GLOBE LIFE INC

The life insurance segment is our primary segment and is the largest contributor to earnings in each period presented. The life insurance segment underwriting margin increased $129 million compared with the prior period, primarily a result of increased premiums and favorable policy obligations as a percent of premium due most notably to a remeasurement gain related to the updating of assumptions in the third quarter. Excess investment income increased $32 million compared with the prior period, resulting from growth in our invested assets and increased yields due to higher interest rates. The health segment increased slightly with $281 million of underwriting margin in the first nine months of 2024 compared with $280 million in the first nine months of 2023.

In 2024, the largest contributor of total underwriting margin was the life insurance segment and the primary distribution channel was the American Income Life Division (American Income). The following charts represent the breakdown of total underwriting margin by operating segment and distribution channel for the nine months ended September 30, 2024.

Total premium income rose 5% for the nine months ended September 30, 2024 to $3.49 billion. Total net sales increased 9% to $622 million, when compared with 2023. Total first-year collected premium (defined in the following section) increased 13% to $507 million for 2024 compared to $449 million in 2023.

Life insurance premium income increased 4% to $2.44 billion over the prior-year total of $2.34 billion. Life net sales rose 9% to $450 million for the first nine months of 2024. First-year collected life premium increased 9% to $342 million. Life underwriting margin, as a percent of premium, increased to 42% for 2024 from 38% in 2023. Underwriting margin increased to $1.02 billion in 2024, compared to $887 million for the same period in 2023.

Health insurance premium income increased 6% to $1.05 billion over the prior-year total of $983 million. Health net sales rose 11% to $171 million for the first nine months of 2024. First-year collected health premium rose 21% to $165 million. Health underwriting margin, as a percent of premium, was 27% for 2024 and 29% for 2023. Health underwriting margin increased slightly to $281 million for the first nine months of 2024, compared to the same period in 2023.

Excess investment income, the measure of profitability of our investment segment, increased 33% during the first nine months of 2024 to $126 million from $95 million in the same period in 2023. Excess investment income per common share, reflecting the impact of our share repurchase program and increased net investment income, increased 41% to $1.38 from $0.98 when compared with the same period in 2023.

Insurance administrative expenses increased 12% in 2024 when compared with the prior-year period. These expenses were 7.2% as a percent of premium during 2024 compared to 6.7% in 2023.

For the nine months ended September 30, 2024, the Company repurchased 9.7 million Globe Life Inc. shares at a total cost of $910 million for an average share price of $93.36.

The discussions of our segments are presented in the manner we view our operations, as described in Note 12—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 is 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 (typically 1 month) has expired. Management considers net sales to be a better indicator of the rate of premium growth than annualized premium issued since annualized premium issued excludes cancellations, and cancellations do not contribute to premium income.

•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. First-year collected premiums are lower than net sales over the prior 12 months because premiums are not collected on lapsed policies after the date of lapse.

Cancellations are not included in lapses.

Approximately 90% of our premiums are collected monthly; however, other premium payment options such as quarterly and annual are offered by the Company and may be elected by the policyholder. The majority of premiums are paid by way of automatic draft or electronic payment from our policyholders and to a lesser extent from other payment methods such as check, credit card, and worksite payroll deduction.

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

LIFE INSURANCE

Life insurance is the Company's predominant segment. During 2024, life premium represented 70% of total premium and life underwriting margin represented 78% 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 36% of premium for the nine months ended September 30, 2024 compared to 41% in the year-ago period. This improvement was primarily due to the assumptions review of lapses, mortality, and morbidity resulting in a remeasurement gain of $56.8 million compared to a remeasurement loss of $2.0 million for the nine months ended September 30, 2024 and 2023, respectively. Refer to Note 6—Policy Liabilities for further discussion of the Company's annual assumptions review.

The table below summarizes life underwriting margin by distribution channel.

Underwriting Margin by Distribution Channel

The following table presents Globe Life's life insurance premium by distribution channel.

Premium by Distribution Channel

Annualized life premium in force was $3.29 billion at September 30, 2024, an increase of 4% over $3.17 billion a year earlier.

An analysis of life net sales, an indicator of new business production, by distribution channel is presented below.

Net Sales by Distribution Channel

First-year collected life premium by distribution channel is presented in the table below.

First-Year Collected Premium by Distribution Channel