GLOBE LIFE INC

The results for each of the years presented above are impacted, as previously noted, by the reserve development and assumption changes in the third quarter of 2023, 2022, and 2021. The life insurance segment is our primary segment and is the largest contributor to earnings in each year presented. In 2023, the life insurance segment underwriting margin increased $63 million compared with 2022, primarily a result of increased premiums, favorable policy obligations as a percent of premium, and a lower remeasurement loss in 2023 resulting from the assumption updates. In 2022, the life insurance segment underwriting margin decreased $32 million when compared with 2021, which was a result of a higher remeasurement loss resulting from assumption updates in 2022 than in 2021, offset by increased premiums.

In 2023, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was the American Income Life Division. The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the year ended December 31, 2023.

Total premium income rose 3% for the year ended December 31, 2023 to $4.46 billion. Total net sales increased 6% to $768 million, when compared with 2022. Total first-year collected premium (defined in the following section) increased 5% to $605 million for 2023 compared to $577 million in 2022.

Life insurance premium income increased 4% to $3.14 billion over the prior-year total of $3.03 billion. Life net sales rose 3% to $544 million for the year ended 2023. First-year collected life premium increased 3% to $420 million. Life underwriting margin, as a percent of premium, increased to 38% in 2023 from 37%. Underwriting margin increased to $1.19 billion in 2023, compared to $1.13 billion for the same period in 2022.

Health insurance premium income increased 3% to $1.32 billion over the prior-year total of $1.28 billion. Health net sales rose 17% to $224 million for the year ended 2023. First-year collected health premium rose 10% to $185 million. Health underwriting margin, as a percent of premium, was 29% in 2023 and 2022. Health underwriting margin decreased slightly to $378 million for the year ended 2023, compared to the same period in 2022.

Excess investment income, the measure of profitability of our investment segment, increased 25% during the year ended 2023 to $130.4 million from $104.6 million in the same period in 2022. Excess investment income per common share, reflecting the impact of our share repurchase program and increased net investment income, increased 27% to $1.35 from $1.06 when compared with the same period in 2022.

Insurance administrative expenses increased 1% in 2023 when compared with the prior-year period. These expenses were 6.8% as a percent of premium during 2023 compared to 6.9% in 2022.

For the year ended December 31, 2023, the Company repurchased 3.4 million Globe Life Inc. shares at a total cost of $380 million for an average share price of $112.84.

The discussions of our segments are presented in the manner we view our operations, as described in Note 15—Business Segments.

We use three measures as indicators of premium growth and sales over the near term: “annualized premium in force,” “net sales,” and “first-year collected premium.”

•Annualized premium in force is defined as the premium income that would be received over the following twelve months at any given date on all active policies if those policies remain in force throughout the twelve-month period.

•Net sales are calculated as annualized premium issued, net of cancellations in the first thirty days after issue, except in the case of Direct to Consumer, where net sales is annualized premium issued at the time the first full premium is paid after any introductory offer period has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued.

•First-year collected premium is defined as the premium collected during the reporting period for all policies in their first policy year. First-year collected premium takes lapses into account in the first year when lapses are more likely to occur, and thus is a useful indicator of how much new premium is expected to be added to premium income in the future.

See further discussion of the distribution channels below for Life and Health.

LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2023, life premium represented 70% of total premium and life underwriting margin represented 75% of the total underwriting margin. Additionally, investments supporting the reserves for life products produce the majority of excess investment income attributable to the investment segment.

The following table presents the summary of results of life insurance. Further discussion of the results by distribution channel is included below.

Summary of Results

Net policy obligations amounted to 41% of premiums for the year ended December 31, 2023, compared to 43% in the year-ago period and 41% for 2021.

The table below summarizes life underwriting margin by distribution channel for the last three years.

Underwriting Margin by Distribution Channel

Life insurance products are marketed through several distribution channels. Premium income by distribution channel for each of the last three years is as follows:

Premium by Distribution Channel

Annualized life premium in force was $3.2 billion at December 31, 2023, an increase of 4% over $3.1 billion a year earlier.

The following table presents net sales information for each of the last three years by distribution channel.

Net Sales by Distribution Channel

The table below discloses first-year collected life premium by distribution channel.

First-Year Collected Premium by Distribution Channel