Globe Life(GL) - 2024 Q2 - Quarterly Results

Globe Life Inc. Q2 2024 Results Q2 2024 Financial Highlights Globe Life Inc. reported strong Q2 2024 growth, with net income up 20% and net operating income rising 8%, alongside active share repurchases | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income per Diluted Share | $2.83 | $2.24 | +26% | | Net Operating Income per Diluted Share | $2.97 | $2.61 | +14% | - For the first six months of 2024, net income as a return on equity (ROE) was 20.8%, while net operating income as an ROE (excluding AOCI) was 14.5%[4] - The American Income Life Division saw a 16% increase in life net sales and a 13% growth in its average producing agent count year-over-year[4] - The Liberty National Division experienced an 11% increase in life net sales and a 16% growth in its average producing agent count year-over-year[4] - The company repurchased 3.8 million shares of its common stock during the second quarter[4] Results of Operations Globe Life's Q2 2024 net operating income rose 8% to $271.2 million, with net income reaching $258.4 million Q2 2024 vs Q2 2023 Operating Summary | Operating Summary | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | Q2 2024 (Per Share) | Q2 2023 (Per Share) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Insurance underwriting income | $340.4 | $315.4 | 8% | $3.72 | $3.28 | 13% | | Excess investment income | $42.8 | $31.4 | 36% | $0.47 | $0.33 | 42% | | Net operating income | $271.2 | $251.5 | 8% | $2.97 | $2.61 | 14% | | Net income | $258.4 | $215.3 | 20% | $2.83 | $2.24 | 26% | Book Value Per Share Comparison | Metric | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Book value per share | $58.06 | $41.44 | | Book value per share, excluding AOCI | $82.38 | $72.09 | Insurance Operations Insurance operations showed solid Q2 2024 growth, with total premium revenue up 5% to $1.17 billion Insurance Underwriting Performance Total insurance underwriting income increased 8% to $340.4 million in Q2 2024, driven by growth in life and health underwriting margins Insurance Premium Revenue by Product (Q2 2024) | Product | Q2 2024 Revenue (in millions) | Q2 2023 Revenue (in millions) | % Change | | :--- | :--- | :--- | :--- | | Life insurance | $815.5 | $781.7 | 4% | | Health insurance | $351.6 | $329.2 | 7% | | Total | $1,167.1 | $1,110.9 | 5% | Insurance Underwriting Income (Q2 2024) | Component | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Life Underwriting Margin | $320.3 | $296.1 | 8% | | Health Underwriting Margin | $100.5 | $92.4 | 9% | | Total Underwriting Margins | $422.6 | $390.7 | 8% | | Administrative expenses | ($82.2) | ($75.5) | 9% | | Insurance underwriting income | $340.4 | $315.4 | 8% | - The ratio of administrative expenses to premium increased slightly to 7.0% in Q2 2024 from 6.8% in the year-ago quarter[17] Life Insurance Results by Distribution Channel Total life insurance net sales grew 10% year-over-year, led by strong performance in American Income and Liberty National divisions Life Net Sales by Channel (Q2 2024 vs Q2 2023) | Distribution Channel | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | American Income | $94.7 | $81.9 | 16% | | Liberty National | $25.9 | $23.3 | 11% | | Direct to Consumer | $30.6 | $31.6 | -3% | | Total | $153.5 | $139.3 | 10% | Life Premium by Channel (Q2 2024 vs Q2 2023) | Distribution Channel | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | American Income | $423.5 | $394.6 | 7% | | Liberty National | $92.2 | $86.6 | 6% | | Direct to Consumer | $248.8 | $248.6 | 0% | | Total | $815.5 | $781.7 | 4% | Health Insurance Results by Distribution Channel Health insurance net sales increased 17% in Q2 2024, driven by a 41% surge in United American division sales and 7% growth in total premiums Health Net Sales by Channel (Q2 2024 vs Q2 2023) | Distribution Channel | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | United American | $18.2 | $12.9 | 41% | | American Income | $5.8 | $4.7 | 23% | | Family Heritage | $24.6 | $23.0 | 7% | | Total | $57.8 | $49.4 | 17% | Health Premium by Channel (Q2 2024 vs Q2 2023) | Distribution Channel | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | United American | $149.2 | $137.5 | 9% | | Family Heritage | $105.9 | $98.1 | 8% | | Total | $351.6 | $329.2 | 7% | Producing Exclusive Agent Count The company's exclusive agent force expanded in Q2 2024, with American Income and Liberty National divisions showing significant agent count growth Quarterly Average Producing Agent Count | Division | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | American Income | 11,869 | 10,488 | 13% | | Liberty National | 3,700 | 3,180 | 16% | | Family Heritage | 1,361 | 1,345 | 1% | Investment Performance The investment segment performed well in Q2 2024, with net investment income up 9% to $285.6 million and a conservative $19.7 billion portfolio Excess Investment Income (Q2 2024 vs Q2 2023) | Metric | Q2 2024 (in millions) | Q2 2023 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Net investment income | $285.6 | $261.2 | 9% | | Interest on policy liabilities | ($242.8) | ($229.9) | 6% | | Excess investment income | $42.8 | $31.4 | 36% | | Per share | $0.47 | $0.33 | 42% | - As of June 30, 2024, the total investment portfolio was valued at $19.7 billion, with fixed maturities comprising 89% of the total[33][34] - The fixed maturity portfolio is high quality, with 97% of assets rated as 'investment grade' at amortized cost[36] Fixed Maturity Acquisitions | Metric | Q2 2024 (in millions) | Q2 2023 (in millions) | | :--- | :--- | :--- | | Amount | $240.7 | $359.5 | | Average annual effective yield | 6.2% | 5.8% | | Average rating | A- | AA | Capital Management and Corporate Outlook Globe Life continues its capital return strategy with $314 million in share repurchases, maintaining strong liquidity and projecting full-year 2024 earnings guidance - During Q2 2024, the company repurchased 3.8 million shares of its common stock for a total of $314 million, at an average price of $81.87 per share[40] - The company's operations generate strong and stable cash flows, ensuring sufficient liquidity at the Parent Company level to meet capital needs[41] - Globe Life projects its full-year 2024 net operating income to be between $11.80 and $12.10 per diluted common share[42] Appendix: GAAP Financial Statements The GAAP Condensed Consolidated Statement of Operations for Q2 2024 shows total revenues of $1.44 billion and net income of $258.4 million GAAP Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Total premium | $1,167.1 | $1,110.9 | | Net investment income | $285.6 | $261.2 | | Total revenue | $1,440.2 | $1,326.4 | | Total benefits and expenses | $1,117.9 | $1,061.9 | | Income before income taxes | $322.3 | $264.5 | | Net income | $258.4 | $215.3 | | Diluted net income per common share | $2.83 | $2.24 |