Globe Life Inc.

Hello and welcome to Globe Life Inc. Second Quarter Earnings Release Conference Call. My name is Jim and I will be your coordinator for today's event. Please note today's conference is being recorded and during our presentation, all participants will remain in a muted or listen-only mode to prevent any background noise. After today's prepared remarks, we will conduct a question and answer session and instructions on how to participate will be shared at that time. It is now my pleasure to hand over to your host, Stephen Mota, Thank you.

Good morning, everyone. Joining the call today are Frank Svoboda 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 2025-10-K and the 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 reconciliation to GAAP measures. I will now turn the call over to Frank.

Thank you, Stephen, and good morning, everyone. In the second quarter, net income was $288 million, or $3.65 per share. an increase of 20% over the $3.05 per share a year ago. Net operating income for the quarter was $285 million, or $3.61 per share, an increase of 10% over the $3.27 per share a year ago. We are pleased to see continued strong results in our operations. As we have said many times over the years, our business model is resilient and able to generate earnings growth Regardless of the economic environment, as clearly demonstrated by Globe Life having produced double-digit net operating income per share growth in eight of the last nine quarters. On a GAAP-reported basis, return on equity through June 30th is 18.4%, and book value per share is $70.18. Excluding accumulated other comprehensive income, or AOCI, return on equity is 14.3%, and book value per share as of June 30th is $100.04, up 11% from a year ago. Now in our insurance operations, total premium revenue in the second quarter grew 7% over the year-ago quarter. For the full year, we expect total premium revenue growth to be in the range of 6.5% to 7%. Life premium revenue for the second quarter increased 3% from the year-ago quarter to $861 million. Life underwriting margin was $359 million, up 6% from a year ago. For the year, we expect life premium revenue to grow between 2.5% and 3%. As a percent of premium, life underwriting margin was 42%, up from 41% in the year-ago quarter. while we anticipate life underwriting margin to be between 43 and 45% for the full year of 2026. We do expect it to be over 50% in the third quarter due to the anticipated impact of assumption updates and between 41 to 42% for the fourth quarter. Tom will discuss this more in his comments. In health insurance, premium revenue grew 16% to $437 million and health underwriting margin was up 1% to $99 million. For the year, we expect health premium revenue to grow in the range of 14 to 16%. This is due to premium rate increases on our Medicare supplement business, as well as strong sales in both our United American and Family Heritage divisions. As a percent of premium, health underwriting margin was approximately 23% in the second quarter down from 26% in the year-ago quarter. For the full year, we anticipate health underwriting margins to be between 23 and 27%. Administrative expenses were $91 million for the quarter, an increase of approximately 6% over the second quarter of 2025. As a percent of premium, administrative expenses were 7%. For the full year, we expect administrative expenses to be approximately 7.3% of premium, consistent with 2025. As we mentioned last quarter, over the long term, we anticipate that expanded implementation of AI applications across the company will help lower this ratio. We believe Globe Life is positively positioned to benefit from AI due to the high volume nature of our business, including the number of applications received and policies issued, Calls received by our customer service representatives and the number of plans reviewed and paid. Of course, these AI-driven improvements will not be limited to administrative expenses. We also expect enterprise-wide benefits, including those that will drive sales growth by helping our distribution operate more efficiently and effectively and those that improve our underwriting and other sales support process. I will now turn the call over to Matt for his comments on the second quarter