Globe Life Q1 Earnings Call Highlights

Key Points

• Globe Life reported Q1 net operating income of $274 million (or $3.43 per share), up 12% year-over-year, and updated full-year 2026 net operating EPS guidance to $15.40–$15.90, citing anticipated share repurchases, assumption updates and higher investment income.
• Management accelerated buybacks—repurchasing about 1.4 million shares for $205 million in Q1—and raised full-year repurchase expectations to $560–$610 million, funded by excess cash flow now expected at $650–$700 million, alongside a 22% increase in the dividend rate.
• Health sales momentum was strong with Q1 health net sales up 58% and health premium revenue rising 13% to $417 million; Globe Life expects health premium growth of 14–17% in 2026, helped by Medicare Supplement rate increases (~$65 million).

Globe Life NYSE: GL reported higher first-quarter earnings and updated its 2026 outlook, as management pointed to continued underwriting profitability, strong health sales momentum, and an accelerated share repurchase pace driven by excess cash flow and what executives described as favorable market conditions.

First-quarter earnings and underwriting results

Co-Chairman and Co-CEO Frank M. Svoboda said first-quarter net income was $271 million, or $3.39 per share, compared with $255 million, or $3.01 per share, a year earlier. Net operating income was $274 million, or $3.43 per share, up 12% from $3.07 per share in the prior-year quarter.

Svoboda said Globe Life’s GAAP return on equity through March 31 was 17.9%, with book value per share at $77.03. Excluding accumulated other comprehensive income (AOCI), he reported return on equity of 14% and book value per share of $98.56, up 12% from a year earlier.

In the insurance operations, Svoboda said total premium revenue grew 6% year over year in the quarter, and the company expects total premium revenue growth of approximately 7% for the full year.

• Life insurance: Premium revenue increased 3% to $853 million. Life underwriting margin rose 3% to $349 million, and the margin remained 41% of premium. Svoboda said the company expects life premium revenue growth of 3% to 3.5% for the year.
• Health insurance: Premium revenue increased 13% to $417 million, and health underwriting margin increased 12% to $95 million. The health underwriting margin was about 23% of premium, consistent with the year-ago quarter. Svoboda said the company expects health premium growth of 14% to 17% for the full year, citing Medicare Supplement rate increases and strong sales at United American and Family Heritage.

Administrative expenses were $94 million, up about 8% from the first quarter of 2025 and 7.4% of premium. Svoboda said Globe Life expects administrative expenses to be about 7.3% of premium for the year and believes broader AI implementation could lower that ratio over time due to the “high volume nature” of the company’s processes. Later on the call, J. Matthew Darden, Co-Chairman and Co-CEO, said management expects AI-enabled tools to help moderate expense growth relative to premium growth over time. CFO Thomas P. Kalmbach added that the company is “looking at” bringing the admin expense ratio “down closer to 7% over the next few years.”

Sales trends across distribution channels

Darden said first-quarter total life net sales grew 6% and total health net sales grew 58%, adding that each division has posted growth in net life sales for the last two quarters.

Within exclusive agencies, Darden highlighted mixed agent count trends at American Income Life alongside productivity gains:

• American Income Life: Life premiums rose 5% to $459 million, and life underwriting margin increased 7% to $209 million. Net life sales were $101 million, up 3%, which Darden attributed to improved productivity. Average producing agent count was 11,064, down 4% year over year, which he attributed primarily to lower new-agent retention. Darden said the company implemented compensation adjustments for middle management at the start of the second quarter to emphasize recruiting and retention, with an expected positive impact on agent count in the second half of the year.
• Liberty National: Life premiums rose 4% to $100 million, and life underwriting margin increased 11% to $35 million. Net life sales were $25 million, up 13%, driven primarily by agent count growth. Net health sales were $7 million, down 3% as the agency emphasized life sales. Average producing agent count was 4,031, up 9%.
• Family Heritage: Health premiums rose 10% to $123 million, with health underwriting margin up 11% to $44 million. Net health sales increased 22% to $33 million. Average producing agent count was 1,561, up 10%.

In the direct-to-consumer division, Darden said life premiums declined about 1% to $244 million, while life underwriting margin increased 15% to $74 million. Net life sales rose 8% to $27 million. Darden said the company has improved conversion on leads shared with agencies, supporting margin improvement and enabling more advertising investment. He said Globe Life expects leads generated for the three exclusive agencies in 2026 to rise 5% to 10%.

At United American General Agency, Darden said health premiums increased 22% to $194 million, while health underwriting margin was $5 million, up about $4 million year over year. Net health sales were $62 million, up about $34 million, driven by Medicare Supplement and worksite sales. Darden noted that Globe Life does not market Medicare Advantage plans.

For 2026, Darden outlined expectations for average producing agent count and sales growth by channel, including low double-digit agent count growth at American Income, Liberty National, and Family Heritage, and health sales growth of “high teens” at United American.

Investments: yields, credit quality, and unrealized losses

Svoboda said excess investment income—defined as net investment income less required interest—was $37 million, up about $1 million from the year-ago quarter. Net investment income rose 3% to $290 million, and average invested assets grew 2%.

During the quarter, Globe Life invested $419 million in fixed maturities at an average yield of 6.23%, average rating A, and average life of 42 years. It also invested about $147 million in commercial mortgage loans and other long-term investments with debt-like characteristics. Svoboda said the earned yield on total long-term invested assets was 5.5% in the first quarter, and the company expects 5.45% to 5.5% for the full year (with the fixed maturity portfolio earned yield expected to be around 5.3% for 2026).

Svoboda said invested assets totaled $22 billion, including $19.1 billion of fixed maturities at amortized cost. He said the fixed maturity portfolio had a net unrealized loss of $1.6 billion due to market rates exceeding book yields, adding that the company is “not concerned” given its intent and ability to hold to maturity.

Svoboda noted that BBB-rated securities comprised 41% of the fixed maturity portfolio, down from 45% a year earlier, and described the level as the lowest since 2003. Below-investment-grade bonds were $511 million, or 2.7% of fixed maturities, consistent with year-end 2025.

Capital, buybacks, and 2026 guidance update

Kalmbach said the parent company ended the quarter with about $85 million of liquid assets and expects to end the year within its target range of $50 million to $60 million.

Globe Life repurchased approximately 1.4 million shares in the quarter for $205 million at an average price of $141.24. Including about $20 million of dividends, Kalmbach said the company returned roughly $225 million to shareholders in the quarter. Svoboda said the company “accelerate[d]” repurchases after shares fell below $140 during part of the quarter, which he described as an attractive opportunity.

Kalmbach said the company increased its full-year share repurchase expectation to $560 million to $610 million and expects about $90 million of dividends in 2026, reflecting a 22% increase in the annual dividend rate per share. In response to an analyst question, Kalmbach said higher buyback expectations were supported by finalizing 2025 statutory earnings and excess cash flows that came in “a little bit higher,” and later narrowed excess cash flow expectations for 2026 to $650 million to $700 million.

On capital, Kalmbach said Globe Life targets a consolidated company action level RBC ratio of 300% to 320%. As of year-end 2025, he said consolidated RBC ratios of U.S. subsidiaries were 316%, providing about $95 million of excess capital above the 300% minimum target.

Kalmbach also updated full-year 2026 net operating EPS guidance to $15.40 to $15.90, representing 8% growth at the midpoint. He attributed the increase primarily to the impact and timing of anticipated share repurchases, refined estimates related to expected third-quarter life assumption updates, and higher full-year investment income estimates. The guidance includes an estimated before-tax benefit of $70 million to $110 million from assumption updates expected in the third quarter, and Kalmbach said the company anticipates third-quarter life margin of 49% to 54% of premium due to the update.

For health, Kalmbach reiterated the expectation for 2026 health premium growth of 14% to 17%, including about $65 million of additional premium in 2026 from approved Medicare Supplement rate increases (primarily in the last three quarters). He also said United American’s health margin as a percentage of premium is expected to be 8% to 9% for the full year, with the average margin expected to be about 10% over the last three quarters as rate increases take effect.

Key Q&A themes: lapses, assumption updates, Medicare Supplement, and Bermuda

During the Q&A, management discussed several operating and macro topics raised by analysts:

• Lapse rates: Kalmbach said the company expects lapse rates to remain elevated in 2026 compared to pre-pandemic levels, citing economic stress and inflation. Regarding American Income Life’s higher first-quarter lapse rate, he said management views it as “more of a fluctuation at this point.”
• Assumption updates and mortality: Kalmbach said the company takes a disciplined approach and needs to see results “emerge” before updating long-term assumptions. He said mortality claims are the primary driver of life remeasurement gains, estimating about “70% mortality and 30% all other.” Kalmbach also cited favorable trends in heart and circulatory deaths and in non-lung cancer deaths, and said non-medical deaths (including suicide, homicide, and drug and alcohol abuse) appear to be improving.
• Medicare Supplement dynamics and margins: Responding to a question about adverse selection from beneficiaries moving from Medicare Advantage to Medicare Supplement, Kalmbach said he did not view adverse selection as a driver of first-quarter margin pressure, pointing instead to first-quarter seasonality and the timing of rate increases that are expected to benefit later quarters. Darden added that higher utilization has been seen “across the entire industry.”
• Bermuda initiative: Kalmbach said there were “no other developments” since the prior call, noting the company was working to complete audits and financial statements. Darden said management expects to provide a more significant update on the next call.

About Globe Life NYSE: GL

Globe Life, traded on the NYSE under the symbol GL, is a U.S.-based insurance holding company that underwrites and distributes a range of life and supplemental health insurance products. Through its subsidiary brands—Globe Life, American Income Life, Liberty National Life, United American Insurance Company and Family Heritage Life—it offers term life, whole life, fixed annuities and supplemental health coverage designed to meet the needs of individuals and families across various socioeconomic segments.

The company's product suite includes low-cost, easy-to-understand life insurance policies, accidental death and dismemberment coverage, hospital indemnity plans and specified disease insurance.

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