Globe Life NYSE: GL reported higher second-quarter earnings and raised its full-year outlook, with executives pointing to favorable life underwriting trends, growth in health premiums and stronger excess investment income, while also addressing changes in online advertising and agent recruiting.
Frank Svoboda, Globe Life’s co-chairman and CEO, said net income for the quarter was $288 million, or $3.65 per share, up 20% from $3.05 per share a year earlier. Net operating income was $285 million, or $3.61 per share, up 10% from $3.27 per share in the prior-year quarter.
“We are pleased to see continued strong results in our operations,” Svoboda said, adding that the company has generated double-digit net operating income per share growth in eight of the last nine quarters. On a GAAP basis, return on equity through June 30 was 18.4%, while book value per share was $70.18. Excluding accumulated other comprehensive income, return on equity was 14.3% and book value per share was $100.04, up 11% from a year earlier.
Premium Growth Led by Health Insurance
Total premium revenue rose 7% in the second quarter, and Svoboda said the company expects full-year total premium growth of 6.5% to 7%.
Life premium revenue increased 3% to $861 million, while life underwriting margin rose 6% to $359 million. The life underwriting margin as a percentage of premium was 42%, up from 41% a year earlier. Globe Life expects full-year life premium revenue growth of 2.5% to 3%.
Health insurance premium revenue increased 16% to $437 million, driven by Medicare Supplement rate increases and sales growth in the United American and Family Heritage divisions. Health underwriting margin rose 1% to $99 million, though the margin as a percentage of premium fell to about 23% from 26% a year earlier. Management expects full-year health premium growth of 14% to 16% and health underwriting margins of 23% to 27%.
Tom Kalmbach, executive vice president and chief financial officer, said life policy obligations as a percentage of premium improved to 34.3% from 36.7% a year earlier, reflecting favorable mortality trends. Health obligations rose to 56.8% from 53.3%, which he said was higher than management’s estimates due to several factors, including Medicare Supplement claims related to prior periods, an industry-wide CMS physician reimbursement rate correction, higher loss ratios at Evry Health and an adverse fluctuation in cancer claims at Liberty National.
Distribution Results Mixed Across Divisions
Matt Darden, co-CEO, said American Income Life premiums rose 5% to $466 million, while life underwriting margin increased 4% to $214 million. Net life sales fell 2% to $95 million, primarily because of a lower agent count. The average producing agent count was 11,391, down 7% from a year earlier but up 3% from the end of the first quarter.
Darden said compensation changes implemented at the start of the second quarter were intended to improve agent recruiting and new-agent retention, and he expects mid-single-digit growth in both agent count and life sales at American Income during the second half of the year.
At Liberty National, life premiums rose 3% to $101 million, and life underwriting margin increased 10% to $37 million. Net life sales rose 6% to $26 million, while net health sales fell 15% to $7 million as the division emphasized life business. Darden said the company is changing its sales presentation to place more emphasis on health sales.
Family Heritage health premiums increased 9% to $126 million, and health underwriting margin rose 10% to $45 million. Net health sales increased 4% to $31 million, supported by a 7% increase in average producing agent count.
United American health premiums rose 29% to $211 million, while health underwriting margin was $11 million, down $1 million from a year earlier. Net health sales increased 10% to $28 million. Darden said Medicare Supplement sales remained strong, supported by more people turning 65, movement from Medicare Advantage to Medicare Supplement and rate increases implemented during the quarter. He noted that Globe Life does not market Medicare Advantage plans.
Direct-to-Consumer Faces AI-Driven Advertising Shift
Globe Life’s direct-to-consumer division reported life premiums down about 1% to $244 million, while life underwriting margin rose 10% to $76 million. Net life sales fell 15% to $27 million.
Darden said the direct-to-consumer business is in a transition period as consumers increasingly use AI tools to search online for goods and services, including life insurance. That change has reduced paid search volume from internet marketing and raised the cost of paid search.
“We’re going to be disciplined on our spend and make sure that we maintain our margin, and we’re not just going to chase sales that don’t meet our profitability targets,” Darden said during the question-and-answer session.
He said Globe Life is working to make its digital content more visible and easier for AI assistants to interpret, while also using platforms such as Instagram and Facebook. He compared the shift to the earlier transition from direct mail to digital marketing. The company still expects to generate more than 1 million leads this year to support its agencies.
Guidance Raised as Buybacks Increase
Kalmbach said Globe Life now expects 2026 net operating earnings per diluted share of $15.55 to $15.95, representing 8.5% growth at the midpoint. He said the increase from prior guidance was primarily due to improved life underwriting margins and excess investment income, partly offset by higher financing costs and the reduced impact of share repurchases due to a higher share price.
The outlook includes expected remeasurement gains from third-quarter life and health assumption updates of $110 million to $130 million. Kalmbach said the life assumption update is expected to contribute $90 million to $100 million, while the health assumption update is expected to contribute $20 million to $30 million.
During the second quarter, Globe Life repurchased about 1.1 million shares for $175 million at an average price of $154.28. Including $25 million in dividends, the company returned about $200 million to shareholders in the quarter.
Kalmbach said the company expects full-year dividends of about $95 million and share repurchases of $670 million to $700 million, a $100 million increase at the midpoint from the prior call. He corrected an earlier statement during the Q&A, saying the company expects to return approximately $350 million to $370 million to shareholders over the remainder of the year.
Investment Income and Bermuda Entity in Focus
Excess investment income rose 10% to $38 million. Net investment income increased 4% to $294 million, while average invested assets grew 2%. Svoboda said Globe Life invested $399 million in fixed maturities during the quarter at an average yield of 6.27%, with an average rating of A and an average life of 36 years. The company also invested about $91 million in commercial mortgage loans and other long-term investments with debt-like characteristics.
Svoboda said invested assets totaled $22.1 billion, including $19.3 billion of fixed maturities at amortized cost. The fixed maturity portfolio had a net unrealized loss position of $1.4 billion, which he said was mostly interest-rate driven and related entirely to bonds with maturities beyond 10 years.
Kalmbach also provided an update on Globe Life Re, the company’s Bermuda reinsurance affiliate. He said Nebraska approved reciprocal jurisdiction for Globe Life Re in the second quarter, and the company is seeking similar approval from Indiana, American Income’s state of domicile. Globe Life expects to complete a new reinsurance cession in the third quarter, reinsuring a portion of new business and in-force policies to Globe Life Re.
Kalmbach said the company does not expect a capital benefit from the next reinsurance transaction in 2026, but expects some benefit in 2027, with the full impact emerging over three to five years.
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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