Globe Life Inc.

and welcome to the Globe Life, Inc. first quarter 2021 earnings release conference call. Today's conference is being recorded. This time, I would like to turn the conference over to Mike Majors, Executive Vice President, Administration and Investors Relations. Please go ahead, sir.

Thank you. Good morning, everyone. Joining the call today are Gary Coleman and Larry Hutchison, 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, 2020 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'll now turn the call over to Gary Coleman.

Thank you, Mike, and good morning, everyone. In the first quarter, net income was $179 million, or $1.70 per share, compared to $166 million, or $1.52 per share, a year ago. Net operating income for the quarter was $160 million, or $1.53 per share, a decrease of 12% per share from a year ago. On a GAAP reported basis, return on equity as of March 31st was 8.6%, and book value per share was $75.10. Excluding unrealized gains and fixed maturities, return on equity was 11.4%, and book value per share was up 9% to $54.36. In the life insurance operations, premium revenue increased 9% to $708 million. As we've noted before, we have seen improved persistency in premium collections since the onset of the pandemic. Life underwriting margin was $137 million, down 24% from a year ago. The decline in margin is due primarily to $38 million of COVID-related claims. For the year, We expect live premium revenue to grow around 7%, and underwriting margin to grow 4% to 6%. And at the midpoint of our 2021 guidance, we assumed approximately $50 million of COVID claims. In health insurance, premium revenue grew 5% to $294 million, and health underwriting margin was up 14% to $72 million. The increase in underwriting margin is primarily due to improved persistency and lower acquisition expense. For the year, we expect health premium revenue to grow 5% to 6%, and underwriting margin to grow 7% to 8%. Before continuing, I'm pleased to note that this is the first quarter in company history in which total premium revenue exceeded $1 billion. We appreciate the efforts of our agents and our employees in achieving this milestone. Continuing the first quarter results, administrative expenses were $66 million for the quarter, up 4% from a year ago. As a percentage of premium, administrative expenses were 6.6% compared to 6.8% a year ago. For the full year, we expect administrative expenses to grow 7% to 8%, and be around 6.7% of premium due primarily to higher pension costs, IT and information security costs, as well as a gradual increase in travel and facilities costs. I will now turn the call over to Larry for his comments on the first quarter of marketing operations.