GLOBE LIFE INC

The life insurance segment is our primary segment and is the largest contributor to earnings in each year presented. In 2024, the life insurance segment underwriting margin increased $160 million compared with 2023. This was primarily a result of increased premiums and favorable policy obligations as a percent of premium due to a remeasurement gain resulting from the assumption updates in 2024. In 2023, the life insurance segment underwriting margin increased $63 million when compared with 2022. The increase was due to increased premiums, favorable policy obligations as a percent of premium, and a lower remeasurement loss resulting from assumption updates in 2023. Excess investment income increased $34 million in 2024 compared with 2023, resulting from growth in our invested assets and increased yields due to higher interest rates. In 2023, excess investment income increased $26 million compared with 2022. In 2024, underwriting margin in the health segment decreased to $372 million due to higher claim utilization, compared with $378 million in 2023 and $377 million in 2022.

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 year ended December 31, 2024.

Total premium income rose 5% for the year ended December 31, 2024 to $4.67 billion. Total net sales increased 9% to $840 million, when compared with 2023. Total first-year collected premium (defined in the following section) increased 11% to $674 million for 2024, compared to $605 million in 2023.

Life insurance premium income increased 4% to $3.26 billion over the prior-year total of $3.14 billion. Life net sales rose 9% to $595 million for the year ended 2024. First-year collected life premium increased 8% to $455 million. Life underwriting margin, as a percent of premium, increased to 41% for 2024 from 38% in 2023. Underwriting margin increased to $1.35 billion in 2024, compared to $1.19 billion in 2023.

Health insurance premium income increased 7% to $1.40 billion over the prior-year total of $1.32 billion. Health net sales rose 10% to $245 million for the year ended 2024. First-year collected health premium rose 18% to $219 million. Health underwriting margin, as a percent of premium, was 27% for 2024 and 29% for 2023. Health underwriting margin declined to $372 million for the year ended 2024, compared to $378 million in 2023.

Excess investment income, the measure of profitability of our investment segment, increased 26% during the year ended 2024 to $164.4 million from $130.4 million in 2023. Excess investment income per common share, reflecting the impact of our share repurchase program and increased net investment income, increased 36% to $1.83 from $1.35 when compared with the same period in 2023.

Insurance administrative expenses increased 14% in 2024 when compared with the prior-year period. These expenses were 7.3% as a percent of premium during 2024 compared to 6.8% in 2023.

For the year ended December 31, 2024, the Company repurchased 10.1 million Globe Life Inc. shares at a total cost of $946 million for an average share price of $93.76.

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 is calculated as annualized premium issued, net of cancellations generally 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.

Excluding our Direct to Consumer Division, we sell our policies primarily through independently contracted agents (“agents”) who earn commissions in accordance with contracts they have with the respective insurance subsidiary of the Company. These contract arrangements with agents cover commission structures and rates, contract periods, credit terms for settlement of agent advance accounts, vesting rights in future renewal commissions upon termination of contracts and responsibility for certain premium collections. Contract terms with agents vary, but generally commissions are earned over the life of the policy as premiums are paid. Commissions are calculated on a policy-by-policy basis and vary by product type and policy year. Commission rates are higher for the first-year premium when a policy is issued and are generally reduced for policies that remain in effect for renewal periods (e.g., commission rates may reduce in years 2-10 and again in year 11 and after). After a certain period (typically 10 years), commission rates become constant over the remaining life of the policy and are considered level commissions.

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 37% of premiums for the year ended December 31, 2024, compared to 41% in 2023, and 43% in 2022. This improvement was primarily due to the assumptions updated based upon our review of lapses, mortality, and morbidity resulting in a remeasurement gain of $56.8 million compared to a remeasurement loss of $2.0 million in 2023 and a remeasurement loss of $47.2 million in 2022. 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 for the last three years.

Underwriting Margin by Distribution Channel

The following table presents Globe Life's life premium distribution channel for the last three years.

Premium by Distribution Channel

Annualized life premium in force was $3.3 billion at December 31, 2024, an increase of 4% over $3.2 billion a year earlier.

The following table presents life net sales, an indicator of new business production, by distribution channel for each of the last three years.

Net Sales by Distribution Channel

The table below discloses first-year collected life premium by distribution channel for the last three years.

First-Year Collected Premium by Distribution Channel