Globe Life touts underwriting, Bermuda efforts, mortality gains in Q2

Although Globe Life executives acknowledged that the insurer remains the target of several investigations, little else went wrong in strong second quarter.

The McKinney, Texas-based company reported solid underwriting improvement, a return to better-then-pre-pandemic mortality rates and across-the-board agent recruiting gains.

Insurance underwriting income grew 15% in the quarter that ended June 30. As a result, co-CEO Frank Svoboda said the insurer expects life premium revenue to grow around 3.5% and health premium revenue to grow “in the range of eight to nine percent.”

Mortality rates were surprisingly good during the quarter, said Tom Kalmbach, chief financial officer. In fact, even slightly better than prepandemic levels, he said. Globe Life is updating its life and health assumptions during the third quarter and improved mortality will be reflected, he said.

“Our guidance anticipates a total remeasurement gain in the third quarter related to both life and health assumption updates to be in the range of $110 million to $160 million,” Kalmbach said. “Recent mortality experience is favorable to prepandemic levels overall and to the extent this continues, we would expect continued quarterly remeasuring gains, even after updated long term assumptions.”

Formerly Torchmark Corp., Globe Life subsidiaries include Liberty National, American Income, Family Heritage and United American life insurance companies.

As he does every quarter, co-CEO Matthew Darden gave an update on the agent count, which grew by 5% at Liberty National and 10% at Family Heritage.

“While we frequently see short-term fluctuations, there is a very close correlation between sales and agent count over the long term,” Darden said.

It will take some time for those new agents to produce results, however, and Globe Life made a slight reduction its guidance for future life sales to “mid-single-digit growth,” Darden said.

“Sometimes in the near term our more experienced agents are spending their time training and onboarding new agents,” Darden explained. “So, the revision of the guidance is just really reflective of what actually happened in Q2 and recognizing that that increase in sales from the increase in agent account may be delayed a little bit more toward the latter half of this year.”

In Other News:

Multiple investigations. Globe Life is facing widespread allegations of illegal sales practices, sexual harassment, insurance fraud, including writing policies for dead and fictitious people, and an alleged kickback scheme that netted millions for senior executives.

The insurer is being investigated by the Department of Justice and the Securities and Exchange Commission. Globe Life also suffered a 2024 data breach that the insurer initially misreported how many people were affected.

There has been no activity from either the DOJ or the SEC since the beginning of the year, Darden said. “We’re still active in trying to bring that to fruition and resolution, and we’d like to be able to communicate that. But as I’ve mentioned before, these are informal processes, and so being able to bring that to a conclusion that we can discuss publicly is definitely our goal.”

Bermuda project. Like many other U.S. life insurers, Globe Life executives are eager to take advantage of offshore reinsurance. Efforts to set up a Bermuda reinsurer are progressing, Kalbach said, with the initial benefits to be seen in 2027.

An updated business plan, along with a formal licensing application, will be submitted in the third quarter, Kalmbach said. Globe Life expects to conduct its first reinsurance transaction by the end of the year, he added.

“This initial reinsurance transaction is currently intended to reinsure a relatively small block of life reserves to get the company up and running,” Kalmbach explained. “However, we anticipate that over time, approximately one-quarter of total statutory life reserves may be ceded to our Bermuda subsidiary.”

Quarterly Snapshot:

• Net income per share increased 8% and net operating income per share increased 10% over the year-ago quarter.
• At the American Income Life and Liberty National divisions, life premiums increased 5% over the year-ago quarter.
• At the Family Heritage division, health net sales increased 20% and health premiums increased 9% over the year-ago quarter.
• In the direct-to-consumer division, life net sales increased 2% over the year-ago quarter and 24% over the first quarter of 2025. Life underwriting margin grew 8% over the year-ago quarter to $69 million.
• Life underwriting margin increased 6% over the year-ago quarter.

Management Perspective:

“While there are clearly uncertainties as to where the U.S. economy is headed, we are well positioned to withstand a significant economic downturn due to the long duration of our fixed policy liabilities. … A critical and foundational part of our investment philosophy is to invest in entities that can survive through multiple economic cycles.”

Co-CEO Frank Svoboda

By The Numbers:

• Total Revenue: $1.48 billion ($1.44 billion in Q2 2024)
• Net Income: $252.7 million ($258.4 million in Q2 2024)
• Earnings Per Share: Diluted net income per share was $3.05 ($2.83 in Q2 2024)
• Share Repurchases: $226 million in Q2 2025
• Stock Price Movement: Stock up 5.9% Thursday afternoon to $131.12.

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