Globe Life Inc.

Hello, and welcome to the Globe Life fourth quarter 2022 earnings call. My name is George. I'll be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be listed in only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star 0. and you will be connected to an operator. And I'd like to hand the call over to your host today, Mr. Stephen Moda, Investor Relations Director. Please go ahead, sir.

Thank you. Good morning, everyone. Joining the call today are Frank Sabota and Matt Darden, our Co-Chief Executive Officers, Tom Kalmbach, our Chief Financial Officer, Mike Majors, our Chief Strategy 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, 2021 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 Frank.

Thank you, Stephen, and good morning, everyone. Before getting started, I want to let you know that due to the ice storms in the DFW area, we are doing this call from multiple locations. So if there are any issues with connections, please bear with us. Then Matt and I would like to quickly take this opportunity to thank Gary Coleman and Larry Hutchinson once again and acknowledge their accomplishments as GlobeLife's co-CEOs over the last 10 years, including 2022, another good year for GlobeLife. Now to the results of the quarter. In the fourth quarter, net income was $212 million, or $2.14 per share, compared to $178 million, or $1.76 per share, a year ago. Net operating income for the quarter was $221 million, or $2.24 per share, an increase of 32% from a year ago. On a GAAP reported basis, Return on equity was 12.3% and book value per share was $49.65. Excluding unrealized losses on fixed maturities, return on equity for the full year was 13.4% and book value per share as of December 31st was $64.01, up 9% from a year ago. It is encouraging that our return on equity excluding unrealized gains and losses for the fourth quarter was 14.3%, reflecting the lessening impact of excess life claims on our operations. In the life insurance operations, premium revenue for the fourth quarter increased 3% from the year-ago quarter to $754 million. With the full year 2022, premium income grew 4%. Growth in premium income was challenged due to the lower sales growth we've seen this year primarily in our direct-to-consumer channel, in addition to the impact of foreign exchange rates on our Canadian premiums at American income. In 2023, we expect life premium to grow around 4%. Life underwriting margin was $212 million, up 45% from a year ago. The increase in margin is due primarily to improved claim experience. With respect to anticipated underwriting income, As we've talked about on prior calls, underwriting margin will be calculated differently under the new LDTI accounting rules and is expected to be substantially higher due to the changes required by the new accounting standards. Tom will discuss the expected impact of LDTI in his comments. In health insurance, premium grew 4% to $324 million and health underwriting margin was up 1% to $82 million. For the full year 2022, premium grew 6%. In 2023, we expect health premium revenue to grow around 3%, lower than 2022 due to lower premium growth in our United American General Agency operations. Administrative expenses were $78 million for the quarter, up 12% from a year ago. As a percentage of premium, administrative expenses were 7.2%, compared to 6.7% a year ago. For the year, administrative expenses were 7% of premium, compared to 6.6% a year ago. 2023, we expect administrative expenses to be up approximately 3% and be around 6.9% of premium, due primarily to higher IT and information security costs. Higher labor costs are expected to be offset by a decline in pension-related employee benefit costs. I will now turn the call over to Matt for his comments on the fourth quarter marketing operations.