Globe Life execs tout agent recruiting, investment income in solid Q2

Investment income gains and strong agent recruiting helped Globe Life post solid second quarter revenues.

One of the first insurers to post Q2 numbers, Globe Life executives held a conference call with Wall Street analysts Thursday. Based in McKinney, Texas, the insurer reported revenue of $1.37 billion, up 3.7% over the same period last year. That translated to a profit of $215.3 million. Earnings per share came in at $2.61, compared to $2.07 in the year-ago quarter.

Formerly Torchmark Corp., Globe Life subsidiaries include Liberty National, American Income, Family Heritage and United American life insurance companies. They sell whole, term and children's life insurance, and accidental benefits, mortgage protection and Medicare Supplement coverage.

They have a combined $220 billion of coverage in force, the company said.

Life insurance accounted for 76% of the company's insurance underwriting margin for the quarter and 70% of total premium revenue, Globe Life said in a news release. Health insurance accounted for 24% of the company's insurance underwriting margin for the quarter and 30% of total premium revenue.

Net sales of life insurance were flat for the quarter, but net health sales increased 12%.

Second-quarter highlights for Globe Life include:

1. Net income as a return on equity was 22.4% for the first half of the year. Net operating income as a return on equity, excluding accumulated other comprehensive income, was 14.6% for the same period.

2. At the Liberty National Division, life net sales and health net sales increased over the year-ago quarter by 21% and 18%, respectively. Additionally, life premiums increased 7% and the average producing agent count increased 17% over the year-ago quarter.

3. At the Family Heritage Division, health net sales increased 19% and premiums increased 8% over the year-ago quarter. Additionally, the average producing agent count increased 15% over the year-ago quarter.

4. The combined average agent count for the three exclusive agencies surpassed 15,000 for the first time.

Soaring agent count

The industry wide resistance to returning to the office is benefiting Globe Life companies as it fights to attract agents in a tough labor market, said Matt

"Our opportunity is a flexible opportunity," said Matt Darden, co-CEO with Frank Svoboda. "It's much more entrepreneurial in nature, and we seem to be attracting additional individuals that are looking for that ability to manage their own schedule, and having an opportunistic approach to grow their income in an entrepreneurial manner."

On a year-over-year basis, Globe Life's "producing agent count" rose 17% at Liberty National, 15% at Family Heritage and 8% at American Income. Globe Life focused on initiatives that would grow agent numbers, Darden said, such as increasing middle management numbers and giving agents more tools.

"We're able to recruit in all markets because we're really recruiting to a better opportunity, and there's still plenty of folks out there looking for better opportunities," Svoboda added.

Globe Life is still seeing some "slightly elevated" mortality, executives said, but it is steadily improving. Heart, circulatory and some cancers are showing lower mortality than in 2021 and 2022, and COVID-19 deaths continue to decline.

Investment gains

Insurers make much of their profit from investments and rising interest rates are helping in this area. Analysts expect insurance companies to post better second-quarter results than other industry sectors.

While the Federal Reserve paused interest rate hikes in June after 15 months of increases, the Fed met Wednesday and increased rates again. Its federal funds target rate range is now at a 22-year high of 5.25%-5.50%.

Globe Life net investment income grew 7% on a year-over-year basis, the release said.

"We just saw very, very good growth in our net investment income and the income grew at a faster pace than the investment assets," Svoboda said.

Senior Editor John Hilton 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.

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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.