. Condensed Consolidated Financial Statements
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Item 1. Condensed Consolidated Financial Statements
Globe Life Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollar amounts in thousands, except per share data)
| June 30, 2024 | December 31, 2023 | ||||||||||
| Assets: | |||||||||||
| Investments: | |||||||||||
| Fixed maturities—available for sale, at fair value (amortized cost: 2024—$19,229,273; 2023—$18,924,914, allowance for credit losses: 2024— $7,132; 2023— $7,115) | $ | 17,613,008 | $ | 17,870,206 | |||||||
| Mortgage loans | 343,492 | 279,199 | |||||||||
| Policy loans | 676,077 | 657,020 | |||||||||
| Other long-term investments (includes: 2024—$915,665; 2023—$795,583 under the fair value option) | 974,515 | 835,878 | |||||||||
| Short-term investments | 100,560 | 81,740 | |||||||||
| Total investments | 19,707,652 | 19,724,043 | |||||||||
| Cash | 87,914 | 103,156 | |||||||||
| Accrued investment income | 274,674 | 270,396 | |||||||||
| Other receivables | 648,065 | 630,223 | |||||||||
| Deferred acquisition costs | 6,260,294 | 6,009,477 | |||||||||
| Goodwill | 481,791 | 481,791 | |||||||||
| Other assets | 838,416 | 832,413 | |||||||||
| Total assets | $ | 28,298,806 | $ | 28,051,499 | |||||||
| Liabilities: | |||||||||||
| Future policy benefits at current discount rates: (at original discount rates: 2024—$17,269,793; 2023—$16,984,615) | $ | 18,430,672 | $ | 19,460,353 | |||||||
| Unearned and advance premium | 270,077 | 254,567 | |||||||||
| Policy claims and other benefits payable | 526,126 | 514,875 | |||||||||
| Other policyholders' funds | 400,625 | 236,958 | |||||||||
| Total policy liabilities | 19,627,500 | 20,466,753 | |||||||||
| Current and deferred income taxes | 684,543 | 494,639 | |||||||||
| Short-term debt | 654,606 | 486,113 | |||||||||
| Long-term debt (estimated fair value: 2024—$1,376,196; 2023—$1,491,229) | 1,630,396 | 1,629,559 | |||||||||
| Other liabilities | 474,007 | 487,632 | |||||||||
| Total liabilities | 23,071,052 | 23,564,696 | |||||||||
| Commitments and Contingencies (Note 5) | |||||||||||
| Shareholders' equity: | |||||||||||
| Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in 2024 and 2023 | — | — | |||||||||
| Common stock, par value $1 per share—320,000,000 shares authorized; outstanding: (2024—102,218,183 issued; 2023—102,218,183 issued) | 102,218 | 102,218 | |||||||||
| Additional paid-in-capital | 534,028 | 532,474 | |||||||||
| Accumulated other comprehensive income (loss) | (2,189,620) | (2,772,419) | |||||||||
| Retained earnings | 7,943,415 | 7,478,813 | |||||||||
| Treasury stock, at cost: (2024—12,176,343 shares; 2023—8,426,854 shares) | (1,162,287) | (854,283) | |||||||||
| Total shareholders' equity | 5,227,754 | 4,486,803 | |||||||||
| Total liabilities and shareholders' equity | $ | 28,298,806 | $ | 28,051,499 |
See accompanying Notes to Condensed Consolidated Financial Statements.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollar amounts in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 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 $12.4 million for the three months ended June 30, 2024, and a remeasurement gain of $2.4 million for the same period in 2023. Net of a remeasurement gain of $17.3 million for the six months ended June 30, 2024, and a remeasurement gain of $5.1 million for the same period in 2023.
(2) Net of remeasurement gain of $3.2 million for the three months ended June 30, 2024 and a remeasurement gain of $2.6 million for the same period in 2023. Net of a remeasurement gain of $6.5 million for the six months ended June 30, 2024, and a remeasurement gain of $532 thousand for the same period in 2023.
See accompanying Notes to Condensed Consolidated Financial Statements.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(Dollar amounts in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net income | $ | 258,355 | $ | 215,260 | $ | 512,572 | $ | 438,870 | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Investments: | |||||||||||||||||||||||
| Unrealized gains (losses) on fixed maturities: | |||||||||||||||||||||||
| Unrealized holding gains (losses) arising during period | (263,012) | (333,329) | (568,028) | 135,790 | |||||||||||||||||||
| Other reclassification adjustments included in net income | 7,400 | 49,425 | 4,988 | 82,015 | |||||||||||||||||||
| Foreign exchange adjustment on fixed maturities recorded at fair value | (117) | (10,567) | 1,500 | (1,000) | |||||||||||||||||||
| Total unrealized investment gains (losses) | (255,729) | (294,471) | (561,540) | 216,805 | |||||||||||||||||||
| Less applicable tax (expense) benefit | 53,701 | 61,836 | 117,923 | (45,532) | |||||||||||||||||||
| Unrealized gains (losses) on investments, net of tax | (202,028) | (232,635) | (443,617) | 171,273 | |||||||||||||||||||
| Future Policy Benefits: | |||||||||||||||||||||||
| Change in discount rate on future policy benefits | 606,384 | 306,211 | 1,310,980 | (414,679) | |||||||||||||||||||
| Less applicable tax (expense) benefit | (127,342) | (64,305) | (275,306) | 87,082 | |||||||||||||||||||
| Future policy benefit adjustments, net of tax | 479,042 | 241,906 | 1,035,674 | (327,597) | |||||||||||||||||||
| Foreign exchange translation: | |||||||||||||||||||||||
| Foreign exchange translation adjustments, other than securities | 641 | 10,358 | (11,956) | 3,842 | |||||||||||||||||||
| Less applicable tax (expense) benefit | (135) | (2,176) | 2,511 | (808) | |||||||||||||||||||
| Foreign exchange translation adjustments, other than securities, net of tax | 506 | 8,182 | (9,445) | 3,034 | |||||||||||||||||||
| Pension: | |||||||||||||||||||||||
| Pension adjustments | 118 | (323) | 236 | (371) | |||||||||||||||||||
| Less applicable tax (expense) benefit | (22) | 66 | (49) | 77 | |||||||||||||||||||
| Pension adjustments, net of tax | 96 | (257) | 187 | (294) | |||||||||||||||||||
| Other comprehensive income (loss) | 277,616 | 17,196 | 582,799 | (153,584) | |||||||||||||||||||
| Comprehensive income (loss) | $ | 535,971 | $ | 232,456 | $ | 1,095,371 | $ | 285,286 |
See accompanying Notes to Condensed Consolidated Financial Statements.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)
(Dollar amounts in thousands, except per share data)
| Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | — | $ | 102,218 | $ | 532,474 | $ | (2,772,419) | $ | 7,478,813 | $ | (854,283) | $ | 4,486,803 | |||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | 305,183 | 254,217 | — | 559,400 | ||||||||||||||||||||||||||||||||||
| Common dividends declared ($0.2400 per share) | — | — | — | — | (22,603) | — | (22,603) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | — | — | — | — | — | (23,469) | (23,469) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | (5,612) | — | (438) | 15,317 | 9,267 | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | (3,334) | 33,097 | 29,763 | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | — | 102,218 | 526,862 | (2,467,236) | 7,706,655 | (829,338) | 5,039,161 | ||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | 277,616 | 258,355 | — | 535,971 | ||||||||||||||||||||||||||||||||||
| Common dividends declared ($0.2400 per share) | — | — | — | — | (21,595) | — | (21,595) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | — | — | — | — | — | (335,873) | (335,873) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 7,166 | — | — | 2,924 | 10,090 | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | — | $ | 102,218 | $ | 534,028 | $ | (2,189,620) | $ | 7,943,415 | $ | (1,162,287) | $ | 5,227,754 | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | — | $ | 105,218 | $ | 529,661 | $ | (2,790,313) | $ | 6,894,535 | $ | (789,524) | $ | 3,949,577 | |||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | (170,780) | 223,610 | — | 52,830 | ||||||||||||||||||||||||||||||||||
| Common dividends declared ($0.2250 per share) | — | — | — | — | (21,542) | — | (21,542) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | — | — | — | — | — | (179,276) | (179,276) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | (1,022) | — | — | 8,700 | 7,678 | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | (4,059) | 41,083 | 37,024 | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2023 | — | 105,218 | 528,639 | (2,961,093) | 7,092,544 | (919,017) | 3,846,291 | ||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | 17,196 | 215,260 | — | 232,456 | ||||||||||||||||||||||||||||||||||
| Common dividends declared ($0.2250 per share) | — | — | — | — | (21,330) | — | (21,330) | ||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock | — | — | — | — | — | (89,755) | (89,755) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 7,487 | — | — | — | 7,487 | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | (665) | 5,822 | 5,157 | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | — | $ | 105,218 | $ | 536,126 | $ | (2,943,897) | $ | 7,285,809 | $ | (1,002,950) | $ | 3,980,306 | |||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollar amounts in thousands)
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash provided from (used for) operating activities | $ | 724,923 | $ | 804,141 | |||||||
| Cash provided from (used for) investing activities: | |||||||||||
| Investments sold or matured: | |||||||||||
| Fixed maturities available for sale—sold | 510,904 | 145,824 | |||||||||
| Fixed maturities available for sale—matured or other redemptions | 85,385 | 138,259 | |||||||||
| Mortgage loans | 26,071 | 9,913 | |||||||||
| Other long-term investments | 14,125 | 49,680 | |||||||||
| Total investments sold or matured | 636,485 | 343,676 | |||||||||
| Acquisition of investments: | |||||||||||
| Fixed maturities—available for sale | (923,096) | (623,023) | |||||||||
| Mortgage loans | (92,167) | (66,437) | |||||||||
| Other long-term investments | (165,322) | (24,749) | |||||||||
| Total investments acquired | (1,180,585) | (714,209) | |||||||||
| Net (increase) decrease in policy loans | (19,057) | (18,692) | |||||||||
| Net (increase) decrease in short-term investments | (18,820) | 42,993 | |||||||||
| Additions to property and equipment | (26,738) | (25,629) | |||||||||
| Investments in low-income housing interests | (17,870) | (38,276) | |||||||||
| Cash provided from (used for) investing activities | (626,585) | (410,137) | |||||||||
| Cash provided from (used for) financing activities: | |||||||||||
| Issuance of common stock | 29,763 | 42,181 | |||||||||
| Cash dividends paid to shareholders | (43,681) | (41,569) | |||||||||
| Repayment of debt | — | (165,612) | |||||||||
| Proceeds from issuance of debt | — | 170,000 | |||||||||
| Payment for debt issuance costs | — | (693) | |||||||||
| Net borrowing from FHLB | 180,000 | — | |||||||||
| Net borrowing (repayment) of commercial paper | (114,494) | (25,371) | |||||||||
| Proceeds from commercial paper with original maturities greater than 90 days | 339,518 | — | |||||||||
| Repayment of commercial paper with original maturities greater than 90 days | (236,786) | — | |||||||||
| Acquisition of treasury stock | (359,342) | (269,031) | |||||||||
| Net receipts (payments) from deposit-type products | 85,236 | (116,437) | |||||||||
| Cash provided from (used for) financing activities | (119,786) | (406,532) | |||||||||
| Effect of foreign exchange rate changes on cash | 6,206 | (5,020) | |||||||||
| Net increase (decrease) in cash | (15,242) | (17,548) | |||||||||
| Cash at beginning of year | 103,156 | 92,559 | |||||||||
| Cash at end of period | $ | 87,914 | $ | 75,011 |
See accompanying Notes to Condensed Consolidated Financial Statements.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 1—Significant Accounting Policies
Business*:* (Globe Life), (the Company), refers to Globe Life Inc., an insurance holding company incorporated in Delaware in 1979, and Globe Life Inc. subsidiaries and affiliates. Globe Life Inc.'s direct or indirect primary subsidiaries are Globe Life And Accident Insurance Company, American Income Life Insurance Company, Liberty National Life Insurance Company, Family Heritage Life Insurance Company of America, and United American Insurance Company. The underwriting companies are owned by their ultimate corporate parent, Globe Life Inc. (Parent Company).
Globe Life provides a variety of life and supplemental health insurance products and annuities to a broad base of customers. The Company is organized into four reportable segments: life insurance, supplemental health insurance, annuities, and investments.
Globe Life markets its insurance products through a number of distribution channels, each of which sells the products of one or more of Globe Life's insurance segments. 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 (DTC).
Basis of Presentation*:* The accompanying condensed consolidated financial statements of Globe Life have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America (GAAP) for annual financial statements. However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial position at June 30, 2024, and the condensed consolidated results of operations, comprehensive income, and cash flows for the periods ended June 30, 2024 and 2023. The interim period condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Form 10-K filed with the Securities Exchange Commission (SEC) on February 28, 2024.
Use of Estimates: The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. See further documentation in the significant accounting policies or the accompanying notes.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 2—New Accounting Standards
| Accounting Pronouncements Adopted in the Current Year | ||||||||||||||||||||
| Standard | Description | Effective Date | Effect on the Condensed Consolidated Financial Statements | |||||||||||||||||
| ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions | ASU 2022-03 adds disclosure requirements specific to equity securities subject to contractual sale restrictions. The disclosures clarify the nature of the contractual sale as well as the duration of the restriction and the circumstances that could cause a lapse in the restriction. | This standard is effective for the Company for fiscal years beginning on January 1, 2024 and interim periods within those fiscal years. | The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements. |
| Accounting Pronouncements Yet to be Adopted | ||||||||||||||||||||
| Standard | Description | Effective Date | Effect on the Condensed Consolidated Financial Statements | |||||||||||||||||
| ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures | ASU 2023-07 adds disclosure requirements to segment expenses, improving the financial reporting of the entity’s overall performance and assessment of future cash flows. The disclosures will require more detailed information related to the entity’s reportable segments. | This standard is effective for the Company for annual periods beginning on January 1, 2024 and for interim periods beginning on January 1, 2025, and will be implemented on a retrospective basis. | The Company is evaluating the standard, but does not expect the standard will have a material impact on the Condensed Consolidated Financial Statements. | |||||||||||||||||
| ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures | ASU 2023-09 adds disclosure requirements to disaggregated information related to the effective tax rate reconciliation and information on income taxes paid. The disclosures will enhance the assessment of the entity’s operations and related tax risks. | This standard is effective for the Company for annual periods beginning on January 1, 2025, and will be implemented on a prospective basis. | The Company does not expect the standard will have a material impact on the Condensed Consolidated Financial Statements. |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income
Components of Accumulated Other Comprehensive Income: An analysis of the change in balance by component of Accumulated Other Comprehensive Income is as follows for the three and six month periods ended June 30, 2024 and 2023:
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
| Available for Sale Assets | Future Policy Benefits | Foreign Exchange | Pension Adjustments | Total | |||||||||||||||||||||||||||||||
| Balance at April 1, 2024 | $ | (1,069,185) | $ | (1,390,759) | $ | (5,232) | $ | (2,060) | $ | (2,467,236) | |||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | (207,874) | 479,042 | 506 | — | 271,674 | ||||||||||||||||||||||||||||||
| Reclassifications, net of tax | 5,846 | — | — | 96 | 5,942 | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (202,028) | 479,042 | 506 | 96 | 277,616 | ||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | (1,271,213) | $ | (911,717) | $ | (4,726) | $ | (1,964) | $ | (2,189,620) |
| Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
| Available for Sale Assets | Future Policy Benefits | Foreign Exchange | Pension Adjustments | Total | |||||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | (1,016,764) | $ | (1,938,707) | $ | (6,829) | $ | 1,207 | $ | (2,961,093) | |||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | (271,681) | 241,906 | 8,182 | — | (21,593) | ||||||||||||||||||||||||||||||
| Reclassifications, net of tax | 39,046 | — | — | (257) | 38,789 | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (232,635) | 241,906 | 8,182 | (257) | 17,196 | ||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | (1,249,399) | $ | (1,696,801) | $ | 1,353 | $ | 950 | $ | (2,943,897) |
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
| Available for Sale Assets | Future Policy Benefits | Foreign Exchange | Pension Adjustments | Total | |||||||||||||||||||||||||||||||
| Balance at January 1, 2024 | $ | (827,596) | $ | (1,947,391) | $ | 4,719 | $ | (2,151) | $ | (2,772,419) | |||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | (447,558) | 1,035,674 | (9,445) | — | 578,671 | ||||||||||||||||||||||||||||||
| Reclassifications, net of tax | 3,941 | — | — | 187 | 4,128 | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | (443,617) | 1,035,674 | (9,445) | 187 | 582,799 | ||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | (1,271,213) | $ | (911,717) | $ | (4,726) | $ | (1,964) | $ | (2,189,620) |
| Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
| Available for Sale Assets | Future Policy Benefits | Foreign Exchange | Pension Adjustments | Total | |||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | (1,420,672) | $ | (1,369,204) | $ | (1,681) | $ | 1,244 | $ | (2,790,313) | |||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | 106,481 | (327,597) | 3,034 | — | (218,082) | ||||||||||||||||||||||||||||||
| Reclassifications, net of tax | 64,792 | — | — | (294) | 64,498 | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | 171,273 | (327,597) | 3,034 | (294) | (153,584) | ||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | (1,249,399) | $ | (1,696,801) | $ | 1,353 | $ | 950 | $ | (2,943,897) |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Reclassification Adjustments: Reclassification adjustments out of Accumulated Other Comprehensive Income are presented below for the three and six month periods ended June 30, 2024 and 2023.
| Three Months Ended June 30, | Six Months Ended June 30, | Affected line items in the Statements of Operations | ||||||||||||||||||||||||||||||
| Component Line Item | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
| Unrealized investment (gains) losses on available for sale assets: | ||||||||||||||||||||||||||||||||
| Realized (gains) losses | $ | 10,217 | $ | 50,347 | $ | 9,989 | $ | 83,471 | Realized (gains) losses | |||||||||||||||||||||||
| Amortization of (discount) premium | (2,817) | (922) | (5,001) | (1,456) | Net investment income | |||||||||||||||||||||||||||
| Total before tax | 7,400 | 49,425 | 4,988 | 82,015 | ||||||||||||||||||||||||||||
| Tax | (1,554) | (10,379) | (1,047) | (17,223) | Income taxes | |||||||||||||||||||||||||||
| Total after-tax | 5,846 | 39,046 | 3,941 | 64,792 | ||||||||||||||||||||||||||||
| Pension adjustments: | ||||||||||||||||||||||||||||||||
| Amortization of prior service cost | 269 | 269 | 538 | 538 | Other operating expense | |||||||||||||||||||||||||||
| Amortization of actuarial (gain) loss | (151) | (592) | (302) | (909) | Other operating expense | |||||||||||||||||||||||||||
| Total before tax | 118 | (323) | 236 | (371) | ||||||||||||||||||||||||||||
| Tax | (22) | 66 | (49) | 77 | Income taxes | |||||||||||||||||||||||||||
| Total after-tax | 96 | (257) | 187 | (294) | ||||||||||||||||||||||||||||
| Total reclassification (after-tax) | $ | 5,942 | $ | 38,789 | $ | 4,128 | $ | 64,498 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 4—Investments
Portfolio Composition*:* Summaries of fixed maturities available for sale by amortized cost, fair value, and allowance for credit losses at June 30, 2024 and December 31, 2023, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows. Redeemable preferred stock is included within "Corporates, by sector."
| At June 30, 2024 | |||||||||||||||||||||||||||||||||||
| Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value**(1)** | % of Total Fixed Maturities**(2)** | ||||||||||||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||||||||||||||
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | 403,341 | $ | — | $ | 3 | $ | (41,886) | $ | 361,458 | 2 | ||||||||||||||||||||||||
| States, municipalities, and political subdivisions | 3,255,829 | — | 27,781 | (473,356) | 2,810,254 | 16 | |||||||||||||||||||||||||||||
| Foreign governments | 40,485 | — | — | (10,537) | 29,948 | — | |||||||||||||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||||||||||||||
| Industrials | 8,227,970 | (7,132) | 117,908 | (780,811) | 7,557,935 | 43 | |||||||||||||||||||||||||||||
| Financial | 5,051,320 | — | 72,372 | (439,205) | 4,684,487 | 26 | |||||||||||||||||||||||||||||
| Utilities | 2,133,247 | — | 40,493 | (124,426) | 2,049,314 | 12 | |||||||||||||||||||||||||||||
| Total corporates | 15,412,537 | (7,132) | 230,773 | (1,344,442) | 14,291,736 | 81 | |||||||||||||||||||||||||||||
| Collateralized debt obligations | 36,945 | — | 5,779 | — | 42,724 | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | 80,136 | — | 1 | (3,249) | 76,888 | 1 | |||||||||||||||||||||||||||||
| Total fixed maturities | $ | 19,229,273 | $ | (7,132) | $ | 264,337 | $ | (1,873,470) | $ | 17,613,008 | 100 |
(1)Amount reported in the balance sheet.
(2)At fair value.
| At December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value**(1)** | % of Total Fixed Maturities**(2)** | ||||||||||||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||||||||||||||
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | 398,450 | $ | — | $ | 7 | $ | (32,306) | $ | 366,151 | 2 | ||||||||||||||||||||||||
| States, municipalities, and political subdivisions | 3,296,305 | — | 47,346 | (403,329) | 2,940,322 | 16 | |||||||||||||||||||||||||||||
| Foreign governments | 44,453 | — | 1 | (10,348) | 34,106 | — | |||||||||||||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||||||||||||||
| Industrials | 8,016,126 | (7,115) | 213,078 | (566,847) | 7,655,242 | 43 | |||||||||||||||||||||||||||||
| Financial | 5,028,151 | — | 112,368 | (388,340) | 4,752,179 | 27 | |||||||||||||||||||||||||||||
| Utilities | 2,017,967 | — | 73,925 | (94,130) | 1,997,762 | 11 | |||||||||||||||||||||||||||||
| Total corporates | 15,062,244 | (7,115) | 399,371 | (1,049,317) | 14,405,183 | 81 | |||||||||||||||||||||||||||||
| Collateralized debt obligations | 37,110 | — | 5,036 | — | 42,146 | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | 86,352 | — | 3 | (4,057) | 82,298 | 1 | |||||||||||||||||||||||||||||
| Total fixed maturities | $ | 18,924,914 | $ | (7,115) | $ | 451,764 | $ | (1,499,357) | $ | 17,870,206 | 100 |
(1)Amount reported in the balance sheet.
(2)At fair value.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The Company has exposure to real estate investment trusts with an average rating of BBB+, which had a fair value of $411 million (2% of the total fixed maturity portfolio) and $425 million (2% of the total fixed maturity portfolio) at June 30, 2024 and December 31, 2023, respectively.
A schedule of fixed maturities available for sale by contractual maturity date at June 30, 2024, is shown below on an amortized cost basis, net of allowance for credit losses, and on a fair value basis. Actual disposition dates could differ from contractual maturities due to call or prepayment provisions.
| At June 30, 2024 | |||||||||||
| Amortized Cost, net | Fair Value | ||||||||||
| Fixed maturities available for sale: | |||||||||||
| Due in one year or less | $ | 129,415 | $ | 128,402 | |||||||
| Due after one year through five years | 734,757 | 738,610 | |||||||||
| Due after five years through ten years | 1,794,742 | 1,791,972 | |||||||||
| Due after ten years through twenty years | 8,908,777 | 8,365,383 | |||||||||
| Due after twenty years | 7,537,335 | 6,468,995 | |||||||||
| Mortgage-backed and asset-backed securities | 117,115 | 119,646 | |||||||||
| $ | 19,222,141 | $ | 17,613,008 |
Analysis of Investment Operations: "Net investment income" for the three and six month periods ended June 30, 2024 and 2023 is summarized as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||||||||||||||||
| Fixed maturities available for sale | $ | 247,215 | $ | 234,187 | 6 | $ | 493,313 | $ | 466,486 | 6 | |||||||||||||||||||||||||
| Policy loans | 13,084 | 12,234 | 7 | 25,900 | 23,989 | 8 | |||||||||||||||||||||||||||||
| Mortgage loans | 6,909 | 4,553 | 52 | 13,669 | 8,556 | 60 | |||||||||||||||||||||||||||||
| Other long-term investments(1) | 18,953 | 12,383 | 53 | 38,616 | 24,123 | 60 | |||||||||||||||||||||||||||||
| Short-term investments | 3,625 | 1,820 | 5,313 | 3,415 | |||||||||||||||||||||||||||||||
| 289,786 | 265,177 | 9 | 576,811 | 526,569 | 10 | ||||||||||||||||||||||||||||||
| Less investment expense | (4,150) | (3,933) | 6 | (8,597) | (8,220) | 5 | |||||||||||||||||||||||||||||
| Net investment income | $ | 285,636 | $ | 261,244 | 9 | $ | 568,214 | $ | 518,349 | 10 |
(1)For the three months ended June 30, 2024 and 2023, the investment funds, accounted for under the fair value option method, recorded $18.1 million and $12.0 million, respectively, in net investment income. For the six months ended June 30, 2024 and 2023, the investment funds, accounted for under the fair value option method, recorded $37.0 million and $23.3 million, respectively, in net investment income. Refer to Other Long-Term Investments below for further discussion on the investment funds.
Selected information about sales of fixed maturities available for sale is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||
| Proceeds from sales(1) | $ | 483,051 | $ | 130,119 | $ | 510,904 | $ | 145,824 | |||||||||||||||
| Gross realized gains | 3,869 | 47 | 4,044 | 47 | |||||||||||||||||||
| Gross realized losses | (13,933) | (10,503) | (13,968) | (10,861) |
(1)There were no unsettled sales in the periods ended June 30, 2024 and 2023.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
An analysis of "Realized gains (losses)" is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Realized investment gains (losses): | |||||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||
| Sales and other(1) | $ | (10,113) | $ | (10,606) | $ | (9,973) | $ | (10,963) | |||||||||||||||
| Provision for credit losses | (104) | (39,741) | (16) | (72,508) | |||||||||||||||||||
| Fair value option—change in fair value | (3,691) | 5,228 | (19,094) | 7,086 | |||||||||||||||||||
| Mortgage loans | (1,280) | (3,579) | (2,154) | (4,859) | |||||||||||||||||||
| Other investments | 837 | (164) | 1,151 | (378) | |||||||||||||||||||
| Realized gains (losses) from investments | (14,351) | (48,862) | (30,086) | (81,622) | |||||||||||||||||||
| Other gains (losses) | 1,762 | 3,019 | 5,698 | 4,852 | |||||||||||||||||||
| Total realized gains (losses) | (12,589) | (45,843) | (24,388) | (76,770) | |||||||||||||||||||
| Applicable tax | 2,644 | 9,627 | 5,122 | 16,122 | |||||||||||||||||||
| Realized gains (losses), net of tax | $ | (9,945) | $ | (36,216) | $ | (19,266) | $ | (60,648) |
(1)During the three months ended June 30, 2024 and 2023, the Company recorded $12.0 million and $17.9 million of issuer-initiated exchanges of fixed maturities (noncash transactions) that resulted in no realized gains (losses) in either period. During the six months ended June 30, 2024 and 2023, the Company recorded $78.9 million and $17.9 million of issuer-initiated exchanges of fixed maturities (noncash transactions) that resulted in no realized gains (losses) in either period.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fair Value Measurements: The following tables represent the fair value of fixed maturities measured on a recurring basis at June 30, 2024 and December 31, 2023:
| Fair Value Measurement at June 30, 2024: | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||||||||||
| Fixed maturities available for sale | |||||||||||||||||||||||
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | — | $ | 361,458 | $ | — | $ | 361,458 | |||||||||||||||
| States, municipalities, and political subdivisions | — | 2,810,254 | — | 2,810,254 | |||||||||||||||||||
| Foreign governments | — | 29,948 | — | 29,948 | |||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||
| Industrials | — | 7,361,270 | 196,665 | 7,557,935 | |||||||||||||||||||
| Financial | — | 4,554,292 | 130,195 | 4,684,487 | |||||||||||||||||||
| Utilities | — | 1,938,143 | 111,171 | 2,049,314 | |||||||||||||||||||
| Total corporates | — | 13,853,705 | 438,031 | 14,291,736 | |||||||||||||||||||
| Collateralized debt obligations | — | — | 42,724 | 42,724 | |||||||||||||||||||
| Other asset-backed securities | — | 76,888 | — | 76,888 | |||||||||||||||||||
| Total fixed maturities | $ | — | $ | 17,132,253 | $ | 480,755 | $ | 17,613,008 | |||||||||||||||
| Percentage of total | — | % | 97 | % | 3 | % | 100 | % |
| Fair Value Measurement at December 31, 2023: | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||||||||||
| Fixed maturities available for sale | |||||||||||||||||||||||
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | — | $ | 366,151 | $ | — | $ | 366,151 | |||||||||||||||
| States, municipalities, and political subdivisions | — | 2,940,322 | — | 2,940,322 | |||||||||||||||||||
| Foreign governments | — | 34,106 | — | 34,106 | |||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||
| Industrials | — | 7,440,493 | 214,749 | 7,655,242 | |||||||||||||||||||
| Financial | — | 4,621,160 | 131,019 | 4,752,179 | |||||||||||||||||||
| Utilities | — | 1,888,797 | 108,965 | 1,997,762 | |||||||||||||||||||
| Total corporates | — | 13,950,450 | 454,733 | 14,405,183 | |||||||||||||||||||
| Collateralized debt obligations | — | — | 42,146 | 42,146 | |||||||||||||||||||
| Other asset-backed securities | — | 82,298 | — | 82,298 | |||||||||||||||||||
| Total fixed maturities | $ | — | $ | 17,373,327 | $ | 496,879 | $ | 17,870,206 | |||||||||||||||
| Percentage of total | — | % | 97 | % | 3 | % | 100 | % |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables represent changes in fixed maturities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||
| Asset- backed Securities | Collateralized Debt Obligations | Corporates | Total | ||||||||||||||||||||
| Balance at January 1, 2024 | $ | — | $ | 42,146 | $ | 454,733 | $ | 496,879 | |||||||||||||||
| Included in realized gains / losses | — | — | — | — | |||||||||||||||||||
| Included in other comprehensive income | — | 742 | (9,905) | (9,163) | |||||||||||||||||||
| Acquisitions | — | — | 14,800 | 14,800 | |||||||||||||||||||
| Sales | — | — | — | — | |||||||||||||||||||
| Amortization | — | 2,277 | (33) | 2,244 | |||||||||||||||||||
| Other(1) | — | (2,441) | (21,564) | (24,005) | |||||||||||||||||||
| Transfers into Level 3(2) | — | — | — | — | |||||||||||||||||||
| Transfers out of Level 3(2) | — | — | — | — | |||||||||||||||||||
| Balance at June 30, 2024 | $ | — | $ | 42,724 | $ | 438,031 | $ | 480,755 | |||||||||||||||
| Percent of total fixed maturities | — | % | — | % | 3 | % | 3 | % |
(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments.
(2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.
| Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||
| Asset- backed Securities | Collateralized Debt Obligations | Corporates | Total | ||||||||||||||||||||
| Balance at January 1, 2023 | $ | — | $ | 50,364 | $ | 478,083 | $ | 528,447 | |||||||||||||||
| Included in realized gains / losses | — | — | — | — | |||||||||||||||||||
| Included in other comprehensive income | — | (8,042) | (1,963) | (10,005) | |||||||||||||||||||
| Acquisitions | — | — | — | — | |||||||||||||||||||
| Sales | — | — | — | — | |||||||||||||||||||
| Amortization | — | 2,288 | 3 | 2,291 | |||||||||||||||||||
| Other(1) | — | (2,305) | (14,619) | (16,924) | |||||||||||||||||||
| Transfers into Level 3(2) | — | — | — | — | |||||||||||||||||||
| Transfers out of Level 3(2) | — | — | — | — | |||||||||||||||||||
| Balance at June 30, 2023 | $ | — | $ | 42,305 | $ | 461,504 | $ | 503,809 | |||||||||||||||
| Percent of total fixed maturities | — | % | — | % | 3 | % | 3 | % |
(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments.
(2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table presents changes in unrealized gains and losses for the period included in accumulated other comprehensive income for assets held at the end of the reporting period for Level 3 classification:
| Changes in Unrealized Gains (Losses) included in Accumulated Other Comprehensive Income for Assets Held at the End of the Period | |||||||||||||||||||||||
| Asset- backed Securities | Collateralized Debt Obligations | Corporates | Total | ||||||||||||||||||||
| At June 30, 2024 | $ | — | $ | 742 | $ | (9,905) | $ | (9,163) | |||||||||||||||
| At June 30, 2023 | — | (8,042) | (1,963) | (10,005) |
Unrealized Loss Analysis*:* The following table discloses information about fixed maturities available for sale in an unrealized loss position.
| Less than Twelve Months | Twelve Months or Longer | Total | |||||||||||||||
| Number of issues (CUSIPs) held: | |||||||||||||||||
| As of June 30, 2024 | 482 | 1,676 | 2,158 | ||||||||||||||
| As of December 31, 2023 | 151 | 1,614 | 1,765 |
Globe Life's entire fixed maturity portfolio consisted of 2,552 issues by 981 different issuers at June 30, 2024 and 2,473 issues by 980 different issuers at December 31, 2023. The increase in the number of securities in an unrealized loss position during the period ended June 30, 2024 is due to the increase in interest rates. The weighted-average quality rating of all unrealized loss positions at amortized cost was A- as of June 30, 2024 and December 31, 2023.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at June 30, 2024 and December 31, 2023.
Analysis of Gross Unrealized Investment Losses
| At June 30, 2024 | |||||||||||||||||||||||||||||||||||
| Less than Twelve Months | Twelve Months or Longer | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||||||||||||||
| Investment grade securities: | |||||||||||||||||||||||||||||||||||
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | 2,304 | $ | (110) | $ | 358,980 | $ | (41,776) | $ | 361,284 | $ | (41,886) | |||||||||||||||||||||||
| States, municipalities, and political subdivisions | 518,622 | (13,082) | 1,786,640 | (460,274) | 2,305,262 | (473,356) | |||||||||||||||||||||||||||||
| Foreign governments | 1,465 | (2) | 28,483 | (10,535) | 29,948 | (10,537) | |||||||||||||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||||||||||||||
| Industrials | 930,937 | (38,817) | 4,175,164 | (708,164) | 5,106,101 | (746,981) | |||||||||||||||||||||||||||||
| Financial | 617,484 | (11,013) | 2,230,054 | (386,505) | 2,847,538 | (397,518) | |||||||||||||||||||||||||||||
| Utilities | 456,346 | (8,729) | 718,695 | (114,197) | 1,175,041 | (122,926) | |||||||||||||||||||||||||||||
| Total corporates | 2,004,767 | (58,559) | 7,123,913 | (1,208,866) | 9,128,680 | (1,267,425) | |||||||||||||||||||||||||||||
| Collateralized debt obligations | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | — | — | 70,874 | (3,232) | 70,874 | (3,232) | |||||||||||||||||||||||||||||
| Total investment grade securities | 2,527,158 | (71,753) | 9,368,890 | (1,724,683) | 11,896,048 | (1,796,436) | |||||||||||||||||||||||||||||
| Below investment grade securities: | |||||||||||||||||||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||||||||||||||
| Industrials | 55,327 | (953) | 142,449 | (32,877) | 197,776 | (33,830) | |||||||||||||||||||||||||||||
| Financial | 8,909 | (1,196) | 192,106 | (40,491) | 201,015 | (41,687) | |||||||||||||||||||||||||||||
| Utilities | 8,916 | (14) | 18,892 | (1,486) | 27,808 | (1,500) | |||||||||||||||||||||||||||||
| Total corporates | 73,152 | (2,163) | 353,447 | (74,854) | 426,599 | (77,017) | |||||||||||||||||||||||||||||
| Collateralized debt obligations | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | — | — | 5,972 | (17) | 5,972 | (17) | |||||||||||||||||||||||||||||
| Total below investment grade securities | 73,152 | (2,163) | 359,419 | (74,871) | 432,571 | (77,034) | |||||||||||||||||||||||||||||
| Total fixed maturities | $ | 2,600,310 | $ | (73,916) | $ | 9,728,309 | $ | (1,799,554) | $ | 12,328,619 | $ | (1,873,470) |
Gross unrealized losses may fluctuate quarter over quarter due to factors in the market that affect our holdings, such as changes in interest rates or credit spreads. The Company considers many factors when determining whether an allowance for a credit loss should be recorded. While the Company holds securities that may be in an unrealized loss position from time to time, Globe Life does not generally intend to sell and it is unlikely that the Company will be required to sell the fixed maturities prior to their anticipated recovery or maturity due to the strong cash flows generated by its insurance operations.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Analysis of Gross Unrealized Investment Losses
| At December 31, 2023 | |||||||||||||||||||||||||||||||||||
| Less than Twelve Months | Twelve Months or Longer | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||||||||||||||
| Investment grade securities: | |||||||||||||||||||||||||||||||||||
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | — | $ | — | $ | 364,006 | $ | (32,306) | $ | 364,006 | $ | (32,306) | |||||||||||||||||||||||
| States, municipalities, and political subdivisions | 252,800 | (3,520) | 1,610,163 | (399,809) | 1,862,963 | (403,329) | |||||||||||||||||||||||||||||
| Foreign governments | — | — | 32,591 | (10,348) | 32,591 | (10,348) | |||||||||||||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||||||||||||||
| Industrials | 191,573 | (3,881) | 4,317,827 | (530,011) | 4,509,400 | (533,892) | |||||||||||||||||||||||||||||
| Financial | 242,099 | (6,584) | 2,341,424 | (339,628) | 2,583,523 | (346,212) | |||||||||||||||||||||||||||||
| Utilities | 81,194 | (648) | 686,043 | (91,959) | 767,237 | (92,607) | |||||||||||||||||||||||||||||
| Total corporates | 514,866 | (11,113) | 7,345,294 | (961,598) | 7,860,160 | (972,711) | |||||||||||||||||||||||||||||
| Collateralized debt obligations | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | — | — | 70,956 | (3,648) | 70,956 | (3,648) | |||||||||||||||||||||||||||||
| Total investment grade securities | 767,666 | (14,633) | 9,423,010 | (1,407,709) | 10,190,676 | (1,422,342) | |||||||||||||||||||||||||||||
| Below investment grade securities: | |||||||||||||||||||||||||||||||||||
| Corporates, by sector: | |||||||||||||||||||||||||||||||||||
| Industrials | 10,745 | (199) | 145,697 | (32,756) | 156,442 | (32,955) | |||||||||||||||||||||||||||||
| Financial | 25,563 | (2,602) | 151,190 | (39,526) | 176,753 | (42,128) | |||||||||||||||||||||||||||||
| Utilities | — | — | 19,654 | (1,523) | 19,654 | (1,523) | |||||||||||||||||||||||||||||
| Total corporates | 36,308 | (2,801) | 316,541 | (73,805) | 352,849 | (76,606) | |||||||||||||||||||||||||||||
| Collateralized debt obligations | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Other asset-backed securities | — | — | 11,288 | (409) | 11,288 | (409) | |||||||||||||||||||||||||||||
| Total below investment grade securities | 36,308 | (2,801) | 327,829 | (74,214) | 364,137 | (77,015) | |||||||||||||||||||||||||||||
| Total fixed maturities | $ | 803,974 | $ | (17,434) | $ | 9,750,839 | $ | (1,481,923) | $ | 10,554,813 | $ | (1,499,357) |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fixed Maturities, Allowance for Credit Losses*:* A summary of the activity in the allowance for credit losses is as follows.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| Allowance for credit losses beginning balance | $ | 7,027 | $ | 32,767 | $ | 7,115 | $ | — | ||||||||||||||||||
| Additions to allowance for which credit losses were not previously recorded | — | 38,228 | — | 72,508 | ||||||||||||||||||||||
| Additions (reductions) to allowance for fixed maturities that previously had an allowance | 105 | 1,513 | 17 | — | ||||||||||||||||||||||
| Reduction of allowance for which the Company intends to sell or more likely than not will be required to sell or sold during the period | — | — | — | — | ||||||||||||||||||||||
| Allowance for credit losses ending balance | $ | 7,132 | $ | 72,508 | $ | 7,132 | $ | 72,508 |
As of June 30, 2024 and December 31, 2023, the Company did not have any fixed maturities in non-accrual status.
Mortgage Loans (commercial mortgage loans)**: Summaries of commercial mortgage loans by property type and geographical location at June 30, 2024 and December 31, 2023 are as follows:
| June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||
| Carrying Value | % of Total | Carrying Value | % of Total | ||||||||||||||||||||
| Property type: | |||||||||||||||||||||||
| Multi-family | $ | 117,508 | 34 | $ | 116,299 | 42 | |||||||||||||||||
| Industrial | 95,496 | 28 | 57,267 | 20 | |||||||||||||||||||
| Retail | 47,853 | 14 | 23,925 | 9 | |||||||||||||||||||
| Hospitality | 43,651 | 13 | 43,897 | 16 | |||||||||||||||||||
| Mixed use | 38,317 | 11 | 34,749 | 12 | |||||||||||||||||||
| Office | 6,493 | 2 | 6,734 | 2 | |||||||||||||||||||
| Total recorded investment | 349,318 | 102 | 282,871 | 101 | |||||||||||||||||||
| Less allowance for credit losses | (5,826) | (2) | (3,672) | (1) | |||||||||||||||||||
| Carrying value, net of allowance for credit losses | $ | 343,492 | 100 | $ | 279,199 | 100 |
| June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||
| Carrying Value | % of Total | Carrying Value | % of Total | ||||||||||||||||||||
| Geographic location: | |||||||||||||||||||||||
| Texas | $ | 71,659 | 21 | $ | 45,111 | 16 | |||||||||||||||||
| Florida | 71,130 | 21 | 48,233 | 17 | |||||||||||||||||||
| New Jersey | 44,611 | 13 | 44,574 | 16 | |||||||||||||||||||
| California | 40,210 | 12 | 54,721 | 20 | |||||||||||||||||||
| New York | 35,815 | 10 | 20,284 | 7 | |||||||||||||||||||
| North Carolina | 21,614 | 6 | — | — | |||||||||||||||||||
| Other | 64,279 | 19 | 69,948 | 25 | |||||||||||||||||||
| Total recorded investment | 349,318 | 102 | 282,871 | 101 | |||||||||||||||||||
| Less allowance for credit losses | (5,826) | (2) | (3,672) | (1) | |||||||||||||||||||
| Carrying value, net of allowance for credit losses | $ | 343,492 | 100 | $ | 279,199 | 100 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables are reflective of the key factors, debt service coverage ratios, and loan-to-value (LTV) ratios that are utilized by management to monitor the performance of the portfolios. The Company only makes new investments in commercial mortgage loans that have a LTV ratio less than 80%. LTV's that exceed 80% are generally as a result of decreases in the valuation of the underlying property. Generally, a higher LTV ratio and a lower debt service coverage ratio equates to higher risk of loss.
| June 30, 2024 | |||||||||||||||||||||||||||||
| Recorded Investment | |||||||||||||||||||||||||||||
| Debt Service Coverage Ratios**(1)** | |||||||||||||||||||||||||||||
| <1.00x | 1.00x—1.20x | >1.20x | Total | % of Gross Total | |||||||||||||||||||||||||
| Loan-to-value ratio**(2)****:** | |||||||||||||||||||||||||||||
| Less than 70% | $ | 18,392 | $ | 153,759 | $ | 160,495 | $ | 332,646 | 95 | ||||||||||||||||||||
| 70% to 80% | — | — | — | — | — | ||||||||||||||||||||||||
| 81% to 90% | 9,637 | — | — | 9,637 | 3 | ||||||||||||||||||||||||
| Greater than 90% | 7,035 | — | — | 7,035 | 2 | ||||||||||||||||||||||||
| Total | $ | 35,064 | $ | 153,759 | $ | 160,495 | 349,318 | 100 | |||||||||||||||||||||
| Less allowance for credit losses | (5,826) | ||||||||||||||||||||||||||||
| Total, net of allowance for credit losses | $ | 343,492 |
(1)Annual net operating income divided by annual mortgage debt service (principal and interest).
(2)Loan balance divided by stabilized appraised value at origination, including planned renovations and stabilized occupancy. Updated internal valuations are used when a loan is materially underperforming.
| December 31, 2023 | |||||||||||||||||||||||||||||
| Recorded Investment | |||||||||||||||||||||||||||||
| Debt Service Coverage Ratios**(1)** | |||||||||||||||||||||||||||||
| <1.00x | 1.00x—1.20x | >1.20x | Total | % of Gross Total | |||||||||||||||||||||||||
| Loan-to-value ratio**(2)****:** | |||||||||||||||||||||||||||||
| Less than 70% | $ | 27,091 | $ | 180,761 | $ | 58,364 | $ | 266,216 | 94 | ||||||||||||||||||||
| 70% to 80% | — | — | — | — | — | ||||||||||||||||||||||||
| 81% to 90% | 8,468 | — | 1,153 | 9,621 | 3 | ||||||||||||||||||||||||
| Greater than 90% | 7,034 | — | — | 7,034 | 3 | ||||||||||||||||||||||||
| Total | $ | 42,593 | $ | 180,761 | $ | 59,517 | 282,871 | 100 | |||||||||||||||||||||
| Less allowance for credit losses | (3,672) | ||||||||||||||||||||||||||||
| Total, net of allowance for credit losses | $ | 279,199 |
(1)Annual net operating income divided by annual mortgage debt service (principal and interest).
(2)Loan balance divided by stabilized appraised value at origination, including planned renovations and stabilized occupancy. Updated internal valuations are used when a loan is materially underperforming.
As of June 30, 2024, the Company evaluated the commercial mortgage loan portfolio on a pool basis to determine the allowance for credit losses. At the end of the period, the Company had 33 loans in the portfolio. For the six months ended June 30, 2024, the allowance for credit losses increased by $2.2 million to $5.8 million. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
| Allowance for credit losses beginning balance | $ | 4,546 | $ | 3,069 | $ | 3,672 | $ | 1,789 | ||||||||||||||||||
| Provision (reversal) for credit losses | 1,280 | (141) | 2,154 | 1,139 | ||||||||||||||||||||||
| Allowance for credit losses ending balance | $ | 5,826 | $ | 2,928 | $ | 5,826 | $ | 2,928 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
There was one delinquent commercial mortgage loan, with an outstanding par value of $1.2 million and outstanding interest due of $63 thousand, as of June 30, 2024. The underlying collateral for this loan is in the process of being sold and the Company expects to recover all interest and principal due as of June 30, 2024. There were no delinquent commercial mortgage loans as of December 31, 2023. As of June 30, 2024, the Company had two commercial mortgage loans in non-accrual status with a principal balance of $7.9 million. As of December 31, 2023, the Company had no commercial mortgage loans in non-accrual status. The Company's unfunded commitment balance to commercial loan borrowers was $30 million as of June 30, 2024.
Other Long-Term Investments*:* Other long-term investments consist of the following assets:
| June 30, 2024 | December 31, 2023 | ||||||||||
| Investment funds | $ | 915,665 | $ | 795,583 | |||||||
| Other | 58,850 | 40,295 | |||||||||
| Total | $ | 974,515 | $ | 835,878 |
The following table presents additional information about the Company's investment funds as of June 30, 2024 and December 31, 2023 at fair value:
| Fair Value | Unfunded Commitments | ||||||||||||||||||||||||||||
| Investment Category | June 30, 2024 | December 31, 2023 | June 30, 2024 | Redemption Term/Notice**(1)** | |||||||||||||||||||||||||
| Commercial mortgage loans | $ | 512,615 | $ | 411,315 | $ | 434,040 | Fully redeemable and non-redeemable with varying terms. | ||||||||||||||||||||||
| Opportunistic and private credit | 186,646 | 181,410 | 146,071 | Fully redeemable and non-redeemable with varying terms. | |||||||||||||||||||||||||
| Infrastructure | 171,518 | 165,887 | 16,536 | Fully redeemable and non-redeemable with varying terms. | |||||||||||||||||||||||||
| Other | 44,886 | 36,971 | 50,757 | Non-redeemable with varying terms | |||||||||||||||||||||||||
| Total investment funds | $ | 915,665 | $ | 795,583 | $ | 647,404 |
(1) Non-redeemable funds generally have an expected life of 7 to 12 years from fund closing with extension options of 1 to 4 years. Redemptions are paid out throughout the life of the funds at the General Partner's discretion. Redeemable funds can generally be redeemed over 6 to 36 months upon request from limited partners.
The Company had $149 million of capital called during the period from existing investment funds. The Company's unfunded commitments were $647 million as of June 30, 2024.
Note 5—Commitments and Contingencies
Guarantees: The Parent Company has guaranteed letters of credit in connection with its credit facility with a group of banks. The letters of credit were issued by TMK Re, Ltd., a wholly-owned subsidiary, to secure TMK Re, Ltd.’s obligation for claims on certain policies reinsured by TMK Re, Ltd. that were sold by other Globe Life insurance subsidiaries. These letters of credit facilitate TMK Re, Ltd.’s ability to reinsure the business of Globe Life's insurance carriers. The agreement was amended on March 29, 2024 and now expires in 2029. The maximum amount of letters of credit available is $250 million. The Parent Company would be liable to the extent that TMK Re, Ltd. does not pay the reinsured party. The amount of letters of credit outstanding at June 30, 2024 was $115 million.
Litigation: Globe Life Inc. and its subsidiaries, in common with the insurance industry in general, are subject to litigation, including: putative class action litigation; alleged breaches of contract; torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of agents of the Parent Company's insurance subsidiaries; alleged employment discrimination; alleged worker misclassification; and miscellaneous other causes of action. Based upon information presently available, and in light of legal and other factual defenses available to the Parent Company and its subsidiaries, management does not believe that it is reasonably possible that such litigation will
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
have a material adverse effect on Globe Life's financial condition, future operating results or liquidity; however, assessing the eventual outcome of litigation necessarily involves forward-looking speculation as to judgments to be made by judges, juries and appellate courts in the future. This bespeaks caution, particularly in states with reputations for high punitive damage verdicts.
On July 22, 2022, putative class and collective action litigation was filed against Arias Agencies and American Income Life Insurance Company (“American Income”) (collectively, “Defendants”) in United States District Court for the Western District of Pennsylvania (David Burkes v. Arias Agencies and American Income Life Insurance Company, Case No. 2:22-cv-1054). The complaint alleges that insurance agent trainees should have been classified as employees, and after contracting should have been classified as employees instead of independent contractors. Plaintiff David Burkes is a former Pennsylvania independent sales agent and asserts claims under Pennsylvania law on behalf of a putative class of all individuals who trained to become and/or worked as sales agents for American Income in the three years prior to July 22, 2022 through case conclusion. Burkes makes claims (a) under the Pennsylvania Minimum Wage Act and the Pennsylvania Wage Payment and Collection Law for the alleged failure to pay minimum wage, alleged failure to pay for time spent in training, alleged failure to pay for missed meals and rest breaks, allegedly requiring putative class members to pay for work-related expenses, and allegedly subjecting putative class members to “chargebacks”; (b) for unjust enrichment for allegedly benefiting from the uncompensated labor of putative class members; and (c) for the rescission of putative class members’ agent contracts. Burkes also asserts a collective action on behalf of the same group of individuals for minimum wage, overtime, liquidated damages, and attorney’s fees and costs under the Fair Labor Standards Act for the three years prior to July 22, 2022 through case conclusion, as well as a claim that American Income allegedly did not keep accurate records of hours worked by sales agents. On January 26, 2023, the court entered an order compelling Burkes to arbitrate his claims on an individual basis and staying the case pending completion of arbitration. Burkes’ individual claims, as well as the individual claims of other current and former agents who are members of the putative class, are currently pending in arbitration.
On September 1, 2023, plaintiff Miné Caglar Cost (“Plaintiff”) filed a complaint against American Income Life Insurance Company (“American Income”) in the Superior Court of the State of California for the County of Los Angeles, asserting a single claim for violation of the Private Attorneys General Act (“PAGA”) (Cost v. American Income Life Insurance Company, et al., Case No. 23SMCV04113). Plaintiff is a former California independent insurance sales agent who alleges one cause of action for civil penalties under PAGA arising out of alleged violations of the wage-and-hour provisions of the California Labor Code stemming from American Income’s alleged misclassification of Plaintiff and other California-based sales agents as independent contractors. American Income filed a motion to compel arbitration on an individual basis and stay the representative component of Plaintiff’s claims, to which Plaintiff stipulated. On December 12, 2023, the Court approved the parties’ stipulation to compel the matter to individual arbitration and stayed the case pending the completion of the individual arbitration.
On April 4, 2023, putative class action litigation was filed against National Income Life Insurance Company (“National Income”) in New York Supreme Court by plaintiffs Melissa K. Goppert, Sarah Valente, James O’Neill, Jennifer Abe, and Emily Herendeen (“Plaintiffs”) (Goppert, et al. v. National Income Life Insurance Company, Index No. 153096/2023). Plaintiffs are former National Income independent sales agents who allege they should have been classified as employees and assert claims under New York state law on behalf of a putative class of former independent sales agents and individuals who trained to become independent sale agents since March 2017. Plaintiffs make claims under New York’s Minimum Wage Law (NYLL § 633 and 12 NYCRR § 142-2.1); Overtime Compensation Law (NYLL § 633 and 12 NYCRR § 142-2.2); and “Spread of Hours” Law (12 NYCRR § 142-2.4) for the alleged failure to pay minimum wages and overtime pay, including for time spent in training, and attorney’s fees and costs. National Income filed a motion to compel arbitration of each Plaintiff’s claims on an individual basis, which the Court granted in full on January 11, 2024, and on February 7, 2024, Plaintiffs filed a notice of appeal of the Court’s order.
On November 30, 2023, the Company and our subsidiary, American Income Life Insurance Company, received subpoenas from the U.S. Attorney’s Office for the Western District of Pennsylvania, seeking documents relating to sales practices by certain of our independent sales agents contracted to sell American Income Life Insurance Company policies. The Company and American Income Life Insurance Company continue to fully cooperate in
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
responding to the Department of Justice’s requests. The Department of Justice has not asserted any claims or made allegations against the Company and American Income Life Insurance Company, and the Company currently is not aware that any legal proceedings are contemplated by governmental authorities. While no assurances can be made, at present management does not believe that it is reasonably possible or probable that this matter will result in a material loss.
In April 2024, the Company received an inquiry from the SEC's Fort Worth Regional Office requesting information related to recent short seller reports making allegations about the Company. The Company has provided information in response to the SEC’s requests and continues to cooperate fully with the SEC. At this time, the SEC has not asserted any claims against the Company or indicated that it intends to do so. While no assurances can be made, at present management does not believe that it is reasonably possible or probable that this matter will result in a material loss.
On April 30, 2024, a putative securities class action was filed against the Company and six of its current/former senior executives and directors in the United States District Court for the Eastern District of Texas. The case, which is captioned City of Miami Gen. Emp. & Sanitation Emp. Ret. Trust, et al. v. Globe Life Inc., et al., Case No. 4:24-cv-00376, asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of purchasers of the Company’s securities from May 8, 2019 through April 10, 2024. The Complaint alleges that certain of the Company’s disclosures about financial performance and certain other public statements during the putative class period were materially false or misleading. On May 16, 2024, the Court entered an order staying proceedings pending the appointment of Lead Plaintiff and Lead Counsel for the putative class of shareholders. The Company plans to vigorously defend against the lawsuit. Pursuant to the Company’s governing documents and indemnification agreements with the named defendants, the Company has agreed to indemnify those defendants for all expenses and losses related to the litigation subject to the terms of those indemnification agreements. The outcome of litigation of this type is inherently uncertain, and there is always the possibility that a court rules in a manner that is adverse to the interests of the Company and the individual defendants. However, the amount of any such loss in that scenario cannot be reasonably estimated at this time. Further, management cannot reasonably estimate whether an outcome on the class action will be resolved in the near term.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 6—Policy Liabilities
The liability for future policy benefits is determined based on the net level premium method, which requires the liability be calculated as the present value of estimated future policyholder benefits and the related termination expenses, less the present value of estimated future net premiums to be collected from policyholders. The following tables summarize balances and changes in the net liability for future policy benefits, before reinsurance, for traditional life long-duration contracts for the three and six month periods ended June 30, 2024 and 2023:
| Life | ||||||||||||||||||||||||||||||||
| Present value of expected future net premiums | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 4,273,156 | $ | 5,910,224 | $ | 1,094,407 | $ | 470,741 | $ | 11,748,528 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 4,246,723 | 5,680,864 | 1,066,123 | 449,209 | 11,442,919 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (69,352) | (128,602) | (15,593) | (6,650) | (220,197) | |||||||||||||||||||||||||||
| Adjusted balance at January 1, 2023 | 4,177,371 | 5,552,262 | 1,050,530 | 442,559 | 11,222,722 | |||||||||||||||||||||||||||
| Issuances(1) | 376,021 | 313,748 | 60,848 | 14,611 | 765,228 | |||||||||||||||||||||||||||
| Interest accrual(2) | 96,850 | 142,473 | 26,655 | 11,331 | 277,309 | |||||||||||||||||||||||||||
| Net premiums collected(3) | (256,959) | (308,129) | (66,472) | (23,026) | (654,586) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | 5,770 | — | — | — | 5,770 | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 4,399,053 | 5,700,354 | 1,071,561 | 445,475 | 11,616,443 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | 73,794 | 288,223 | 38,456 | 25,804 | 426,277 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 4,472,847 | $ | 5,988,577 | $ | 1,110,017 | $ | 471,279 | $ | 12,042,720 | ||||||||||||||||||||||
| Balance at January 1, 2024 | $ | 4,681,888 | $ | 6,052,651 | $ | 1,129,716 | $ | 478,052 | $ | 12,342,307 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 4,523,329 | 5,664,259 | 1,077,831 | 443,949 | 11,709,368 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (113,699) | (122,971) | (17,268) | (7,321) | (261,259) | |||||||||||||||||||||||||||
| Adjusted balance at January 1, 2024 | 4,409,630 | 5,541,288 | 1,060,563 | 436,628 | 11,448,109 | |||||||||||||||||||||||||||
| Issuances(1) | 412,701 | 287,040 | 60,219 | 12,156 | 772,116 | |||||||||||||||||||||||||||
| Interest accrual(2) | 109,168 | 147,351 | 27,775 | 11,505 | 295,799 | |||||||||||||||||||||||||||
| Net premiums collected(3) | (274,166) | (305,391) | (67,915) | (22,738) | (670,210) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | (9,222) | — | — | — | (9,222) | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 4,648,111 | 5,670,288 | 1,080,642 | 437,551 | 11,836,592 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (12,208) | 140,230 | 4,591 | 12,332 | 144,945 | |||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 4,635,903 | $ | 5,810,518 | $ | 1,085,233 | $ | 449,883 | $ | 11,981,537 |
(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.
(3)Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period on the in-force business.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Life | ||||||||||||||||||||||||||||||||
| Present value of expected future net premiums | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | 4,467,637 | $ | 6,110,550 | $ | 1,128,083 | $ | 483,056 | $ | 12,189,326 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 4,325,957 | 5,718,900 | 1,070,775 | 448,677 | 11,564,309 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (39,371) | (80,616) | (10,004) | (4,764) | (134,755) | |||||||||||||||||||||||||||
| Adjusted balance at April 1, 2023 | 4,286,586 | 5,638,284 | 1,060,771 | 443,913 | 11,429,554 | |||||||||||||||||||||||||||
| Issuances(1) | 183,466 | 144,796 | 30,706 | 7,370 | 366,338 | |||||||||||||||||||||||||||
| Interest accrual(2) | 48,952 | 71,484 | 13,368 | 5,661 | 139,465 | |||||||||||||||||||||||||||
| Net premiums collected(3) | (129,720) | (154,210) | (33,284) | (11,469) | (328,683) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | 9,769 | — | — | — | 9,769 | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 4,399,053 | 5,700,354 | 1,071,561 | 445,475 | 11,616,443 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | 73,794 | 288,223 | 38,456 | 25,804 | 426,277 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 4,472,847 | $ | 5,988,577 | $ | 1,110,017 | $ | 471,279 | $ | 12,042,720 | ||||||||||||||||||||||
| Balance at April 1, 2024 | $ | 4,652,671 | $ | 5,945,259 | $ | 1,102,209 | $ | 464,169 | $ | 12,164,308 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 4,596,138 | 5,698,050 | 1,073,485 | 442,392 | 11,810,065 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (65,450) | (86,743) | (6,820) | (5,471) | (164,484) | |||||||||||||||||||||||||||
| Adjusted balance at April 1, 2024 | 4,530,688 | 5,611,307 | 1,066,665 | 436,921 | 11,645,581 | |||||||||||||||||||||||||||
| Issuances(1) | 200,853 | 137,809 | 34,056 | 6,227 | 378,945 | |||||||||||||||||||||||||||
| Interest accrual(2) | 55,345 | 73,931 | 13,936 | 5,741 | 148,953 | |||||||||||||||||||||||||||
| Net premiums collected(3) | (138,480) | (152,759) | (34,015) | (11,338) | (336,592) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | (295) | — | — | — | (295) | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 4,648,111 | 5,670,288 | 1,080,642 | 437,551 | 11,836,592 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (12,208) | 140,230 | 4,591 | 12,332 | 144,945 | |||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 4,635,903 | $ | 5,810,518 | $ | 1,085,233 | $ | 449,883 | $ | 11,981,537 |
(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.
(3)Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period on the in-force business.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Life | ||||||||||||||||||||||||||||||||
| Present value of expected future policy benefits | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 9,119,104 | $ | 9,225,451 | $ | 3,429,256 | $ | 3,976,150 | $ | 25,749,961 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 8,409,761 | 8,477,892 | 3,272,980 | 3,403,704 | 23,564,337 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (72,388) | (130,006) | (13,119) | (8,367) | (223,880) | |||||||||||||||||||||||||||
| Adjusted balance at January 1, 2023 | 8,337,373 | 8,347,886 | 3,259,861 | 3,395,337 | 23,340,457 | |||||||||||||||||||||||||||
| Issuances(1) | 376,021 | 313,749 | 60,848 | 14,611 | 765,229 | |||||||||||||||||||||||||||
| Interest accrual(2) | 220,666 | 226,661 | 86,722 | 101,129 | 635,178 | |||||||||||||||||||||||||||
| Benefit payments(3) | (194,971) | (295,399) | (109,650) | (62,586) | (662,606) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | 14,437 | — | — | — | 14,437 | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 8,753,526 | 8,592,897 | 3,297,781 | 3,448,491 | 24,092,695 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | 914,681 | 894,336 | 210,064 | 661,215 | 2,680,296 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 9,668,207 | $ | 9,487,233 | $ | 3,507,845 | $ | 4,109,706 | $ | 26,772,991 | ||||||||||||||||||||||
| Balance at January 1, 2024 | $ | 10,163,627 | $ | 9,714,516 | $ | 3,605,392 | $ | 4,239,623 | $ | 27,723,158 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 9,061,833 | 8,656,752 | 3,338,252 | 3,506,859 | 24,563,696 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (121,945) | (129,976) | (19,337) | (10,212) | (281,470) | |||||||||||||||||||||||||||
| Adjusted balance at January 1, 2024 | 8,939,888 | 8,526,776 | 3,318,915 | 3,496,647 | 24,282,226 | |||||||||||||||||||||||||||
| Issuances(1) | 412,703 | 287,041 | 60,221 | 12,156 | 772,121 | |||||||||||||||||||||||||||
| Interest accrual(2) | 243,096 | 236,977 | 89,276 | 104,571 | 673,920 | |||||||||||||||||||||||||||
| Benefit payments(3) | (220,560) | (301,894) | (111,881) | (68,051) | (702,386) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | (21,601) | — | — | — | (21,601) | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 9,353,526 | 8,748,900 | 3,356,531 | 3,545,323 | 25,004,280 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | 457,881 | 540,934 | 68,237 | 436,575 | 1,503,627 | |||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 9,811,407 | $ | 9,289,834 | $ | 3,424,768 | $ | 3,981,898 | $ | 26,507,907 |
(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected future policy benefits, as well as the interest on actual benefits and expenses paid during the period, using the original interest rate.
(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the period due to death, surrender, and maturity benefit payments based on the revised expected assumptions.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Life | ||||||||||||||||||||||||||||||||
| Present value of expected future policy benefits | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | 9,637,463 | $ | 9,624,680 | $ | 3,559,012 | $ | 4,166,527 | $ | 26,987,682 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 8,573,734 | 8,563,604 | 3,284,594 | 3,427,535 | 23,849,467 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (40,862) | (81,059) | (6,065) | (5,471) | (133,457) | |||||||||||||||||||||||||||
| Adjusted balance at April 1, 2023 | 8,532,872 | 8,482,545 | 3,278,529 | 3,422,064 | 23,716,010 | |||||||||||||||||||||||||||
| Issuances(1) | 183,466 | 144,797 | 30,706 | 7,370 | 366,339 | |||||||||||||||||||||||||||
| Interest accrual(2) | 111,337 | 113,893 | 43,466 | 50,751 | 319,447 | |||||||||||||||||||||||||||
| Benefit payments(3) | (98,297) | (148,338) | (54,920) | (31,694) | (333,249) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | 24,148 | — | — | — | 24,148 | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 8,753,526 | 8,592,897 | 3,297,781 | 3,448,491 | 24,092,695 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | 914,681 | 894,336 | 210,064 | 661,215 | 2,680,296 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 9,668,207 | $ | 9,487,233 | $ | 3,507,845 | $ | 4,109,706 | $ | 26,772,991 |
| Balance at April 1, 2024 | $ | 9,958,093 | $ | 9,500,215 | $ | 3,499,742 | $ | 4,103,892 | $ | 27,061,942 | ||||||||||||||||||||||
| Beginning balance at original discount rates | 9,216,265 | 8,728,403 | 3,340,412 | 3,527,882 | 24,812,962 | |||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | |||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (69,724) | (93,532) | (8,889) | (7,345) | (179,490) | |||||||||||||||||||||||||||
| Adjusted balance at April 1, 2024 | 9,146,541 | 8,634,871 | 3,331,523 | 3,520,537 | 24,633,472 | |||||||||||||||||||||||||||
| Issuances(1) | 200,858 | 137,810 | 34,057 | 6,224 | 378,949 | |||||||||||||||||||||||||||
| Interest accrual(2) | 122,894 | 119,052 | 44,723 | 52,436 | 339,105 | |||||||||||||||||||||||||||
| Benefit payments(3) | (115,802) | (142,833) | (53,772) | (33,874) | (346,281) | |||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | (965) | — | — | — | (965) | |||||||||||||||||||||||||||
| Ending balance at original discount rates | 9,353,526 | 8,748,900 | 3,356,531 | 3,545,323 | 25,004,280 | |||||||||||||||||||||||||||
| Effect of change from original to current discount rates | 457,881 | 540,934 | 68,237 | 436,575 | 1,503,627 | |||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 9,811,407 | $ | 9,289,834 | $ | 3,424,768 | $ | 3,981,898 | $ | 26,507,907 |
(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected future policy benefits, as well as the interest on actual benefits and expenses paid during the period, using the original interest rate.
(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the period due to death, surrender, and maturity benefit payments based on the revised expected assumptions.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Life**(2)** | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits as of June 30, 2023 | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Net liability for future policy benefits at original discount rates | $ | 4,354,473 | $ | 2,892,543 | $ | 2,226,220 | $ | 3,003,016 | $ | 12,476,252 | ||||||||||||||||||||||
| Effect of changes in discount rate assumptions | 840,887 | 606,113 | 171,608 | 635,411 | 2,254,019 | |||||||||||||||||||||||||||
| Other adjustments(1) | 72 | 4,750 | 7,639 | 35 | 12,496 | |||||||||||||||||||||||||||
| Net liability for future policy benefits, after other adjustments, at current discount rates | 5,195,432 | 3,503,406 | 2,405,467 | 3,638,462 | 14,742,767 | |||||||||||||||||||||||||||
| Reinsurance recoverable | (142) | — | (7,581) | (36,472) | (44,195) | |||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable, at current discount rates | $ | 5,195,290 | $ | 3,503,406 | $ | 2,397,886 | $ | 3,601,990 | $ | 14,698,572 |
(1)Other adjustments include the Company's effects of capping and flooring the liability (guidance requires an amount not less than zero at the calculation level of the liability for future policy benefits).
(2)Includes the immaterial error correction noted below.
| Life | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits as of June 30, 2024 | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Net liability for future policy benefits at original discount rates | $ | 4,705,415 | $ | 3,078,612 | $ | 2,275,889 | $ | 3,107,772 | $ | 13,167,688 | ||||||||||||||||||||||
| Effect of changes in discount rate assumptions | 470,089 | 400,704 | 63,646 | 424,243 | 1,358,682 | |||||||||||||||||||||||||||
| Other adjustments(1) | 194 | — | — | 34 | 228 | |||||||||||||||||||||||||||
| Net liability for future policy benefits, after other adjustments, at current discount rates | 5,175,698 | 3,479,316 | 2,339,535 | 3,532,049 | 14,526,598 | |||||||||||||||||||||||||||
| Reinsurance recoverable | (170) | — | (7,830) | (35,403) | (43,403) | |||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable, at current discount rates | $ | 5,175,528 | $ | 3,479,316 | $ | 2,331,705 | $ | 3,496,646 | $ | 14,483,195 |
(1)Other adjustments include the Company's effects of flooring the liability (guidance requires an amount not less than zero at the calculation level of the liability for future policy benefits).
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables summarize balances and changes in the net liability for future policy benefits for long-duration health contracts for the three and six month periods ended June 30, 2024 and 2023:
| Health | ||||||||||||||||||||||||||||||||||||||
| Present value of expected future net premiums | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | DTC | Total | |||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 2,908,501 | $ | 1,594,992 | $ | 423,490 | $ | 190,296 | $ | 90,143 | $ | 5,207,422 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 2,941,261 | 1,729,219 | 415,442 | 192,631 | 87,751 | 5,366,304 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (28,923) | (34,394) | (27,833) | (5,249) | (1,895) | (98,294) | ||||||||||||||||||||||||||||||||
| Adjusted balance at January 1, 2023 | 2,912,338 | 1,694,825 | 387,609 | 187,382 | 85,856 | 5,268,010 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 143,716 | 132,346 | 28,191 | 20,787 | 4,215 | 329,255 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 63,854 | 32,819 | 9,666 | 4,134 | 2,118 | 112,591 | ||||||||||||||||||||||||||||||||
| Net premiums collected(3) | (134,248) | (88,784) | (25,286) | (10,981) | (5,349) | (264,648) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | 387 | — | 387 | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 2,985,660 | 1,771,206 | 400,180 | 201,709 | 86,840 | 5,445,595 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (1,106) | (110,186) | 9,371 | 135 | 2,834 | (98,952) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 2,984,554 | $ | 1,661,020 | $ | 409,551 | $ | 201,844 | $ | 89,674 | $ | 5,346,643 | ||||||||||||||||||||||||||
| Balance at January 1, 2024 | $ | 3,697,771 | $ | 1,711,741 | $ | 358,472 | $ | 206,381 | $ | 115,363 | $ | 6,089,728 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 3,625,803 | 1,783,173 | 348,570 | 201,869 | 109,880 | 6,069,295 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (37,074) | (31,290) | (21,165) | (7,058) | (2,462) | (99,049) | ||||||||||||||||||||||||||||||||
| Adjusted balance at January 1, 2024 | 3,588,729 | 1,751,883 | 327,405 | 194,811 | 107,418 | 5,970,246 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 191,794 | 128,874 | 29,015 | 22,124 | 8,503 | 380,310 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 84,630 | 36,717 | 8,347 | 4,642 | 2,760 | 137,096 | ||||||||||||||||||||||||||||||||
| Net premiums collected(3) | (145,045) | (93,746) | (25,833) | (11,871) | (5,434) | (281,929) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | (839) | — | (839) | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 3,720,108 | 1,823,728 | 338,934 | 208,867 | 113,247 | 6,204,884 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (61,617) | (132,931) | (1,193) | (2,978) | 1,629 | (197,090) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 3,658,491 | $ | 1,690,797 | $ | 337,741 | $ | 205,889 | $ | 114,876 | $ | 6,007,794 |
(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.
(3)Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period on the in-force business.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Health | ||||||||||||||||||||||||||||||||||||||
| Present value of expected future net premiums | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | DTC | Total | |||||||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | 2,997,723 | $ | 1,664,414 | $ | 421,447 | $ | 200,666 | $ | 90,243 | $ | 5,374,493 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 2,948,641 | 1,750,468 | 404,647 | 197,446 | 85,966 | 5,387,168 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | 5,210 | (15,636) | (11,249) | (3,629) | 679 | (24,625) | ||||||||||||||||||||||||||||||||
| Adjusted balance at April 1, 2023 | 2,953,851 | 1,734,832 | 393,398 | 193,817 | 86,645 | 5,362,543 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 67,875 | 64,559 | 14,888 | 10,575 | 1,823 | 159,720 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 32,267 | 16,620 | 4,776 | 2,098 | 1,061 | 56,822 | ||||||||||||||||||||||||||||||||
| Net premiums collected(3) | (68,333) | (44,805) | (12,882) | (5,556) | (2,689) | (134,265) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | 775 | — | 775 | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 2,985,660 | 1,771,206 | 400,180 | 201,709 | 86,840 | 5,445,595 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (1,106) | (110,186) | 9,371 | 135 | 2,834 | (98,952) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 2,984,554 | $ | 1,661,020 | $ | 409,551 | $ | 201,844 | $ | 89,674 | $ | 5,346,643 | ||||||||||||||||||||||||||
| Balance at April 1, 2024 | $ | 3,653,395 | $ | 1,694,026 | $ | 345,441 | $ | 203,795 | $ | 113,879 | $ | 6,010,536 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 3,661,448 | 1,801,792 | 342,165 | 203,850 | 110,863 | 6,120,118 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | 3,458 | (14,197) | (9,755) | (3,508) | (144) | (24,146) | ||||||||||||||||||||||||||||||||
| Adjusted balance at April 1, 2024 | 3,664,906 | 1,787,595 | 332,410 | 200,342 | 110,719 | 6,095,972 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 87,190 | 64,865 | 15,457 | 12,174 | 3,893 | 183,579 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 42,808 | 18,614 | 4,119 | 2,360 | 1,392 | 69,293 | ||||||||||||||||||||||||||||||||
| Net premiums collected(3) | (74,796) | (47,346) | (13,052) | (6,032) | (2,757) | (143,983) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | 23 | — | 23 | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 3,720,108 | 1,823,728 | 338,934 | 208,867 | 113,247 | 6,204,884 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (61,617) | (132,931) | (1,193) | (2,978) | 1,629 | (197,090) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 3,658,491 | $ | 1,690,797 | $ | 337,741 | $ | 205,889 | $ | 114,876 | $ | 6,007,794 |
(1)Issuances represent the present value, using the original discount rate, of the expected net premiums related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected net premiums, as well as the interest on actual net premiums earned during the period, using the original interest rate.
(3)Net premiums collected represent the product of the current period net premium ratio and the gross premiums collected during the period on the in-force business.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Health | ||||||||||||||||||||||||||||||||||||||
| Present value of expected future policy benefits | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | DTC | Total | |||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 3,046,829 | $ | 3,005,664 | $ | 941,574 | $ | 312,750 | $ | 87,532 | $ | 7,394,349 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 3,080,633 | 3,336,344 | 904,865 | 303,713 | 85,212 | 7,710,767 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (27,940) | (36,292) | (27,018) | (6,018) | (1,830) | (99,098) | ||||||||||||||||||||||||||||||||
| Adjusted balance at January 1, 2023 | 3,052,693 | 3,300,052 | 877,847 | 297,695 | 83,382 | 7,611,669 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 143,404 | 132,346 | 27,901 | 20,787 | 4,208 | 328,646 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 67,592 | 65,320 | 23,526 | 7,389 | 2,118 | 165,945 | ||||||||||||||||||||||||||||||||
| Benefit payments(3) | (146,921) | (61,551) | (48,395) | (11,660) | (6,520) | (275,047) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | 876 | — | 876 | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 3,116,768 | 3,436,167 | 880,879 | 315,087 | 83,188 | 7,832,089 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (379) | (268,706) | 42,269 | 13,492 | 2,668 | (210,656) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 3,116,389 | $ | 3,167,461 | $ | 923,148 | $ | 328,579 | $ | 85,856 | $ | 7,621,433 | ||||||||||||||||||||||||||
| Balance at January 1, 2024 | $ | 3,814,328 | $ | 3,315,880 | $ | 865,808 | $ | 335,504 | $ | 109,482 | $ | 8,441,002 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 3,741,530 | 3,506,689 | 816,819 | 315,431 | 104,501 | 8,484,970 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | (36,684) | (35,000) | (21,424) | (8,179) | (2,326) | (103,613) | ||||||||||||||||||||||||||||||||
| Adjusted balance at January 1, 2024 | 3,704,846 | 3,471,689 | 795,395 | 307,252 | 102,175 | 8,381,357 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 191,231 | 128,875 | 28,604 | 22,126 | 8,485 | 379,321 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 87,778 | 72,179 | 21,549 | 7,956 | 2,760 | 192,222 | ||||||||||||||||||||||||||||||||
| Benefit payments(3) | (160,345) | (67,428) | (46,232) | (13,072) | (6,277) | (293,354) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | (1,556) | — | (1,556) | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 3,823,510 | 3,605,315 | 799,316 | 322,706 | 107,143 | 8,657,990 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (65,023) | (355,849) | 16,462 | 5,730 | 1,474 | (397,206) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 3,758,487 | $ | 3,249,466 | $ | 815,778 | $ | 328,436 | $ | 108,617 | $ | 8,260,784 |
(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected future policy benefits, as well as the interest on actual benefits and expenses paid during the period, using the original interest rate.
(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the period based on the revised expected assumptions.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Health | ||||||||||||||||||||||||||||||||||||||
| Present value of expected future policy benefits | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | DTC | Total | |||||||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | 3,132,462 | $ | 3,174,672 | $ | 949,996 | $ | 326,533 | $ | 87,090 | $ | 7,670,753 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 3,079,790 | 3,387,380 | 890,019 | 308,170 | 83,001 | 7,748,360 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | 3,503 | (16,513) | (11,023) | (4,439) | 472 | (28,000) | ||||||||||||||||||||||||||||||||
| Adjusted balance at April 1, 2023 | 3,083,293 | 3,370,867 | 878,996 | 303,731 | 83,473 | 7,720,360 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 67,721 | 64,559 | 14,616 | 10,575 | 1,820 | 159,291 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 34,112 | 33,031 | 11,686 | 3,721 | 1,061 | 83,611 | ||||||||||||||||||||||||||||||||
| Benefit payments(3) | (68,358) | (32,290) | (24,419) | (4,523) | (3,166) | (132,756) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | 1,583 | — | 1,583 | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 3,116,768 | 3,436,167 | 880,879 | 315,087 | 83,188 | 7,832,089 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (379) | (268,706) | 42,269 | 13,492 | 2,668 | (210,656) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 3,116,389 | $ | 3,167,461 | $ | 923,148 | $ | 328,579 | $ | 85,856 | $ | 7,621,433 |
| Balance at April 1, 2024 | $ | 3,756,534 | $ | 3,271,604 | $ | 834,006 | $ | 328,783 | $ | 107,775 | $ | 8,298,702 | ||||||||||||||||||||||||||
| Beginning balance at original discount rates | 3,766,995 | 3,554,274 | 804,316 | 317,365 | 105,050 | 8,548,000 | ||||||||||||||||||||||||||||||||
| Effect of changes in assumptions on future cash flows | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
| Effect of actual variances from expected experience | 3,641 | (15,951) | (8,603) | (4,177) | (5) | (25,095) | ||||||||||||||||||||||||||||||||
| Adjusted balance at April 1, 2024 | 3,770,636 | 3,538,323 | 795,713 | 313,188 | 105,045 | 8,522,905 | ||||||||||||||||||||||||||||||||
| Issuances(1) | 86,801 | 64,866 | 15,255 | 12,177 | 3,887 | 182,986 | ||||||||||||||||||||||||||||||||
| Interest accrual(2) | 44,334 | 36,517 | 10,716 | 4,019 | 1,392 | 96,978 | ||||||||||||||||||||||||||||||||
| Benefit payments(3) | (78,261) | (34,391) | (22,368) | (6,670) | (3,181) | (144,871) | ||||||||||||||||||||||||||||||||
| Effect of changes in the foreign exchange rate | — | — | — | (8) | — | (8) | ||||||||||||||||||||||||||||||||
| Ending balance at original discount rates | 3,823,510 | 3,605,315 | 799,316 | 322,706 | 107,143 | 8,657,990 | ||||||||||||||||||||||||||||||||
| Effect of change from original to current discount rates | (65,023) | (355,849) | 16,462 | 5,730 | 1,474 | (397,206) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 3,758,487 | $ | 3,249,466 | $ | 815,778 | $ | 328,436 | $ | 108,617 | $ | 8,260,784 |
(1)Issuances represent the present value, using the original discount rate, of the expected future policy benefits related to new policies issued during each respective period.
(2)The interest accrual is the interest earned on the beginning present value of the expected future policy benefits, as well as the interest on actual benefits and expenses paid during the period, using the original interest rate.
(3)Benefit payments represent the release of the present value, using the original discount rate, of the actual future policy benefits incurred during the based on the revised expected assumptions.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Health**(2)** | ||||||||||||||||||||||||||||||||||||||
| Net liability for future policy benefits as of June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | Direct to Consumer | Total | |||||||||||||||||||||||||||||||||
| Net liability for future policy benefits at original discount rates | $ | 131,108 | $ | 1,664,961 | $ | 480,699 | $ | 113,378 | $ | (3,652) | $ | 2,386,494 | ||||||||||||||||||||||||||
| Effect of changes in discount rate assumptions | 727 | (158,520) | 32,898 | 13,357 | (166) | (111,704) | ||||||||||||||||||||||||||||||||
| Other adjustments(1) | 4,702 | 69 | 6,049 | 605 | 4,645 | 16,070 | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after other adjustments, at current discount rates | 136,537 | 1,506,510 | 519,646 | 127,340 | 827 | 2,290,860 | ||||||||||||||||||||||||||||||||
| Reinsurance recoverable | (3,598) | (9,866) | (1,378) | — | — | (14,842) | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable, at current discount rates | $ | 132,939 | $ | 1,496,644 | $ | 518,268 | $ | 127,340 | $ | 827 | $ | 2,276,018 |
(1)Other adjustments include the effects of capping and flooring the liability (guidance requires an amount not less than zero at the calculation level of the liability for future policy benefits).
(2)Includes the immaterial error correction noted below.
| Health | ||||||||||||||||||||||||||||||||||||||
| Net liability for future policy benefits as of June 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | Direct to Consumer | Total | |||||||||||||||||||||||||||||||||
| Net liability for future policy benefits at original discount rates | 103,402 | 1,781,587 | 460,382 | 113,839 | (6,104) | 2,453,106 | ||||||||||||||||||||||||||||||||
| Effect of changes in discount rate assumptions | (3,406) | (222,918) | 17,655 | 8,708 | (155) | (200,116) | ||||||||||||||||||||||||||||||||
| Other adjustments(1) | 14,032 | 52 | 9,169 | 933 | 6,952 | 31,138 | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after other adjustments, at current discount rates | 114,028 | 1,558,721 | 487,206 | 123,480 | 693 | 2,284,128 | ||||||||||||||||||||||||||||||||
| Reinsurance recoverable | (2,905) | (10,470) | (1,114) | — | — | (14,489) | ||||||||||||||||||||||||||||||||
| Net liability for future policy benefits, after reinsurance recoverable, at current discount rates | $ | 111,123 | $ | 1,548,251 | $ | 486,092 | $ | 123,480 | $ | 693 | $ | 2,269,639 |
(1)Other adjustments include the effects of flooring the liability (guidance requires an amount not less than zero at the calculation level of the liability for future policy benefits).
Immaterial Correction of Previously Issued Financial Statements—The Company previously presented reinsurance recoverable on a net basis as a component of future policy benefits. In the fourth quarter of 2023, the Company corrected its presentation of reinsurance recoverable to a gross basis as a component of other assets, which resulted in the reclassification of $60 million of reinsurance recoverable at current discount rates from liabilities to assets ($50 million at original discount rates) as of June 30, 2023, with no change to equity, and the related tables in the footnote have been adjusted to reflect such changes.
Remeasurement Gain or Loss—During the three months ended June 30, 2024 and 2023, the Company's results for actual variances from expected experience produced a net reserve remeasurement gain of $15.6 million and a net reserve remeasurement gain of $5.0 million, respectively, in the Condensed Consolidated Statements of Operations. During the six months ended June 30, 2024 and 2023, the Company's results for actual variances from expected experience produced a net reserve remeasurement gain of $23.7 million and a net reserve remeasurement gain of $5.6 million, respectively, in the Condensed Consolidated Statements of Operations. The variance of actual experience from expected experience during the first six months of 2024 was primarily due to favorable variances from our assumptions as compared to actual experience in our life insurance segment (a $17.3 million gain), and favorable variances from our assumptions as compared to actual experience in our health insurance segment (a $6.5 million gain). The variance of actual experience from expected experience during the six months ended 2023 was primarily due to favorable variances from our assumptions of life experience as compared to actual experience in our life insurance segment (a $5.1 million gain), and favorable variances from our assumptions of health experience as compared to actual experience in our health insurance segment (a $0.5 million
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
gain). There were no changes to the judgments, assumptions, and methods used in measuring the liability for future policy benefits during the six months ended June 30, 2024 and 2023.
The following table reconciles the liability for future policy benefits to the Condensed Consolidated Balance Sheets as of June 30, 2024 and 2023:
| At Original Discount Rates | At Current Discount Rates | |||||||||||||||||||||||||
| As of June 30, | As of June 30, | |||||||||||||||||||||||||
| 2024 | 2023**(2)** | 2024 | 2023**(2)** | |||||||||||||||||||||||
| Life(1): | ||||||||||||||||||||||||||
| American Income | $ | 4,705,606 | $ | 4,354,545 | $ | 5,175,698 | $ | 5,195,432 | ||||||||||||||||||
| Direct to Consumer | 3,078,612 | 2,892,543 | 3,479,316 | 3,503,406 | ||||||||||||||||||||||
| Liberty National | 2,275,889 | 2,226,220 | 2,339,535 | 2,405,467 | ||||||||||||||||||||||
| Other | 3,107,805 | 3,003,041 | 3,532,049 | 3,638,462 | ||||||||||||||||||||||
| Net liability for future policy benefits—long duration life | 13,167,912 | 12,476,349 | 14,526,598 | 14,742,767 | ||||||||||||||||||||||
| Health(1): | ||||||||||||||||||||||||||
| United American | 115,771 | 134,120 | 114,028 | 136,537 | ||||||||||||||||||||||
| Family Heritage | 1,781,632 | 1,665,025 | 1,558,721 | 1,506,510 | ||||||||||||||||||||||
| Liberty National | 469,145 | 485,797 | 487,206 | 519,646 | ||||||||||||||||||||||
| American Income | 114,716 | 113,981 | 123,480 | 127,340 | ||||||||||||||||||||||
| Direct to Consumer | 673 | 798 | 693 | 827 | ||||||||||||||||||||||
| Net liability for future policy benefits—long duration health | 2,481,937 | 2,399,721 | 2,284,128 | 2,290,860 | ||||||||||||||||||||||
| Deferred profit liability | 176,123 | 172,531 | 176,123 | 172,531 | ||||||||||||||||||||||
| Deferred annuity | 706,022 | 853,064 | 706,022 | 853,064 | ||||||||||||||||||||||
| Interest sensitive life | 728,097 | 736,920 | 728,097 | 736,920 | ||||||||||||||||||||||
| Other | 9,702 | 9,906 | 9,704 | 9,909 | ||||||||||||||||||||||
| Total future policy benefits | $ | 17,269,793 | $ | 16,648,491 | $ | 18,430,672 | $ | 18,806,051 |
(1)Balances are presented net of the effects of capping and flooring the liability (guidance requires an amount not less than zero at the calculation level of the liability for future policy benefits).
(2)Includes the immaterial error correction for reinsurance as noted above.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables provide the weighted-average original and current discount rates for the liability for future policy benefits and the additional insurance liabilities as of June 30, 2024 and 2023:
| As of June 30, | ||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||
| Original discount rate | Current discount rate | Original discount rate | Current discount rate | |||||||||||||||||||||||||||||||||||
| Life | ||||||||||||||||||||||||||||||||||||||
| American Income | 5.7 | % | 5.3 | % | 5.8 | % | 5.0 | % | ||||||||||||||||||||||||||||||
| Direct to Consumer | 6.0 | % | 5.4 | % | 6.0 | % | 5.1 | % | ||||||||||||||||||||||||||||||
| Liberty National | 5.6 | % | 5.4 | % | 5.6 | % | 5.1 | % | ||||||||||||||||||||||||||||||
| Other | 6.2 | % | 5.4 | % | 6.2 | % | 5.1 | % | ||||||||||||||||||||||||||||||
| Health | ||||||||||||||||||||||||||||||||||||||
| United American | 5.1 | % | 5.2 | % | 5.1 | % | 4.9 | % | ||||||||||||||||||||||||||||||
| Family Heritage | 4.2 | % | 5.3 | % | 4.3 | % | 5.1 | % | ||||||||||||||||||||||||||||||
| Liberty National | 5.8 | % | 5.4 | % | 5.8 | % | 5.1 | % | ||||||||||||||||||||||||||||||
| American Income | 5.8 | % | 5.2 | % | 5.9 | % | 4.9 | % | ||||||||||||||||||||||||||||||
| Direct to Consumer | 5.1 | % | 5.2 | % | 5.1 | % | 4.9 | % |
The following table provides the weighted-average durations of the liability for future policy benefits and the additional insurance liabilities as of June 30, 2024 and 2023:
| As of June 30, | ||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||
| At original discount rates | At current discount rates | At original discount rates | At current discount rates | |||||||||||||||||||||||||||||||||||
| Life | ||||||||||||||||||||||||||||||||||||||
| American Income | 23.03 | 23.17 | 22.91 | 23.45 | ||||||||||||||||||||||||||||||||||
| Direct to Consumer | 19.44 | 20.66 | 20.12 | 21.81 | ||||||||||||||||||||||||||||||||||
| Liberty National | 15.22 | 15.40 | 14.97 | 15.69 | ||||||||||||||||||||||||||||||||||
| Other | 16.10 | 17.23 | 16.44 | 18.19 | ||||||||||||||||||||||||||||||||||
| Health | ||||||||||||||||||||||||||||||||||||||
| United American | 11.59 | 10.64 | 11.37 | 10.79 | ||||||||||||||||||||||||||||||||||
| Family Heritage | 15.16 | 14.21 | 14.87 | 14.41 | ||||||||||||||||||||||||||||||||||
| Liberty National | 9.26 | 9.26 | 9.34 | 9.68 | ||||||||||||||||||||||||||||||||||
| American Income | 12.35 | 12.55 | 12.12 | 12.73 | ||||||||||||||||||||||||||||||||||
| Direct to Consumer | 11.59 | 10.64 | 11.37 | 10.79 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables summarize the amount of gross premiums and interest related to long duration life and health contracts that are recognized in the Condensed Consolidated Statements of Operations for the three and six month periods ended June 30, 2024 and 2023:
| Life | ||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||
| Gross Premiums | Interest expense | Gross Premiums | Interest expense | |||||||||||||||||||||||||||||||||||
| American Income | $ | 836,931 | $ | 133,928 | $ | 781,453 | $ | 123,816 | ||||||||||||||||||||||||||||||
| Direct to Consumer | 491,235 | 89,541 | 490,443 | 84,062 | ||||||||||||||||||||||||||||||||||
| Liberty National | 181,110 | 61,153 | 169,570 | 59,670 | ||||||||||||||||||||||||||||||||||
| Other | 101,652 | 92,151 | 103,343 | 88,926 | ||||||||||||||||||||||||||||||||||
| Total | $ | 1,610,928 | $ | 376,773 | $ | 1,544,809 | $ | 356,474 |
| Life | ||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | |||||||||||||||||||||||||
| Gross Premiums | Interest expense | Gross Premiums | Interest expense | |||||||||||||||||||||||
| American Income | $ | 423,172 | $ | 67,549 | $ | 394,308 | $ | 62,385 | ||||||||||||||||||
| Direct to Consumer | 246,041 | 45,081 | 245,736 | 42,348 | ||||||||||||||||||||||
| Liberty National | 91,239 | 30,611 | 85,498 | 29,901 | ||||||||||||||||||||||
| Other | 50,583 | 46,233 | 51,507 | 44,652 | ||||||||||||||||||||||
| Total | $ | 811,035 | $ | 189,474 | $ | 777,049 | $ | 179,286 |
| Health | ||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||
| Gross Premiums | Interest expense | Gross Premiums | Interest expense | |||||||||||||||||||||||||||||||||||
| United American | $ | 214,850 | $ | 3,041 | $ | 198,679 | $ | 3,604 | ||||||||||||||||||||||||||||||
| Family Heritage | 209,246 | 35,204 | 194,219 | 32,272 | ||||||||||||||||||||||||||||||||||
| Liberty National | 94,952 | 13,155 | 93,434 | 13,801 | ||||||||||||||||||||||||||||||||||
| American Income | 58,389 | 3,314 | 56,335 | 3,256 | ||||||||||||||||||||||||||||||||||
| Direct to Consumer | 7,390 | — | 7,097 | — | ||||||||||||||||||||||||||||||||||
| Total | $ | 584,827 | $ | 54,714 | $ | 549,764 | $ | 52,933 |
| Health | ||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | |||||||||||||||||||||||||
| Gross Premiums | Interest expense | Gross Premiums | Interest expense | |||||||||||||||||||||||
| United American | $ | 110,753 | $ | 1,474 | $ | 100,847 | $ | 1,782 | ||||||||||||||||||
| Family Heritage | 105,855 | 17,773 | 98,129 | 16,295 | ||||||||||||||||||||||
| Liberty National | 47,518 | 6,572 | 46,690 | 6,881 | ||||||||||||||||||||||
| American Income | 29,470 | 1,659 | 28,239 | 1,624 | ||||||||||||||||||||||
| Direct to Consumer | 3,733 | — | 3,555 | — | ||||||||||||||||||||||
| Total | $ | 297,329 | $ | 27,478 | $ | 277,460 | $ | 26,582 |
Gross premiums are included within life and health premium on the Condensed Consolidated Statements of Operations, while the related interest expense is included in life and health policyholder benefits.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables provide the undiscounted and discounted expected future net premiums, expected future gross premiums, and expected future policy benefits, at both original and current discount rates, for life and health contracts as of June 30, 2024 and 2023:
| Life | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2024 | As of June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Not discounted | At original discount rates | At current discount rates | Not discounted | At original discount rates | At current discount rates | |||||||||||||||||||||||||||||||||||||||||||||||||||
| American Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 25,077,717 | $ | 14,130,383 | $ | 14,177,334 | $ | 23,507,444 | $ | 13,292,363 | $ | 13,604,682 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 8,240,194 | 4,648,111 | 4,635,903 | 7,764,339 | 4,399,053 | 4,472,847 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 31,638,799 | 9,353,526 | 9,811,407 | 29,442,642 | 8,753,526 | 9,668,207 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| DTC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 17,605,488 | $ | 9,202,366 | $ | 9,418,076 | $ | 17,486,509 | $ | 9,157,664 | $ | 9,599,872 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 10,784,908 | 5,670,288 | 5,810,518 | 10,811,358 | 5,700,354 | 5,988,577 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 25,978,972 | 8,748,900 | 9,289,834 | 25,685,249 | 8,592,897 | 9,487,233 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liberty National | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 4,760,222 | $ | 2,777,507 | $ | 2,744,508 | $ | 4,511,931 | $ | 2,630,182 | $ | 2,657,925 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 1,900,361 | 1,080,642 | 1,085,233 | 1,891,335 | 1,071,561 | 1,110,017 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 8,997,194 | 3,356,531 | 3,424,768 | 8,710,626 | 3,297,781 | 3,507,845 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 3,671,193 | $ | 1,866,118 | $ | 1,974,726 | $ | 3,773,740 | $ | 1,909,405 | $ | 2,075,784 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 897,326 | 437,551 | 449,883 | 914,258 | 445,475 | 471,279 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 12,433,005 | 3,545,323 | 3,981,898 | 12,398,774 | 3,448,491 | 4,109,706 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 51,114,620 | $ | 27,976,374 | $ | 28,314,644 | $ | 49,279,624 | $ | 26,989,614 | $ | 27,938,263 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 21,822,789 | 11,836,592 | 11,981,537 | 21,381,290 | 11,616,443 | 12,042,720 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 79,047,970 | 25,004,280 | 26,507,907 | 76,237,291 | 24,092,695 | 26,772,991 |
As of June 30, 2024, for the life segment using current discount rates, the Company anticipates $28.3 billion of expected future gross premiums and $12.0 billion of expected future net premiums. As of June 30, 2023, using current discount rates, the Company anticipated $27.9 billion of expected future gross premiums and $12.0 billion in expected future net premiums. For each respective period, only expected future net premiums are included in the determination of the liability for future policy benefits on the balance sheet, while the difference between the expected future gross premiums and the expected future net premiums is not.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Health | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of June 30, 2024 | As of June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Not discounted | At original discount rates | At current discount rates | Not discounted | At original discount rates | At current discount rates | |||||||||||||||||||||||||||||||||||||||||||||||||||
| United American | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 8,930,346 | $ | 5,449,708 | $ | 5,359,418 | $ | 6,896,513 | $ | 4,338,871 | $ | 4,335,298 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 6,100,831 | 3,720,108 | 3,658,491 | 4,754,498 | 2,985,660 | 2,984,554 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 6,287,625 | 3,823,510 | 3,758,487 | 4,976,470 | 3,116,768 | 3,116,389 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Family Heritage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 6,998,187 | $ | 4,103,577 | $ | 3,823,106 | $ | 6,569,913 | $ | 3,903,618 | $ | 3,684,436 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 3,092,463 | 1,823,728 | 1,690,797 | 2,958,074 | 1,771,206 | 1,661,020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 6,909,758 | 3,605,315 | 3,249,466 | 6,483,691 | 3,436,167 | 3,167,461 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liberty National | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 2,061,622 | $ | 1,307,386 | $ | 1,326,826 | $ | 2,212,104 | $ | 1,382,884 | $ | 1,429,939 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 505,985 | 338,934 | 337,741 | 627,206 | 400,180 | 409,551 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 1,391,768 | 799,316 | 815,778 | 1,561,839 | 880,879 | 923,148 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| American Income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 1,792,241 | $ | 1,003,909 | $ | 1,021,346 | $ | 1,787,907 | $ | 998,307 | $ | 1,035,471 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 373,186 | 208,867 | 205,889 | 360,163 | 201,709 | 201,844 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 656,571 | 322,706 | 328,436 | 640,722 | 315,087 | 328,579 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 242,288 | $ | 151,969 | $ | 154,318 | $ | 174,681 | $ | 114,216 | $ | 118,015 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 180,882 | 113,247 | 114,876 | 133,047 | 86,840 | 89,674 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 168,428 | 107,143 | 108,617 | 125,192 | 83,188 | 85,856 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future gross premiums | $ | 20,024,684 | $ | 12,016,549 | $ | 11,685,014 | $ | 17,641,118 | $ | 10,737,896 | $ | 10,603,159 | ||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future net premiums | 10,253,347 | 6,204,884 | 6,007,794 | 8,832,988 | 5,445,595 | 5,346,643 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| PV of expected future policy benefits | 15,414,150 | 8,657,990 | 8,260,784 | 13,787,914 | 7,832,089 | 7,621,433 |
As of June 30, 2024, for the health segment using current discount rates, the Company anticipates $11.7 billion of expected future gross premiums and $6.0 billion of expected future net premiums. As of June 30, 2023, using current discount rates, the Company anticipated $10.6 billion of expected future gross premiums and $5.3 billion in expected future net premiums. For each respective period, only expected future net premiums are included in the determination of the liability for future policy benefits on the balance sheet, while the difference between the expected future gross premiums and the expected future net premiums is not.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table summarizes the balances of, and changes in, policyholders’ account balances as of June 30, 2024 and 2023:
| Policyholders' Account Balances | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Sensitive Life | Deferred Annuity | Other Policy-holders' Funds | Interest Sensitive Life | Deferred Annuity | Other Policy-holders' Funds | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 1, | $ | 732,948 | $ | 773,039 | $ | 236,958 | $ | 739,105 | $ | 954,318 | $ | 123,234 | ||||||||||||||||||||||||||||||||||||||||||||
| Issuances | — | 358 | — | — | 371 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums received | 11,110 | 6,409 | 168,470 | 11,664 | 8,104 | 68,409 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges | (6,172) | — | — | (6,516) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrenders and withdrawals | (11,476) | (62,562) | (7,351) | (10,622) | (87,271) | (6,324) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Benefit payments | (16,740) | (24,137) | — | (15,495) | (37,412) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest credited | 13,968 | 12,213 | 9,104 | 14,191 | 14,745 | 3,339 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 4,459 | 702 | (6,556) | 4,593 | 209 | (785) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, | $ | 728,097 | $ | 706,022 | $ | 400,625 | $ | 736,920 | $ | 853,064 | $ | 187,873 |
| Policyholders' Account Balances | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Sensitive Life | Deferred Annuity | Other Policy-holders' Funds | Interest Sensitive Life | Deferred Annuity | Other Policy-holders' Funds | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at April 1, | $ | 729,721 | $ | 739,019 | $ | 401,269 | $ | 737,900 | $ | 907,797 | $ | 142,686 | ||||||||||||||||||||||||||||||||||||||||||||
| Issuances | — | 160 | — | — | 169 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums received | 5,486 | 2,836 | 1,770 | 5,634 | 3,328 | 46,747 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges | (3,061) | — | — | (3,197) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Surrenders and withdrawals | (5,167) | (30,999) | (3,834) | (5,238) | (43,738) | (3,021) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Benefit payments | (7,600) | (11,366) | — | (7,651) | (21,628) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest credited | 6,952 | 5,970 | 5,583 | 7,056 | 7,185 | 2,101 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 1,766 | 402 | (4,163) | 2,416 | (49) | (640) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, | $ | 728,097 | $ | 706,022 | $ | 400,625 | $ | 736,920 | $ | 853,064 | $ | 187,873 |
| Weighted-average credit rate | 3.87 | % | 3.35 | % | 5.69 | % | 3.88 | % | 3.30 | % | 5.18 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Net amount at risk | $ | 1,714,347 | N/A | N/A | $ | 1,819,695 | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash surrender value | $ | 680,564 | $ | 706,022 | $ | 400,625 | $ | 675,044 | $ | 853,064 | $ | 187,872 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables present the policyholders' account balances by range of guaranteed minimum crediting rates and the related range of difference, if any, in basis points between rates being credited to policy holders and the respective guaranteed minimums as of June 30, 2024 and 2023:
| At June 30, 2024 | ||||||||||||||||||||
| Range of guaranteed minimum crediting rates | Interest Sensitive Life | Deferred Annuity | Other Policyholders' Funds | |||||||||||||||||
| At guaranteed minimum | ||||||||||||||||||||
| Less than 3.00% | $ | — | $ | 1,743 | $ | 304,454 | ||||||||||||||
| 3.00%-3.99% | 29,238 | 515,442 | 3,246 | |||||||||||||||||
| 4.00%-4.99% | 608,867 | 187,985 | 6,539 | |||||||||||||||||
| Greater than 5.00% | 89,992 | — | 36,775 | |||||||||||||||||
| Total | 728,097 | 705,170 | 351,014 | |||||||||||||||||
| 51-150 basis points above | ||||||||||||||||||||
| Less than 3.00% | — | — | — | |||||||||||||||||
| 3.00%-3.99% | — | — | — | |||||||||||||||||
| 4.00%-4.99% | — | — | 49,611 | |||||||||||||||||
| Greater than 5.00% | — | — | — | |||||||||||||||||
| Total | — | — | 49,611 | |||||||||||||||||
| Greater than 150 basis points above | ||||||||||||||||||||
| Less than 3.00% | — | — | — | |||||||||||||||||
| 3.00%-3.99% | — | 852 | — | |||||||||||||||||
| 4.00%-4.99% | — | — | — | |||||||||||||||||
| Greater than 5.00% | — | — | — | |||||||||||||||||
| Total | — | 852 | — | |||||||||||||||||
| Grand Total | $ | 728,097 | $ | 706,022 | $ | 400,625 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| At June 30, 2023 | ||||||||||||||||||||
| Range of guaranteed minimum crediting rates | Interest Sensitive Life | Deferred Annuity | Other Policyholders' Funds | |||||||||||||||||
| At guaranteed minimum | ||||||||||||||||||||
| Less than 3.00% | $ | — | $ | 2,076 | $ | 88,301 | ||||||||||||||
| 3.00%-3.99% | 29,014 | 647,355 | 4,025 | |||||||||||||||||
| 4.00%-4.99% | 618,071 | 203,633 | 8,587 | |||||||||||||||||
| Greater than 5.00% | 89,835 | — | 38,594 | |||||||||||||||||
| Total | 736,920 | 853,064 | 139,507 | |||||||||||||||||
| 51-150 basis points above | ||||||||||||||||||||
| Less than 3.00% | $ | — | $ | — | $ | — | ||||||||||||||
| 3.00%-3.99% | — | — | — | |||||||||||||||||
| 4.00%-4.99% | — | — | 48,366 | |||||||||||||||||
| Greater than 5.00% | — | — | — | |||||||||||||||||
| Total | — | — | 48,366 | |||||||||||||||||
| Greater than 150 basis points above | ||||||||||||||||||||
| Less than 3.00% | $ | — | $ | — | $ | — | ||||||||||||||
| 3.00%-3.99% | — | — | — | |||||||||||||||||
| 4.00%-4.99% | — | — | — | |||||||||||||||||
| Greater than 5.00% | — | — | — | |||||||||||||||||
| Total | — | — | — | |||||||||||||||||
| Grand Total | $ | 736,920 | $ | 853,064 | $ | 187,873 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 7—Deferred Acquisition Costs
The following tables roll forward the deferred policy acquisition costs for the three and six month periods ended June 30, 2024 and 2023:
| Life | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 2,258,291 | $ | 1,676,931 | $ | 610,723 | $ | 298,346 | $ | 4,844,291 | ||||||||||||||||||||||
| Capitalizations | 234,172 | 87,389 | 50,649 | 6,767 | 378,977 | |||||||||||||||||||||||||||
| Amortization expense | (77,742) | (49,605) | (25,163) | (8,252) | (160,762) | |||||||||||||||||||||||||||
| Foreign exchange adjustment | 2,759 | — | — | — | 2,759 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 2,417,480 | $ | 1,714,715 | $ | 636,209 | $ | 296,861 | $ | 5,065,265 | ||||||||||||||||||||||
| Balance at January 1, 2024 | $ | 2,573,370 | $ | 1,737,117 | $ | 666,419 | $ | 294,869 | $ | 5,271,775 | ||||||||||||||||||||||
| Capitalizations | 259,856 | 78,976 | 58,100 | 6,280 | 403,212 | |||||||||||||||||||||||||||
| Amortization expense | (87,377) | (50,420) | (27,614) | (8,272) | (173,683) | |||||||||||||||||||||||||||
| Foreign exchange adjustment | (5,711) | — | — | — | (5,711) | |||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 2,740,138 | $ | 1,765,673 | $ | 696,905 | $ | 292,877 | $ | 5,495,593 |
| Life | ||||||||||||||||||||||||||||||||
| American Income | DTC | Liberty National | Other | Total | ||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | 2,332,600 | $ | 1,699,588 | $ | 622,532 | $ | 297,542 | $ | 4,952,262 | ||||||||||||||||||||||
| Capitalizations | 118,777 | 39,979 | 26,428 | 3,446 | 188,630 | |||||||||||||||||||||||||||
| Amortization expense | (39,443) | (24,852) | (12,751) | (4,127) | (81,173) | |||||||||||||||||||||||||||
| Foreign exchange adjustment | 5,546 | — | — | — | 5,546 | |||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 2,417,480 | $ | 1,714,715 | $ | 636,209 | $ | 296,861 | $ | 5,065,265 | ||||||||||||||||||||||
| Balance at April 1, 2024 | $ | 2,652,009 | $ | 1,754,184 | $ | 678,885 | $ | 293,747 | $ | 5,378,825 | ||||||||||||||||||||||
| Capitalizations | 132,413 | 36,851 | 32,035 | 3,267 | 204,566 | |||||||||||||||||||||||||||
| Amortization expense | (44,401) | (25,362) | (14,015) | (4,137) | (87,915) | |||||||||||||||||||||||||||
| Foreign exchange adjustment | 117 | — | — | — | 117 | |||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 2,740,138 | $ | 1,765,673 | $ | 696,905 | $ | 292,877 | $ | 5,495,593 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Health | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | DTC | Total | |||||||||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 77,394 | $ | 416,608 | $ | 133,096 | $ | 57,811 | $ | 1,854 | $ | 686,763 | ||||||||||||||||||||||||||
| Capitalizations | 996 | 30,591 | 9,734 | 6,320 | — | 47,641 | ||||||||||||||||||||||||||||||||
| Amortization expense | (3,041) | (13,200) | (6,554) | (1,903) | (94) | (24,792) | ||||||||||||||||||||||||||||||||
| Foreign exchange adjustment | — | — | — | 57 | — | 57 | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 75,349 | $ | 433,999 | $ | 136,276 | $ | 62,285 | $ | 1,760 | $ | 709,669 | ||||||||||||||||||||||||||
| Balance at January 1, 2024 | $ | 73,489 | $ | 452,843 | $ | 139,941 | $ | 66,783 | $ | 1,679 | $ | 734,735 | ||||||||||||||||||||||||||
| Capitalizations | 1,289 | 33,932 | 12,444 | 7,280 | 2 | 54,947 | ||||||||||||||||||||||||||||||||
| Amortization expense | (2,803) | (14,521) | (7,288) | (2,237) | (73) | (26,922) | ||||||||||||||||||||||||||||||||
| Foreign exchange adjustment | — | — | — | (237) | — | (237) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 71,975 | $ | 472,254 | $ | 145,097 | $ | 71,589 | $ | 1,608 | $ | 762,523 | ||||||||||||||||||||||||||
| Health | ||||||||||||||||||||||||||||||||||||||
| United American | Family Heritage | Liberty National | American Income | DTC | Total | |||||||||||||||||||||||||||||||||
| Balance at April 1, 2023 | $ | 76,388 | $ | 425,145 | $ | 134,728 | $ | 59,890 | $ | 1,807 | $ | 697,958 | ||||||||||||||||||||||||||
| Capitalizations | 489 | 15,494 | 4,852 | 3,177 | — | 24,012 | ||||||||||||||||||||||||||||||||
| Amortization expense | (1,528) | (6,640) | (3,304) | (965) | (47) | (12,484) | ||||||||||||||||||||||||||||||||
| Foreign exchange adjustment | — | — | — | 183 | — | 183 | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 75,349 | $ | 433,999 | $ | 136,276 | $ | 62,285 | $ | 1,760 | $ | 709,669 | ||||||||||||||||||||||||||
| Balance at April 1, 2024 | $ | 72,604 | $ | 462,346 | $ | 144,313 | $ | 68,938 | $ | 1,643 | $ | 749,844 | ||||||||||||||||||||||||||
| Capitalizations | 793 | 17,242 | 4,465 | 3,750 | 1 | 26,251 | ||||||||||||||||||||||||||||||||
| Amortization expense | (1,422) | (7,334) | (3,681) | (1,138) | (36) | (13,611) | ||||||||||||||||||||||||||||||||
| Foreign exchange adjustment | — | — | — | 39 | — | 39 | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | 71,975 | $ | 472,254 | $ | 145,097 | $ | 71,589 | $ | 1,608 | $ | 762,523 | ||||||||||||||||||||||||||
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following table presents a reconciliation of deferred policy acquisition costs to the Condensed Consolidated Balance Sheets as of June 30, 2024:
| June 30, | ||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||
| Life | ||||||||||||||||||||
| American Income | $ | 2,740,138 | $ | 2,417,480 | ||||||||||||||||
| Direct to Consumer | 1,765,673 | 1,714,715 | ||||||||||||||||||
| Liberty National | 696,905 | 636,209 | ||||||||||||||||||
| Other | 292,877 | 296,861 | ||||||||||||||||||
| Total DAC—Life | 5,495,593 | 5,065,265 | ||||||||||||||||||
| Health | ||||||||||||||||||||
| United American | 71,975 | 75,349 | ||||||||||||||||||
| Family Heritage | 472,254 | 433,999 | ||||||||||||||||||
| Liberty National | 145,097 | 136,276 | ||||||||||||||||||
| American Income | 71,589 | 62,285 | ||||||||||||||||||
| Direct to Consumer | 1,608 | 1,760 | ||||||||||||||||||
| Total DAC—Health | 762,523 | 709,669 | ||||||||||||||||||
| Annuity | 2,178 | 3,798 | ||||||||||||||||||
| Total | $ | 6,260,294 | $ | 5,778,732 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 8—Liability for Unpaid Claims
Activity in the liability for unpaid health claims is summarized as follows:
| June 30, 2024 | December 31, 2023 | ||||||||||
| Balance at beginning of period | $ | 194,809 | $ | 184,286 | |||||||
| Less reinsurance recoverables | (2,157) | (2,084) | |||||||||
| Net balance at beginning of period | 192,652 | 182,202 | |||||||||
| Incurred related to: | |||||||||||
| Current year | 368,295 | 697,521 | |||||||||
| Prior years | (3,930) | (4,853) | |||||||||
| Total incurred | 364,365 | 692,668 | |||||||||
| Paid related to: | |||||||||||
| Current year | 225,585 | 535,971 | |||||||||
| Prior years | 128,535 | 146,247 | |||||||||
| Total paid | 354,120 | 682,218 | |||||||||
| Net balance at end of period | 202,897 | 192,652 | |||||||||
| Plus reinsurance recoverables | 1,668 | 2,157 | |||||||||
| Balance at end of period | $ | 204,565 | $ | 194,809 |
Below is the reconciliation of the liability of "Policy claims and other benefits payable" in the Condensed Consolidated Balance Sheets.
| June 30, 2024 | December 31, 2023 | ||||||||||
| Policy claims and other benefits payable: | |||||||||||
| Life insurance | $ | 321,561 | $ | 320,066 | |||||||
| Health insurance | 204,565 | 194,809 | |||||||||
| Total | $ | 526,126 | $ | 514,875 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 9—Postretirement Benefits
Globe Life has qualified noncontributory defined benefit pension plans (Pension Plans) and contributory savings plans that cover substantially all employees. There is also a nonqualified noncontributory supplemental executive retirement plan (SERP) that covers a limited number of officers. The tables included herein will focus on the Pension Plans and SERP.
Pension Assets: The following table presents the assets of the Company's Pension Plans at June 30, 2024 and December 31, 2023.
Pension Assets by Component at June 30, 2024
| Fair Value Determined by: | |||||||||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Amount | % of Total | |||||||||||||||||||||||||
| Exchange traded fund(4) | $ | 35,996 | $ | — | $ | — | $ | 35,996 | 6 | ||||||||||||||||||||
| Equity exchange traded fund(1) | 295,168 | — | — | 295,168 | 50 | ||||||||||||||||||||||||
| U.S. Government and Agency | — | 180,280 | — | 180,280 | 30 | ||||||||||||||||||||||||
| Other bonds | — | 4 | — | 4 | — | ||||||||||||||||||||||||
| Guaranteed annuity contract(2) | — | 43,736 | — | 43,736 | 7 | ||||||||||||||||||||||||
| Short-term investments | 8,808 | — | — | 8,808 | 2 | ||||||||||||||||||||||||
| Other | 1,103 | — | — | 1,103 | — | ||||||||||||||||||||||||
| $ | 341,075 | $ | 224,020 | $ | — | 565,095 | 95 | ||||||||||||||||||||||
| Other long-term investments(3) | 26,977 | 5 | |||||||||||||||||||||||||||
| Total pension assets | $ | 592,072 | 100 |
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3)Includes non-redeemable investment funds that report the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value (NAV) per share, or its equivalent, as a practical expedient for fair value. As of June 30, 2024, the Globe Life Inc. Pension Plan owned less than 1% of two long-term investment funds.
(4)A fund including U.S. dollar-denominated investment-grade securities issued by industrial, utility, and financial companies with maturities greater than 10 years.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Pension Assets by Component at December 31, 2023
| Fair Value Determined by: | |||||||||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Amount | % of Total | |||||||||||||||||||||||||
| Exchange traded fund(4) | $ | 18,715 | $ | — | $ | — | $ | 18,715 | 3 | ||||||||||||||||||||
| Equity exchange traded fund(1) | 315,886 | — | — | 315,886 | 55 | ||||||||||||||||||||||||
| U.S. Government and Agency | — | 167,450 | — | 167,450 | 30 | ||||||||||||||||||||||||
| Other bonds | — | 5 | — | 5 | — | ||||||||||||||||||||||||
| Guaranteed annuity contract(2) | — | 43,428 | — | 43,428 | 8 | ||||||||||||||||||||||||
| Short-term investments | 6,506 | — | — | 6,506 | 1 | ||||||||||||||||||||||||
| Other | 463 | — | — | 463 | — | ||||||||||||||||||||||||
| $ | 341,570 | $ | 210,883 | $ | — | 552,453 | 97 | ||||||||||||||||||||||
| Other long-term investments(3) | 18,314 | 3 | |||||||||||||||||||||||||||
| Total pension assets | $ | 570,767 | 100 |
(1)A fund including marketable securities that mirror the S&P 500 index.
(2)Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3)Includes non-redeemable investment funds that report the Globe Life Inc. Pension Plan's pro-rata share of the limited partnership's net asset value (NAV) per share, or its equivalent, as a practical expedient for fair value. As of December 31, 2023, the Globe Life Inc. Pension Plan owned less than 1% of two long-term investment funds.
(4)A fund including U.S. dollar-denominated investment-grade securities issued by industrial, utility, and financial companies with maturities greater than 10 years.
SERP: The following tables include premiums paid for the company owned life insurance (COLI) at June 30, 2024 and 2023 and investments of the Rabbi Trust at June 30, 2024 and December 31, 2023.
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Premiums paid for insurance coverage | $ | 443 | $ | 443 | |||||||
| June 30, 2024 | December 31, 2023 | ||||||||||
| Total investments: | |||||||||||
| COLI | $ | 56,423 | $ | 55,185 | |||||||
| Exchange traded funds | 92,857 | 86,156 | |||||||||
| $ | 149,280 | $ | 141,341 |
Pension Plans and SERP Liabilities: The following table presents liabilities for the defined benefit pension plans and SERP at June 30, 2024 and December 31, 2023.
| June 30, 2024 | December 31, 2023 | ||||||||||
| Pension Plans | $ | 581,490 | $ | 554,957 | |||||||
| SERP | 72,579 | 72,603 | |||||||||
| Benefit obligation | $ | 654,069 | $ | 627,560 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Net Periodic Benefit Cost: The following table presents the net periodic benefit costs for the defined benefit pension plans and SERP by expense components for the three and six month periods ended June 30, 2024 and 2023.
Components of Net Periodic Benefit Cost
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Service cost—benefits earned during the period | $ | 6,228 | $ | 5,390 | $ | 12,449 | $ | 10,782 | |||||||||||||||
| Interest cost on projected benefit obligation | 8,308 | 7,834 | 16,575 | 15,668 | |||||||||||||||||||
| Expected return on assets | (10,647) | (9,656) | (21,293) | (19,312) | |||||||||||||||||||
| Amortization: | |||||||||||||||||||||||
| Prior service cost | 269 | 269 | 538 | 538 | |||||||||||||||||||
| Actuarial (gain) loss | 6 | (52) | 12 | (104) | |||||||||||||||||||
| Net periodic benefit cost | $ | 4,164 | $ | 3,785 | $ | 8,281 | $ | 7,572 |
Note 10—Earnings Per Share
Earnings per Share*:* A reconciliation of basic and diluted weighted-average shares outstanding used in the computation of basic and diluted earnings per share is as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Basic weighted average shares outstanding | 91,441,350 | 95,330,416 | 92,653,478 | 95,856,391 | |||||||||||||||||||
| Weighted average dilutive options outstanding | — | 921,019 | 333,855 | 1,228,920 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 91,441,350 | 96,251,435 | 92,987,333 | 97,085,311 | |||||||||||||||||||
| Antidilutive shares | 4,958,491 | 492,970 | 2,063,624 | 351,343 |
Antidilutive shares are excluded from the calculation of diluted earnings per share. All antidilutive shares noted above result from outstanding out of the money employee and Director stock options.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 11—Debt
The following table presents information about the terms and outstanding balances of Globe Life's debt.
Selected Information about Debt Issues
| As of | |||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Instrument | Issue Date | Maturity Date | Coupon Rate | Par Value | Unamortized Discount & Issuance Costs | Book Value | Fair Value | Book Value | |||||||||||||||||||||||||||||||||||||||
| Senior notes | 09/27/2018 | 09/15/2028 | 4.550% | $ | 550,000 | $ | (3,359) | $ | 546,641 | $ | 522,121 | $ | 546,283 | ||||||||||||||||||||||||||||||||||
| Senior notes | 08/21/2020 | 08/15/2030 | 2.150% | 400,000 | (3,099) | 396,901 | 320,552 | 396,670 | |||||||||||||||||||||||||||||||||||||||
| Senior notes(1) | 05/19/2022 | 06/15/2032 | 4.800% | 250,000 | (3,928) | 246,072 | 229,785 | 245,873 | |||||||||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 11/17/2017 | 11/17/2057 | 5.275% | 125,000 | (1,565) | 123,435 | 109,258 | 123,427 | |||||||||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 06/14/2021 | 06/15/2061 | 4.250% | 325,000 | (7,653) | 317,347 | 194,480 | 317,306 | |||||||||||||||||||||||||||||||||||||||
| Total long-term debt | 1,650,000 | (19,604) | 1,630,396 | 1,376,196 | 1,629,559 | ||||||||||||||||||||||||||||||||||||||||||
| Term loan(2) | 05/11/2023 | 11/11/2024 | 6.420% | 170,000 | (196) | 169,804 | 169,804 | 169,549 | |||||||||||||||||||||||||||||||||||||||
| FHLB borrowings | 180,000 | — | 180,000 | 180,000 | — | ||||||||||||||||||||||||||||||||||||||||||
| Commercial paper | 313,225 | (8,423) | 304,802 | 304,802 | 316,564 | ||||||||||||||||||||||||||||||||||||||||||
| Total short-term debt | 663,225 | (8,619) | 654,606 | 654,606 | 486,113 | ||||||||||||||||||||||||||||||||||||||||||
| Total debt | $ | 2,313,225 | $ | (28,223) | $ | 2,285,002 | $ | 2,030,802 | $ | 2,115,672 |
(1)An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.
(2)Interest calculated quarterly using Secured Overnight Financing Rate (SOFR) plus 135 basis points.
The commercial paper has the highest priority of all unsecured debt, followed by senior notes then junior subordinated debentures. The senior notes are callable under a make-whole provision, and the junior subordinated debentures are subject to an optional redemption five years from issuance. Interest on the 4.25% junior subordinated debentures is payable quarterly while all other long-term debt is payable semi-annually.
Credit facility*:* On March 29, 2024, Globe Life amended the credit agreement dated September 30, 2021, which provides for a $1 billion revolving credit facility that may be increased to $1.25 billion. The amended credit facility matures March 29, 2029 and may be extended up to two one-year periods upon the Company's request. Pursuant to this agreement, the participating lenders have agreed to make revolving loans to Globe Life and to issue secured or unsecured letters of credit. The Company has not drawn on any of the credit to date.
The facility is further designated as a back-up credit line for a commercial paper program under which the Company may either borrow from the credit line or issue commercial paper at any time, with total commercial paper outstanding not to exceed the facility maximum of $1 billion, less any letters of credit issued. Interest is charged at variable rates. In accordance with the agreement, Globe Life is subject to certain covenants regarding capitalization. As of June 30, 2024, the Company was in full compliance with these covenants.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables present certain information about our commercial paper borrowings.
Credit Facility—Commercial Paper
(Dollar amounts in thousands)
| At | |||||||||||||||||
| June 30, 2024 | December 31, 2023 | June 30, 2023 | |||||||||||||||
| Balance of commercial paper at end of period (par value) | $ | 313,225 | $ | 319,000 | $ | 260,000 | |||||||||||
| Annualized interest rate | 6.02 | % | 5.71 | % | 5.57 | % | |||||||||||
| Letters of credit outstanding | $ | 115,000 | $ | 115,000 | $ | 115,000 | |||||||||||
| Remaining amount available under credit line | 571,775 | 316,000 | 375,000 |
Credit Facility—Commercial Paper Activity
(Dollar amounts in thousands)
| Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Average balance of commercial paper outstanding during period (par value) | $ | 392,905 | $ | 313,259 | |||||||
| Daily-weighted average interest rate (annualized) | 5.76 | % | 5.21 | % | |||||||
| Maximum daily amount outstanding during period (par value) | $ | 633,425 | $ | 477,700 | |||||||
| Commercial paper issued during period (par value) | 997,492 | 1,055,000 | |||||||||
| Commercial paper matured during period (par value) | (1,003,267) | (1,080,000) | |||||||||
| Net commercial paper issued (matured) during period (par value) | (5,775) | (25,000) |
Federal Home Loan Bank (FHLB)**: FHLB membership provides certain of our insurance subsidiaries with access to various low-cost collateralized borrowings and funding agreements. The membership requires ownership of FHLB common stock, as well as the purchase of activity-based common stock equal to approximately 4.1% of outstanding borrowings.
Globe Life owned $36.4 million in FHLB common stock as of June 30, 2024 and $22.3 million as of December 31, 2023. The FHLB stock is restricted for the duration of the membership and recorded at cost (par) as required by applicable guidance. The FHLB stock is included in "Other long-term investments*"* in the Condensed Consolidated Balance Sheets. Borrowings with the FHLB are subject to the availability of pledged assets at the insurance subsidiaries of Globe Life. As of June 30, 2024, Globe Life's insurance subsidiaries maximum borrowing capacity under the FHLB facility was approximately $640 million, net of outstanding funding agreements and short-term borrowings, on pledged assets with a fair value of $1.4 billion. As of June 30, 2024, $303 million in funding agreements were outstanding with the FHLB, compared to $138 million as of December 31, 2023. This amount is included in "Other policyholders' funds" in the Condensed Consolidated Balance Sheets. In addition, the Company had $180 million in short-term borrowings from the FHLB as of June 30, 2024, compared to $0 as of December 31, 2023, this amount is recorded in "Short-term debt".
Note 12—Business Segments
Globe Life is organized into four segments: life insurance, supplemental health insurance, annuities, and investments. In addition, other expenses not included in these segments are reported in "Corporate & Other."
Globe Life's reportable insurance segments are based on the insurance product lines it markets and administers: life insurance, supplemental health insurance, and annuities. These major product lines are set out as reportable segments because of the common characteristics of products within these categories, comparability of margins, and
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
the similarity in regulatory environment and management techniques. There is also an investment segment that manages the investment portfolio and cash flow for the insurance segments and the corporate function. The Company's chief operating decision makers evaluate the overall performance of the operations of the Company in accordance with these segments.
Life insurance products marketed by Globe Life include traditional whole life and term life insurance. An immaterial amount of annuities sold as companion products are included in the life segment. Health insurance products are generally guaranteed renewable and include Medicare Supplement, cancer, critical illness, accident, and other limited-benefit supplemental hospital and surgical products. Annuities include fixed-benefit contracts.
The following tables present segment premium revenue by each of Globe Life's distribution channels.
| Premium Income by Distribution Channel | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution Channel | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||||||||||||||||||
| American Income | $ | 423,534 | 52 | $ | 30,721 | 9 | $ | — | — | $ | 454,255 | 39 | ||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | 248,839 | 31 | 18,132 | 5 | — | — | 266,971 | 23 | ||||||||||||||||||||||||||||||||||||||||||
| Liberty National | 92,197 | 11 | 47,705 | 14 | — | — | 139,902 | 12 | ||||||||||||||||||||||||||||||||||||||||||
| United American | 1,558 | — | 149,230 | 42 | — | — | 150,788 | 13 | ||||||||||||||||||||||||||||||||||||||||||
| Family Heritage | 1,645 | — | 105,855 | 30 | — | — | 107,500 | 9 | ||||||||||||||||||||||||||||||||||||||||||
| Other | 47,709 | 6 | — | — | — | — | 47,709 | 4 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 815,482 | 100 | $ | 351,643 | 100 | $ | — | — | $ | 1,167,125 | 100 |
| Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution Channel | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||||||||||||||||||
| American Income | $ | 394,620 | 51 | $ | 29,527 | 9 | $ | — | — | $ | 424,147 | 38 | ||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | 248,607 | 32 | 17,175 | 5 | — | — | 265,782 | 24 | ||||||||||||||||||||||||||||||||||||||||||
| Liberty National | 86,634 | 11 | 46,903 | 14 | — | — | 133,537 | 12 | ||||||||||||||||||||||||||||||||||||||||||
| United American | 1,849 | — | 137,453 | 42 | — | — | 139,302 | 13 | ||||||||||||||||||||||||||||||||||||||||||
| Family Heritage | 1,513 | — | 98,129 | 30 | — | — | 99,642 | 9 | ||||||||||||||||||||||||||||||||||||||||||
| Other | 48,510 | 6 | — | — | — | — | 48,510 | 4 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 781,733 | 100 | $ | 329,187 | 100 | $ | — | — | $ | 1,110,920 | 100 |
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution Channel | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||||||||||||||||||
| American Income | $ | 837,578 | 52 | $ | 61,218 | 9 | $ | — | — | $ | 898,796 | 39 | ||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | 496,879 | 31 | 35,998 | 5 | — | — | 532,877 | 23 | ||||||||||||||||||||||||||||||||||||||||||
| Liberty National | 182,974 | 11 | 95,335 | 14 | — | — | 278,309 | 12 | ||||||||||||||||||||||||||||||||||||||||||
| United American | 3,401 | — | 290,865 | 42 | — | — | 294,266 | 13 | ||||||||||||||||||||||||||||||||||||||||||
| Family Heritage | 3,261 | — | 209,246 | 30 | — | — | 212,507 | 9 | ||||||||||||||||||||||||||||||||||||||||||
| Other | 95,654 | 6 | — | — | — | — | 95,654 | 4 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 1,619,747 | 100 | $ | 692,662 | 100 | $ | — | — | $ | 2,312,409 | 100 |
| Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution Channel | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||||||||||||||||||||||
| American Income | $ | 782,132 | 51 | $ | 59,121 | 9 | $ | — | — | $ | 841,253 | 38 | ||||||||||||||||||||||||||||||||||||||
| Direct to Consumer | 496,274 | 32 | 34,423 | 5 | — | — | 530,697 | 24 | ||||||||||||||||||||||||||||||||||||||||||
| Liberty National | 171,837 | 11 | 93,875 | 14 | — | — | 265,712 | 12 | ||||||||||||||||||||||||||||||||||||||||||
| United American | 3,731 | — | 270,060 | 42 | — | — | 273,791 | 12 | ||||||||||||||||||||||||||||||||||||||||||
| Family Heritage | 2,993 | — | 194,201 | 30 | — | — | 197,194 | 9 | ||||||||||||||||||||||||||||||||||||||||||
| Other | 97,363 | 6 | — | — | — | — | 97,363 | 5 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 1,554,330 | 100 | $ | 651,680 | 100 | $ | — | — | $ | 2,206,010 | 100 |
Due to the nature of the life insurance industry, Globe Life has no individual or group that would be considered a major customer. Substantially all of Globe Life's business is conducted in the United States.
The measure of profitability established by the chief operating decision makers for the insurance segments is underwriting margin before other income and administrative expenses, in accordance with the manner in which the segments are managed. It essentially represents gross profit margin on insurance products before insurance administrative expenses and consists primarily of premium less net policy benefits, acquisition expenses, and commissions. Required interest on policy liabilities is reflected as a component of the Investment segment (rather than as a component of underwriting margin in the insurance and annuity segments) in order to match this cost with the investment income earned on the assets supporting the policy liabilities.
The measure of profitability for the Investment segment is excess investment income, representing the income earned on the investment portfolio in excess of policy requirements. Other than the required interest on the insurance segments, no other intersegment revenues or expenses are recognized. Expenses directly attributable to corporate operations are included in the “Corporate & Other” category. Stock-based compensation expense is considered a corporate expense by Globe Life management and is included in this category. All other unallocated revenues and expenses on a pretax basis, including insurance administrative expense and interest on debt, are also included in the “Corporate & Other” segment category.
Globe Life holds a sizable investment portfolio to support its insurance liabilities, the yield from which is used to offset policy benefit, acquisition, administrative, and tax expenses. This yield or investment income is taken into account when establishing premium rates and profitability expectations for its insurance products. From time to time, investments are sold or called, or experience a credit loss event, each of which are reflected by the Company as realized gain (loss)—investments. These gains or losses generally occur as a result of disposition due to issuer calls, compliance with Company investment policies, or other reasons often beyond management’s control. Unlike investment income, realized gains and losses are incidental to insurance operations, and only overall yields are considered when setting premium rates or insurance product profitability expectations. While these gains and losses
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
are not relevant to segment profitability or core operating results, they can have a material positive or negative result on net income. For these reasons, management removes realized investment gains and losses when it views its segment operations.
Management also removes non-operating items unrelated to the Company's core insurance activities when evaluating those results. Therefore, these items are excluded in its presentation of segment results because accounting guidance requires that operating segment results be presented as management views its business. All of these items are included in “Other operating expense” in the Condensed Consolidated Statements of Operations for the appropriate year. See additional detail below in the tables.
The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items. See Note 1—Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.
| Three Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Investment | Corporate & Other | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Premium | $ | 815,482 | $ | 351,643 | $ | — | $ | — | $ | — | $ | — | $ | 1,167,125 | ||||||||||||||||||||||||||||||
| Net investment income | — | — | — | 285,636 | — | — | 285,636 | |||||||||||||||||||||||||||||||||||||
| Other income | — | — | — | — | 74 | — | 74 | |||||||||||||||||||||||||||||||||||||
| Total revenue | 815,482 | 351,643 | — | 285,636 | 74 | — | 1,452,835 | |||||||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Policy benefits | 518,792 | 205,423 | 5,943 | 5,536 | — | — | 735,694 | |||||||||||||||||||||||||||||||||||||
| Required interest on reserves | (201,815) | (27,410) | (8,084) | 237,309 | — | — | — | |||||||||||||||||||||||||||||||||||||
| Amortization of acquisition costs | 87,915 | 13,611 | 389 | — | — | — | 101,915 | |||||||||||||||||||||||||||||||||||||
| Commissions, premium taxes, and non-deferred acquisition costs | 90,267 | 59,531 | 4 | — | — | — | 149,802 | |||||||||||||||||||||||||||||||||||||
| Insurance administrative expense(1) | — | — | — | — | 82,196 | 916 | (2) | 83,112 | ||||||||||||||||||||||||||||||||||||
| Parent expense | — | — | — | — | 3,130 | 2,776 | (2,3) | 5,906 | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | 10,090 | — | 10,090 | |||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | 31,404 | — | 31,404 | |||||||||||||||||||||||||||||||||||||
| Total expenses | 495,159 | 251,155 | (1,748) | 242,845 | 126,820 | 3,692 | 1,117,923 | |||||||||||||||||||||||||||||||||||||
| Subtotal | 320,323 | 100,488 | 1,748 | 42,791 | (126,746) | (3,692) | 334,912 | |||||||||||||||||||||||||||||||||||||
| Non-operating items | — | — | — | — | — | 3,692 | (2,3) | 3,692 | ||||||||||||||||||||||||||||||||||||
| Measure of segment profitability (pretax) | $ | 320,323 | $ | 100,488 | $ | 1,748 | $ | 42,791 | $ | (126,746) | $ | — | 338,604 | |||||||||||||||||||||||||||||||
| Realized gains (losses) | (12,589) | |||||||||||||||||||||||||||||||||||||||||||
| Legal costs and proceedings | (2,435) | |||||||||||||||||||||||||||||||||||||||||||
| Non-operating expenses | (1,257) | |||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes per Condensed Consolidated Statements of Operations | $ | 322,323 |
(1)Administrative expense is not allocated to insurance segments.
(2)Legal costs and proceedings.
(3)Non-operating expenses.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Investment | Corporate & Other | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Premium | $ | 781,733 | $ | 329,187 | $ | — | $ | — | $ | — | $ | — | $ | 1,110,920 | ||||||||||||||||||||||||||||||
| Net investment income | — | — | — | 261,244 | — | — | 261,244 | |||||||||||||||||||||||||||||||||||||
| Other income | — | — | — | — | 85 | — | 85 | |||||||||||||||||||||||||||||||||||||
| Total revenue | 781,733 | 329,187 | — | 261,244 | 85 | — | 1,372,249 | |||||||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Policy obligations | 512,664 | 195,924 | 7,107 | 1,815 | — | — | 717,510 | |||||||||||||||||||||||||||||||||||||
| Required interest on reserves | (191,781) | (26,548) | (9,715) | 228,044 | — | — | — | |||||||||||||||||||||||||||||||||||||
| Amortization of acquisition costs | 81,173 | 12,484 | 423 | — | — | — | 94,080 | |||||||||||||||||||||||||||||||||||||
| Commissions, premium taxes, and non-deferred acquisition costs | 83,547 | 54,908 | 4 | — | — | — | 138,459 | |||||||||||||||||||||||||||||||||||||
| Insurance administrative expense(1) | — | — | — | — | 75,459 | — | 75,459 | |||||||||||||||||||||||||||||||||||||
| Parent expense | — | — | — | — | 3,088 | 3,088 | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | 7,486 | — | 7,486 | |||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | 25,818 | — | 25,818 | |||||||||||||||||||||||||||||||||||||
| Total expenses | 485,603 | 236,768 | (2,181) | 229,859 | 111,851 | — | 1,061,900 | |||||||||||||||||||||||||||||||||||||
| Subtotal | 296,130 | 92,419 | 2,181 | 31,385 | (111,766) | — | 310,349 | |||||||||||||||||||||||||||||||||||||
| Non-operating items | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Measure of segment profitability (pretax) | $ | 296,130 | $ | 92,419 | $ | 2,181 | $ | 31,385 | $ | (111,766) | $ | — | 310,349 | |||||||||||||||||||||||||||||||
| Realized gains (losses) | (45,843) | |||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes per Condensed Consolidated Statements of Operations | $ | 264,506 |
(1)Administrative expense is not allocated to insurance segments.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Investment | Corporate & Other | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Premium | $ | 1,619,747 | $ | 692,662 | $ | — | $ | — | $ | — | $ | — | $ | 2,312,409 | ||||||||||||||||||||||||||||||
| Net investment income | — | — | — | 568,214 | — | — | 568,214 | |||||||||||||||||||||||||||||||||||||
| Other income | — | — | — | — | 150 | — | 150 | |||||||||||||||||||||||||||||||||||||
| Total revenue | 1,619,747 | 692,662 | — | 568,214 | 150 | — | 2,880,773 | |||||||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Policy obligations | 1,038,663 | 407,750 | 12,070 | 9,004 | — | — | 1,467,487 | |||||||||||||||||||||||||||||||||||||
| Required interest on reserves | (401,522) | (54,583) | (16,529) | 472,634 | — | — | — | |||||||||||||||||||||||||||||||||||||
| Required interest on DAC | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Amortization of acquisition costs | 173,683 | 26,922 | 788 | — | — | — | 201,393 | |||||||||||||||||||||||||||||||||||||
| Commissions, premium taxes, and non-deferred acquisition costs | 179,589 | 118,315 | 8 | — | — | — | 297,912 | |||||||||||||||||||||||||||||||||||||
| Insurance administrative expense(1) | — | — | — | — | 162,607 | 916 | (2) | 163,523 | ||||||||||||||||||||||||||||||||||||
| Parent expense | — | — | — | — | 5,956 | 3,486 | (2,3) | 9,442 | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | 19,357 | — | 19,357 | |||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | 60,025 | — | 60,025 | |||||||||||||||||||||||||||||||||||||
| Total expenses | 990,413 | 498,404 | (3,663) | 481,638 | 247,945 | 4,402 | 2,219,139 | |||||||||||||||||||||||||||||||||||||
| Subtotal | 629,334 | 194,258 | 3,663 | 86,576 | (247,795) | (4,402) | 661,634 | |||||||||||||||||||||||||||||||||||||
| Non-operating items | — | — | — | — | — | 4,402 | (2,3) | 4,402 | ||||||||||||||||||||||||||||||||||||
| Measure of segment profitability (pretax) | $ | 629,334 | $ | 194,258 | $ | 3,663 | $ | 86,576 | $ | (247,795) | $ | — | 666,036 | |||||||||||||||||||||||||||||||
| Realized gains (losses) | (24,388) | |||||||||||||||||||||||||||||||||||||||||||
| Legal costs and proceedings | (2,435) | |||||||||||||||||||||||||||||||||||||||||||
| Non-operating expenses | (1,967) | |||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes per Condensed Consolidated Statements of Operations | $ | 637,246 |
(1)Administrative expense is not allocated to insurance segments.
(2)Legal costs and proceedings.
(3)Non-operating expenses.
GL Q2 2024 FORM 10-Q
Globe Life Inc.
Notes to Condensed Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
| Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| Life | Health | Annuity | Investment | Corporate & Other | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||
| Premium | $ | 1,554,330 | $ | 651,680 | $ | — | $ | — | $ | — | $ | — | $ | 2,206,010 | ||||||||||||||||||||||||||||||
| Net investment income | — | — | — | 518,349 | — | — | 518,349 | |||||||||||||||||||||||||||||||||||||
| Other income | — | — | — | — | 135 | — | 135 | |||||||||||||||||||||||||||||||||||||
| Total revenue | 1,554,330 | 651,680 | — | 518,349 | 135 | — | 2,724,494 | |||||||||||||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Policy obligations | 1,020,641 | 386,886 | 14,648 | 3,262 | — | — | 1,425,437 | |||||||||||||||||||||||||||||||||||||
| Required interest on reserves | (381,602) | (52,871) | (19,974) | 454,447 | — | — | — | |||||||||||||||||||||||||||||||||||||
| Amortization of acquisition costs | 160,762 | 24,792 | 848 | — | — | — | 186,402 | |||||||||||||||||||||||||||||||||||||
| Commissions, premium taxes, and non-deferred acquisition costs | 167,125 | 109,122 | 9 | — | — | — | 276,256 | |||||||||||||||||||||||||||||||||||||
| Insurance administrative expense(1) | — | — | — | — | 149,366 | — | 149,366 | |||||||||||||||||||||||||||||||||||||
| Parent expense | — | — | — | — | 5,673 | — | 5,673 | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | 15,165 | — | 15,165 | |||||||||||||||||||||||||||||||||||||
| Interest expense | — | — | — | — | 50,685 | — | 50,685 | |||||||||||||||||||||||||||||||||||||
| Total expenses | 966,926 | 467,929 | (4,469) | 457,709 | 220,889 | — | 2,108,984 | |||||||||||||||||||||||||||||||||||||
| Subtotal | 587,404 | 183,751 | 4,469 | 60,640 | (220,754) | — | 615,510 | |||||||||||||||||||||||||||||||||||||
| Non-operating items | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Measure of segment profitability (pretax) | $ | 587,404 | $ | 183,751 | $ | 4,469 | $ | 60,640 | $ | (220,754) | $ | — | 615,510 | |||||||||||||||||||||||||||||||
| Realized gains (losses) | (76,770) | |||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes per Condensed Consolidated Statements of Operations | $ | 538,740 |
(1)Administrative expense is not allocated to insurance segments.
GL Q2 2024 FORM 10-Q
CAUTIONARY STATEMENTS
We caution readers regarding certain forward-looking statements contained in the foregoing discussion and elsewhere in this document, and in any other statements made by, or on behalf of Globe Life whether or not in future filings with the Securities and Exchange Commission. Any statement that is not a historical fact, or that might otherwise be considered an opinion or projection concerning the Company or its business, whether express or implied, is meant as and should be considered a forward-looking statement. Such statements represent management's opinions concerning future operations, strategies, financial results or other developments. We specifically disclaim any obligation to update or revise any forward-looking statement because of new information, future developments, or otherwise.
Forward-looking statements are based upon estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control, including uncertainties related to the impact of the recent pandemic and associated direct and indirect effects on our business operations, financial results, and financial condition. If these estimates or assumptions prove to be incorrect, the actual results of Globe Life may differ materially from the forward-looking statements made on the basis of such estimates or assumptions. 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 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 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 the competitiveness of the Company's products and pricing;
7.Litigation results or regulatory actions against the Company;
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 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, level of claims, 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.
GL Q2 2024 FORM 10-Q
GLOBE LIFE INC.
Management's Discussion & Analysis
Previous: Cover and table of contents · Next: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations