What Globe Life (GL) Said on Its Q3 Earnings Call

Key Points

• Third-quarter performance was mixed: Net operating income rose 1% to $379 million, while total premium revenue increased 7%, led by 16% growth in health premiums. Globe Life lowered its 2026 earnings guidance to $15.35–$15.65 per share.
• Health operations faced temporary pressure from nearly $7 million in delayed Medicare Supplement claims and a nearly $16 million underwriting loss at Evry. Management expects pricing actions and claims normalization to support improved results, although Evry’s loss ratios should remain elevated through year-end.
• Globe Life continued returning capital to shareholders, repurchasing about 1.1 million shares for $185 million and paying $25 million in dividends during the quarter. The company returned approximately $630 million year to date and projects 2027 operating earnings of $16.10–$17.10 per share.

Globe Life NYSE: GL reported third-quarter net income of $361 million, or $4.62 per share, down 2% from $4.73 per share a year earlier. Net operating income rose 1% to $379 million, or $4.84 per share, compared with $4.81 per share in the prior-year quarter.

Co-Chief Executive Officer Frank Svoboda said quarterly results were affected by the company’s annual update of assumptions used to establish policy obligations. Globe Life recorded a remeasurement gain tied to those updates, reflecting favorable claims experience relative to its longer-term assumptions. The company said the assumption changes reduced life and health policy obligations by about $120 million, including a $96 million reduction in life obligations and a $24 million reduction in health obligations.

Total premium revenue increased 7% year over year during the quarter. Life premium revenue rose 2% to $865 million, while health premium revenue climbed 16% to $447 million. Globe Life expects full-year premium revenue growth of about 6.5%, with life premiums increasing 2.5% to 2.75% and health premiums increasing about 15%.

Health Results Pressured by Medicare Claims and Evry Losses

Health underwriting margin rose 7% to $116 million, but results at the United American General Agency division were affected by a Medicare Supplement claims-processing matter and losses at Evry, the company’s developing group health business.

United American’s health premiums increased 29% to $219 million, while its underwriting result moved to a $6 million loss from a $16 million profit a year earlier. Co-CEO Matt Darden said a processing delay at the Centers for Medicare & Medicaid Services resulted in nearly $7 million of excess Medicare Supplement claims paid during the quarter that related to prior periods.

Darden also said Evry recorded an underwriting loss of nearly $16 million, driven by an unusually high number of high-severity claims. Excluding the CMS-related claims and Evry’s results, United American would have generated a $16 million underwriting margin, or about 7% of premiums.

Management said the CMS issue was largely tied to Medicare reimbursement-rate corrections and reissued Medicare identification numbers that delayed processing of previously denied legitimate claims. The company expects those claims to normalize going forward, although the higher claims trend will be reflected in rate filings expected to take effect beginning in the second quarter of 2027, if approved.

Globe Life said it is taking pricing actions at Evry and expects the effects of high-severity claims to improve in the fourth quarter. However, it expects Evry loss ratios to remain above target for the balance of the year. Management said the business needs a larger base of groups and insured lives to reduce volatility. Evry had about 30 groups at the time of the call, with quarterly premiums of roughly $11 million; Globe Life expects annualized premiums of about $100 million and approximately 50 groups next year.

For 2027, management expects health underwriting margins to range from 20% to 24% of premiums. While that range incorporates potential variability from Evry, the company expects health underwriting-margin dollars to grow 7% to 9%, supported by sales growth and anticipated Medicare Supplement and Evry pricing actions.

Agency Sales Trends Differ Across Distribution Channels

American Income Life reported a 4% increase in life premiums to $470 million and a 3% increase in life underwriting margin to $268 million. Net life sales were flat at $97 million as increased agent productivity offset a 7% decline in the average producing-agent count from a year earlier.

Darden said compensation changes implemented at the beginning of the second quarter helped stabilize American Income’s agent count and improve productivity. The company plans further structural compensation changes intended to support sales, recruiting and retention. Globe Life expects American Income net life sales to grow at a mid- to high-single-digit rate in 2027.

At Liberty National, life premiums rose 4% to $102 million, while life underwriting margin fell 27% to $51 million, primarily because the annual assumption-update benefit declined from $35 million a year earlier to $14 million in the current quarter. Excluding that change, management said Liberty National’s life underwriting margin would have risen 5%. Net life sales increased 7%, aided by a 9% increase in average producing agents.

Family Heritage health premiums rose 8% to $129 million, health underwriting margin increased 12% to $57 million, and net health sales grew 5% to $35 million. Direct-to-consumer life sales, meanwhile, declined 12% to $24 million as the company navigated changes in digital advertising and AI-powered search behavior. Darden said inquiry rates improved during the second half of the quarter, supported by initiatives including AI-enabled advertising.

Investment Income, Capital Returns and Outlook

Excess investment income increased 3% to $38 million, as net investment income rose 3% to $296 million. During the quarter, Globe Life invested $833 million in fixed maturities at an average yield of 6.4%, an average rating of A and an average life of 35 years.

The company reported $22.3 billion of invested assets, including $19.6 billion of fixed maturities at amortized cost. Its fixed-maturity portfolio had a net unrealized loss position of $2.7 billion, which Svoboda said was primarily interest-rate driven and concentrated in bonds with maturities beyond 10 years. Globe Life said it has the intent and ability to hold investments to maturity.

Chief Financial Officer Tom Kalmbach said the company repurchased approximately 1.1 million shares for $185 million during the quarter, at an average price of $175.61 per share. Including $25 million in shareholder dividends, Globe Life returned about $210 million to shareholders in the quarter and about $630 million year to date.

For the full year, Globe Life now expects share repurchases of $725 million to $775 million and shareholder dividend payments of approximately $95 million. The company expects fourth-quarter repurchases of about $185 million.

Globe Life lowered its full-year 2026 net operating earnings guidance to $15.35 to $15.65 per diluted share, reflecting third-quarter results and revised fourth-quarter United American margin expectations. It expects normalized EPS growth, excluding assumption updates, of approximately 8% for 2026.

For 2027, the company projected net operating earnings of $16.10 to $17.10 per diluted share, representing 7% growth at the midpoint. It expects parent-company excess cash flow of $850 million to $950 million in 2027, including anticipated dividends from U.S. and Bermuda subsidiaries, some of which remain subject to regulatory approvals.

About Globe Life (NYSE:GL)

Globe Life Inc NYSE: GL is an insurance holding company that provides individual life and supplemental health insurance products through a network of wholly owned subsidiaries. Its offerings are designed primarily for middle-income households and include term and whole life insurance, mortgage protection coverage, accident and supplemental health insurance, Medicare supplement policies, and annuities.

The company markets its products through several distribution channels, including exclusive and independent agency networks, direct-to-consumer sales, and workplace or union-affiliated programs.

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