XML 38 R21.htm IDEA: XBRL DOCUMENT v3.23.2
Business Segments
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Business Segments Note 12—Business Segments
Globe Life is organized into four segments: life insurance, supplemental health insurance, annuities, and investments. In addition, other expenses not included in these segments are reported in "Corporate & Other."

Globe Life's reportable insurance segments are based on the insurance product lines it markets and administers: life insurance, supplemental health insurance, and annuities. These major product lines are set out as reportable segments because of the common characteristics of products within these categories, comparability of margins, and the similarity in regulatory environment and management techniques. There is also an investment segment that manages the investment portfolio and cash flow for the insurance segments and the corporate function, which has been retrospectively adjusted to exclude the interest on deferred acquisition costs due to the adoption of ASU 2018-12 and the interest on debt. The Company's chief operating decision makers evaluate the overall performance of the operations of the Company in accordance with these segments.

Life insurance products marketed by Globe Life include traditional whole life and term life insurance. An immaterial amount of annuities sold as companion products are included in the life segment. Health insurance products are generally guaranteed renewable and include Medicare Supplement, cancer, critical illness, accident, and limited-benefit supplemental hospital and surgical coverage. Annuities include fixed-benefit contracts.

The following tables present segment premium revenue by each of Globe Life's distribution channels.
Premium Income by Distribution Channel
Three Months Ended June 30, 2023
 LifeHealthAnnuityTotal
Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American Income$394,620 51 $29,527 9 $— — $424,147 38 
Direct to Consumer248,607 32 17,175 5 — — 265,782 24 
Liberty National86,634 11 46,903 14 — — 133,537 12 
United American1,849 — 137,453 42 — — 139,302 13 
Family Heritage1,513 — 98,129 30 — — 99,642 9 
Other48,510 6 — — — — 48,510 4 
$781,733 100 $329,187 100 $— — $1,110,920 100 
Premium Income by Distribution Channel

 Three Months Ended June 30, 2022
 LifeHealthAnnuityTotal
Distribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
American Income$375,748 50 $29,411 9 $— — $405,159 38 
Direct to Consumer247,264 33 17,848 6 — — 265,112 25 
Liberty National81,316 11 46,846 15 — — 128,162 12 
United American2,003 — 135,444 42 — — 137,447 13 
Family Heritage1,373 — 90,758 28 — — 92,131 8 
Other49,188 6 — — — — 49,188 4 
$756,892 100 $320,307 100 $— — $1,077,199 100 
Six Months Ended June 30, 2023
 LifeHealthAnnuityTotal
Distribution ChannelAmount% of
Total		Amount% of
Total		Amount% of
Total		Amount% of
Total
American Income$782,132 51 $59,121 9 $— — $841,253 38 
Direct to Consumer496,274 32 34,423 5 — — 530,697 24 
Liberty National171,837 11 93,875 14 — — 265,712 12 
United American3,731 — 270,060 42 — — 273,791 12 
Family Heritage2,993 — 194,201 30 — — 197,194 9 
Other97,363 6 — — — — 97,363 5 
$1,554,330 100 $651,680 100 $— — $2,206,010 100 

 Six Months Ended June 30, 2022
 LifeHealthAnnuityTotal
Distribution ChannelAmount
% of
Total
Amount
% of
Total
Amount
% of
Total
Amount
% of
Total
American Income$745,854 49 $58,177 9 $— — $804,031 37 
Direct to Consumer492,996 33 35,776 6 — — 528,772 25 
Liberty National161,876 11 94,606 15 — — 256,482 12 
United American4,077 — 267,134 42 — — 271,211 13 
Family Heritage2,732 — 180,298 28 — — 183,030 8 
Other98,485 7 — — — — 98,485 5 
$1,506,020 100 $635,991 100 $— — $2,142,011 100 

Due to the nature of the life insurance industry, Globe Life has no individual or group that would be considered a major customer. Substantially all of Globe Life's business is conducted in the United States.
 
The measure of profitability established by the chief operating decision makers for the insurance segments is underwriting margin before other income and administrative expenses, in accordance with the manner in which the segments are managed. It essentially represents gross profit margin on insurance products before insurance administrative expenses and consists primarily of premium less net policy benefits, acquisition expenses, and commissions. Required interest on policy liabilities is reflected as a component of the Investment segment (rather
than as a component of underwriting margin in the insurance and annuity segments) in order to match this cost with the investment income earned on the assets supporting the policy liabilities.
 
The measure of profitability for the Investment segment is excess investment income, representing the income earned on the investment portfolio in excess of policy requirements. During the implementation of ASU 2018-12, the Company reviewed its segment disclosures and modified the measure of profitability of our Investment Segment due to the adoption impact of the standard and to align more appropriately with how we view and measure this segment. As of January 1, 2023, this measure was retrospectively adjusted to exclude the interest on deferred acquisition costs due to the adoption of ASU 2018-12 and the interest expense on debt. Other than the above-mentioned interest allocations, no other intersegment revenues or expenses are recognized. Expenses directly attributable to corporate operations are included in the “Corporate & Other” category. Stock-based compensation expense is considered a corporate expense by Globe Life management and is included in this category. All other unallocated revenues and expenses on a pretax basis, including insurance administrative expense and interest on debt, are also included in the “Corporate & Other” segment category.
 
Globe Life holds a sizable investment portfolio to support its insurance liabilities, the yield from which is used to offset policy benefit, acquisition, administrative and tax expenses. This yield or investment income is taken into account when establishing premium rates and profitability expectations for its insurance products. From time to time, investments are sold or called, or experience a credit loss event, each of which is reflected by the Company as realized gain (loss)—investments. These gains or losses generally occur as a result of disposition due to issuer calls, compliance with Company investment policies, or other reasons often beyond management’s control. Unlike investment income, realized gains and losses are incidental to insurance operations, and only overall yields are considered when setting premium rates or insurance product profitability expectations. While these gains and losses are not relevant to segment profitability or core operating results, they can have a material positive or negative result on net income. For these reasons, management removes realized investment gains and losses when it views its segment operations.

Management removes items that are related to prior periods when evaluating the operating results of current periods. Management also removes non-operating items unrelated to the Company's core insurance activities when evaluating those results. Therefore, these items are excluded in its presentation of segment results because accounting guidance requires that operating segment results be presented as management views its business. With the exception of administrative settlements, all of these items are included in “Other operating expense” in the Condensed Consolidated Statements of Operations for the appropriate year. See additional detail below in the tables.
The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items. See Note 1—Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.
Three Months Ended June 30, 2023
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$781,733 $329,187 $— $— $— $— $1,110,920 
Net investment income— — — 261,244 — — 261,244 
Other income— — — — 85 — 85 
Total revenue781,733 329,187 — 261,244 85 — 1,372,249 
Expenses:
Policy benefits512,664 195,924 7,107 1,815 — — 717,510 
Required interest on reserves(191,781)(26,548)(9,715)228,044 — — — 
Amortization of acquisition costs81,173 12,484 423 — — — 94,080 
Commissions, premium taxes, and non-deferred acquisition costs83,547 54,908 4 — — — 138,459 
Insurance administrative expense(1)
— — — — 75,459 75,459 
Parent expense— — — — 3,088 — 3,088 
Stock-based compensation expense— — — — 7,486 — 7,486 
Interest expense— — — — 25,818 — 25,818 
Total expenses485,603 236,768 (2,181)229,859 111,851 — 1,061,900 
Subtotal296,130 92,419 2,181 31,385 (111,766)— 310,349 
Non-operating items— — — — — — 
Measure of segment profitability (pretax)
$296,130 $92,419 $2,181 $31,385 $(111,766)$— 310,349 
Realized gain (loss)—investments(45,843)
Income before income taxes per Condensed Consolidated Statements of Operations
$264,506 
(1)Administrative expense is not allocated to insurance segments.
Three Months Ended June 30, 2022
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$756,892 $320,307 $— $— $— $— $1,077,199 
Net investment income— — — 244,712 — — 244,712 
Other income— — — — 299 — 299 
Total revenue756,892 320,307 — 244,712 299 — 1,322,210 
Expenses:
Policy obligations492,364 190,075 7,922 1,070 — — 691,431 
Required interest on reserves(182,756)(25,460)(11,361)219,577 — — — 
Amortization of acquisition costs73,681 12,052 452 — — — 86,185 
Commissions, premium taxes, and non-deferred acquisition costs74,478 51,729 6 — — — 126,213 
Insurance administrative expense(1)
— — — — 73,700 4,985 (2)78,685 
Parent expense— — — — 2,893 (368)(2)2,525 
Stock-based compensation expense— — — — 8,448 — 8,448 
Interest expense— — — — 21,828 — 21,828 
Total expenses457,767 228,396 (2,981)220,647 106,869 4,617 1,015,315 
Subtotal299,125 91,911 2,981 24,065 (106,570)(4,617)306,895 
Non-operating items— — — — — 4,617 (2)4,617 
Measure of segment profitability (pretax)
$299,125 $91,911 $2,981 $24,065 $(106,570)$— 311,512 
Realized gain (loss)—investments(30,446)
Non-operating expenses(4,617)
Income before income taxes per Condensed Consolidated Statements of Operations
$276,449 
(1)Administrative expense is not allocated to insurance segments.
(2)Non-operating expenses.
The following tables set forth a reconciliation of Globe Life's revenues and operations by segment to its major income statement line items. See Note—1 Significant Accounting Policies for additional information concerning reconciling items of segment profits to pretax income.
Six Months Ended June 30, 2023
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$1,554,330 $651,680 $— $— $— $— $2,206,010 
Net investment income— — — 518,349 — — 518,349 
Other income— — — — 135 — 135 
Total revenue1,554,330 651,680 — 518,349 135 — 2,724,494 
Expenses:
Policy obligations1,020,641 386,886 14,648 3,262 — — 1,425,437 
Required interest on reserves(381,602)(52,871)(19,974)454,447 — — — 
Amortization of acquisition costs160,762 24,792 848 — — — 186,402 
Commissions, premium taxes, and non-deferred acquisition costs167,125 109,122 9 — — — 276,256 
Insurance administrative expense(1)
— — — — 149,366 149,366 
Parent expense— — — — 5,673 5,673 
Stock-based compensation expense— — — — 15,165 — 15,165 
Interest expense— — — — 50,685 — 50,685 
Total expenses966,926 467,929 (4,469)457,709 220,889 — 2,108,984 
Subtotal587,404 183,751 4,469 60,640 (220,754)— 615,510 
Non-operating items— — — — — — — 
Measure of segment profitability (pretax)
$587,404 $183,751 $4,469 $60,640 $(220,754)$— 615,510 
Realized gain (loss)—investments(76,770)
Income before income taxes per Consolidated Statements of Operations
$538,740 
(1)Administrative expense is not allocated to insurance segments.
Six Months Ended June 30, 2022
LifeHealthAnnuityInvestmentCorporate & OtherAdjustmentsConsolidated
Revenue:
Premium$1,506,020 $635,991 $— $— $— $— $2,142,011 
Net investment income— — — 489,606 — — 489,606 
Other income— — — — 463 — 463 
Total revenue1,506,020 635,991 — 489,606 463 — 2,632,080 
Expenses:
Policy obligations987,793 379,093 16,564 2,130 — — 1,385,580 
Required interest on reserves(364,128)(50,730)(22,728)437,586 — — — 
Amortization of acquisition costs145,610 24,166 905 — — — 170,681 
Commissions, premium taxes, and non-deferred acquisition costs148,026 103,681 15 — — — 251,722 
Insurance administrative expense(1)
— — — — 146,265 5,097 (2)151,362 
Parent expense— — — — 5,533 (368)(2)5,165 
Stock-based compensation expense— — — — 17,483 — 17,483 
Interest expense— — — — 41,772 — 41,772 
Total expenses917,301 456,210 (5,244)439,716 211,053 4,729 2,023,765 
Subtotal588,719 179,781 5,244 49,890 (210,590)(4,729)608,315 
Non-operating items— — — — — 4,729 (2)4,729 
Measure of segment profitability (pretax)
$588,719 $179,781 $5,244 $49,890 $(210,590)$— 613,044 
Realized gain (loss)—investments(37,690)
Non-operating expenses(4,729)
Income before income taxes per Consolidated Statements of Operations
$570,625 
(1)Administrative expense is not allocated to insurance segments.
(2)Non-operating expenses.