Fitch monitoring Globe Life following short seller’s allegations

Fitch Ratings continues to monitor the impact to Globe Life’s (GL) financial and operational performance following last week’s short seller report that included allegations of insurance fraud and misconduct that led to a material decline in the company’s share price. GL has issued a statement refuting the report’s allegations. The allegations have not been independently verified. Media reports have also suggested that GL is the subject of a Department of Justice probe into related allegations of misconduct.

Fitch rates GL’s Insurer Financial Strength (IFS) rating ‘A+’ and Long-Term Issuer Default Rating (IDR) ‘A-’. The ratings are not impacted by the recent developments at this time. Fitch recognizes that the short seller has its own particular agenda. However, Fitch’s view may change as the impact of the allegations develops, particularly any negative impacts to GL’s current business strategy or performance.

Fitch will continue to assess the extent of the financial and/or reputational effects of these allegations, as well as any possible regulatory investigations. Additionally, Fitch will continue to monitor trends in policy surrenders, sales, recruiting, litigation activity and other indicators of financial performance, business profile, and corporate governance. Any effects from the allegations will be considered in Fitch’s rating process.

Fitch affirmed GL’s ratings as well as its rated operating subsidiaries on Oct. 5, 2023. The Rating Outlook is Positive, reflecting improvement in the company's Prism score year-over-year and profitability levels that exceed similarly rated peers and rating expectations. The ratings are supported by the company’s low risk liability profile, a long record of very strong financial performance, and a consistent capital position.