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What changed in Globe Life's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Globe Life's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+349 added−370 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-23)

Top changes in Globe Life's 2023 10-K

349 paragraphs added · 370 removed · 258 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

26 edited+1 added−1 removed28 unchanged
Biggest changeAnnualized Premium in Force (Dollar amounts in thousands) 2022 2021 2020 Amount % of Total Amount % of Total Amount % of Total Whole life: Traditional $ 2,106,878 69 $ 2,011,349 68 $ 1,857,106 68 Interest-sensitive 31,838 1 33,912 1 36,297 1 Term 756,471 25 750,005 26 716,698 26 Other 166,333 5 147,919 5 129,848 5 $ 3,061,520 100 $ 2,943,185 100 $ 2,739,949 100 Policy Count and Average Face Amount Per Policy (Dollar amounts in thousands) 2022 2021 2020 Policy Count Average Face Amount per Policy Policy Count Average Face Amount per Policy Policy Count Average Face Amount per Policy Whole life: Traditional 9,011,227 $ 15.7 8,963,774 $ 15.3 8,717,785 $ 14.7 Interest-sensitive 183,887 20.4 191,536 20.4 199,975 20.3 Term 4,720,870 15.3 4,731,044 15.3 4,526,172 15.1 Other 453,515 16.1 432,372 15.3 408,859 14.3 14,369,499 $ 15.6 14,318,726 $ 15.3 13,852,791 $ 14.9 3 GL 2022 FORM 10-K Table of Contents Health Insurance The following table presents Globe Life's health insurance annualized premium in force for the three years ended December 31, 2022 by distribution channel.
Biggest changeAnnualized Premium in Force (Dollar amounts in thousands) 2023 2022 2021 Amount % of Total Amount % of Total Amount % of Total Whole life: Traditional $ 2,213,816 69 $ 2,106,878 69 $ 2,011,349 68 Interest-sensitive 29,929 1 31,838 1 33,912 1 Term 753,261 24 756,471 25 750,005 26 Other 188,739 6 166,333 5 147,919 5 $ 3,185,745 100 $ 3,061,520 100 $ 2,943,185 100 Policy Count and Average Face Amount Per Policy (Dollar amounts in thousands) 2023 2022 2021 Policy Count Average Face Amount per Policy Policy Count Average Face Amount per Policy Policy Count Average Face Amount per Policy Whole life: Traditional 9,050,091 $ 16.0 9,011,227 $ 15.7 8,963,774 $ 15.3 Interest-sensitive 176,339 20.4 183,887 20.4 191,536 20.4 Term 4,680,364 15.1 4,720,870 15.3 4,731,044 15.3 Other 479,664 17.3 453,515 16.1 432,372 15.3 14,386,458 $ 15.8 14,369,499 $ 15.6 14,318,726 $ 15.3 3 GL 2023 FORM 10-K Table of Contents Health Insurance The following table presents Globe Life's health insurance annualized premium in force for the three years ended December 31, 2023 by distribution channel.
In furtherance of our commitment to our employees, we offer a comprehensive employee benefits package that includes competitive monetary benefits, retirement 7 GL 2022 FORM 10-K Table of Contents benefits through a Section 401(k) plan and a qualified pension to eligible employees, fitness center reimbursement, paid-time-off (based on years of service), health insurance, dental and vision insurance, employee resource program, health savings and flexible spending accounts, family leave, and tuition assistance.
In furtherance of our commitment to our employees, we offer a comprehensive employee benefits package that includes competitive monetary benefits, retirement 7 GL 2023 FORM 10-K Table of Contents benefits through a Section 401(k) plan and a qualified pension to eligible employees, fitness center reimbursement, paid-time-off (based on years of service), health insurance, dental and vision insurance, employee resource program, health savings and flexible spending accounts, family leave, and tuition assistance.
Annuities in each of the three years ended December 31, 2022, comprised less than 1% of premium. The Company does not currently market stand-alone fixed or deferred annuity products. Pricing Premium rates for life and health insurance products are established using assumptions as to future mortality, morbidity, persistency, investment income, expenses, and target profit margins.
Annuities in each of the three years ended December 31, 2023, comprised less than 1% of premium. The Company does not currently market stand-alone fixed or deferred annuity products. Pricing Premium rates for life and health insurance products are established using assumptions as to future mortality, morbidity, persistency, investment income, expenses, and target profit margins.
Reserves The life insurance policy reserves reflected in Globe Life's consolidated financial statements as future policy benefits are calculated based on accounting principles generally accepted in the United States of America (GAAP). These reserves, with future premiums and the associated interest compounded at assumed rates, must be sufficient to cover policy and contract obligations as they mature.
Reserves The life insurance policy reserves reflected in Globe Life's consolidated financial statements as future policy benefits are calculated based on accounting principles generally accepted in the United States of America (GAAP). These reserves, with future premiums and the associated interest compounded at assumed rates, are expected to be sufficient to cover policy and contract obligations as they mature.
Insurance companies are also required to file detailed annual reports with supervisory agencies, and records of their business are subject to examination at any time. Under the rules of the 5 GL 2022 FORM 10-K Table of Contents National Association of Insurance Commissioners (NAIC), insurance companies are examined periodically by one or more of the supervisory agencies.
Insurance companies are also required to file detailed annual reports with supervisory agencies, and records of their business are subject to examination at any time. Under the rules of the 5 GL 2023 FORM 10-K Table of Contents National Association of Insurance Commissioners (NAIC), insurance companies are examined periodically by one or more of the supervisory agencies.
Primary Distribution Method Underwriting Company Products and Target Markets Distribution Direct to Consumer Division Globe Life And Accident Insurance Company McKinney, Texas Individual life and supplemental health insurance including juvenile and senior life coverage and Medicare Supplement to lower middle-income to middle-income Americans. Nationwide distribution through direct to consumer channels: including direct mail, electronic media, and insert media.
Primary Distribution Method Underwriting Company Products and Target Markets Distribution Direct to Consumer Division Globe Life And Accident Insurance Company McKinney, Texas Individual life and supplemental health limited-benefit insurance including juvenile and senior life coverage and Medicare Supplement to lower middle-income to middle-income Americans. Nationwide distribution through direct to consumer channels: including direct mail, electronic media, and insert media.
Generally, the mortality and persistency assumptions used in the calculations of reserves are based on Company experience. Similar reserves are held on most of the health insurance policies written by Globe Life's insurance subsidiaries, since these policies generally are issued on a guaranteed-renewable basis.
Generally, the mortality and lapse assumptions used in the calculations of reserves are based on Company experience. Similar reserves are held on most of the health insurance policies written by Globe Life's insurance subsidiaries, since these policies generally are issued on a guaranteed-renewable basis.
Profits are also earned from investment income in excess of the amounts required for policy reserves. 4 GL 2022 FORM 10-K Table of Contents Underwriting The underwriting standards of Globe Life's insurance subsidiaries are established by management.
Profits are also earned from investment income in excess of the amounts required for policy reserves. 4 GL 2023 FORM 10-K Table of Contents Underwriting The underwriting standards of Globe Life's insurance subsidiaries are established by management.
Other information included in Globe Life's website is not incorporated into this filing. 1 GL 2022 FORM 10-K Table of Contents The following table presents Globe Life's business by primary marketing distribution method. Additional information concerning industry segments may be found in Management’s Discussion and Analysis and in Note 14—Business Segments within the Notes to the Consolidated Financial Statements .
Other information included in Globe Life's website is not incorporated into this filing. 1 GL 2023 FORM 10-K Table of Contents The following table presents Globe Life's business by primary marketing distribution method. Additional information concerning industry segments may be found in Management’s Discussion and Analysis and in Note 15—Business Segments within the Notes to the Consolidated Financial Statements .
Each subsidiary uses information obtained from the application, and in some cases, telephone interviews with applicants, inspection reports, pharmacy data, motor vehicle records, responses to both medical and non-medical questions, doctors’ statements and/or medical examinations.
Each subsidiary uses information obtained from the application, and in some cases additional information such as, telephone interviews with applicants, inspection reports, pharmacy data, motor vehicle records, responses to both medical and non-medical questions, doctors’ statements and/or medical examinations.
In 2022, we provided financial support of approximately $4.0 million to organizations within that focus, including charities that support underserved communities, provide scholarships to youth, and advance equity and diversity efforts. Talent Development At Globe Life, we believe investing in our employees through training and development is paramount to their success.
In 2023, we provided financial support of approximately $4.3 million to organizations within that focus, including charities that support underserved communities, provide scholarships to youth, and advance equity and diversity efforts. Talent Development At Globe Life, we believe investing in our employees through training and development is paramount to their success.
The following table presents supplemental health annualized premium in force information for the three years ended December 31, 2022 by product category.
The following table presents supplemental health annualized premium in force information for the three years ended December 31, 2023 by product category.
United American Division United American Insurance Company McKinney, Texas Medicare Supplement coverage to Medicare beneficiaries and, to a lesser extent, supplemental limited-benefit health coverage to people under age 65. 3,327 independent producing agents in the U.S. 2 GL 2022 FORM 10-K Table of Contents Insurance Life Insurance The distribution channels for life insurance products include direct to consumer, exclusive agents, and independent agents.
United American Division United American Insurance Company McKinney, Texas Supplemental health Medicare coverage to beneficiaries and, to a lesser extent, supplemental limited-benefit coverage to people under age 65. 3,223 independent producing agents in the U.S. 2 GL 2023 FORM 10-K Table of Contents Insurance Life Insurance The distribution channels for life insurance products include direct to consumer, exclusive agents, and independent agents.
These methods are described in greater detail within the primary marketing distribution channel chart as seen above.
These methods are described in greater detail within the primary marketing distribution channel chart as shown above.
Maintaining superior human capital is a key driver to the success and longevity that our Company has experienced since its origins dating back to the early 1900s. As of December 31, 2022, the Company had 3,543 full time, part-time, and temporary employees, a 10% increase over the prior year.
Maintaining superior human capital is a key driver to the success and longevity that our Company has experienced since its origins dating back to the early 1900s. As of December 31, 2023, the Company had 3,636 full time, part-time, and temporary employees, a 3% increase over the prior year.
Our commitment to diversity starts at the top; of the 10 independent Board members, 50% are women and 20% are racial/ethnic minorities as of December 31, 2022. 1 Per the Globe Life Employee Handbook, the Globe Life mission statement is "We help families Make Tomorrow Better by working to protect their financial future." 6 GL 2022 FORM 10-K Table of Contents As of December 31, 2022 and 2021, the Globe Life employees, (excluding independently-contracted agents) identify as follows: 2022 Ethnicity/Race Gender Generations White 54 % Female 68 % Baby Boomers (1946-1964) 18 % Black or African American 22 Male 32 Gen X (1965-1977) 30 Hispanic or Latino 13 Millennials (1978-1995) 43 Asian 9 Gen Z (1996-2012) 9 American Indian or Alaskan Native 1 Native Hawaiian or Pacific Islander — Other or Not Specified 1 Total 100 % 100 % 100 % 2021 Ethnicity/Race Gender Generations White 56 % Female 66 % Baby Boomers (1946-1964) 20 % Black or African American 21 Male 34 Gen X (1965-1977) 31 Hispanic or Latino 12 Millennials (1978-1995) 41 Asian 9 Gen Z (1996-2012) 8 American Indian or Alaskan Native 1 Native Hawaiian or Pacific Islander — Other or Not Specified 1 Total 100 % 100 % 100 % We conduct a confidential survey biennially to give our employees the opportunity to provide candid feedback about their experiences at the Company, including but not limited to, confidence in the Company and leadership, competitiveness of our compensation and benefit package, and departmental relationships.
Our commitment to diversity starts at the top; of the 10 independent Board members, 60% are women and 30% are racial/ethnic minorities as of December 31, 2023. 1 Per the Globe Life Employee Handbook, the Globe Life mission statement is "We help families Make Tomorrow Better by working to protect their financial future." 6 GL 2023 FORM 10-K Table of Contents As of December 31, 2023 and 2022, the Globe Life employees, (excluding independently-contracted agents) identify as follows: 2023 Ethnicity/Race Gender Generations White 52 % Female 68 % Baby Boomers (1946-1964) 16 % Black or African American 24 Male 32 Gen X (1965-1977) 29 Hispanic or Latino 13 Millennials (1978-1995) 45 Asian 9 Gen Z (1996-2012) 10 American Indian or Alaskan Native 1 Native Hawaiian or Pacific Islander — Other or Not Specified 1 Total 100 % 100 % 100 % 2022 Ethnicity/Race Gender Generations White 54 % Female 68 % Baby Boomers (1946-1964) 18 % Black or African American 22 Male 32 Gen X (1965-1977) 30 Hispanic or Latino 13 Millennials (1978-1995) 43 Asian 9 Gen Z (1996-2012) 9 American Indian or Alaskan Native 1 Native Hawaiian or Pacific Islander — Other or Not Specified 1 Total 100 % 100 % 100 % We conduct a confidential survey biennially to give our employees the opportunity to provide candid feedback about their experiences at the Company, including but not limited to, confidence in the Company and leadership, competitiveness of our compensation and benefit package, and departmental relationships.
The increase in headcount in 2022 was primarily to support the increased growth in recent periods, as well as lower attrition levels than normal. The Company engages over 13,700 independently-contracted insurance agents. Refer to Management's Discussion & Analysis for exclusive agent counts.
The increase in headcount in 2023 was primarily to support the increased growth in recent periods, as well as lower attrition levels than normal. The Company engages over 15,400 independently-contracted insurance agents. Refer to Management's Discussion & Analysis for exclusive agent counts.
The following table presents annualized premium in force for the three years ended December 31, 2022 by distribution method: Annualized Premium in Force (1) (Dollar amounts in thousands) 2022 2021 2020 Direct to Consumer $ 936,507 $ 929,197 $ 881,012 Exclusive agents: American Income 1,553,003 1,458,408 1,325,293 Liberty National 360,963 341,332 318,545 Independent agents: United American 7,609 8,426 9,314 Other 203,438 205,822 205,785 $ 3,061,520 $ 2,943,185 $ 2,739,949 (1) See definition of annualized premium in force under Results of Operations in Management's Discussion & Analysis .
The following table presents annualized premium in force for the three years ended December 31, 2023 by distribution method: Annualized Premium in Force (1) (Dollar amounts in thousands) 2023 2022 2021 Direct to Consumer $ 933,057 $ 936,507 $ 929,197 Exclusive agents: American Income 1,654,197 1,553,003 1,458,408 Liberty National 390,693 360,963 341,332 Independent agents: United American 6,958 7,609 8,426 Other 200,840 203,438 205,822 $ 3,185,745 $ 3,061,520 $ 2,943,185 (1) See definition of annualized premium in force under Results of Operations in Management's Discussion & Analysis .
Annualized Premium in Force (Dollar amounts in thousands) 2022 2021 2020 Amount % of Total Amount % of Total Amount % of Total Limited-benefit plans $ 735,858 55 $ 700,767 54 $ 617,759 52 Medicare Supplement 591,996 45 585,311 46 575,603 48 $ 1,327,854 100 $ 1,286,078 100 $ 1,193,362 100 Annuities Annuity products include single-premium and flexible-premium deferred annuities.
Annualized Premium in Force (Dollar amounts in thousands) 2023 2022 2021 Amount % of Total Amount % of Total Amount % of Total Limited-benefit plans $ 782,424 56 $ 735,858 55 $ 700,767 54 Medicare Supplement 602,877 44 591,996 45 585,311 46 $ 1,385,301 100 $ 1,327,854 100 $ 1,286,078 100 Annuities Annuity products include single-premium and flexible-premium deferred annuities.
While there are insurance companies competing with Globe Life, no individual company dominates any of Globe Life's life or health insurance markets. Globe Life's health insurance products compete with, in addition to the products of other health insurance carriers, health maintenance organizations, preferred provider organizations, and other health care-related institutions which provide medical benefits based on contractual agreements.
Globe Life's health insurance products compete with, in addition to the products of other health insurance carriers, health maintenance organizations, preferred provider organizations, and other health care-related institutions which provide medical benefits based on contractual agreements.
Annualized Premium in Force (Dollar amounts in thousands) 2022 2021 2020 Direct to Consumer $ 72,161 $ 74,627 $ 77,522 Exclusive agents: Liberty National 196,336 196,783 196,534 American Income 113,087 111,102 104,701 Family Heritage 387,897 363,226 338,309 Independent agents: United American 558,373 540,340 476,296 $ 1,327,854 $ 1,286,078 $ 1,193,362 Globe Life offers Medicare Supplement and limited-benefit supplemental health insurance products that include primarily critical illness and accident plans.
Annualized Premium in Force (Dollar amounts in thousands) 2023 2022 2021 Direct to Consumer $ 70,249 $ 72,161 $ 74,627 Exclusive agents: Liberty National 200,160 196,336 196,783 American Income 116,962 113,087 111,102 Family Heritage 418,693 387,897 363,226 Independent agents: United American 579,237 558,373 540,340 $ 1,385,301 $ 1,327,854 $ 1,286,078 Globe Life offers Medicare Supplement and limited-benefit supplemental health insurance products that include accident, cancer, critical illness, heart, and intensive care products.
Reinsurance Globe Life has historically participated in very limited third-party reinsurance as a result of the low face amounts of the policies sold by the Company. See Schedule IV and Note 6—Commitments and Contingencies for more information. Investments The nature, quality, and percentage mix of insurance company investments are regulated by state laws.
Reinsurance Globe Life has historically participated in very limited third-party reinsurance as a result of the low face amounts of the policies sold by the Company. See Schedule IV , Note 5—Commitments and Contingencies , Note 6—Policy Liabilities , and Note 8—Liability for Unpaid Claims for more information.
Family Heritage Division Family Heritage Life Insurance Company of America Cleveland, Ohio Supplemental limited-benefit health insurance to lower middle-income to middle-income families. 1,210 average producing agents in the U.S.
Liberty National Division Liberty National Life Insurance Company McKinney, Texas Life and supplemental health limited-benefit insurance distributed through in-home and worksite channels. 3,229 average producing agents in the U.S. Family Heritage Division Family Heritage Life Insurance Company of America Cleveland, Ohio Supplemental limited-benefit health insurance to lower middle-income to middle-income families. 1,334 average producing agents in the U.S.
American Income Life Division American Income Life Insurance Company Waco, Texas Individual life and supplemental health insurance marketed to working families. 9,444 average producing agents in the U.S., Canada, and New Zealand. Liberty National Division Liberty National Life Insurance Company McKinney, Texas Life and supplemental health insurance distributed through in-home and worksite channels. 2,775 average producing agents in the U.S.
American Income Life Division American Income Life Insurance Company Waco, Texas Individual life and supplemental health limited-benefit insurance marketed to working families. 10,579 average producing agents in the U.S., Canada, and New Zealand.
The investments of Globe Life insurance subsidiaries consist predominantly of high-quality, investment-grade securities. Approximately 91% of our invested assets, at fair value, are fixed maturities at December 31, 2022 (see Note 4—Investments and Management’s Discussion and Analysis ). Competition Globe Life competes with other insurance carriers through policyholder service, price, product design, and sales efforts.
Investments The nature, quality, and percentage mix of insurance company investments are regulated by state laws. The investments of Globe Life insurance subsidiaries consist predominantly of high-quality, investment-grade securities. Approximately 91% of our invested assets, at fair value, are fixed maturities at December 31, 2023 (see Note 4—Investments and Management’s Discussion and Analysis ).
The Company remains committed to the well-being and safety of its employees, agents, customers, guests, vendors and shareholders in our resolve to maintain a stable and secure business environment. In response to the COVID-19 pandemic, our crisis management and incident response teams guided the Company through an expedited, yet smooth, transition towards working remotely.
The Company remains committed to the well-being and safety of its employees, agents, customers, guests, vendors and shareholders in our resolve to maintain a stable and secure business environment. 8 GL 2023 FORM 10-K Table of Contents
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In 2022, the Company continued to implement steps that were effective during the pandemic to ensure the health and safety of our employees, including: • Continuation of business operations, both in a remote and hybrid work environment; • Maintaining workplace health and safety protocols to allow employees to safely return to Company facilities on a voluntary basis; • Enhancements to “Resilient@Globe Life,” an intra-company website dedicated to COVID-19 issues, which provides employees with relevant and timely information, and interactive employee guides; • Extension of our short-term disability benefits to support employees unable to work as a result of contracting or being exposed to COVID-19; and • Communication with employees on pandemic-related policies and procedures, implementation of emergency business operations (such as social distancing and enhanced cleaning protocols at company facilities), and provision of pandemic health and wellness resources (including seminars regarding mental health). 8 GL 2022 FORM 10-K Table of Contents
Added
Competition Globe Life competes with other insurance carriers through policyholder service, price, product design, and sales efforts. While there are insurance companies competing with Globe Life, no individual company dominates any of Globe Life's life or health insurance markets.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+19 added−11 removed36 unchanged
Biggest changeGeneral Risk Factors The failure to maintain effective and efficient information systems at the Company could compromise data security, thereby adversely affecting our financial condition and results of operations. Our business is highly dependent upon the internet, third-party service providers, and information systems to operate in an efficient and resilient manner.
Biggest changeOur business is highly dependent upon the internet, third-party service providers, and information systems to operate in an efficient and resilient manner. We gather and maintain data for the purpose of conducting marketing, actuarial analysis, sales, and policy administration functions.
We have several life distribution channels that focus on distinct market niches, three of which are labor unions, affinity groups, and sales via Direct to Consumer solicitations. Deterioration of our relationships with either organized labor or affinity groups, or adverse changes in the public’s receptivity to Direct to Consumer marketing initiatives could negatively affect our life insurance business.
We have several life distribution channels that focus on distinct market niches, three of which are labor unions, affinity groups, and sales via Direct to Consumer solicitations. Deterioration of our relationships with either organized labor union groups or affinity groups, or adverse changes in the public’s receptivity to Direct to Consumer marketing initiatives could negatively affect our life insurance business.
As a result, our Medicare Supplement business is characterized by lower profit margins than life insurance and requires strict administrative discipline and economies of scale for success. Since Medicare Supplement policies are coordinated with the federal Medicare program, which commonly experiences health care inflation every year, annual premium rate increases for the Medicare Supplement policies are typically necessary.
As a result, Medicare Supplement business is characterized by lower profit margins than life insurance and requires strict administrative discipline and economies of scale for success. Since Medicare Supplement policies are coordinated with the federal Medicare program, which commonly experiences health care inflation every year, annual premium rate increases for the Medicare Supplement policies are typically necessary.
Accordingly, the inability of our insurance subsidiaries to obtain approval of appropriate premium rate increases for supplemental health insurance plans in a timely manner from state insurance regulatory authorities could adversely impact their profitability and thus our business, financial condition, and results of operations.
Accordingly, the inability to obtain approval of appropriate premium rate increases for supplemental health insurance plans in a timely manner from state insurance regulatory authorities could adversely impact their profitability and thus our business, financial condition, and results of operations.
Declines in interest rates expose insurance companies to the risk that they will fail to earn the level of interest on investments assumed in pricing products and in setting discount rates used to calculate net policy liabilities, which could have a negative impact on income.
Declines in interest rates expose insurance companies to the risk that they will fail to earn the level of interest on investments assumed in pricing products and in setting discount rates used to calculate policy liabilities, which could have a negative impact on income.
Doing so may be difficult due to many factors, including but not limited to, fluctuations in economic and industry conditions and the effectiveness of our compensation programs and competition among other employers. Our life insurance products are sold in niche markets. We are at risk should any of these markets diminish.
Doing so may be difficult due to many factors, including but not limited to, fluctuations in economic and industry conditions and the effectiveness of our compensation programs and competition among other companies. Our life insurance products are sold in niche markets. We are at risk should any of these markets diminish.
Climate change may increase the frequency and severity of weather-related natural disasters and pandemics, which may adversely impact our mortality and morbidity rates and disrupt our business operations. In addition, climate change and climate change regulation may affect the prospects of companies and other entities whose securities we hold, or our willingness to continue to hold their securities.
Climate change may increase the frequency and severity of weather-related events and natural disasters, which may adversely impact our mortality and morbidity rates and disrupt our business operations. In addition, climate change and climate change regulation may affect the prospects of companies and other entities whose securities we hold, or our willingness to continue to hold their securities.
In such an event, the impact to our operations could have a material adverse impact on our ability to conduct business and on our results of operations and financial condition, particularly if those problems affect employees performing operational tasks and supporting computer-based data processing, or destroy the capability to transmit, store, and retrieve valuable data.
In such an event, the impact to our operations could have a material adverse impact on our ability to conduct business and on our results of operations and financial condition, particularly if those problems affect our producing agents or our employees performing operational tasks and supporting computer-based data processing, or impair or destroy our capability to transmit, store, and retrieve valuable data.
Industry Risks Variations in actual-to-expected rates of mortality, morbidity and persistency could materially negatively affect our results of operations and financial condition. We establish policy reserves to pay future policyholder benefits.
Industry Risks Variations in actual-to-expected rates of mortality, morbidity and policyholder behavior could materially negatively affect our results of operations and financial condition. We establish policy reserves to pay future policyholder benefits.
Any breach of confidential information systems resulting from the above factors could damage our reputation in the marketplace, deter potential customers from purchasing our products, result in the loss of existing customers, subject us to significant civil and criminal liability, constrain cash flows, or require us to incur significant technical, legal, or other expenses.
Any incident affecting confidential information systems resulting from the above factors could damage our reputation in the marketplace, deter potential customers from purchasing our products, result in the loss of existing customers, subject us to significant civil and criminal liability, constrain cash flows, or require us to incur significant technical, legal, or other expenses.
Additionally, we could fail to report accurately or achieve progress on our metrics on a timely basis, or at all, which in-turn could adversely affect our reputation, business, financial performance and growth. We may face adverse regulatory, investor, customer, media, or public scrutiny leading to business, reputational, or legal challenges. 15 GL 2022 FORM 10-K Table of Contents Item 1B.
Additionally, we could fail to report accurately or achieve progress on our metrics on a timely basis, or at all, which in-turn could adversely affect our reputation, business, financial performance and growth. We may face adverse regulatory, investor, customer, media, or public scrutiny leading to business, reputational, or legal challenges. 14 GL 2023 FORM 10-K Table of Contents Item 1B.
However, our insurance operations could be exposed to the risk of catastrophic mortality or morbidity caused by events such as a pandemic, hurricane, earthquake, or man-made catastrophes, including acts of terrorism or war, which may produce significant claims in larger areas, especially those that are heavily populated.
However, our insurance operations could be exposed to the risk of catastrophic mortality or morbidity caused by events such as a pandemic or other public health issues, hurricane, earthquake, or man-made catastrophes, including acts of terrorism or war, which may produce significant claims in larger areas, especially those that are heavily populated.
Our investment portfolio consists predominately of fixed maturity and short-term investments, where we are exposed to the risk that individual issuers will not have the ability to make required interest or principal payments. A concentration of these investments in any particular issuer, industry, group of related industries or geographic areas could increase this risk.
Our investment portfolio consists predominately of fixed income investments, where we are exposed to the risk that individual issuers will not have the ability to make required interest or principal payments. A concentration of these investments in any particular issuer, industry, group of related industries or geographic areas could increase this risk.
Should we be unable to implement these innovations effectively, efficiently, or in a timely manner, it could result in poor customer experience, poor agent experience, additional expenses, reputational harm, legal and regulatory actions and other adverse consequences. This could also result in the inability to effectively support business operations.
In addition, should we be unable to implement or maintain our technology effectively, efficiently, or in a timely manner, it could result in poor customer experience, poor agent experience, additional expenses, reputational harm, legal and regulatory actions, and other adverse consequences. This could also result in the inability to effectively support business operations.
Unresolved Staff Comments As of December 31, 2022, Globe Life had no unresolved SEC staff comments.
Unresolved Staff Comments As of December 31, 2023, Globe Life had no unresolved SEC staff comments.
For example, in the states where our companies are domiciled, an insurance company generally may pay dividends only out of its unassigned surplus as reflected in its statutory financial statements filed in that state. Additionally, dividends paid by insurance subsidiaries are restricted based on regulations by their states of domicile.
For example, in the states where our companies are domiciled, an insurance company generally may pay dividends only out of its unassigned surplus as reflected in its statutory financial statements filed in that state. Additionally, dividends paid by insurance subsidiaries are restricted based on 10 GL 2023 FORM 10-K Table of Contents regulations by their states of domicile.
In such a case, realized losses could result from the sale of the invested assets and could adversely affect our statutory income, required capital levels, and results of operations. 10 GL 2022 FORM 10-K Table of Contents Our ability to fund operations is substantially dependent on available funds from our insurance subsidiaries.
In such a case, realized losses could result from the sale of the invested assets and could adversely affect our statutory income, required capital levels, and results of operations. Our ability to fund operations is substantially dependent on available funds from our insurance subsidiaries.
(Refer to Note 1—Significant Accounting Policies under the caption Accounting Pronouncements Yet to be Adopted ) 13 GL 2022 FORM 10-K Table of Contents Non-compliance with laws or regulations related to customer and consumer privacy and information security, including a failure to ensure that our business associates with access to sensitive customer and consumer information maintain its confidentiality, could materially adversely affect our reputation and business operations.
(Refer to Note 1—Significant Accounting Policies under the caption Accounting Pronouncements Yet to be Adopted ) Non-compliance with laws or regulations related to customer and consumer privacy and information security, including a failure to ensure that our business associates with access to sensitive customer and consumer information maintain its confidentiality, could materially adversely affect our reputation and business operations.
The failure to effectively maintain and modernize our information technology systems and infrastructure could adversely affect our business. Our ability to modernize our information technology systems and infrastructure requires us to commit to significant resources, effective planning, and execution.
Our ability to modernize and maintain our information technology systems and infrastructure requires us to commit significant resources and effective planning and execution.
Even though our actuaries continually test actual-to-expected results, actual results may differ significantly from the levels assumed, which could result in increased policy obligations and expenses and thus negatively affect our profit margins and income. A ratings downgrade or other negative action by a rating agency could materially affect our business, financial condition, and results of operations.
Further, actual results may differ significantly from the levels assumed, which could result in increased policy obligations and expenses and thus negatively affect our profit margins and income. 11 GL 2023 FORM 10-K Table of Contents A ratings downgrade or other negative action by a rating agency could materially affect our business, financial condition, and results of operations.
We may fail to meet our commitments or targets, and our policies and processes to evaluate and manage ESG standards in coordination with other business priorities may not prove completely effective or satisfy investors, customers, regulators, or others.
Prevailing corporate responsibility and sustainability standards and expectations may also reflect contrasting or conflicting values or agendas. We may fail to meet our commitments or targets, and our policies and processes to evaluate and manage these standards in coordination with other business priorities may not prove completely effective or satisfy investors, customers, regulators, or others.
The primary purpose of this supervision and regulation is the protection of policyholders, not investors. Regulatory agencies have broad administrative power over numerous aspects of our business, including premium rates and other terms and conditions included in the insurance policies offered by our insurance subsidiaries, marketing practices, advertising, agent licensing, policy forms, capital adequacy, solvency, reserves and permitted investments.
Regulatory agencies have broad administrative power over numerous aspects of our business, including premium rates for our life, Medicare Supplement and other supplement health products, as well as other terms and conditions included in the insurance policies offered by our insurance subsidiaries, marketing practices, advertising, agent licensing, policy forms, capital adequacy, solvency, reserves and permitted investments.
If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend some or all of our business activities and/or impose substantial fines. Changes in U.S. federal income tax law could increase our tax costs or negatively impact our insurance subsidiaries' capital.
If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend some or all of our business activities and/or impose substantial fines.
From time-to-time, we are subject to civil litigation, including class and collective action litigation, alleging that we have improperly classified certain of our sales agents as independent contractors.
From time-to-time, we are subject to civil litigation, including class and collective action litigation, alleging that we have improperly classified certain of our sales agents as independent contractors. A future adverse judgment in connection with such litigation could result in substantial damages.
Claims resulting from natural or man-made catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially reduce our profitability or harm our financial condition.
Claims resulting from natural or man-made catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially reduce our profitability or harm our financial condition. In addition, government, business and consumer reactions to public health events could result in material negative impacts to our business and operations.
Further, the development and retention of producing agents are critical to supporting sales growth in our agency operations because our insurance sales are primarily made to individuals. A failure to effectively develop new methods of reaching consumers, realize cost efficiencies or generate an attractive value proposition in our Direct to Consumer Division business could result in reduced sales and profits.
A failure to effectively develop new methods of reaching consumers, realize cost efficiencies or generate an attractive value proposition in our Direct to Consumer Division business could result in reduced sales and profits.
These reserves do not represent an exact calculation of liability, but rather are actuarial estimates based on models and accounting requirements that include many assumptions and projections which are inherently uncertain.
These reserves do not represent an exact calculation of liability, but rather are actuarial estimates based on models and accounting requirements that include many assumptions and projections which are inherently uncertain. The reserve assumptions involve the exercise of significant judgment with respect to levels or trends of mortality, morbidity, lapses, and discount rates.
Other sources of liquidity include a variety of short-term and long-term instruments, including our credit facility, commercial paper, long-term debt, Federal Home Loan Bank (FHLB), intercompany financing and reinsurance. The principal sources of our insurance subsidiaries’ liquidity are insurance premiums, as well as investment income, maturities, repayments and other cash flow from our investment portfolio.
Other sources of liquidity include a variety of short-term and long-term instruments, including our credit facility, commercial paper, long-term debt, Federal Home Loan Bank (FHLB), intercompany financing and reinsurance.
Noncompliance with any privacy laws, whether by us or by one of our business associates, could have a material adverse effect on our business, reputation and results of operations and could result in material fines and penalties, various forms of damages, consent orders regarding our privacy and security practices, adverse actions against our licenses to do business, and injunctive relief.
Noncompliance with these laws, whether by us or by one of our business associates, could have a material adverse effect on our business, reputation, and results of operations and could result in material fines and penalties, various forms of damages, consent orders regarding our privacy and security practices, adverse actions against our licenses to do business, and injunctive relief. 13 GL 2023 FORM 10-K Table of Contents General Risk Factors The failure to maintain effective and efficient information systems at the Company could adversely affect our financial condition and results of operations.
In addition, due to the highly regulated nature of the insurance industry, we must continually implement new, and maintain existing, technology or adapt existing technology to meet compliance requirements of new and proposed regulations.
As a result of more frequent and sophisticated cyberattacks and the highly regulated nature of the insurance industry, we must continually implement new, and maintain existing, technology or adapt existing technology to protect against security and privacy incidents and to meet compliance requirements of new and proposed regulations.
Employee or agent malfeasance or errors in the handling of our information systems may result in unauthorized access to customer or proprietary information, or an inability to use our information systems to efficiently support business operations. More frequent and sophisticated cyberattacks and more impactful regulatory oversight models could result in additional costs to protect against security breaches.
Malicious third parties, employee or agent errors or disasters affecting our information systems could impair our business operations, regulatory compliance, and financial condition. Employee or agent malfeasance or errors in the handling of our information systems may result in unauthorized access to customer or proprietary information, or an inability to use our information systems to efficiently support business operations.
In addition, if the credit and capital markets were to experience significant disruption, uncertainty and instability, these conditions could adversely affect our access to capital. Such market conditions could limit our ability to replace maturing debt obligations in a timely manner or at all and/or access the capital necessary to grow our business.
In addition, if the credit and capital markets were to experience significant disruption, uncertainty and instability, these conditions could adversely affect our access to capital.
Negative publicity through traditional media, internet, social media and other public forums could damage our brand or reputation and adversely impact our agent recruiting efforts, the ability to market our products and the persistency of in-force policies. 14 GL 2022 FORM 10-K Table of Contents We may fail to meet expectations relating to environmental, social, and governance standards and practices .
Damage to the brand and reputation of Globe Life or its subsidiaries could affect our ability to conduct business. Negative publicity through traditional media, internet, social media and other public forums could damage our brand or reputation and adversely impact our agent recruiting efforts, the ability to market our products and the persistency of in-force policies.
Business and Operational Risks The development and maintenance of our various distribution channels are critical to growth in product sales and profits. Our future success depends, in substantial part, on our ability to recruit, hire, and motivate highly-skilled insurance personnel.
Our future success depends, in substantial part, on our ability to recruit, hire, and motivate highly-skilled insurance personnel. Further, the development and retention of producing agents are critical to supporting sales growth in our agency operations because our insurance sales are primarily made to individuals.
In addition, in the event that a significant number of our management were unavailable following a disaster, the achievement of our strategic objectives could be negatively impacted. 12 GL 2022 FORM 10-K Table of Contents Our business is subject to the risk of direct or indirect effects of climate change.
In addition, in the event that a significant number of our management were unavailable following a disaster, the achievement of our strategic objectives could be negatively impacted.
Certain existing or potential investors, customers and regulators evaluate our business or other practices according to a variety of environmental, social and governance (ESG) standards and expectations. Certain of our regulators have proposed or adopted, or may propose or adopt, ESG rules or standards that would apply to our business.
We may fail to meet expectations relating to corporate responsibility and sustainability standards and practices . Certain existing or potential investors, customers and regulators evaluate our business or other practices according to a variety of corporate responsibility and sustainability standards and expectations.
In the unlikely event that current sources of liquidity do not satisfy our needs, we may have to seek additional financing or raise capital.
Such market conditions could limit our ability to replace maturing debt obligations in a timely manner, or at all, and/or access the capital necessary to grow our business and maintain required capital levels and credit ratings. In the event that current sources of liquidity do not satisfy our needs, we may have to seek additional financing or raise capital.
Various state laws address the use and disclosure of personally identifiable information to the extent they are more restrictive than those contained in the privacy and security provisions in the federal Gramm-Leach-Bliley Act of 1999 (GLBA), the Health Information Technology for Economic and Clinical Health Act (HITECH), and in the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
We are subject to the privacy and security provisions of federal laws including, but not limited to, the Gramm-Leach-Biley Act of 1999 (GLBA), the Health Information Technology for Economic and Clinical Health Act (HITECH), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA additionally requires that we impose privacy and security requirements on our business associates.
Removed
Item 1A. Risk Factors Risks Related to Our Business The insurance industry is a regulated industry, populated by many public and private companies. We operate in the industry's life and health insurance sectors, each of which has its own set of risks.
Added
Item 1A. Risk Factors Risks Related to Our Business The following is a summary of the material risks and uncertainties that could adversely affect our business, financial condition and results of operations. Business and Operational Risks The development and maintenance of our various distribution channels are critical to growth in product sales and profits.
Removed
The impact of COVID-19 and related risks could materially affect our results of operations, financial position and/or liquidity. The effects of the COVID-19 pandemic, and U.S. and international responses, are wide-ranging, costly, and disruptive, and has resulted in significant disruptions in economic activity and financial markets.
Added
Future changes in rules, regulations or interpretations of existing rules and regulations could require us to reclassify all or a portion of our agents as employees and the impact could significantly increase our operating costs and negatively impact our insurance business.
Removed
Excess deaths from non-COVID causes have directly and indirectly adversely affected the Company and will likely continue to do so for an uncertain period of time.
Added
The use of third-party vendors to support the Company's operations makes the Company susceptible to the operational risk of those third parties, which could lower revenues, increase costs, reduce profits, disrupt business, or damage the Company’s reputation.
Removed
The COVID-19 pandemic subjects the Company to various potential risks that could adversely affect the Company in different ways, including but not limited to the following: • Reduced sales resulting from potential limitations in the virtual sales and agent recruiting process or reductions in the willingness or ability of consumers to purchase our products; • Reduced cash flows from lower premiums, higher surrenders and greater than anticipated claim payments; • Disruptions, delays, and increased costs and risks related to employees working remotely, having limited or no access to our facilities, and experiencing reductions or interruptions of critical or essential services; • Ratings downgrades, increased bankruptcies and credit spread widening in industries in which we invest in our investment portfolio.
Added
The Company utilizes third-party vendors to provide certain business support services and functions, which exposes the Company to risks outside the control of the Company that may lead to business disruptions.
Removed
Though we believe our sales agents are properly classified as independent contractors, a future adverse judgment in connection with such litigation could result in substantial damages. 9 GL 2022 FORM 10-K Table of Contents Financial and Strategic Risks Our investments are subject to market and credit risks.
Added
The reliance on these third-party vendors creates a number of business risks, such as the risk that the Company may not maintain service quality, control or effective management of the outsourced business operations and that the Company cannot control the information systems, facilities or networks of such third-party vendors.
Removed
The reserve computations involve the exercise of significant judgment with respect to levels of mortality, morbidity, persistency, and investment yields, as well as the 11 GL 2022 FORM 10-K Table of Contents timing of premium and benefit payments.
Added
Additionally, the Company is at risk of being unable to meet legal, regulatory, financial or customer obligations if the information systems, facilities or networks of a third-party vendor are disrupted, damaged or fail, whether due to physical disruptions, such as fire, natural disaster, pandemic or power outage, or due to cybersecurity incidents, ransomware or other impacts to vendors, including labor strikes, political unrest and terrorist attacks.
Removed
The supplemental health insurance market is subject to substantial regulatory scrutiny. Regulatory changes could impact our Medicare Supplement and other supplemental health business. The nature and timing of any such changes cannot be predicted and could have a material adverse effect on our supplemental health insurance business.
Added
The Company may be adversely affected by a third-party vendor who operates in a poorly controlled manner or fails to deliver contracted services, which could lower revenues, increase costs, reduce profits, disrupt business, or damage the Company’s reputation. 9 GL 2023 FORM 10-K Table of Contents Financial and Strategic Risks Our investments are subject to market and credit risks.
Removed
HIPAA also requires that we impose privacy and security requirements on our business associates (as that term is defined in the HIPAA regulations).
Added
The principal sources of our insurance subsidiaries’ liquidity are insurance premiums, as well as investment income, maturities, repayments and other cash flow from our investment portfolio.
Removed
We gather and maintain data for the purpose of conducting marketing, actuarial analysis, sales and policy administration functions. Malicious third-parties, employee or agent errors or disasters affecting our information systems could impair our business operations, regulatory compliance, and financial condition.
Added
We are subject to liquidity risks associated with sourcing a concentration of our funding from the Federal Home Loan Bank (“FHLB”). We use institutional funding agreements originating from FHLB, which from time to time serve as a significant source of our liquidity. Additionally, we use agreements with the FHLB to meet near-term liquidity needs.
Removed
Damage to the brand and reputation of Globe Life or its subsidiaries could affect our ability to conduct business.
Added
If the FHLB were to change its definition of eligible collateral, we could be required to post additional amounts of collateral in the form of cash or other assets.
Removed
Our practices may be judged by ESG standards that are continually evolving and not always clear. Prevailing ESG standards and expectations may also reflect contrasting or conflicting values or agendas.
Added
Additionally, if our creditworthiness falls below the FHLB’s requirements or if legislative or other political actions cause changes to the FHLB’s mandate or to the eligibility of life insurance companies to be members of the FHLB system, we could be required to find other sources to replace this funding, which may prove difficult and increase our liquidity risk.
Added
Changes in assumptions could materially impact our financial condition and results of operations.
Added
We are exposed to model risk, which is the risk of financial loss or reputational damage or adverse regulatory impacts caused by model errors or limitations, incorrect implementation of models, or misuse of or overreliance upon models.
Added
Models are utilized by our businesses and corporate areas primarily to project future cash flows associated with pricing products, calculating reserves and valuing assets, as well as in evaluating risk and determining capital requirements, among other uses. These models may not operate properly and may rely on assumptions and projections that are inherently uncertain.
Added
As our businesses continue to grow and evolve, the number and complexity of models we utilize expands, increasing our exposure to error in the design, implementation or use of models, including the associated input data and assumptions. 12 GL 2023 FORM 10-K Table of Contents Our business is subject to the risk of direct or indirect effects of climate change.
Added
The primary purpose of this supervision and regulation is the protection of policyholders, not investors.
Added
Various state laws also address the use and disclosure of personally identifiable information, to the extent they are more restrictive than these and other federal laws. Further, approximately half of the states have adopted a form of the National Association of Insurance Commissioners’ data security model law, which imposes security requirements.
Added
Changes in U.S. federal income tax law could increase our tax costs or negatively impact our insurance subsidiaries' capital.
Added
Certain of our regulators have proposed or adopted, or may propose or adopt, certain corporate responsibility and sustainability rules or standards that would apply to our business. Our practices may be judged by these standards that are continually evolving and not always clear. Our decisions or priorities are made with the considerations of all stakeholders.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Globe Life Inc., through its subsidiaries, owns or leases buildings that are used in the normal course of business. Globe Life Inc. owns and occupies approximately 480,000 combined square feet in McKinney, Texas (headquarters) and at the Waco, Texas and Oklahoma City, Oklahoma campuses. Additionally, the Company leases other buildings across the U.S.
Biggest changeItem 2. Properties Globe Life Inc., through its subsidiaries, owns or leases buildings that are used in the normal course of business. Globe Life Inc. owns and occupies approximately 480,000 combined square feet in McKinney, Texas (headquarters) and at the Waco, Texas and Oklahoma City, Oklahoma campuses.
Added
Additionally, the Company leases other buildings across the U.S. 16 GL 2023 FORM 10-K Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAll rights reserved. 17 GL 2022 FORM 10-K Table of Contents Purchases of Certain Equity Securities by the Issuer and Others for the Fourth Quarter 2022 (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares (or Approximate Dollar Amount) that May Yet Be Purchased Under the Plans or Programs October 1-31, 2022 122,082 $ 110.68 122,082 — November 1-30, 2022 605,700 113.57 605,700 — December 1-31, 2022 310,000 118.98 310,000 — On August 10, 2022, Globe Life's Board reaffirmed its continued authorization of the Company’s stock repurchase program in amounts and with timing that management, in consultation with the Board, determined to be in the best interest of the Company.
Biggest changeAll rights reserved. 18 GL 2023 FORM 10-K Table of Contents Purchases of Certain Equity Securities by the Issuer and affiliated purchasers for the Fourth Quarter 2023 (a) (b) (c) (d) Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares (or Approximate Dollar Amount) that May Yet Be Purchased Under the Plans or Programs October 1-31, 2023 235,678 $ 109.75 235,678 — November 1-30, 2023 437,158 118.25 437,158 — December 1-31, 2023 541,892 122.96 541,892 —
Globe Life's stock is included within the S&P 500 Index. *$100 invested on 12/31/2017 in stock or index, including reinvestment of dividends. Fiscal year ended December 31. Copyright© 2023 Standard & Poor's, a division of S&P Global.
Globe Life's stock is included within the S&P 500 Index. *$100 invested on 12/31/2018 in stock or index, including reinvestment of dividends. Fiscal year ended December 31. Copyright© 2023 Standard & Poor's, a division of S&P Global.
There were 2,030 shareholders of record on December 31, 2022, excluding shareholder accounts held in nominee form. The line graph shown below compares Globe Life's cumulative total return on its common stock with the cumulative total returns of the Standard & Poor’s 500 Stock Index (S&P 500) and a Life Insurance Index.
There were 1,924 shareholders of record on December 31, 2023, excluding shareholder accounts held in nominee form. The line graph shown below compares Globe Life's cumulative total return on its common stock with the cumulative total returns of the Standard & Poor’s 500 Stock Index (S&P 500) and a Life Insurance Index.
Removed
The program has no defined expiration date or maximum number of shares to be purchased.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe severity, magnitude, and impact of natural or man-made catastrophic events, including but not limited to pandemics, tornadoes, hurricanes, earthquakes, war and terrorism, on our operations and personnel, commercial activity and demand for our products; and 14. Our ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period.
Biggest changeThe severity, magnitude, and impact of natural or man-made catastrophic events, including but not limited to pandemics, tornadoes, hurricanes, earthquakes, war and terrorism, on our operations and personnel, commercial activity, level of claims, and demand for our products; and 14.
Compromise by a malicious actor or other event that causes a loss of secure data from, or inaccessibility to, our computer and other information technology systems; 13.
Compromise by a malicious actor or other event that causes a loss of data from, or inaccessibility to, our computer and other information technology systems; 13.
General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from geopolitical events and the COVID-19 pandemic, particularly in certain industries that may comprise part of our investment portfolio) that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities; 6.
General economic, industry sector or individual debt issuers’ financial conditions (including developments and volatility arising from geopolitical events, particularly in certain industries that may comprise part of our investment portfolio) that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities; 6.
Economic and other conditions, including the impact of inflation, geopolitical events and the COVID-19 pandemic on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions; 2.
Economic and other conditions, including the impact of inflation, geopolitical events, and the recent pandemic on the U.S. economy, leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Globe Life's assumptions; 2.
Forward-looking statements are based upon estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control, including uncertainties related to the impact of the COVID-19 pandemic and associated direct and indirect effects on our business operations, financial results, and financial condition.
Forward-looking statements are based upon estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control, including uncertainties related to the impact of the recent pandemic and associated direct and indirect effects on our business operations, financial results, and financial condition.
Item 6. [Reserved] 18 GL 2022 FORM 10-K Table of Contents CAUTIONARY STATEMENTS We caution readers regarding certain forward-looking statements contained in the foregoing discussion and elsewhere in this document, and in any other statements made by, or on behalf of Globe Life whether or not in future filings with the Securities and Exchange Commission.
Item 6. [Reserved] 19 GL 2023 FORM 10-K Table of Contents CAUTIONARY STATEMENTS We caution readers regarding certain forward-looking statements contained in the foregoing discussion and elsewhere in this document, and in any other statements made by, or on behalf of Globe Life whether or not in future filings with the Securities and Exchange Commission.
Changes in the competitiveness of the Company's products and pricing; 7. Litigation results; 8. Levels of administrative and operational efficiencies that differ from our assumptions (including any reduction in efficiencies resulting from increased costs arising from operating during the COVID-19 pandemic and the impact of higher than anticipated inflation); 9.
Changes in the competitiveness of the Company's products and pricing; 7. Litigation results; 8. Levels of administrative and operational efficiencies that differ from our assumptions (including any reduction in efficiencies resulting from increased costs arising from the impact of higher than anticipated inflation); 9.
Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission. 19 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis
Our ability to access the commercial paper and debt markets, particularly if such markets become unpredictable or unstable for a certain period. Readers are also directed to consider other risks and uncertainties described in other documents on file with the Securities and Exchange Commission. 20 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

182 edited+70 added−99 removed39 unchanged
Biggest changeOperating Expenses Selected Information (Dollar amounts in thousands) 2022 2021 2020 Amount % of Premium Amount % of Premium Amount % of Premium Insurance administrative expenses: Salaries $ 129,711 3.0 $ 115,852 2.8 $ 105,935 2.8 Other employee costs 42,319 1.0 41,841 1.0 39,885 1.0 Information technology costs 55,526 1.3 47,923 1.2 45,742 1.2 Legal costs 12,056 0.3 15,494 0.4 11,256 0.3 Other administrative costs 59,729 1.4 50,521 1.2 48,129 1.3 Total insurance administrative expenses 299,341 7.0 271,631 6.6 250,947 6.6 Parent company expense 11,156 9,553 9,891 Stock compensation expense 35,650 30,272 35,892 Legal proceedings 2,496 8,139 3,275 Non-operating expenses 5,311 2,434 1,033 Total operating expenses, per Consolidated Statements of Operations $ 353,954 $ 322,029 $ 301,038 2022 2021 2020 Amount % Amount % Amount % Total insurance administrative expenses increase (decrease) over prior year $ 27,710 10.2 $ 20,684 8.2 $ 10,626 4.4 Total operating expenses increase (decrease) over prior year 31,925 9.9 20,991 7.0 (3,787) (1.2) Total operating expenses 2022 increased 10% over the prior year reflecting higher insurance administrative expenses.
Biggest changeOperating Expenses Selected Information (Dollar amounts in thousands) 2023 2022 2021 Amount % of Premium Amount % of Premium Amount % of Premium Insurance administrative expenses: Salaries $ 119,699 2.7 $ 129,711 3.0 $ 115,852 2.8 Other employee costs 35,905 0.8 42,319 1.0 41,841 1.0 Information technology costs 64,998 1.5 55,526 1.3 47,923 1.2 Legal costs 15,335 0.3 12,056 0.2 15,494 0.4 Other administrative costs 65,224 1.5 59,729 1.4 50,521 1.2 Total insurance administrative expenses 301,161 6.8 299,341 6.9 271,631 6.6 Parent company expense 10,866 11,156 9,553 Stock compensation expense 30,736 35,650 30,272 Legal proceedings 900 2,496 8,139 Non-operating expenses 4,170 5,311 2,434 Total operating expenses, per Consolidated Statements of Operations $ 347,833 $ 353,954 $ 322,029 2023 2022 2021 Amount % Amount % Amount % Total insurance administrative expenses increase (decrease) over prior year $ 1,820 0.6 $ 27,710 10.2 $ 20,684 8.2 Total operating expenses increase (decrease) over prior year (6,121) (1.7) 31,925 9.9 20,991 7.0 Total operating expenses for December 31, 2023 decreased in comparison with the prior year primarily due to decreases in stock compensation expense and other non-operating costs.
Fixed Maturities by Sector December 31, 2022 (Dollar amounts in thousands) Below Investment Grade Total Fixed Maturities % of Total Fixed Maturities Amortized Cost, net Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost, net Gross Unrealized Gains Gross Unrealized Losses Fair Value At Amortized Cost, net At Fair Value Corporates: Financial Insurance - life, health, P&C $ 107,355 $ 22 $ (13,966) $ 93,411 $ 2,375,633 $ 44,578 $ (216,938) $ 2,203,273 13 13 Banks 26,944 84 (192) 26,836 1,336,868 14,035 (100,038) 1,250,865 7 8 Other financial 74,963 1 (22,026) 52,938 1,195,293 4,513 (187,513) 1,012,293 7 6 Total financial 209,262 107 (36,184) 173,185 4,907,794 63,126 (504,489) 4,466,431 27 27 Industrial Energy 44,723 — (10,168) 34,555 1,436,598 22,637 (101,923) 1,357,312 8 8 Basic materials — — — — 1,090,309 14,913 (95,958) 1,009,264 6 6 Consumer, non-cyclical — — — — 2,146,003 20,427 (232,196) 1,934,234 12 12 Other industrials 25,461 — (522) 24,939 1,212,674 19,107 (121,540) 1,110,241 6 7 Communications 28,499 — (2,253) 26,246 857,375 7,779 (110,132) 755,022 5 5 Transportation — — — — 520,029 11,684 (34,269) 497,444 3 3 Consumer. cyclical 149,465 — (27,822) 121,643 592,657 4,903 (85,005) 512,555 3 3 Technology — — — — 247,996 90 (59,672) 188,414 1 1 Total industrial 248,148 — (40,765) 207,383 8,103,641 101,540 (840,695) 7,364,486 44 45 Utilities 35,496 433 (3,173) 32,756 1,924,190 36,670 (125,713) 1,835,147 11 11 Total corporates 492,906 540 (80,122) 413,324 14,935,625 201,336 (1,470,897) 13,666,064 82 83 States, municipalities, and political divisions: General obligations — — — — 915,725 5,041 (167,393) 753,373 5 5 Revenues — — — — 1,875,305 19,287 (338,054) 1,556,538 10 9 Total states, municipalities, and political divisions — — — — 2,791,030 24,328 (505,447) 2,309,911 15 14 Other fixed maturities: Government (U.S. and foreign) — — — — 449,603 33 (51,674) 397,962 2 2 Collateralized debt obligations 37,098 13,266 — 50,364 37,098 13,266 — 50,364 — — Other asset-backed securities 12,493 — (1,618) 10,875 88,336 4 (9,276) 79,064 1 1 Total fixed maturities $ 542,497 $ 13,806 $ (81,740) $ 474,563 $ 18,301,692 $ 238,967 $ (2,037,294) $ 16,503,365 100 100 42 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC.
Management's Discussion & Analysis Fixed Maturities by Sector December 31, 2022 (Dollar amounts in thousands) Below Investment Grade Total Fixed Maturities % of Total Fixed Maturities Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value At Amortized Cost, net At Fair Value Corporates: Financial Insurance - life, health, P&C $ 107,355 $ 22 $ (13,966) $ 93,411 $ 2,375,633 $ 44,578 $ (216,938) $ 2,203,273 13 13 Banks 26,944 84 (192) 26,836 1,336,868 14,035 (100,038) 1,250,865 7 8 Other financial 74,963 1 (22,026) 52,938 1,195,293 4,513 (187,513) 1,012,293 7 6 Total financial 209,262 107 (36,184) 173,185 4,907,794 63,126 (504,489) 4,466,431 27 27 Industrial Energy 44,723 — (10,168) 34,555 1,436,598 22,637 (101,923) 1,357,312 8 8 Basic materials — — — — 1,090,309 14,913 (95,958) 1,009,264 6 6 Consumer, non-cyclical — — — — 2,146,003 20,427 (232,196) 1,934,234 12 12 Other industrials 25,461 — (522) 24,939 1,212,674 19,107 (121,540) 1,110,241 6 7 Communications 28,499 — (2,253) 26,246 857,375 7,779 (110,132) 755,022 5 5 Transportation — — — — 520,029 11,684 (34,269) 497,444 3 3 Consumer. cyclical 149,465 — (27,822) 121,643 592,657 4,903 (85,005) 512,555 3 3 Technology — — — — 247,996 90 (59,672) 188,414 1 1 Total industrial 248,148 — (40,765) 207,383 8,103,641 101,540 (840,695) 7,364,486 44 45 Utilities 35,496 433 (3,173) 32,756 1,924,190 36,670 (125,713) 1,835,147 11 11 Total corporates 492,906 540 (80,122) 413,324 14,935,625 201,336 (1,470,897) 13,666,064 82 83 States, municipalities, and political divisions: General obligations — — — — 915,725 5,041 (167,393) 753,373 5 5 Revenues — — — — 1,875,305 19,287 (338,054) 1,556,538 10 9 Total states, municipalities, and political divisions — — — — 2,791,030 24,328 (505,447) 2,309,911 15 14 Other fixed maturities: Government (U.S., municipal, and foreign) — — — — 449,603 33 (51,674) 397,962 2 2 Collateralized debt obligations 37,098 13,266 — 50,364 37,098 13,266 — 50,364 — — Other asset-backed securities 12,493 — (1,618) 10,875 88,336 4 (9,276) 79,064 1 1 Total fixed maturities $ 542,497 $ 13,806 $ (81,740) $ 474,563 $ 18,301,692 $ 238,967 $ (2,037,294) $ 16,503,365 100 100 40 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC.
The composite rating for each security, other than private-placement securities managed by third parties, is the average of the security’s ratings as assigned by Moody’s Investor Service, Standard & Poor’s, Fitch Ratings, and Dominion Bond Rating Service, LTD. The ratings assigned by these four nationally recognized statistical rating organizations are evenly weighted when calculating the average.
The composite rating for each security, other than private-placement securities managed by third parties, is the average of the security’s available ratings as assigned by Moody’s Investor Service, Standard & Poor’s, Fitch Ratings, and Dominion Bond Rating Service, LTD. The ratings assigned by these four nationally recognized statistical rating organizations are evenly weighted when calculating the average.
In addition to offering financial incentives and training opportunities, the agency has made considerable investments in information technology, including launching 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.
In addition to offering financial incentives and training opportunities, the agency 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.
While the juvenile market is an important source of sales, it is also a vehicle to reach the parents and grandparents of juvenile policyholders, who are more likely to respond favorably to a DTC solicitation for life coverage on themselves in comparison to the general adult population.
The juvenile market is an important source of sales, it is also a vehicle to reach the parents and grandparents of juvenile policyholders, who are more likely to respond favorably to a DTC solicitation for life coverage on themselves in comparison to the general adult population.
We find this flexibility to be enticing for new recruits as well as a driver of sustainability for our agency force. The Direct to Consumer Division (DTC) offers adult and juvenile life insurance through a variety of marketing approaches, including direct mailings, insert media, and electronic media.
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) offers adult and juvenile life insurance through a variety of marketing approaches, including direct mailings, insert media, and electronic media.
Management considers both historical and future yields to determine the expected return. The Company determines mortality assumptions through the use of published mortality tables that reflect broad-based studies of mortality and published longevity improvement scales. The criteria used to determine the primary assumptions are discussed in Note 9—Postretirement Benefits .
Management considers both historical and future yields to determine the expected return. The Company determines mortality assumptions through the use of published mortality tables that reflect broad-based studies of mortality and published longevity improvement scales. The criteria used to determine the primary assumptions are discussed in Note 10—Postretirement Benefits .
The following graphs represent net income and net operating income for the three years ended December 31, 2022. (1) As shown in the charts above, net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure.
The following graphs represent net income and net operating income for the three years ended December 31, 2023. (1) As shown in the charts above, net operating income is the consolidated total of segment profits after tax and as such is considered a non-GAAP measure.
Management's Discussion & Analysis In 2022, 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, 2022.
Management's Discussion & Analysis 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.
If market conditions are favorable, we currently expect that share repurchases will continue to be a primary use of those funds. As discussed in Note 1—Significant Accounting Policies , the Company will adopt ASU 2018-12, Financial Services–Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI) , effective on January 1, 2023.
If market conditions are favorable, we currently expect that share repurchases will continue to be a primary use of those funds. As discussed in Note 1—Significant Accounting Policies , the Company adopted ASU 2018-12, Financial Services–Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI) on January 1, 2023.
For more information about our fixed maturity portfolio by component at December 31, 2022 and December 31, 2021, including a discussion of allowance for credit losses, an analysis of unrealized investment losses and a schedule of maturities, see Note 4—Investments .
For more information about our fixed maturity portfolio by component at December 31, 2023 and December 31, 2022, including a discussion of allowance for credit losses, an analysis of unrealized investment losses and a schedule of maturities, see Note 4—Investments .
As of December 31, 2022, the Parent Company was in full compliance with all covenants related to the aforementioned debt. As a part of the credit facility, Globe Life has stand-by letters of credits. These letters are issued among our subsidiaries, one of which is an offshore captive reinsurer, and have no impact on company obligations as a whole.
As of December 31, 2023, the Parent Company was in full compliance with all covenants related to the aforementioned debt. As a part of the credit facility, Globe Life has stand-by letters of credit. These letters are issued among our subsidiaries, one of which is an offshore captive reinsurer, and have no impact on company obligations as a whole.
Our goal is to maintain statutory capital within our insurance subsidiaries at levels necessary to support our current ratings. For 2022, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%.
Our goal is to maintain statutory capital within our insurance subsidiaries at levels necessary to support our current ratings. For 2024, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%.
Additionally, the agency continues to help improve the ability of agents to develop new marketing opportunities. Systems that have been put in place, including the addition of a CRM platform and enhanced analytical capabilities, have also helped the agents develop additional marketing opportunities as well as improve the productivity of agents selling in the individual life market.
Additionally, the agency 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.
Additionally, this division has invested in and successfully implemented technology that allows the agency force to engage in virtual recruiting, training, and sales activity. Over the course of the pandemic, the agents have shifted to primarily a virtual experience with the customers and have generated a vast majority of sales through virtual presentations.
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 the customers and have generated a vast majority of sales through virtual presentations.
The following chart presents the growth in net investment income and the growth in mean invested assets. 2022 2021 2020 Growth in net investment income 3.7 % 2.7 % 1.8 % Growth in mean invested assets (at amortized cost) 4.1 % 5.3 % 5.6 % Globe Life's net investment income benefits from higher interest rates on new investments.
The following chart presents the growth in net investment income and the growth in mean invested assets. 2023 2022 2021 Growth in net investment income 6.6 % 3.7 % 3.2 % Growth in mean invested assets (at amortized cost) 3.5 % 4.1 % 5.3 % Globe Life's net investment income benefits from higher interest rates on new investments.
The following tables summarize certain information about the major corporate sectors and security types held in our fixed maturity portfolio at December 31, 2022 and 2021.
The following tables summarize certain information about the major corporate sectors and security types held in our fixed maturity portfolio at December 31, 2023 and 2022.
We maintain a significant available-for-sale fixed maturity portfolio to support our insurance policy liabilities. Current accounting guidance requires that we revalue our portfolio to fair market value at the end of each accounting period. The period-to-period changes in fair value, net of their associated impact on deferred acquisition costs and income tax, are reflected directly in shareholders’ equity.
We maintain a significant available-for-sale fixed maturity portfolio to support our insurance policy liabilities. Current accounting guidance requires that we revalue our portfolio to fair market value at the end of each accounting period. The period-to-period changes in fair value, net of their associated impact on income tax, are reflected directly in shareholders’ equity.
Since implementing our share repurchase program in 1986, we have used $9.0 billion of excess cash flow at the Parent Company to repurchase Globe Life Inc. common shares after determining that the repurchases provided a greater risk adjusted after-tax return than other investment alternatives.
Since implementing our share repurchase program in 1986, we have used $9.4 billion of excess cash flow at the Parent Company to repurchase Globe Life Inc. common shares after determining that the repurchases provide a greater risk-adjusted after-tax return than other investment alternatives.
The outstanding letters of credit remained at $125 million at December 31, 2022. The Parent Company expects to have readily available funds for 2023 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiaries through internally generated cash flow and the credit facility.
The outstanding letters of credit remained at $115 million at December 31, 2023. The Parent Company expects to have readily available funds for 2024 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiaries through internally generated cash flow and the credit facility.
Our strong cash flows from operations, ongoing investment maturities, and credit line availability make any need to sell securities for liquidity highly unlikely. Capital Resources. The Parent Company's capital structure consists of short-term debt (the commercial paper facility and current maturities of long-term debt) , long-term debt, and shareholders’ equity.
Our strong cash flows from operations, ongoing investment maturities, and available liquidity under credit facility make any need to sell securities for liquidity highly unlikely. Capital Resources. The Parent Company's capital structure consists of short-term debt (the commercial paper facility and current maturities of long-term debt) , long-term debt, and shareholders’ equity.
As of December 31, 2022, we had available $340 million of additional borrowing capacity under this facility, compared with $295 million a year earlier. Interest charged on the commercial paper program resembles variable rate debt due to its short term nature.
As of December 31, 2023, we had available $316 million of additional borrowing capacity under this facility, compared with $340 million a year earlier. Interest charged on the commercial paper program resembles variable rate debt due to its short term nature.
The Company holds insignificant amounts in foreign government bonds, collateralized debt obligations, asset-backed securities, and mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers. At December 31, 2022, the total fixed maturity portfolio consisted of 979 issuers.
The Company holds insignificant amounts in foreign government bonds, collateralized debt obligations, asset-backed securities, and mortgage-backed securities. Corporate securities are diversified over a variety of industry sectors and issuers. At December 31, 2023, the total fixed maturity portfolio consisted of 980 issuers.
Up to $250 million in letters of credit can be issued against the facility. The facility is further designated as a back-up line of credit for a commercial paper program under which commercial paper may be issued at any time, with total commercial paper outstanding not to exceed the facility maximum less any letters of credit issued.
Up to $250 million in letters of credit can be issued against the facility. The facility serves as a back-up line of credit for a commercial paper program under which commercial paper may be issued at any time, with total commercial paper outstanding not to exceed the facility maximum less any letters of credit issued.
Most of its policies include a cash-back feature, such as a return of premium, where any excess of premiums over claims paid is returned to the policyholder at the end of a specified period stated within the insurance policy. Underwriting margin as a percent of premium in 2022 was 27%, the same as in 2021.
Most of its policies include a cash-back feature, such as a return of premium, where any excess of premiums over claims paid is returned to the policyholder at the end of a specified period stated within the insurance policy. Underwriting margin as a percent of premium was 34% in 2023, the same as in 2022, and 31% in 2021.
At December 31, 2022, our gross liability under these plans was $563 million, but was offset by assets of $500 million. The actuarial assumptions used in determining our obligations/expenses for pensions include: employee mortality and turnover, retirement age, the expected return on plan assets, projected salary increases, and the discount rate at which future obligations could be settled.
At December 31, 2023, our gross liability under these plans was $628 million, but was offset by assets of $571 million. The actuarial assumptions used in determining our obligations/expenses for pensions include: employee mortality and turnover, retirement age, the expected return on plan assets, projected salary increases, and the discount rate at which future obligations could be settled.
Globe Life has consistently been able to issue commercial paper as needed during the three years ended December 31, 2022. As discussed in Note 11—Debt , on September 30, 2021, Globe Life amended the credit agreement dated August 24, 2020. The five-year credit agreement will now mature on September 30, 2026.
Globe Life has consistently been able to issue commercial paper as needed during the three years ended December 31, 2023. As discussed in Note 12—Debt , on September 30, 2021, Globe Life amended the credit agreement dated August 24, 2020. The five-year credit agreement will mature on September 30, 2026.
Included in the following chart are private placement fixed maturity holdings of $466 million at amortized cost, net of allowance for credit losses ($425 million at fair value) for which the ratings were assigned by the third-party managers.
Included in the following chart are private placement fixed maturity holdings of $439 million at amortized cost, net of allowance for credit losses ($402 million at fair value) for which the ratings were assigned by the third-party managers.
The following table shows net sales information for each of the last three years by distribution channel.
The following table presents net sales information for each of the last three years by distribution channel.
In recent years, production from electronic media, which is comprised of sales through both the internet and inbound phone calls to our call center, has grown faster than direct mail response as customer demand increased marketing activity to internet and mobile technology.
In recent years, production from electronic media, which is comprised of sales through both the internet and inbound phone calls to our call center, has grown faster than direct mail response as customer preferences have focused marketing activity to internet and mobile technology.
We believe this strategy is appropriate since our expected future cash flows are generally stable and predictable and the likelihood that we will need to sell invested assets to raise cash is low. The following table summarizes selected information for fixed maturity investments.
Management's Discussion & Analysis strategy is appropriate since our expected future cash flows are generally stable and predictable and the likelihood that we will need to sell invested assets to raise cash is low. The following table summarizes selected information for fixed maturity investments.
An analysis of the fixed maturity portfolio by a composite quality rating at December 31, 2022 and December 31, 2021, is shown in the following tables.
An analysis of the fixed maturity portfolio by composite quality rating at December 31, 2023 and December 31, 2022, is shown in the following tables.
See further discussion of the distribution channels below for Life and Health . 27 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis LIFE INSURANCE Life insurance is the Company's predominant segment. During 2022, life premium represented 70% of total premium and life underwriting margin represented 70% of the total underwriting margin.
See further discussion of the distribution channels below for Life and Health . 26 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis 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.
With no specified authorization amount, we determine the amount of repurchases based on the amount of the excess cash flows after the payment of dividends to the Parent Company shareholders, general market conditions, and other alternative uses.
With no specified authorization amount, management determines the amount of repurchases based on the amount of the excess cash flows after the payment of dividends to the Parent Company shareholders, general market conditions, and other alternative uses.
(2) The discount rate for determining the net periodic benefit cost was 3.19% for 2022. The discount rate used for determining the projected benefit obligation as of December 31, 2022 was 5.71%. (3) The expected long-term return rate assumed was 6.98% at December 31, 2022, and 6.67% in the prior year.
(2) The discount rate for determining the net periodic benefit cost was 5.71% for 2023. The discount rate used for determining the projected benefit obligation as of December 31, 2023 was 5.40%. (3) The expected long-term return rate assumed was 6.98% at December 31, 2023, and 6.98% in the prior year.
Note 9—Postretirement Benefits also contains information about pension plan assets, investment policies, and other related data. There were no significant changes in the assumptions in the current year. 55 GL 2022 FORM 10-K Table of Contents
Note 10—Postretirement Benefits also contains information about pension plan assets, investment policies, and other related data. There were no significant changes in the assumptions in the current year. 52 GL 2023 FORM 10-K Table of Contents
Possible uses of excess cash flow include, but are not limited to, share repurchases, acquisitions, increases in shareholder dividends, investment in securities, or repayment of short-term debt. We will determine the best use of excess cash after ensuring that targeted capital levels are maintained in our insurance subsidiaries.
Possible uses of excess cash flow include, but are not limited to, share repurchases, acquisitions, shareholder dividend payments, investments in securities, or repayment of short-term debt. We will determine the best use of excess cash after ensuring that targeted capital levels are maintained in our insurance subsidiaries.
While not the only source of liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed. Refer to Note 11—Debt for further details. 48 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis Parent Company Liquidity.
While not the only 44 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis source of liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed. Refer to Note 12—Debt for further details. Parent Company Liquidity.
Management's Discussion & Analysis Selected information concerning the fixed maturity portfolio is as follows: Fixed Maturity Portfolio Selected Information At December 31, 2022 2021 Average annual effective yield (1) 5.19% 5.17% Average life, in years, to: Next call (2) 14.7 15.7 Maturity (2) 18.5 19.0 Effective duration to: Next call (2,3) 8.8 10.6 Maturity (2,3) 10.4 12.2 (1) Tax-equivalent basis.
Management's Discussion & Analysis Selected information concerning the fixed maturity portfolio is as follows: Fixed Maturity Portfolio Selected Information At December 31, 2023 2022 Average annual effective yield (1) 5.23% 5.19% Average life, in years, to: Next call (2) 14.6 14.7 Maturity (2) 18.6 18.5 Effective duration to: Next call (2,3) 9.0 8.8 Maturity (2,3) 10.7 10.4 (1) Tax-equivalent basis.
We currently expect that the average annual turnover rate of fixed maturity assets will be less than 2% over the next five years and will not have a material negative impact on net investment income.
We currently expect that the average annual turnover rate of fixed maturity assets will be less than 1% per annum over the next five years and will not have a material impact on net investment income.
First-year collected premium from Medicare Supplement policies make up the remaining 36%, or $60 million for 2022 compared with $61 million in 2021. A discussion of health operations by distribution channel follows. The United American Independent Agency consists of non-exclusive independent agencies who may also sell for other companies.
First-year collected premium from Medicare Supplement policies make up the remaining $52 million, or 28%, for 2023 compared with $60 million, or 36%, in 2022. A discussion of health operations by distribution channel follows. The United American Division consists of non-exclusive independent agencies who may also sell for other companies.
Considerable information concerning the policies, procedures, classification levels, and other relevant data concerning the valuation of our fixed maturity investments is presented in Note 1—Significant Accounting Policies and in Note 4—Investments under the captions Fair Value Measurements in both notes. There were no significant changes in the valuation process in the current year. Investments: Allowance for Credit Losses.
Considerable information concerning the policies, procedures, classification levels, and other relevant data concerning the valuation of our fixed maturity investments is presented in Note 1—Significant Accounting Policies and in Note 4—Investments under the captions Fair Value Measurements in both notes. There were no significant changes in the valuation process in the current year. Market Risk Sensitivity.
Management's Discussion & Analysis Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the December 31, 2022 fixed maturity portfolio, representing 82% of amortized cost, net and 83% of fair value. The remainder of the portfolio is invested primarily in securities issued by the U.S. government and U.S. municipalities.
Management's Discussion & Analysis Corporate securities, which consist of bonds and redeemable preferred stocks, were the largest component of the fixed maturity portfolio as of December 31, 2023, representing 80% of amortized cost, net, and 81% of fair value. The remainder of the portfolio is invested primarily in securities issued by the U.S. government and U.S. municipalities.
Medicare Supplement sales make up the remaining 29%, or $54 million for 2022 compared with $66 million in 2021. The following table discloses first-year collected health premium by distribution channel.
Medicare Supplement sales make up the remaining $63 million, or 28%, for 2023 compared with $54 million, or 29%, in 2022. The following table discloses first-year collected health premium by distribution channel.
(3) Effective duration is a measure of the price sensitivity of a fixed-income security to a particular change in interest rates. 41 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis Credit Risk Sensitivity .
(3) Effective duration is a measure of the price sensitivity of a fixed-income security to a 1% change in interest rates. 38 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis Credit Risk Sensitivity .
Any future regulatory changes that restrict the use of off-shore captive reinsurers might require Globe Life to obtain third-party financing, which could cause an insignificant increase in financing costs. On October 26, 2021, the letters of credit were amended to reduce the amount outstanding from $135 million to $125 million.
Any future regulatory changes that restrict the use of off-shore captive reinsurers might require Globe Life to obtain third-party financing, which could cause an insignificant increase in financing costs. On March 29, 2023, the letters of credit were amended to reduce the amount outstanding from $125 million to $115 million.
Fixed Maturities by Rating At December 31, 2022 (Dollar amounts in thousands) Amortized Cost, net % of Total Fair Value % of Total Average Composite Quality Rating on Amortized Cost, net Investment grade: AAA $ 828,315 5 $ 733,524 4 AA 2,779,587 15 2,260,257 14 A 4,752,633 26 4,438,913 27 BBB+ 3,934,053 21 3,639,118 22 BBB 4,254,730 23 3,844,182 23 BBB- 1,209,877 7 1,112,808 7 Total investment grade 17,759,195 97 16,028,802 97 A- Below investment grade: BB 462,356 3 389,132 3 B 43,044 — 35,067 — Below B 37,097 — 50,364 — Total below investment grade 542,497 3 474,563 3 BB- $ 18,301,692 100 $ 16,503,365 100 Weighted average composite quality rating A- 44 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC.
Management's Discussion & Analysis Fixed Maturities by Rating At December 31, 2022 (Dollar amounts in thousands) Amortized Cost, net % of Total Fair Value % of Total Average Composite Quality Rating on Amortized Cost Investment grade: AAA $ 828,315 5 $ 733,524 4 AA 2,779,587 15 2,260,257 14 A 4,752,633 26 4,438,913 27 BBB+ 3,934,053 21 3,639,118 22 BBB 4,254,730 23 3,844,182 23 BBB- 1,209,877 7 1,112,808 7 Total investment grade 17,759,195 97 16,028,802 97 A- Below investment grade: BB 462,356 3 389,132 3 B 43,044 — 35,067 — Below B 37,097 — 50,364 — Total below investment grade 542,497 3 474,563 3 BB- $ 18,301,692 100 $ 16,503,365 100 Weighted average composite quality rating A- The overall quality rating of the portfolio is A-, the same as of year-end 2022.
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. 2022 2021 2020 2022 Change % 2021 Change % American Income 9,444 9,971 8,738 (527) (5) 1,233 14 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.
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. 2023 2022 2021 2023 Change % 2022 Change % American Income 10,579 9,444 9,971 1,135 12 (527) (5) 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 fixed maturities, the Company has also invested in limited partnerships with debt like characteristics that diversify risk and enhance risk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the investment funds for the year ended December 31, 2022 was 5.65%. See additional information in Note 4—Investments .
In addition to fixed maturities, the Company has also invested in commercial mortgage loans and limited partnerships with debt-like characteristics that diversify risk and enhance risk-adjusted, capital-adjusted returns on the portfolio. The earned yield on the investment funds for the year ended December 31, 2023 was 6.95%. See additional information in Note 4—Investments .
We maintain funded defined benefit plans covering most full-time employees. We also have an unfunded nonqualified defined benefit plan covering a limited number of officers. Our obligations under these plans are determined actuarially based on specified actuarial assumptions.
We also have an unfunded nonqualified defined benefit plan covering a limited number of officers. Our obligations under these plans are determined actuarially based on specified actuarial assumptions.
An additional source of Parent Company liquidity is a revolving credit facility with a group of lenders which allows unsecured borrowings and stand-by letters of credit up to $750 million, which could be extended up to $1 billion. While Globe Life can request the extension, it is not guaranteed.
An additional source of Parent Company liquidity is a credit facility with a group of lenders allowing for unsecured borrowings and stand-by letters of credit up to $750 million, which could be extended up to $1 billion. While the Parent Company may request the extension, it is not guaranteed.
Approximately 97% of our fixed income securities are publicly traded, freely tradable under SEC Rule 144, or qualified for resale under SEC Rule 144A. We generally expect to hold fixed income securities to maturity, and even though these securities are classified as available for sale, we have the ability and general intent to hold any securities until recovery or maturity.
Further, approximately 97% of our fixed income securities are publicly traded, freely tradable under SEC Rule 144, or qualified for resale under SEC Rule 144A. While our fixed income securities are classified as available for sale, we have the ability and general intent to hold any securities to recovery or maturity.
Since fixed maturities represent such a significant portion of our investment portfolio, the remainder of the discussion of portfolio composition will focus on fixed maturities. See a breakdown of the Company's other investments in Other Investment Information within Note 4—Investments . 40 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC.
Since fixed maturities represent such a significant portion of our investment portfolio, the remainder of the discussion of portfolio composition will focus on fixed maturities. See a breakdown of the Company's Other long-term investments in Note 4—Investments . 37 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC.
Recent investments in new sales technologies as well as recent growth in middle management within the agency are expected to help continue this growth. The underwriting margin as a percent of premium was 22%, up from 17% for the year ended 2021.
Recent investments in new sales technologies as well as recent growth in middle management within the agency are expected to help continue this growth. The underwriting margin as a percent of premium was 33%, up from 31% for the year ended 2022, but down slightly from 34% for 2021.
At this time, we do not expect any change in this estimate to have a material impact on earnings or financial position consistent with our historical experience. There were no significant changes in the claims process in the current year. Valuation of Fixed Maturities.
However, there is no certainty that the resulting stated liability will be our ultimate obligation. At this time, we do not expect any change in this estimate to have a material impact on earnings or financial position consistent with our historical experience. There were no significant changes in the claims process in the current year. Valuation of Fixed Maturities.
As the division continues to gain momentum in its sales and recruiting initiatives and advances its technology and CRM platform, the agency anticipates an increase in recruiting of new agents and an increase in the average producing agent count. The Other Agencies distribution channels primarily include non-exclusive independent agencies selling predominantly life insurance.
As the division continues to gain momentum in its sales and recruiting initiatives, as well as advances its technology and CRM platform, the agency anticipates continued growth in recruiting activity and average producing agent count. The Other Agencies distribution channels primarily include non-exclusive independent agencies selling primarily life insurance.
The data measures the change in fair value arising from an immediate and sustained change in interest rates in increments of 100 basis points.
Treasury curve) on the fair value of the fixed maturity portfolio. The data measures the change in fair value arising from an immediate and sustained change in interest rates in increments of 100 basis points.
Fixed Maturity Acquisitions Selected Information (Dollar amounts in thousands) Year Ended December 31, 2022 2021 2020 Cost of acquisitions (1) : Investment-grade corporate securities $ 812,697 $ 566,400 $ 686,844 Investment-grade municipal securities 599,946 434,482 543,088 Other investment-grade securities 7,577 10,465 34,171 Total fixed maturity acquisitions $ 1,420,220 $ 1,011,347 $ 1,264,103 Effective annual yield (one year compounded) (2) 5.18 % 3.39 % 3.73 % Average life (in years to next call) 13.5 21.7 15.8 Average life (in years to maturity) 22.8 31.7 26.3 Average rating A A+ A (1) Fixed maturity acquisitions included unsettled trades of $0 in 2022, $7 million in 2021 and $2 million in 2020.
Fixed Maturity Acquisitions Selected Information (Dollar amounts in thousands) Year Ended December 31, 2023 2022 2021 Cost of acquisitions: Investment-grade corporate securities $ 967,588 $ 812,697 $ 566,400 Investment-grade municipal securities 572,654 599,946 434,482 Other investment-grade securities — 7,577 10,465 Total fixed maturity acquisitions (1) $ 1,540,242 $ 1,420,220 $ 1,011,347 Effective annual yield (one year compounded) (2) 6.13 % 5.18 % 3.39 % Average life (in years, to next call) 18.0 13.5 21.7 Average life (in years, to maturity) 24.8 22.8 31.7 Average rating A A A+ (1) Fixed maturity acquisitions included unsettled trades of $4 million in 2023, $0 in 2022 and $7 million in 2021.
Also, future offerings to juvenile policyholders and their parents are sources of low acquisition-cost life insurance sales in the future. DTC net sales decreased 15% to $126 million for the year ended December 31, 2022 compared with $149 million in the prior year.
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 8% to $116 million for the year ended December 31, 2023 compared with $126 million in the prior year.
Total premium income rose 5% for the year ended December 31, 2022 to $4.3 billion. Total net sales increased 2% to $722 million, when compared with 2021. Total first-year collected premium (defined in the following section) was $577 million for 2022, compared with $583 million for 2021.
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.
Additionally, when stock options are exercised, proceeds from these exercises and the resulting tax benefit are used to repurchase additional shares on the open market to minimize dilution as a result of the option exercises.
Additionally, when stock options are exercised, proceeds from these exercises and the resulting tax benefit are used to repurchase additional shares on the open market to minimize dilution as a result of the option exercises. The following table summarizes share repurchases for each of the last three years.
For example, a sensitivity analysis is presented below for the impact of change in the discount rate and the long-term rate of return on assets assumed on our defined benefit pension plans expense for the year 2022 and projected benefit obligation as of December 31, 2022.
For example, a sensitivity analysis is presented below for the impact of change in the discount rate and the long-term rate of return on assets assumed on our defined benefit pension plans expense for the year 2023 and projected benefit obligation as of December 31, 2023. 51 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC.
Liberty National markets limited-benefit supplemental health products consisting primarily of critical illness insurance. Much of Liberty National’s health business is generated through worksite marketing targeting small businesses. In 2022, health premium income declined 1%. Liberty National's first-year collected premium increased 10% to $22 million in 2022 compared with $20 million in 2021.
The Liberty National Division markets limited-benefit supplemental health products, consisting primarily of cancer and critical illness insurance. Much of Liberty National’s health business is generated through worksite marketing targeting small businesses. In 2023, health premium income was flat. Liberty National's first-year collected premium increased 14% to $26 million in 2023 compared with $22 million in 2022.
For these reasons, and in line with industry practice, we remove the effects of realized gains and losses when evaluating overall insurance operating results. 38 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC. Management's Discussion & Analysis The following table summarizes our tax-effected realized gains (losses) by component for each of the three years ended December 31, 2022.
For these reasons, and in line with industry practice, we remove the effects of realized gains and losses when evaluating overall insurance operating results. The following table summarizes our tax-effected realized gains (losses) by component for each of the three years ended December 31, 2023.
Excess investment income per diluted common share generally increases at a faster pace than excess investment income because the number of diluted shares outstanding generally decreases from year to year as a result of our share repurchase program. 35 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC.
Excess investment income per diluted common share generally increases at a faster pace than excess investment income because the number of diluted shares outstanding generally decreases from year to year as a result of our share repurchase program.
Excess investment income represents the profit margin attributable to investment operations and is the measure that we use to evaluate the performance of the investment segment as described in Note 14—Business Segments .
Excess investment income represents the profit margin attributable to investment operations and is the measure that we use to evaluate the performance of the investment segment as described in Note 15—Business Segments . It is defined as net investment income less the required interest attributable to policy liabilities.
In the unlikely event that more liquidity is needed, the Company could generate additional funds through multiple sources including, but not limited to, the issuance of debt, an additional short-term credit facility, and intercompany borrowing. Refer to Note 6—Commitments and Contingencies and the discussion surrounding the Company's obligations over the next five years.
In the unlikely event that more liquidity is needed, the Company could generate additional funds through multiple sources including, but not limited to, the issuance of debt, an additional short-term credit facility, and intercompany borrowing.
While increasing interest rates have resulted in a net unrealized loss on the fixed maturities portfolio as of December 31, 2022, we are not concerned because we do not generally intend to sell, nor is it likely that we will be required to sell, the fixed maturities prior to their anticipated recovery.
While increasing interest rates have resulted in a net unrealized loss from our available for sale debt securities included in accumulated other comprehensive income (loss) as of December 31, 2023, we are not concerned because we do not generally intend to sell, nor is it likely that we will be required to sell, the fixed maturities prior to their anticipated recovery.
Health Insurance First-Year Collected Premium by Distribution Channel (Dollar amounts in thousands) 2022 2021 2020 Amount % of Total Amount % of Total Amount % of Total United American $ 64,410 39 $ 60,386 37 $ 79,628 45 Family Heritage 60,699 36 57,427 36 54,242 31 Liberty National 22,415 13 20,348 13 20,169 11 American Income 17,294 10 18,939 12 18,536 11 Direct to Consumer 3,115 2 3,253 2 3,051 2 Total $ 167,933 100 $ 160,353 100 $ 175,626 100 First-year collected premium related to limited-benefit plans comprise $108 million, or 64% of total first-year collected premium for 2022 compared with $99 million in 2021.
Health Insurance First-Year Collected Premium by Distribution Channel (Dollar amounts in thousands) 2023 2022 2021 Amount % of Total Amount % of Total Amount % of Total United American $ 66,002 36 $ 64,410 39 $ 60,386 37 Family Heritage 72,362 39 60,699 36 57,427 36 Liberty National 25,608 14 22,415 13 20,348 13 American Income 17,633 9 17,294 10 18,939 12 Direct to Consumer 3,683 2 3,115 2 3,253 2 Total $ 185,288 100 $ 167,933 100 $ 160,353 100 First-year collected premium related to limited-benefit plans comprise $133 million, or 72% of total first-year collected premium for 2023 compared with $108 million, or 64%, in 2022.
Each distribution channel operates in a niche market offering insurance products designed for that particular market. Whether analyzing profitability of a segment as a whole, or the individual distribution channels within the segment, the measure of profitability used by management is the underwriting margin, as seen below: Premium revenue (Policy obligations) (Policy acquisition costs and commissions) Underwriting margin Investment Segment.
Whether analyzing profitability of a segment as a whole, or the individual distribution channels within the segment, the measure of profitability used by management is the underwriting margin, as seen below: Premium revenue (Policy obligations) (Policy acquisition costs and commissions) Underwriting margin Investment Segment.
We use three statistical 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, a statistical performance measure, 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 has expired.
Management's Discussion & Analysis • 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.
The division experienced a 14% increase in health net sales in 2022 as compared with the 2021, primarily due to an increase in recruiting, agent productivity and training. The division will continue to implement incentive programs to help drive an increase in productivity and the number of producing agents.
The division experienced a 16% rise in health net sales in 2023 as compared with the 2022, primarily due to an increase in recruiting, as well as improved agent productivity and training. The division will continue to implement incentive and retention programs to further these increases in the number of producing agents.
The effective annual yield shown is based on the acquisition price and call features, if any, of the securities. For non-callable bonds, the yield is calculated to maturity date. For callable bonds acquired at a premium, the yield is calculated to the earliest known 39 GL 2022 FORM 10-K Table of Contents GLOBE LIFE INC.
The effective annual yield shown is based on the acquisition price and call features, if any, of the securities. For non-callable bonds, the yield is calculated to maturity date. For callable bonds acquired at a premium, the yield is calculated to the earliest known call date and call price after acquisition ("first call date").
It is defined as excess investment income divided by the total diluted weighted average shares outstanding, representing the contribution by the investment segment to the consolidated earnings per share of the Company.
Management also views excess investment income per diluted common share as an important and useful measure to evaluate the performance of the investment segment. It is defined as excess investment income divided by the total diluted weighted average shares outstanding, representing the contribution by the investment segment to the consolidated earnings per share of the Company.
Life Insurance Net Sales by Distribution Channel (Dollar amounts in thousands) 2022 2021 2020 Amount % of Total Amount % of Total Amount % of Total American Income $ 316,715 59 $ 290,512 56 $ 253,276 52 Direct to Consumer 125,979 24 148,846 28 165,426 34 Liberty National 78,390 15 71,184 14 54,931 12 Other 9,844 2 11,055 2 10,371 2 Total $ 530,928 100 $ 521,597 100 $ 484,004 100 The table below discloses first-year collected life premium by distribution channel.
Life Insurance Net Sales by Distribution Channel (Dollar amounts in thousands) 2023 2022 2021 Amount % of Total Amount % of Total Amount % of Total American Income $ 322,658 59 $ 316,715 59 $ 290,512 56 Direct to Consumer 116,454 21 125,979 24 148,846 28 Liberty National 95,459 18 78,390 15 71,184 14 Other 9,701 2 9,844 2 11,055 2 Total $ 544,272 100 $ 530,928 100 $ 521,597 100 The table below discloses first-year collected life premium by distribution channel.
An insurer rated A has strong capacity to meet its financial commitments but it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than insurers in higher-rated categories.
An insurer rated A has strong capacity to meet its financial commitments but it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than insurers in higher-rated categories. The plus sign (+) or minus sign (-) shows the relative standing within the major rating category. OTHER ITEMS Litigation.
The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below: Net investment income (Required interest on net policy liabilities) (Financing costs) Excess investment income 20 GL 2022 FORM 10-K Table of Contents Long-Duration Targeted Improvements.
The investment segment involves the management of our capital resources, including investments and the management of liquidity. Our measure of profitability for the investment segment is excess investment income, as seen below: Net investment income (Required interest on policy liabilities) Excess investment income 21 GL 2023 FORM 10-K Table of Contents GLOBE LIFE INC.
Management's Discussion & Analysis Net investment income increased at a compound annual growth rate of 3% over the 3 years ending 2022 while mean invested assets increased at a compound rate of 5% during the same period. The tax equivalent effective annual yield rate earned on the fixed maturity portfolio was 5.16% in 2022.
Net investment income increased at a compound annual growth rate of 4% over the three years ending 2023 and mean invested assets increased at a compound annual growth rate of 4% during the same period. The effective annual yield rate earned on the fixed maturity portfolio was 5.20% in 2023.
Realized Gains and Losses. Our life and health insurance companies collect premium income from policyholders for the eventual payment of policyholder benefits, sometimes paid many years or even decades in the future. Since benefits are expected to be paid in future periods, premium receipts in excess of current expenses are invested to provide for these obligations.
Realized Gains and Losses. Our life and health insurance companies collect premium income from policyholders for the eventual payment of policyholder benefits, sometimes paid many years or even decades in the future.
We remove items such as these that relate to prior periods or are non-operating items when evaluating the results of current operations, and therefore exclude such items from our segment analysis for current periods.
We remove items such as these that relate to prior periods or are non-operating items when evaluating the results of current operations, and therefore exclude such items from our segment analysis for current periods. The liability for future policy benefits is determined each reporting period based on the net level premium method.

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