Globe Life Inc.

Dan, welcome to the Globe Life Inc. Fourth Quarter 2020 Earnings Release Conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Majors, Executive Vice President, Administration and Investor Relations. Please go ahead, sir.

Thank you. Good morning, everyone. Joining the call today are Gary Coleman and Larry Hatchison, our co-chief executive officers, Frank Svoboda, our chief financial officer, and Brian Mitchell, our general counsel. Some of our comments or answers to your questions may contain forward-looking statements that are provided for general guidance purposes only. Accordingly, please refer to our earnings release, our 2019 10-K, and any subsequent forms 10-Q on file with the SEC. Some of our comments may also contain non-GAAP measures. Please see our earnings release and website for discussion of these terms and reconciliations to GAAP measures. I will now turn the call over to Gary Coleman.

Thank you, Mike, and good morning, everyone. I would like to open by saying that in this COVID environment, the company continues to conduct business effectively, and our operations are running efficiently. In the fourth quarter, net income was $204 million, or $1.93 per share, compared to $187 million, or $1.69 per share, a year ago. Net operating income for the quarter was $184 million, or $1.74 per share, a per share increase of 2% from a year ago. On a GAAP-reported basis, return on equity was 9.5%, and book value per share was $83.19. Excluding unrealized gains and losses on fixed securities, return on equity was 13.5%, and book value per share grew 10% to $53.12. In our life insurance operations, premium revenue increased 7% to $678 million. As noted before, we have seen improved persistency and premium collections since the onset of the crisis. Life underwriting margin was $164 million, down 8% from a year ago. The decline in margin is due primarily to approximately $27 million of COVID claims. In 2021, we expect both live premium revenue and underwriting margins to grow 6% to 7%. At the midpoint of our guidance, we anticipate approximately $52 million of COVID claims. Health insurance premium grew 5% to $290 million, and health underwriting margin was up 18% to $72 million. The increase in underwriting margin was primarily due to improved persistency and lower acquisition expenses. In 2021, we expect both health premium revenue and underwriting margin to grow around 6%. Administrative expenses were $63 million for the quarter, up 3% from a year ago. As a percentage of premium, administrative expenses were 6.5% compared to 6.7% a year ago. In 2021, we expect administrative expenses to grow 7% to 8% and be around 6.7% of premium due primarily to higher pension costs, higher IT and information security costs, and a gradual increase in travel and facilities costs. I will now turn the call over to Larry for his comments on the fourth quarter marketing operations.