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Investments

9 Months Ended

Sep. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Note 4—Investments

Portfolio Composition: Summaries of fixed maturities available for sale by amortized cost, fair value, and allowance for credit losses at September 30, 2024 and December 31, 2023, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are as follows. Redeemable preferred stock is included within "Corporates, by sector."


	At September 30, 2024
	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value(1)		% of Total Fixed Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	397,969	$	—	$	38	$	(21,026)	$	376,981	2
States, municipalities, and political subdivisions	3,253,819		—		49,409		(424,989)		2,878,239		16
Foreign governments	41,794		—		17		(9,885)		31,926		—
Corporates, by sector:
Industrials	8,115,835		(7,132)		258,165		(508,089)		7,858,779		43
Financial	5,014,169		—		171,762		(299,903)		4,886,028		26

Utilities	2,140,610		—		109,998		(72,371)		2,178,237		12
Total corporates	15,270,614		(7,132)		539,925		(880,363)		14,923,044		81
Collateralized debt obligations	36,685		—		5,798		—		42,483		—
Other asset-backed securities	83,573		—		1		(1,677)		81,897		1
Total fixed maturities	$	19,084,454	$	(7,132)	$	595,188	$	(1,337,940)	$	18,334,570	100

(1)Amount reported in the balance sheet.

(2)At fair value.


	At December 31, 2023
	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value(1)		% of Total Fixed Maturities(2)
Fixed maturities available for sale:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	398,450	$	—	$	7	$	(32,306)	$	366,151	2
States, municipalities, and political subdivisions	3,296,305		—		47,346		(403,329)		2,940,322		16
Foreign governments	44,453		—		1		(10,348)		34,106		—
Corporates, by sector:
Industrials	8,016,126		(7,115)		213,078		(566,847)		7,655,242		43
Financial	5,028,151		—		112,368		(388,340)		4,752,179		27

Utilities	2,017,967		—		73,925		(94,130)		1,997,762		11
Total corporates	15,062,244		(7,115)		399,371		(1,049,317)		14,405,183		81
Collateralized debt obligations	37,110		—		5,036		—		42,146		—
Other asset-backed securities	86,352		—		3		(4,057)		82,298		1
Total fixed maturities	$	18,924,914	$	(7,115)	$	451,764	$	(1,499,357)	$	17,870,206	100

(1)Amount reported in the balance sheet.

(2)At fair value.

The Company has exposure to real estate investment trusts with an average rating of BBB+, which had a fair value of $429 million (2% of the total fixed maturity portfolio) and $425 million (2% of the total fixed maturity portfolio) at September 30, 2024 and December 31, 2023, respectively.

A schedule of fixed maturities available for sale by contractual maturity date at September 30, 2024, is shown below on an amortized cost basis, net of allowance for credit losses, and on a fair value basis. Actual disposition dates could differ from contractual maturities due to call or prepayment provisions.


	At September 30, 2024
	Amortized Cost, net		Fair Value
Fixed maturities available for sale:
Due in one year or less	$	111,956	$	111,456
Due after one year through five years	748,300		771,458
Due after five years through ten years	1,841,477		1,912,103
Due after ten years through twenty years	8,954,048		8,827,993
Due after twenty years	7,301,254		6,587,150
Mortgage-backed and asset-backed securities	120,287		124,410
	$	19,077,322	$	18,334,570

Analysis of Investment Operations: "Net investment income" for the three and nine month periods ended September 30, 2024 and 2023 is summarized as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2024		2023		% Change	2024		2023		% Change
Fixed maturities available for sale	$	245,313	$	237,609	3	$	738,626	$	704,095	5
Policy loans	13,296		12,446		7	39,196		36,435		8
Mortgage loans	7,668		5,363		43	21,337		13,919		53
Other long-term investments(1)	19,992		14,630		37	58,608		38,753		51
Short-term investments	3,083		1,396			8,396		4,811
	289,352		271,444		7	866,163		798,013		9
Less investment expense	(4,388)		(4,518)		(3)	(12,985)		(12,738)		2
Net investment income	$	284,964	$	266,926	7	$	853,178	$	785,275	9

(1)For the three months ended September 30, 2024 and 2023, the investment funds, accounted for under the fair value option method, recorded $19.1 million and $14.0 million, respectively, in net investment income. For the nine months ended September 30, 2024 and 2023, the investment funds, accounted for under the fair value option method, recorded $56.1 million and $37.2 million, respectively, in net investment income. Refer to Other Long-Term Investments below for further discussion on the investment funds.

Selected information about sales of fixed maturities available for sale is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Fixed maturities available for sale:
Proceeds from sales(1)	$	163,221	$	46,210	$	674,125	$	192,034
Gross realized gains	2,042		261		6,086		308
Gross realized losses	(1,856)		(67,018)		(15,824)		(77,879)

(1)As of September 30, 2024 and 2023, the Company had $0 and $27 thousand of unsettled trades, respectively.

An analysis of "Realized gains (losses)" is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Realized investment gains (losses):
Fixed maturities available for sale:
Sales and other(1)	$	257	$	(66,767)	$	(9,716)	$	(77,730)

Provision for credit losses	—		65,008		(16)		(7,500)
Fair value option—change in fair value	(3,683)		868		(22,777)		7,954
Mortgage loans	(1,376)		(59)		(3,530)		(4,918)
Other investments	(16)		880		1,135		502
Realized gains (losses) from investments	(4,818)		(70)		(34,904)		(81,692)

Other gains (losses)	2,626		(2,123)		8,324		2,729
Total realized gains (losses)	(2,192)		(2,193)		(26,580)		(78,963)
Applicable tax	460		461		5,582		16,583
Realized gains (losses), net of tax	$	(1,732)	$	(1,732)	$	(20,998)	$	(62,380)

(1)During the three months ended September 30, 2024 and 2023, the Company recorded $3.4 million and $21.1 million of issuer-initiated exchanges of fixed maturities (noncash transactions) that resulted in no realized gains (losses) in either period. During the nine months ended September 30, 2024 and 2023, the Company recorded $82.2 million and $39.0 million of issuer-initiated exchanges of fixed maturities (noncash transactions) that resulted in no realized gains (losses) in either period.

Fair Value Measurements: The following tables represent the fair value of fixed maturities measured on a recurring basis at September 30, 2024 and December 31, 2023:


	Fair Value Measurement at September 30, 2024:
	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	—		$	376,981		$	—		$	376,981
States, municipalities, and political subdivisions	—			2,878,239			—			2,878,239
Foreign governments	—			31,926			—			31,926
Corporates, by sector:
Industrials	—			7,659,257			199,522			7,858,779
Financial	—			4,754,596			131,432			4,886,028

Utilities	—			2,063,380			114,857			2,178,237
Total corporates	—			14,477,233			445,811			14,923,044
Collateralized debt obligations	—			—			42,483			42,483
Other asset-backed securities	—			74,021			7,876			81,897
Total fixed maturities	$	—		$	17,838,400		$	496,170		$	18,334,570
Percentage of total	—		%	97		%	3		%	100		%


	Fair Value Measurement at December 31, 2023:
	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Fixed maturities available for sale
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	—		$	366,151		$	—		$	366,151
States, municipalities, and political subdivisions	—			2,940,322			—			2,940,322
Foreign governments	—			34,106			—			34,106
Corporates, by sector:
Industrials	—			7,440,493			214,749			7,655,242
Financial	—			4,621,160			131,019			4,752,179

Utilities	—			1,888,797			108,965			1,997,762
Total corporates	—			13,950,450			454,733			14,405,183
Collateralized debt obligations	—			—			42,146			42,146
Other asset-backed securities	—			82,298			—			82,298
Total fixed maturities	$	—		$	17,373,327		$	496,879		$	17,870,206
Percentage of total	—		%	97		%	3		%	100		%

The following tables represent changes in fixed maturities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


	Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Asset- backed Securities			Collateralized Debt Obligations			Corporates			Total
Balance at January 1, 2024	$	—		$	42,146		$	454,733		$	496,879

Included in realized gains / losses	—			—			—			—
Included in other comprehensive income	—			762			5,448			6,210
Acquisitions	7,876			—			14,800			22,676
Sales	—			—			—			—
Amortization	—			3,414			(38)			3,376
Other(1)	—			(3,839)			(29,132)			(32,971)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at September 30, 2024	$	7,876		$	42,483		$	445,811		$	496,170
Percent of total fixed maturities	—		%	—		%	3		%	3		%

(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments.

(2)Considered to be transferred at the end of the period. Transfers into Level 3 occur when observable inputs are no longer available. Transfers out of Level 3 occur when observable inputs become available.


	Analysis of Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Asset- backed Securities			Collateralized Debt Obligations			Corporates			Total
Balance at January 1, 2023	$	—		$	50,364		$	478,083		$	528,447

Included in realized gains / losses	—			—			—			—
Included in other comprehensive income	—			(8,424)			(15,968)			(24,392)
Acquisitions	—			—			—			—
Sales	—			—			—			—
Amortization	—			3,429			5			3,434
Other(1)	—			(3,684)			(26,669)			(30,353)
Transfers into Level 3(2)	—			—			—			—
Transfers out of Level 3(2)	—			—			—			—
Balance at September 30, 2023	$	—		$	41,685		$	435,451		$	477,136
Percent of total fixed maturities	—		%	—		%	3		%	3		%

(1)Includes capitalized interest, foreign exchange adjustments, and principal repayments.

The following table presents changes in unrealized gains and losses for the period included in accumulated other comprehensive income for assets held at the end of the reporting period for Level 3 classification:


	Changes in Unrealized Gains (Losses) included in Accumulated Other Comprehensive Income for Assets Held at the End of the Period
	Asset- backed Securities		Collateralized Debt Obligations		Corporates		Total
At September 30, 2024	$	—	$	762	$	5,448	$	6,210
At September 30, 2023	—		(8,424)		(15,968)		(24,392)

Unrealized Loss Analysis: The following table discloses information about fixed maturities available for sale in an unrealized loss position.


	Less than Twelve Months	Twelve Months or Longer	Total
Number of issues (CUSIPs) held:
As of September 30, 2024	87	1,553	1,640
As of December 31, 2023	151	1,614	1,765

Globe Life's entire fixed maturity portfolio consisted of 2,532 issues by 975 different issuers at September 30, 2024 and 2,473 issues by 980 different issuers at December 31, 2023. The weighted-average quality rating of all unrealized loss positions at amortized cost was A- as of September 30, 2024 and December 31, 2023.

The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for sale at September 30, 2024 and December 31, 2023.

Analysis of Gross Unrealized Investment Losses


	At September 30, 2024
	Less than Twelve Months				Twelve Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Fixed maturities available for sale:
Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	—	$	—	$	374,361	$	(21,026)	$	374,361	$	(21,026)
States, municipalities, and political subdivisions	201,640		(4,821)		1,636,467		(420,168)		1,838,107		(424,989)
Foreign governments	—		—		28,493		(9,885)		28,493		(9,885)
Corporates, by sector:
Industrials	124,717		(11,134)		4,071,839		(464,628)		4,196,556		(475,762)
Financial	19,176		(303)		2,005,383		(261,465)		2,024,559		(261,768)

Utilities	7,012		(92)		667,192		(71,489)		674,204		(71,581)
Total corporates	150,905		(11,529)		6,744,414		(797,582)		6,895,319		(809,111)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		68,549		(1,607)		68,549		(1,607)
Total investment grade securities	352,545		(16,350)		8,852,284		(1,250,268)		9,204,829		(1,266,618)

Below investment grade securities:


Corporates, by sector:
Industrials	2,670		(169)		143,088		(32,158)		145,758		(32,327)
Financial	4,199		(13)		178,887		(38,122)		183,086		(38,135)

Utilities	—		—		11,945		(790)		11,945		(790)
Total corporates	6,869		(182)		333,920		(71,070)		340,789		(71,252)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		5,432		(70)		5,432		(70)
Total below investment grade securities	6,869		(182)		339,352		(71,140)		346,221		(71,322)
Total fixed maturities	$	359,414	$	(16,532)	$	9,191,636	$	(1,321,408)	$	9,551,050	$	(1,337,940)

Gross unrealized losses may fluctuate quarter over quarter due to factors in the market that affect our holdings, such as changes in interest rates or credit spreads. The Company considers many factors when determining whether an allowance for a credit loss should be recorded. While the Company holds securities that may be in an unrealized loss position from time to time, Globe Life does not generally intend to sell and it is unlikely that the Company will be required to sell the fixed maturities prior to their anticipated recovery or maturity due to the strong cash flows generated by its insurance operations.

Analysis of Gross Unrealized Investment Losses


	At December 31, 2023
	Less than Twelve Months				Twelve Months or Longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Fixed maturities available for sale:
Investment grade securities:
U.S. Government direct, guaranteed, and government-sponsored enterprises	$	—	$	—	$	364,006	$	(32,306)	$	364,006	$	(32,306)
States, municipalities, and political subdivisions	252,800		(3,520)		1,610,163		(399,809)		1,862,963		(403,329)
Foreign governments	—		—		32,591		(10,348)		32,591		(10,348)
Corporates, by sector:
Industrials	191,573		(3,881)		4,317,827		(530,011)		4,509,400		(533,892)
Financial	242,099		(6,584)		2,341,424		(339,628)		2,583,523		(346,212)

Utilities	81,194		(648)		686,043		(91,959)		767,237		(92,607)
Total corporates	514,866		(11,113)		7,345,294		(961,598)		7,860,160		(972,711)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		70,956		(3,648)		70,956		(3,648)
Total investment grade securities	767,666		(14,633)		9,423,010		(1,407,709)		10,190,676		(1,422,342)

Below investment grade securities:


Corporates, by sector:
Industrials	10,745		(199)		145,697		(32,756)		156,442		(32,955)
Financial	25,563		(2,602)		151,190		(39,526)		176,753		(42,128)

Utilities	—		—		19,654		(1,523)		19,654		(1,523)
Total corporates	36,308		(2,801)		316,541		(73,805)		352,849		(76,606)
Collateralized debt obligations	—		—		—		—		—		—
Other asset-backed securities	—		—		11,288		(409)		11,288		(409)
Total below investment grade securities	36,308		(2,801)		327,829		(74,214)		364,137		(77,015)
Total fixed maturities	$	803,974	$	(17,434)	$	9,750,839	$	(1,481,923)	$	10,554,813	$	(1,499,357)

Fixed Maturities, Allowance for Credit Losses: A summary of the activity in the allowance for credit losses is as follows.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Allowance for credit losses beginning balance	$	7,132	$	72,508	$	7,115	$	—
Additions to allowance for which credit losses were not previously recorded	—		—		—		72,508
Additions (reductions) to allowance for fixed maturities that previously had an allowance	—		(65,008)		17		(65,008)
Reduction of allowance for which the Company intends to sell or more likely than not will be required to sell or sold during the period	—		—		—		—
Allowance for credit losses ending balance	$	7,132	$	7,500	$	7,132	$	7,500

As of September 30, 2024 and December 31, 2023, the Company did not have any fixed maturities in non-accrual status.

Mortgage Loans (commercial mortgage loans): Summaries of commercial mortgage loans by property type and geographical location at September 30, 2024 and December 31, 2023 are as follows:


	September 30, 2024			December 31, 2023
	Carrying Value		% of Total	Carrying Value		% of Total
Property type:
Multi-family	$	127,155	33	$	116,299	42
Industrial	102,402		27	57,267		20
Retail	73,252		19	23,925		9
Hospitality	43,435		11	43,897		16
Mixed use	35,886		10	34,749		12
Office	6,387		2	6,734		2

Total recorded investment	388,517		102	282,871		101
Less allowance for credit losses	(7,202)		(2)	(3,672)		(1)
Carrying value, net of allowance for credit losses	$	381,315	100	$	279,199	100


	September 30, 2024			December 31, 2023
	Carrying Value		% of Total	Carrying Value		% of Total
Geographic location:
Texas	$	75,002	20	$	45,111	16
New Jersey	51,454		14	44,574		16
Florida	46,506		12	48,233		17
California	40,715		11	54,721		20
New York	35,865		9	20,284		7
Alabama	35,838		9	11,003		4
Other	103,137		27	58,945		21
Total recorded investment	388,517		102	282,871		101
Less allowance for credit losses	(7,202)		(2)	(3,672)		(1)
Carrying value, net of allowance for credit losses	$	381,315	100	$	279,199	100

The following tables are reflective of the key factors, debt service coverage ratios, and loan-to-value (LTV) ratios that are utilized by management to monitor the performance of the portfolios. The Company only makes new investments in commercial mortgage loans that have a LTV ratio less than 80%. LTV's that exceed 80% are generally as a result of decreases in the valuation of the underlying property. Generally, a higher LTV ratio and a lower debt service coverage ratio equates to higher risk of loss.


	September 30, 2024
	Recorded Investment
	Debt Service Coverage Ratios(1)
	<1.00x		1.00x—1.20x		>1.20x		Total		% of Gross Total
Loan-to-value ratio(2):
Less than 70%	$	22,841	$	138,034	$	203,226	$	364,101	94
70% to 80%	1,058		—		—		1,058		—
81% to 90%	8,569		—		—		8,569		2
Greater than 90%	14,789		—		—		14,789		4
Total	$	47,257	$	138,034	$	203,226	388,517		100
Less allowance for credit losses							(7,202)
Total, net of allowance for credit losses							$	381,315

(1)Annual net operating income divided by annual mortgage debt service (principal and interest).

(2)Loan balance divided by stabilized appraised value at origination, including planned renovations and stabilized occupancy. Updated internal valuations are used when a loan is materially underperforming.


	December 31, 2023
	Recorded Investment
	Debt Service Coverage Ratios(1)
	<1.00x		1.00x—1.20x		>1.20x		Total		% of Gross Total
Loan-to-value ratio(2):
Less than 70%	$	27,091	$	180,761	$	58,364	$	266,216	94
70% to 80%	—		—		—		—		—
81% to 90%	8,468		—		1,153		9,621		3
Greater than 90%	7,034		—		—		7,034		3
Total	$	42,593	$	180,761	$	59,517	282,871		100
Less allowance for credit losses							(3,672)
Total, net of allowance for credit losses							$	279,199

(1)Annual net operating income divided by annual mortgage debt service (principal and interest).

As of September 30, 2024, the Company evaluated the commercial mortgage loan portfolio on a pool basis to determine the allowance for credit losses. At the end of the period, the Company had 36 loans in the portfolio. For the nine months ended September 30, 2024, the allowance for credit losses increased by $3.5 million to $7.2 million. The provision for credit losses is included in "Realized gains (losses)" in the Condensed Consolidated Statements of Operations.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Allowance for credit losses beginning balance	$	5,826	$	2,928	$	3,672	$	1,789

Provision (reversal) for credit losses	1,376		60		3,530		1,199

Allowance for credit losses ending balance	$	7,202	$	2,988	$	7,202	$	2,988

There was one delinquent commercial mortgage loan, with an outstanding par value of $36.0 million and outstanding interest due of $1.9 million, as of September 30, 2024. The underlying collateral for this loan is in the process of being sold and the Company expects to recover all interest and principal due as of September 30, 2024. There were no delinquent commercial mortgage loans as of December 31, 2023. As of September 30, 2024, the Company had three commercial mortgage loans in non-accrual status with a principal balance of $8.8 million. As of December 31, 2023, the Company had no commercial mortgage loans in non-accrual status. The Company's unfunded commitment balance to commercial loan borrowers was $31 million as of September 30, 2024.

Other Long-Term Investments: Other long-term investments consist of the following assets:


	September 30, 2024		December 31, 2023
Investment funds	$	979,397	$	795,583
Company-owned life insurance	200,114		—
Other	42,377		40,295
Total	$	1,221,888	$	835,878

During the current quarter ended September 30, 2024, the Company acquired other investments in company-owned life insurance (COLI) in the amount of $200 million. COLI is reported at cash surrender value.

The following table presents additional information about the Company's investment funds as of September 30, 2024 and December 31, 2023 at fair value:


	Fair Value				Unfunded Commitments
Investment Category	September 30, 2024		December 31, 2023		September 30, 2024		Redemption Term/Notice(1)




Commercial mortgage loans	$	567,425	$	411,315	$	378,892	Fully redeemable and non-redeemable with varying terms.
Opportunistic and private credit	195,957		181,410		166,514		Fully redeemable and non-redeemable with varying terms.


Infrastructure	174,971		165,887		16,318		Fully redeemable and non-redeemable with varying terms.


Other	41,044		36,971		50,757		Non-redeemable with varying terms
Total investment funds	$	979,397	$	795,583	$	612,481

(1) Non-redeemable funds generally have an expected life of 7 to 12 years from fund closing with extension options of 1 to 4 years. Redemptions are paid out throughout the life of the funds at the General Partner's discretion. Redeemable funds can generally be redeemed over 6 to 36 months upon request from limited partners.

The Company had $226 million of capital called during the period from existing investment funds. The Company's unfunded commitments were $612 million as of September 30, 2024.