GLOBE LIFE INC

A discussion of life operations by distribution channel follows.

The American Income Life Division markets to members of labor unions and other affinity groups and continues to diversify its lead sources utilizing third-party internet vendor leads and obtaining referrals to facilitate sustainable growth. This division is Globe Life's largest contributor of life premium of any distribution channel at 52% of the Company's 2024 total life premium. In 2024, the average monthly life premium issued per policy was $56 as compared to $54 in 2023. Net sales were $382 million in 2024, up from $323 million in 2023. The underwriting margin, as a percent of premium, was 47% in 2024, up from 45% in 2023.

The average producing agent count increased 11% over the year-ago period. Over 65% of the Division's net sales are driven by agents that have been producing for the Division for six months or more. The increase in average producing agent count was driven by an increase in new agent recruiting along with continued improvement in new agent retention. Sales growth in this Division, as well as within our other exclusive agencies, is generally dependent on growth in the size of the agency force.

Below is the average producing agent count as of the indicated periods for the American Income Division. The average producing agent count is based on the actual count at the beginning and end of each week during the year.

American Income Life continues to focus on growing and strengthening the agency force, specifically through emphasis on agency middle-management growth and additional agency office openings. In addition to offering financial incentives and training opportunities, the Division has made considerable investments in information technology, including a customer relationship management (CRM) tool for the agency force. This tool is designed to drive productivity in lead distribution, conservation of business, manager dashboards, and new agent recruiting. Additionally, this Division has invested in and successfully implemented technology that allows the agency force to engage in virtual recruiting, training, and sales activity. The agents have shifted to primarily a virtual experience with customers and have generated the vast majority of sales through virtual presentations. We find this flexibility to be attractive to new recruits as well as a driver of sustainability for our agency force.

The Direct to Consumer Division (DTC) markets adult and juvenile life insurance through a variety of mediums, including direct mail, insert media, and digital marketing. The different media channels support and complement one another in the Division's efforts to provide consumer outreach. All three channels work in an omnichannel approach. Sales from the internet and inbound phone calls continue to outpace the activity from direct mail. DTC's long-term growth has been fueled by consistent innovation and brand awareness. Additionally, the DTC division provides valuable support to our agency business through brand impressions and inquires that may lead to sales in our exclusive agency channels. New initiatives are continuously introduced to help increase response rates, issue rates, and create a seamless customer experience. The juvenile market is an important source of sales as well as a vehicle to reach the parent and grandparent market of juvenile policyholders, who are more likely to respond favorably to a solicitation for life insurance.

It is also a vehicle to reach the parents and grandparents of juvenile policyholders, who are more likely to respond favorably to a seamless customer experience solicitation for life coverage on themselves in comparison to the general adult population. Also, future offerings to juvenile policyholders and their parents are sources of lower acquisition-cost life insurance sales in the future.

DTC net sales declined 9% to $106 million in 2024 compared with $116 million for the same period a year ago. This decline is due primarily to the management of costs relative to direct mail and mailing insert marketing activity as a result of inflation related to postage, paper, and online advertising costs. While total sales have declined, the focus has been on improving profitability and improving the underwriting margin. In 2024, DTC’s underwriting margin, as a percent of premium, was 29% compared with 24% in 2023.

The Liberty National Division markets individual life insurance to middle-income household and worksite customers. Recent investments in new sales technologies as well as recent growth in middle management within the agency are expected to support increased sales. The underwriting margin as a percent of premium was 38% in 2024, compared with 33% in 2023. The increase is primarily attributable to increased premiums and lower policy obligations as a percent of premium during the year compared with the same year ago period. In 2024, the average monthly life premium issued per policy was $43 as compared to $44 in 2023. Net sales rose 3% in 2024 over the same period in 2023 due primarily to increased agent count.

Below is the average producing agent count as of the indicated periods for the Liberty National Division. The average producing agent count is based on the actual count at the beginning and end of each week during the year.

The Liberty National Division average producing agent count increased significantly compared with the prior-year comparable periods. We continue to execute our long-term plan to grow this agency through expansion from small-town markets in the Southeast to more densely populated areas with larger pools of potential agent recruits and customers as we serve communities, regions, and cities. Continued expansion of this Division’s presence in larger geographic cities, with less penetrated areas will help create long-term sustainable agency growth. Additionally, the Division continues to help improve the ability of agents to develop new worksite marketing business. Systems that have been put in place, including the addition of a CRM platform and enhanced analytical capabilities, have helped the agents develop additional worksite marketing opportunities as well as improve the productivity of agents selling in the individual life market. As the Division continues to gain momentum in its sales and recruiting initiatives, as well as advances in its technology and CRM platform, the Division anticipates continued growth in recruiting activity, average producing agent count and net sales.

The Other agency distribution channels primarily include non-exclusive independent agencies selling primarily life insurance. The other distribution channels contributed $204 million of life premium income, or 6% of Globe Life's total life premium income in 2024, and contrib uted 2% of net sales for the year.

HEALTH INSURANCE

Health insurance sold by the Company primarily includes Medicare Supplement insurance including retiree health insurance business, accident coverage, and other limited-benefit supplemental health products including cancer, critical illness, heart disease, intensive care, and other health products.

Health premium accounted for 30% of our total premium in 2024, while the health underwriting margin accounted for 22% of total underwriting margin. Health underwriting margin declined to $372 million compared to $378 million in the prior year. While the Company continues to emphasize life insurance sales relative to health due to life’s superior long-term profitability and its greater contribution to excess investment income, the health business provides a significant contribution to return on equity as it does not require a substantial amount of up-front capital.

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

Summary of Results

Net policy obligations amounted to 53% of premium in 2024 compared to 51% in both 2023 and 2022. This increase was primarily due to the assumptions review of lapses and morbidity resulting in a remeasurement loss of $10.5 million compared to a remeasurement gain of $5.2 million and $10.7 million in 2023 and 2022, respectively. Refer to Note 6—Policy Liabilities for further discussion of the Company's annual assumptions review.

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

Underwriting Margin by Distribution Channel

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

Premium by Distribution Channel

Premium related to limited-benefit supplemental health products comprise $786 million, or 56%, of the total health premiums for 2024 compared with $743 million, or 56%, in 2023. Premium from Medicare Supplement products comprises the remaining $619 million, or 44%, for 2024 compared with $576 million, or 44%, in 2023.

Annualized health premium in force was $1.48 billion at December 31, 2024, an increase of 7% from $1.39 billion a year earlier.

Presented below is a table of health net sales, an indicator of new business production, by distribution channel for each of the last three years.

Net Sales by Distribution Channel

Health net sales related to limited-benefit supplemental health products, comprise $175 million, or 71%, of the total health net sales for 2024 compared with $161 million, or 72%, in 2023. Medicare Supplement sales make up the remaining $70 million, or 29%, for 2024 compared with $63 million, or 28%, in 2023.

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

First-Year Collected Premium by Distribution Channel

First-year collected premium related to limited-benefit supplemental health plans comprise $155 million, or 71% of total first-year collected premium for 2024 compared with $133 million, or 72%, in 2023. First-year collected premium from Medicare Supplement policies make up the remaining $64 million, or 29%, for 2024 compared with $52 million, or 28%, in 2023.