Globe Life boosts Q2 earnings, eyes AI shift for long-term growth

Globe Life reported higher second-quarter earnings Wednesday, driven by continued underwriting strength, growing Medicare supplement premiums and investment income.

Co-CEOs Frank Svoboda and J. Matthew Darden teased the expanded use of artificial intelligence to improve efficiency across the company and drive even more long-term growth.

“We believe Globe Life is positively positioned to benefit from AI due to the high-volume nature of our business, including the number of applications received and policies issued, calls received by our customer service representatives, and the number of plans reviewed and paid,” Svoboda said.

Executives returned several times to the potential of AI to scale up Globe Life business.

Administrative expenses increased 6% during the quarter but remained 7% of premium revenue. Over time, executives expect broader deployment of AI applications to reduce that ratio by automating high-volume processes across the organization.

The company said AI is expected to improve customer service operations, underwriting, claims processing and sales support while helping agents operate more efficiently.

Executives also said AI-driven improvements should extend beyond expense reductions by helping increase sales productivity and streamline underwriting operations.

Premium growth led by health insurance

Total premium revenue increased during the quarter, led by continued strength in Globe Life's health insurance business. Health premium revenue rose 16% to $437 million, fueled by Medicare supplement premium increases and strong sales at United American and Family Heritage.

The company expects health premium revenue to grow between 14% and 16% for the full year.

Health revenues benefited from “tailwinds from the high volume of people turning 65, movement of Medicare beneficiaries from Medicare Advantage to Medicare Supplement, and the rate increases implemented during the second quarter,” Darden explained.

Life insurance premium revenue increased 3% to $861 million, while life underwriting margin rose 6% to $359 million. Globe Life expects life premium growth of 2.5% to 3% for the year.

Executives also forecast a life underwriting margin exceeding 50% during the third quarter because of annual actuarial assumption updates before returning to more typical levels in the fourth quarter.

Distribution results mixed

Performance varied across Globe Life's distribution channels, Darden reported.

• American Income Life reported a 5% increase in life premiums, although life sales slipped 2% as agent counts declined from a year earlier. Recruiting and compensation changes implemented earlier this year are beginning to reverse that trend, Darden said, with producing agent counts increasing sequentially during the second quarter.
• Liberty National posted 6% growth in life sales and an 8% increase in producing agents. Net health sales were $7 million, down 15% from the year ago quarter, “as more emphasis has been placed on life business in recent periods,” Darden said.
• Family Heritage increased health sales by 4% and expanded its agent force by 7%. Health premiums increased 9% from the year-ago quarter to $120 million and the health underwriting margin increased 10%.
• United American remained one of the company's strongest growth drivers. Health premiums increased 29% to $211 million, while health sales climbed 10%.

The company's direct-to-consumer business faced headwinds as consumers increasingly rely on AI-powered search tools rather than traditional internet search, Darden said.

Executives said growing use of AI assistants has reduced paid search traffic that historically generated life insurance leads. As a result, the insurer is adapting its digital marketing strategy to make its online content more visible and accessible to AI-driven search platforms.

"This shift is similar in many ways to the initial move to digital marketing away from direct mail many years ago when consumers began to utilize the internet," Darden said. “I'm confident that DTC will successfully transition as we continue to meet the consumer where they want to be met.”

Despite weaker direct-to-consumer sales, Globe Life said it still expects the division to generate more than a million leads this year for its agency operations.

Quarterly Highlights

• Double-digit operating earnings per share growth in eight of the past nine quarters.
• Book value, excluding accumulated other comprehensive income, increased 11% from a year earlier to $100.04 per share, while return on equity stood at 14.3%.
• Net investment income increased 4% to $294 million as invested assets continued to grow.
• Although rising interest rates have produced $1.4 billion in unrealized investment losses, executives said those losses are primarily interest rate-driven and do not reflect credit deterioration.

By The Numbers

• Total Revenue: $1.6 billion ($1.48 billion in Q2 2025)
• Net Income: $287.7 million ($252.7 million in Q2 2025)
• Earnings Per Share: $3.65 per diluted share ($3.05 in Q2 2025)
• Share Repurchases: $175 million in Q2 2026
• Dividend Declared: $0.33 per share in Q2 2026
• Stock Price Movement: Shares declined more than 7% by the end of the day to $170.50

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.