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2022
2022
Annual
Annual
Report
Report
3700 S Stonebridge Dr
3700 S Stonebridge Dr
McKinney, Texas 75070
McKinney, Texas 75070
GlobeLifeInsurance.com
GlobeLifeInsurance.com
2022 in Focus
$ in thousands
$4,302,709
Total Premium
Financial Highlights
$ in thousands, except per share amounts
$806,345
Net Operating
Income
$739,704
Net Income
$3,061,520
Annualized Life
Premium In Force
$1,327,854
Annualized Health
Premium In Force
2022
2021
% CHANGE
OPERATIONS
Total Premium
$4,302,709
$4,099,887
4.9
Net Operating Income1
806,345
707,497
14.0
Net Income
739,704
744,959
Annualized Life Premium In Force
3,061,520
2,943,185
Annualized Health Premium In Force
1,327,854
1,286,078
Diluted Average Shares Outstanding
98,985
103,170
Net Operating Income as a Return on
Average Equity (excluding net unrealized
gains on fixed maturities1)
13.4%
12.3%
Net Income as a Return on Average Equity
12.3%
8.8%
0.7
4.0
3.2
4.1
PER COMMON SHARE (on a diluted basis)
Net Operating Income1
Net Income
Shareholders’ Equity (excluding net
unrealized gains on fixed maturities1)
$8.15
7.47
64.01
$6.86
18.8
7.22
58.50
3.5
9.4
1 The following financial measures utilized by management and contained in the following Letter to Shareholders are considered non-GAAP: net operating income;
net operating income as a return on average equity, excluding net unrealized gains on fixed maturities; book value (shareholders’ equity) per share, excluding
net unrealized gains or losses on fixed maturities; underwriting income or margin (consolidated). Globe Life includes non-GAAP measures to enhance investors’
understanding of management’s view of the business. The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by
providing broader perspective. Globe Life’s definitions of non-GAAP measures may differ from other companies’ definitions. Reconciliations to GAAP financial data
are presented on pages 16–17.
11
Letter to Shareholders*
At Globe Life, everything is done with purpose to
Make Tomorrow Better. Gary Coleman and Larry
Hutchison, who stepped down as Co-CEOs of Globe
Life on December 31, 2022, after a combined 78 years
of service to the Globe Life family of companies,
are a testament to that purpose. Gary and Larry’s
complementary skill sets provided depth to a Co-CEO
structure that facilitated sound collective decision-making
processes and allowed the flexibility to both oversee
daily operations and plan more easily for the future.
Throughout their 10-year period as Co-CEOs, they
led the streamlining and modernization of Company
operations, directed critical innovations in digital
marketing, and successfully navigated through difficult
challenges. Gary and Larry are admired for their
leadership, resilience, and integrity, and for making each
decision with the interests of Globe Life’s shareholders,
policyholders, agents, and employees in mind.
We are honored to write the next chapter in Globe Life’s
history of growth. We look forward to continuing the
successful execution of our strategy and are committed
to enhancing value for Globe Life’s stakeholders.
Even with the lingering effects of the COVID-19
pandemic, Globe Life continued to thrive in 2022. Our
overall performance remained positive with strong
results despite a challenging economic environment and
paying approximately $118 million of excess life claims
directly or indirectly related to COVID-19. Total premium
grew 5% and total net sales grew to a record of $722
million. Net operating income as a return on equity,
excluding net unrealized gains on fixed maturities, was
13.4%. While we still anticipate excess mortality in 2023,
we believe the impact of COVID-19 will continue to
moderate as it develops into an endemic state.
The core tenets of our business model — provide basic
protection insurance to our niche markets, grow our
business profitably, manage costs, and return excess
capital to shareholders — are fundamental to Globe
Life’s success. This model has produced strong results
year after year and is summarized below.
Market
Products
Distribution
For over half a century we
have focused our operations
on the lower-middle to middle-
income markets. These markets
are vastly underserved and
provide significant opportunity
for growth.
Margins
As a result of Globe Life’s history
of consistently strong underwriting
margins, we do not have to rely
on investment income to produce
operating income. Approximately
78% of the Company’s pretax
operating income comes from
underwriting income.
We offer affordable
basic protection life and
health insurance products
to customers that help
provide a financial
safeguard when the
unexpected happens.
Cash Flows
Our highly persistent
block of in-force business
produces strong excess
cash flows year after year.
More than 90% of Globe
Life’s premium revenue is
generated from policies
sold in prior years.
Products are distributed to the individual
and worksite markets primarily through
a diverse exclusive agency force and
direct-to-consumer marketing channels.
Through these channels, we can
effectively manage costs, which leads
to consistent underwriting margins.
Return of Excess
Capital to Shareholders
Globe Life consistently produces
excess cash flow which is
returned to shareholders. Since
1986, Globe Life has returned
approximately $11.4 billion to
shareholders in the form of share
repurchases and dividends.
Please note that our business model will not change as the new accounting guidance for insurance contracts, titled Long
Duration Targeted Improvements (LDTI), is implemented in 2023. While LDTI generates timing differences that will impact
our GAAP financial statements, it will have no impact whatsoever on how we view or operate our business. There will be
no impact to the cash flows generated by our operations. The cash flow dividends provided by the insurance subsidiaries
to the parent company are based on our statutory income, which is not impacted by LDTI.
*Throughout this letter net operating income represents net operating income from continuing operations.
2
Our Growth
A strong return on equity (ROE) has routinely been generated by Globe Life. In 2022, net income as an ROE
was 12.3%, and net operating income as an ROE, excluding net unrealized gains on fixed maturities, was 13.4%.
Our business model is central to our success and delivers consistent results year after year. We continue
to pursue enhancements of our operations through careful use of innovation and technology to effectively
manage agent recruiting, lead generation, training, business conservation, and sales activities.
The charts below demonstrate the sustained growth in earnings per share and book value per share.
Net Income Per Share
Compound Annual Growth Rate:
10-Year: 7.6%
$6.82
$6.09
$4.49
$4.09
$3.60
Net Operating Income
Per Share
$7.47
Compound Annual Growth Rate:
10-Year: 9.4%
$8.15
$6.88
$6.13
$4.49
$3.92
$3.31
2012
2014
2016
20181
2020
2022
2012
2014
2016
20181
2020
2022
Book Value Per Share
Compound Annual Growth Rate:
10-Year: 5.0%
$83.19
$48.11
$49.65
$36.19
$37.76
$30.56
Book Value Per Share
(Excluding Net Unrealized Gains or
Losses on Fixed Maturities)
Compound Annual Growth Rate:
10-Year: 10.5%
$44.32
$32.13
$27.91
$23.49
$64.01
$53.12
2012
2014
2016
20181
2020
2022
2012
2014
2016
20181
2020
2022
1In 2017, tax legislation revised the corporate income tax rate from 35% to 21% effective Jan. 1, 2018, among other modifications.
3
Operations
Net operating income has long been
used as a performance measure for Globe
Life’s insurance operations. Net operating
income is a common metric used in the life
insurance industry. We continue to utilize
net operating income because we believe
it provides a clearer view of the profitability
and operating trends of our business.
In 2022, net operating income per share
was up 18.8% to $8.15 due primarily to
improved mortality.
Underwriting
Income
Underwriting income, which is premium
income less the funding of policy benefits,
acquisition costs, and administrative
expenses, increased by 20% year over year.
The higher underwriting income is primarily
due to higher premiums and improved
claims experience. In 2022, approximately
78% of pretax operating income was
produced from underwriting income.
Globe Life uses multiple channels to
distribute its products. American Income,
Liberty National, and Family Heritage
market to individuals and worksites through
in-person and virtual platforms. The
Direct to Consumer Division provides life
insurance products to adult and juvenile
customers through the Internet, direct
mail, call center, and insert media channels.
United American is our independent (non-
exclusive) agency. This general agency
division markets Medicare Supplement and
limited benefit supplemental health plans
to individuals and employer groups.
Company-wide, Globe Life issued almost 2.3
million new life and health policies in 2022,
which represents millions of family members
who are being protected due to the efforts
of our employees and the thousands
of exclusive and independent agents
representing Globe Life. We have been able
to maintain robust underwriting margins
by effectively managing our expenses. The
chart at right reflects the distribution of
underwriting margin by channel.
Components of Net Operating Income
($ in millions, except per share data)
Underwriting Income
Excess Investment Income
Tax and Other Parent Expenses
Stock Compensation Expense, Net of Tax
PER SHARE
$799
$8.08
238
(208)
(23)
2.41
(2.10)
(0.23)
Net Operating Income
$806
$8.15
Components of Underwriting Income
($ in millions)
AS % OF
PREMIUM
Underwriting Margin
– Life
– Health
– Other
Total
25.4%
25.1%
$769
321
8
$1,098
25.5%
Admin. Expenses Net of Other Income
(299)
7.0%
Underwriting Income
$799
18.6%
2022 Total Underwriting Margin
52%
8%
9%
7%
11%
13%
American Income Division
Liberty National Division
Direct to Consumer Division
Family Heritage Division
United American Division
Other
4 American Income remains the largest contributor
of premium and underwriting margin among Globe
Life’s distribution channels. In 2022, American
Income represented 50% of life premiums and 52%
of total underwriting margin.
Life net sales at American Income increased 9% in
2022. Over the past ten years, life net sales have
grown at a compound annual growth rate of 7.1%.
American Income is a “union label” company with
union members not only in the home office, but
also in the sales force. With the endorsement of
unions at the international level, the sales force
markets products to union membership at the local
level. American Income is honored to be among
those “All-Union Wall-to-Wall” companies cited
by the AFL-CIO Union Label and Service Trades
Department. While this union affiliation will always
be an important part of our business, we have
greatly expanded our markets in recent years.
Today, the majority of our new business comes from
non-union sources.
For more than six decades, American Income has
offered the same basic protection life insurance
products to working families. Even so, the Division
has continued to evolve considerably over time in
how they recruit, train, sell, gather leads, and develop
emerging agency leaders.
In our exclusive agency operations, sales growth
is generally dependent upon agent count growth.
In 2020 and 2021, American Income Division
experienced tremendous growth in agent count due
to the pivot away from face-to-face sales to virtual
recruiting and selling during the pandemic. In 2022,
the Division saw a decline in average agent count
resulting from higher-than-expected attrition.
We have seen positive momentum as a result of our
new retention efforts and agency compensation
adjustments aimed at recruiting and retention, and
we expect to see renewed agent growth in 2023.
We are confident American Income will
continue to have long-term growth opportunities
to recruit new agents and grow sales. Our agencies
recruit underemployed individuals searching for
a better opportunity, and there will always be a
large pool of such individuals. These agencies
also understand the importance of leadership
development and offering unlimited opportunity to
those desiring the prospect of leading a team and
ultimately owning their own agency.
American Income Division
Average Agent Count
Compound Annual Growth Rate: 5-Year: 6.3%
9,971
9,444
8,738
6,962
6,971
7,360
2017
2018
2019
2020
2021
2022
American Income Division
Life Net Sales
Compound Annual Growth Rate: 5-Year: 7.3%
($ in millions)
$317
$291
$253
$238
$223
$224
2017
2018
2019
2020
2021
2022
5
Liberty National had one of the best years in
its 100-year history with all-time highs in agent
count, amount of annualized premium written
per agent, middle management leadership
counts, and net submitted premium. These
results translated into the Division breaking its
longstanding goal of reaching $100 million in
sales from the individual and worksite markets.
Total life net sales at Liberty National grew
10% year over year. As shown in the charts,
agent count and total net sales have grown at a
compound annual growth rate of 6.6% and 9.8%,
respectively over the past five years.
We continue to innovate and invest in
technology to enhance business processes,
including real-time presentation metrics, lead
management, and seamless process flow
throughout the sales presentation, which helps
agents build confidence in building rapport
and closing sales. These improvements in
technology allowed visibility into activity which
has enhanced agent productivity.
We are pleased by the growth at Liberty
National and expect continued expansion of
their reach beyond small-town markets in the
Southeast to more heavily populated areas
across the United States.
6
Liberty National Division
Average Agent Count
Compound Annual Growth Rate: 5-Year: 6.6%
2,775
2,716
2,575
2,350
2,156
2,017
2017
2018
2019
2020
2021
2022
Liberty National Division
Total Net Sales
Compound Annual Growth Rate: 5-Year: 9.8%
($ in millions)
$107
$98
$78
$78
$71
$67
2017
2018
2019
2020
2021
2022
Family Heritage focuses on providing limited-benefit
health insurance products to non-urban areas and
smaller cities throughout the United States. The
majority of these products offer a return of premium
feature, which refunds any excess of premiums
received less claims paid to the policyholder at the
end of a specified period.
While average agent count was relatively flat
for the last three years, we are very encouraged
with the direction of this agency. Agency bonus
compensation was adjusted last year to incentivize
recruiting activity and agency middle management
development. In addition, a customer relationship
management tool was deployed to the entire agency,
providing agents better access to information about
their clients and prospects.
These changes have generated positive momentum,
as net health sales grew 14% to $83 million and
average agent count grew steadily the last three
quarters of 2022, ending the year above 1,300
agents. We are excited with the progress made last
year and are very optimistic for the future.
Family Heritage Division
Average Agent Count
Compound Annual Growth Rate: 5-Year: 4.0%
1,325
1,213
1,210
1,112
1,064
995
2017
2018
2019
2020
2021
2022
Family Heritage Division
Health Net Sales
Compound Annual Growth Rate: 5-Year: 7.8%
($ in millions)
$57
$60
$83
$71
$73
$66
2017
2018
2019
2020
2021
2022
7
Direct to Consumer has evolved over the years
from a direct mail distribution channel to a multi-
channel division that also utilizes insert media,
a call center, and the Internet. Having these
various channels to reach consumers provides
a significant advantage since we can monetize
leads more effectively than other life insurers.
Direct to Consumer focuses on the lower-middle
to middle-income market offering adult and
juvenile life insurance protection.
Life net sales in the Direct to Consumer Division
declined approximately 15% in 2022, falling back
to pre-pandemic levels following a surge over the
past two years. Life underwriting margin grew
71% to $115 million primarily due to improved
claims experience. The decline in net life sales
was due to reduced consumer demand and in
part a reduction in our circulation and mailings as
increases in postage and paper costs impeded
our ability to achieve a satisfactory return on our
investment for certain marketing campaigns.
An offset to the reduced circulation and mailing
volume is the growth of our Internet activity,
which has a lower acquisition cost than our
mailing and insert programs. Today, electronic
media sales are approximately 70% of our
business compared to 54% in 2019. We are also
encouraged to see the average premium per
issued policy has increased each year for the last
several years and was 16% higher in 2022 than
in 2019. All of the Direct to Consumer channels
work together to support and drive activity to our
other distribution Divisions.
The tremendous amount of data and experience
we have accumulated over nearly six decades
helps us understand what works and what
doesn’t work in this market, and provides a
significant competitive advantage in consumer
segmentation, advanced analytics, production
efficiency, and pricing. As Globe Life’s second-
largest division, Direct to Consumer remains a key
contributor to Globe Life’s success.
8
Direct to Consumer Division
Life Net Sales
Compound Annual Growth Rate: 5-Year: -1.5%
($ in millions)
$165
$149
$136
$126
$126
$126
2017
2018
2019
2020
2021
2022
Direct to Consumer Division
Life Premium
Compound Annual Growth Rate: 5-Year: 3.8%
($ in millions)
$971
$982
$813
$829
$907
$856
2017
2018
2019
2020
2021
2022
Our United American Division primarily sells
individual and group Medicare Supplement
insurance using an independent agency
distribution model. The Medicare Supplement
market is very competitive and subject to
considerable regulatory scrutiny that can
impact product demand or pricing.
Net health sales declined 8% in 2022 due
primarily to Medicare market dynamics. Health
underwriting margin grew 7% over the prior
year. While we focus primarily on life insurance
at Globe Life, we like the Medicare Supplement
business as it generates stable profit margins,
and we have the knowledge and infrastructure
to administer this business efficiently.
We have been in the Medicare Supplement
business since Medicare began, and we have
seen swings in market dynamics over that
entire period. We will maintain a disciplined
approach to this business and will take care to
protect our profit margins.
United American Division
Health Net Sales
Compound Annual Growth Rate: 5-Year: -0.7%
($ in millions)
$79
$70
$61
$64
$62
$59
2017
2018
2019
2020
2021
2022
United American Division
Health Premium
Compound Annual Growth Rate: 5-Year: 8.1%
($ in millions)
$538
$482
$453
$417
$364
$381
2017
2018
2019
2020
2021
2022
9
Investment Operations
Excess investment income is the metric we use to measure our performance in the investment
segment. The components of excess investment income can be seen in the chart. Excess
investment income produced 23% of our pretax operating income in 2022.
Components of Net Operating Income
Excess Investment Income
($ in millions, except per share data)
($ in millions)
Underwriting Income
Excess Investment Income
Tax and Other Parent Expenses
Stock Compensation Expense, Net of Tax
Net Operating Income
PER SHARE
$8.08
2.41
(2.10)
(0.23)
$8.15
$799
238
(208)
(23)
$806
Net Investment Income
Required Interest on Net Policy Liabilities
Interest on Debt
Excess Investment Income
$987
(659)
(90)
$238
10
Investment Portfolio
December 31, 2022
Invested Assets ($ in millions)
Fixed Maturities (at fair value)
Policy Loans
Other Investments
Total*
AS % OF
TOTAL
91%
3%
6%
$16,503
$615
$1,090
$18,208
100%
*Total invested assets with fixed maturities at amortized cost: $20,007
Total Invested Assets at Amortized Cost
Compound Annual Growth Rate: 10-Year: 4.8%
($ in billions)
$20.0
$18.4
$16.6
$14.8
$12.5
$13.3
2012
2014
2016
2018
2020
2022
Investment
Portfolio
The primary purpose of our investment
activities is to fund future obligations to our
policyholders. To do this, we invest primarily
in investment-grade, long-dated fixed
maturities which provide the best match for
our long-term fixed liability products. These
assets have historically provided attractive
risk-adjusted, capital-adjusted returns
due in large part to our unique ability to
hold securities to maturity regardless of
fluctuations in interest rates or equity markets.
Due to the types of products we sell and the
strength of our underwriting margins, Globe
Life does not need to invest in high-risk assets
such as derivatives, public equities, residential
mortgages, collateralized loan obligations,
and other asset-backed securities. We have
a conservative investment philosophy that
emphasizes preservation of capital.
During 2022, we executed some
repositioning of the fixed maturity portfolio
to improve yield and quality. Over the
course of the year, we sold approximately
$359 million of fixed maturities with an
average rating of BBB and reinvested the
proceeds in higher-yielding securities with
an average rating of A+.
Below investment grade bonds are $542
million, compared to $702 million a year ago.
The percentage of below investment grade
bonds to fixed maturities is 3.0%, the lowest
this ratio has been for more than 20 years. In
addition, below investment grade bonds plus
bonds rated BBB are 54% of fixed maturities,
the lowest this ratio has been in 8 years.
Since 2020, we have invested approximately
$785 million in limited partnerships and
commercial mortgage loans with debt-like
characteristics. These investments were
made to diversify our portfolio and generate
additional yield, while staying in line with
our conservative investment philosophy.
Since we expect to hold our investments to
maturity, we take special care to invest in
entities that have the ability to survive
multiple economic cycles. Overall, we are
confident regarding the resiliency of our
investment portfolio and believe we are well
equipped to withstand a potential recession,
and to opportunistically purchase higher
yielding securities should such an event occur.
11
Fixed Maturity
Portfolio Yield
This chart reflects the impact of lower interest rates
over the years. However, the chart also shows that
the portfolio yield increased from 2021 to 2022.
This is the first time this has happened since 2008.
We are very pleased to see higher interest rates as
this has a positive impact on net operating income
by driving up net investment income. We are not
concerned about interest-rate driven unrealized
losses as we have the intent and the ability to hold
our investments to maturity.
Fixed Maturity Portfolio Yield
(at end of year)
5.60%
5.55%
5.41%
5.28%
5.19%
5.17%
2017
2018
2019
2020
2021
2022
12
Capital
Management
Our capital management strategy is a key
component of the Globe Life business model, which
we believe maximizes shareholder value. We are
able to generate substantial excess cash flow due
to our large in force block of policies. Our capital
management strategy is to fully fund our insurance
operations, maintain appropriate capital levels, and
return excess capital not needed in our operations
to our shareholders.
We continue to maintain our Company Action
Level Risk-Based Capital (RBC) ratio target of
300% to 320%. This RBC ratio is lower than that of
similarly rated peers. We do not need to hold as
much capital as many of our peers due to our lower
risk profile, which is attributable to our conservative
investment portfolio, policy obligations that are
primarily fixed and not subject to fluctuations in
interest rates and equity markets, lower withdrawal
risk, the strength of our underwriting margins, and
consistent cash flow generation.
The chart on the top right presents a history of
excess cash flows back to 2012. Excess cash flows
are defined as dividends received by the parent from
its subsidiaries less interest paid on debt. Over the
years, we have returned the great majority of these
excess cash flows to shareholders through dividends
and share repurchases as can be seen in the chart
on the bottom right. Excess cash flows in 2021 and
2022 were negatively impacted by approximately
$207 million of COVID-19 claims. We estimate for
2023, after payments of interest on debt, the holding
company should have approximately $410 million to
$450 million available to return to its shareholders in
the form of dividends and share repurchases.
Our first priority is to maximize the profitable growth
of our insurance business, so share repurchases come
from excess cash flow remaining after fully funding
profitable sales growth and insurance operations.
We began our share repurchase program in 1986
and have spent $9 billion to repurchase 83% of the
outstanding shares of the Company. As long as we
believe the stock is not fully valued and can generate
a risk-adjusted return on share buybacks that
exceeds our cost of equity and other alternative
uses, we will continue to repurchase shares.
Excess Cash Flow
($ in millions)
$442
$411
$421
$378
$466
$359
2012
2014
2016
2018
2020
2022
Return of Excess Capital
to Shareholders
($ in millions)
SHAREHOLDER
DIVIDENDS
SHARE
REPURCHASES
$56
$360
65
67
71
78
81
375
311
372
380
335
TOTAL
SPENT
$416
440
378
443
458
416
2012
2014
2016
2018
2020
2022
13
Conclusion
Globe Life had another good year in 2022. We believe
the Company’s performance through the pandemic
illustrates the resiliency of our business model, which has
facilitated the delivery of strong, consistent results over
the years regardless of the macroenvironment.
The Company’s long-term performance is reflected
in the Total Shareholder Return chart shown to the
right. Globe Life’s total return has exceeded the S&P
500 index and the S&P 500 Life and Health Insurance
Index over the past ten years including three years of
the pandemic, despite being primarily a “mortality
company.” For 2022, the Company’s total shareholder
return was 29.7%, compared to –18.1% for the S&P 500
index and 10.3% for the S&P 500 Life and Health index.
The Company’s success would not be possible without the
efforts of our employees and agents. We are extremely
grateful for their contributions and will continue to invest
in human capital to support the growth of our operations.
We are proud to represent a Company that helps provide
financial stability to a segment of the market that is largely
ignored by the financial services industry. Our products
promise to provide basic protection to help families
put food on the table, cover rent and other routine
living expenses, and avoid the devastating impact of
significant medical expenses in the event of the death or
critical illness of a breadwinner. As promised, Globe Life
was able to provide that protection to our policyholders
during the pandemic when they needed us most.
We have advanced the Company’s environmental, social
and governance (ESG) strategy by aligning our ESG
disclosures with the Sustainability Accounting Standards
Board (SASB) and the Task Force for Climate-related
Financial Disclosures (TCFD) recommendations.
Total Shareholder Return
10-year Cumulative Annualized Return:
Globe Life – 14.34%
S&P 500 – 12.55%
S&P 500 Life & Health Insurance – 11.70%
$400
$350
$300
$250
$200
$150
$100
2012
2014
2016
2018
2020
2022
We are humbled to serve as the next Co-CEOs of Globe
Life. While the manner in which we operate our business
will change as we continue to invest in technology
and modernize our operations, we firmly believe in
Globe Life’s unique business model as it has served the
Company very well over the years and provides the best
opportunity to succeed in the future.
We are excited to continue the successful execution
of our financial and operational strategies and look
forward to capitalizing on the many opportunities we
have for continued growth.
Thank you for your continued investment in Globe Life.
J. Matthew Darden
Co-Chief Executive Officer
Frank M. Svoboda
Co-Chief Executive Officer
Note: Globe Life cautions you that this Letter to Shareholders may contain forward-looking statements within the meaning of the federal securities law. These
prospective statements reflect management’s current expectations, but are not guarantees of future performance. Accordingly, please refer to our cautionary
statement regarding forward-looking statements and the business environment in which the Company operates, contained in the Company’s Form 10-K for the
period ended December 31, 2022, found on the following pages and on file with the Securities and Exchange Commission. Globe Life specifically disclaims any
obligation to update or revise any forward-looking statement because of new information, future developments, or otherwise.
14
PRINCIPAL EXECUTIVE OFFICE
3700 South Stonebridge Drive
McKinney, Texas 75070
972-569-4000
ANNUAL MEETING OF SHAREHOLDERS
10:00 a.m. CDT, Thursday, April 27, 2023
The proceedings will be made available
for replay on the Investors page of the
Globe Life website. The Company’s Annual
Meeting will be conducted in accordance
with its Shareholders’ Rights Policy. A copy
of this policy can be obtained on the
Company’s website, or by contacting the
Corporate Secretary at the Globe Life
principal executive office address.
INVESTOR RELATIONS
Contact: Mike Majors
Phone: 972-569-3239
Fax: 972-569-3282
Email: Investors@Globe.Life
INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS
Deloitte & Touche LLP
2200 Ross Avenue
Suite 1600
Dallas, Texas 75201
STOCK EXCHANGE LISTINGS
New York Stock Exchange Symbol: GL
INDENTURE TRUSTEE FOR 7.875%,
4.800%, 4.550%, AND 2.150% SENIOR
NOTES AND 5.275% AND 4.250%
JUNIOR SUBORDINATED DEBENTURES
Regions Bank Corporate Trust Services
3773 Richmond Ave., Suite 1100
Houston, TX 77046-3703
Phone: 713-244-8042
Website: www.regions.com/
commercial_ banking/corp_trust.rf
The 4.250% debentures trade through
Depository Trust Company under global
certificates listed on the New York Stock
Exchange (NYSE Symbol GL PRD). The 5.275%
debentures trade through Depository Trust
Company under global certificates listed on
the Singapore Stock Exchange.
STOCK TRANSFER AGENT AND
SHAREHOLDER ASSISTANCE
EQ Shareowner Services
P.O. Box 64854, St. Paul, MN 55164-0854
or 1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100
Toll-Free Number: 866-557-8699
TDD: Hearing impaired can use a relay service
Outside the U.S.: 651-450-4064
Website: www.shareowneronline.com
DIVIDEND REINVESTMENT
Globe Life maintains a dividend
reinvestment plan for all holders of its
common stock. Under the plan, shareholders
may reinvest all or part of their dividends in
additional shares of common stock and may
also make periodic additional cash payments
of up to $3,000 toward the purchase of
Globe Life stock. Participation is voluntary.
More information on the plan may be
obtained from the Stock Transfer Agent by
calling toll-free 866-557-8699 or by writing:
Globe Life Inc., c/o EQ Shareowner Services,
P.O. Box 64874, St. Paul, MN 55164-0874
or 1110 Centre Pointe Curve, Suite 101,
Mendota Heights, MN 55120-4100.
AUTOMATIC DEPOSIT OF DIVIDENDS
Automatic deposit of dividends is available
to shareholders who wish to have their
dividends directly deposited into the
financial institution of their choice.
Authorization forms may be obtained
from the Stock Transfer Agent by calling
toll-free 866-557-8699.
Globe Life
Investors Website
The Investors page contains a menu with
links to many topics of interest to investors
and other interested third parties:
• Financial Reports and Other
Financial Information
• Annual Reports, 10-K and Proxy Statements
• Calendar
• News Releases
• SEC Filings
• Environmental, Social & Governance Report
• Political Contributions and
Public Advocacy Policy
• Executive Leadership
• About Globe Life Inc.
• Contact Us
• GlobeLifeInsurance.com
STOCK INFORMATION
• Stock Transfer Agent and
Shareholder Assistance
• Dividend Reinvestment
• Automatic Deposit of Dividends
CORPORATE GOVERNANCE
• Corporate By-laws
• Code of Business Conduct and Ethics
• Code of Ethics for CEO and Senior
Financial Officers
• Corporate Governance Guidelines
• Employee Complaint Procedures
• Shareholders’ Rights Policy
• Regulation FD Policy and Guidelines
• Related Party Transaction Policy
• Human Rights and Labor Policy
• Third Party Code of Conduct
• Anti-Bribery and Corruption Policy
BOARD OF DIRECTORS
• Board of Directors
• Board Committees
• Audit Committee
• Compensation Committee
• Governance and Nominating Committee
• Executive Sessions
• Qualifications of Directors
• Director Independence Criteria
• Director Resignation Policy
CALLS AND MEETINGS
• Management Presentations
• Conference Calls on the Web
• Conference Call Replays and Transcripts
• Annual Meeting of Shareholders
15
Operating Summary
Unaudited and $ in thousands except per share amounts
UNDERWRITING INCOME
Life:
Premium
Net policy obligations
Nondeferred commissions and amortization
Nondeferred acquisition expense
Underwriting margin
Health:
Premium
Net policy obligations
Nondeferred commissions and amortization
Nondeferred acquisition expense
Underwriting margin
Annuity underwriting margin
Total underwriting margin
Other income
Insurance administration expenses
Underwriting income
EXCESS INVESTMENT INCOME
Net investment income
Required interest on:
Net policy liabilities:
Policy reserves
Deferred acquisition costs
Debt
Total excess investment income
Corporate expenses
Pre-tax operating income
Income tax
Net operating income before stock compensation expense
Stock compensation expense, net of tax
NET OPERATING INCOME
Operating EPS on a diluted basis
Diluted average shares outstanding
Reconciliation of Net Operating Income to Net Income:
Net operating income
Non operating items, net of tax:
Realized gains (losses) – investments
Realized gains (losses) – redemption of debt
Administrative settlements
Non-operating expenses
Legal proceedings
NET INCOME
EPS on a diluted basis
Twelve months ended December 31,
2022
2021
% Increase
or Decrease
$3,023,296
(1,273,816)
(883,373)
(97,561)
768,546
1,279,412
(682,020)
(240,711)
(35,969)
320,712
8,226
1,097,484
1,246
(299,341)
799,389
$2,898,210
(1,335,203)
(853,399)
(85,933)
623,675
1,201,676
(656,171)
(214,373)
(26,830)
304,302
8,704
936,681
1,216
(271,631)
666,266
4.3
23.2
6.5
5.4
10.2
20.0
987,499
952,447
3.7
(919,864)
260,843
(90,395)
238,083
(11,156)
1,026,316
(197,059)
829,257
(22,912)
$806,345
$8.15
98,985
(877,822)
247,389
(83,486)
238,528
(9,553)
895,241
(169,426)
725,815
(18,318)
$707,497
$6.86
103,170
0.2
14.6
14.0
18.8
$806,345
$707,497
(60,473)
—
—
(4,196)
(1,972)
$739,704
$7.47
54,220
(7,358)
(1,047)
(1,923)
(6,430)
$744,959
$7.22
Note: The Operating Summary has been prepared in the manner Globe Life management uses to evaluate the operating results of the Company.
It differs from the Consolidated Statements of Operations found in the accompanying SEC Form 10-K.
16 At December 31,
2022
2021
Condensed Balance Sheets
Unaudited and $ in thousands except per share amounts
Assets:
Fixed maturities at amortized cost*
Cash and short-term investments
Other investments
Deferred acquisition costs*
Goodwill
Other assets
Total assets*
Liabilities and shareholders’ equity:
Policy liabilities
Current and deferred income taxes payable*
Short-term debt
Long-term debt
Other liabilities
Shareholders’ equity, excluding ASC 320* +
Total liabilities and shareholders’ equity
Actual shares outstanding:
Basic
Diluted
Book value (shareholders’ equity, excluding ASC 320) per diluted share
Net operating income as a return on average equity, excluding ASC 320
Average equity, excluding ASC 320
Debt to capital ratio, excluding ASC 320
$18,301,692
206,680
1,590,882
5,244,527
481,791
1,504,534
$27,330,106
$17,335,977
1,062,691
449,103
1,627,952
542,094
6,312,289
$27,330,106
96,740
98,615
$64.01
13.4%
$6,015,546
24.8%
Reconciliation of Globe Life management’s view of selected financial items to comparable GAAP measures*:
Shareholders’ equity, excluding ASC 320+
Effect of ASC 320:
Increase (decrease) fixed maturities
Increase (decrease) deferred acquisition costs
Decrease (increase) current and deferred income taxes payable
Shareholders’ equity
Other comparable GAAP measures:
Fixed maturities at fair value
Deferred acquisition costs
Total assets
Shareholders’ equity
Current and deferred income taxes payable
Book value (shareholders’ equity) per diluted share
Net income as a return on average equity
Average equity
Debt to capital ratio
$6,312,289
(1,798,327)
5,380
376,519
$4,895,861
$16,503,365
5,249,907
25,537,159
4,895,861
686,172
49.65
12.3%
$6,023,479
29.8%
$17,804,922
161,308
1,383,559
4,919,055
481,791
1,521,375
$26,272,010
$16,612,074
1,030,853
479,644
1,546,494
722,009
5,880,936
$26,272,010
99,567
100,535
$58.50
12.3%
$5,743,285
25.6%
$5,880,936
3,500,365
(4,327)
(734,168)
$8,642,806
$21,305,287
4,914,728
29,768,048
8,642,806
1,765,021
85.97
8.8%
$8,494,262
19.0%
*The Condensed Balance Sheets, excluding ASC 320 have been prepared in the manner Globe Life management, industry analysts, rating agencies
and financial institutions use to evaluate the financial position of the company. It differs from the Consolidated Balance Sheets found in the
accompanying SEC Form 10-K.
+ASC 320 includes guidance for treatment of unrealized gains and losses on available-for-sale fixed maturities previously included in FAS 115.
1717 Directors
LINDA L. ADDISON
Of Counsel, Norton Rose Fulbright US LLP
Houston, Texas
MARILYN A. ALEXANDER
Principal of Alexander and Friedman, LLC
Laguna Beach, California
CHERYL D. ALSTON
Executive Director and Chief Investment
Officer, Employees’ Retirement Fund
of the City of Dallas
Frisco, Texas
MARK A. BLINN
Former President and Chief Executive
Officer, Flowserve Corporation
Dallas, Texas
JAMES P. BRANNEN
Retired Chief Executive Officer,
FBL Financial Group, Inc.
Panora, Iowa
Officers
GARY L. COLEMAN
Co-Chairman
LARRY M. HUTCHISON
Co-Chairman
J. MATTHEW DARDEN
Co-Chief Executive Officer
FRANK M. SVOBODA
Co-Chief Executive Officer
JENNIFER A. HAWORTH
Executive Vice President and
Chief Marketing Officer
MARY ELIZABETH HENDERSON
Corporate Senior Vice President,
Enterprise Lead Generation
JANE BUCHAN
Chief Executive Officer,
Martlet Asset Management LLC
Newport Beach, California
ALICE S. CHO
Senior Advisor to the
Boston Consulting Group
Dallas, Texas
GARY L. COLEMAN
Co-Chairman, Globe Life Inc.
LARRY M. HUTCHISON
Co-Chairman, Globe Life Inc.
ROBERT W. INGRAM
Retired Ross-Culverhouse Professor
of Accounting, Culverhouse College of
Commerce, University of Alabama
Jupiter, Florida
STEVEN P. JOHNSON
Retired Partner, Deloitte & Touche LLP
Plano, Texas
DARREN M. REBELEZ
President and Chief Executive Officer,
Casey’s General Stores, Inc.
West Des Moines, Iowa
DAVID A. RODRIGUEZ
Retired EVP and Global Chief
Human Resources Officer of
Marriott International, Inc.
Potomac, Maryland
MARY E. THIGPEN
Consultant for Digital Transformation
Strategies, Technology and Cybersecurity
Assessments, and Systemic Risk
Mitigation Competencies
Alpharetta, Georgia
M. SHANE HENRIE
Corporate Senior Vice President and
Chief Accounting Officer
ROBERT E. HENSLEY
Executive Vice President and
Chief Investment Officer
THOMAS P. KALMBACH
Executive Vice President
and Chief Financial Officer
MICHAEL C. MAJORS
Executive Vice President,
Policy Acquisition and Chief Strategy Officer
R. BRIAN MITCHELL
Executive Vice President,
General Counsel and Chief Risk Officer
CHRISTOPHER T. MOORE
Corporate Senior Vice President,
Associate Counsel and Corporate Secretary
JEFFREY S. MORRIS
Corporate Senior Vice President
and Chief Actuary
PAMELA I. RAMIREZ
Corporate Senior Vice President,
Enterprise Transformation
JOEL P. SCARBOROUGH
Corporate Senior Vice President,
Legal and Compliance
DOLORES L. SKARJUNE
Executive Vice President and
Chief Administrative Officer
CHRISTOPHER K. TYLER
Executive Vice President and
Chief Information Officer
REBECCA E. ZORN
Executive Vice President and
Chief Talent Officer
Distribution Officers
AMERICAN INCOME DIVISION
STEVEN K. GREER
Chief Executive Officer
DAVID S. ZOPHIN
President
FAMILY HERITAGE DIVISION
KENNETH J. MATSON
President and Chief Executive Officer
DIRECT TO CONSUMER DIVISION
JASON A. HARVEY
President and Chief Executive Officer
LIBERTY NATIONAL DIVISION
STEVEN J. DICHIARO
Chief Executive Officer
UNITED AMERICAN INSURANCE COMPANY
MICHAEL C. MAJORS
President
18 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
[ ☒ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
[ ☐ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number: 001-08052
GLOBE LIFE INC.
(Exact name of registrant as specified in its charter)
Delaware
63-0780404
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
3700 South Stonebridge Drive, McKinney, TX
(Address of principal executive offices)
75070
(Zip Code)
972-569-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $1.00 par value per share
4.250% Junior Subordinated Debentures
GL
GL PRD
New York Stock Exchange
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
Yes x No ¨
Yes x No ¨
Yes ¨
No x
Yes x No ¨
GL 2022 FORM 10-K
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.:
Large accelerated filer x
Non-accelerated filer
¨
Accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.
¨
¨
¨
¨
Indicate by checkmark whether the registrant has filed a report on and attestation to its management's assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
x
by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
☐
registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by checkmark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to
☐
§240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No x
As of June 30, 2022, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was
$9.3 billion based on the closing sale price as reported on the New York Stock Exchange.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
Common Stock, $1.00 par value per share
Outstanding as of January 31, 2023
96,497,627 shares
DOCUMENTS INCORPORATED BY REFERENCE
Document
Proxy Statement for the Annual Meeting of Stockholders to be
held on April 27, 2023 (Proxy Statement)
Parts Into Which Incorporated
Part III
GL 2022 FORM 10-K
Globe Life Inc.
Table of Contents
Page
PART I.
PART II.
Business..................................................................................................................................
Item 1.
Item 1A. Risk Factors............................................................................................................................
Item 1B. Unresolved Staff Comments ................................................................................................
Properties................................................................................................................................
Item 2.
Legal Proceedings .................................................................................................................
Item 3.
Mine Safety Disclosures .......................................................................................................
Item 4.
Item 5.
Item 6.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities............................................................................................
[Reserved]...............................................................................................................................
Cautionary Statements..........................................................................................................
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations...............................................................................................................................
Item 7A. Quantitative and Qualitative Disclosures about Market Risk..........................................
Financial Statements and Supplementary Data................................................................
Item 8.
Consolidated Balance Sheets..............................................................................................
Consolidated Statements of Operations ............................................................................
Consolidated Statements of Comprehensive Income......................................................
Consolidated Statements of Shareholders' Equity ...........................................................
Consolidated Statements of Cash Flows ...........................................................................
Notes to Consolidated Financial Statements ....................................................................
Note 1—Significant Accounting Policies .......................................................................
Note 2—Statutory Accounting.........................................................................................
Note 3—Supplemental Information about Changes to Accumulated Other
Comprehensive Income...................................................................................................
Note 4—Investments........................................................................................................
Note 5—Deferred Acquisition Costs ..............................................................................
Note 6—Commitments and Contingencies...................................................................
Note 7—Liability for Unpaid Claims ...............................................................................
Note 8—Income Taxes.....................................................................................................
Note 9—Postretirement Benefits....................................................................................
Note 10—Supplemental Disclosures of Cash Flow Information ...............................
Note 11—Debt ...................................................................................................................
Note 12—Shareholders' Equity ......................................................................................
Note 13—Stock-Based Compensation..........................................................................
Note 14—Business Segments........................................................................................
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure................................................................................................................................
Item 9A. Controls and Procedures......................................................................................................
Item 9B. Other Information ...................................................................................................................
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ..........................
Item 10. Directors, Executive Officers, and Corporate Governance .............................................
Executive Compensation......................................................................................................
Item 11.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters...............................................................................................................
Item 13. Certain Relationships and Related Transactions and Director Independence ............
Item 14. Principal Accountant Fees and Services............................................................................
Item 15. Exhibits and Financial Statement Schedules ....................................................................
Signatures ...............................................................................................................................
PART III.
PART IV.
1
9
16
16
16
16
17
18
19
20
56
56
59
60
61
62
63
64
64
76
77
79
93
94
97
98
100
106
107
109
110
115
122
122
125
125
125
125
125
126
126
126
137
GL 2022 FORM 10-K
[THIS PAGE INTENTIONALLY LEFT BLANK]
Part I
Item 1. Business
Globe Life and the Company refer to Globe Life Inc., an insurance holding company incorporated in Delaware in
1979, and its subsidiaries and affiliates. Its primary subsidiaries are Globe Life And Accident Insurance Company,
American Income Life Insurance Company, Liberty National Life Insurance Company, Family Heritage Life
Insurance Company of America, and United American Insurance Company.
Globe Life's website is: www.globelifeinsurance.com. Globe Life makes available free of charge through its website,
its annual report on Form 10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments
to those reports as soon as reasonably practicable after they have been electronically filed with or furnished to the
Securities and Exchange Commission. Other information included in Globe Life's website is not incorporated into
this filing.
1
GL 2022 FORM 10-K
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.
Primary
Distribution
Method
Direct to
Consumer
Division
Underwriting
Company
Products and Target
Markets
Distribution
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.
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
Family Heritage
Division
Family Heritage Life
Insurance Company
of America
Cleveland, Ohio
United American
Division
United American
Insurance Company
McKinney, Texas
2,775 average
producing agents in
the U.S.
1,210 average
producing agents in
the U.S.
3,327 independent
producing agents in
the U.S.
Life and supplemental
health insurance
distributed through in-
home and worksite
channels.
Supplemental limited-
benefit health
insurance to lower
middle-income to
middle-income
families.
Medicare Supplement
coverage to Medicare
beneficiaries and, to a
lesser extent,
supplemental limited-
benefit health
coverage to people
under age 65.
2
GL 2022 FORM 10-K
Life Insurance
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. 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
Other.................................................................................................................................
203,438
8,426
205,822
9,314
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.
Globe Life's insurance subsidiaries write a variety of nonparticipating ordinary life insurance products. These include
traditional whole life, term life, and other life insurance. The Company does not currently sell
interest-sensitive
whole life products. The following tables present selected information about Globe Life's life insurance products.
Annualized 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
Interest-sensitive .....................................................
Term ..............................................................................
Other .............................................................................
31,838
756,471
166,333
1
25
5
33,912
750,005
147,919
1
26
5
36,297
716,698
129,848
68
1
26
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
Average
Face
Amount per
Policy
Policy
Count
Average
Face
Amount per
Policy
Policy
Count
Average
Face
Amount per
Policy
Policy
Count
Whole life:
Traditional......................................
9,011,227
$
Interest-sensitive..........................
183,887
Term ...................................................
4,720,870
Other ..................................................
453,515
14,369,499
$
15.7
20.4
15.3
16.1
15.6
8,963,774
$
191,536
4,731,044
432,372
14,318,726
$
15.3
20.4
15.3
15.3
15.3
8,717,785
$
199,975
4,526,172
408,859
13,852,791
$
14.7
20.3
15.1
14.3
14.9
3
GL 2022 FORM 10-K
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.
Annualized Premium in Force
(Dollar amounts in thousands)
2022
2021
2020
Direct to Consumer ....................................................................................................... $
72,161
$
74,627
$
77,522
Exclusive agents:
Liberty National...............................................................................................................
American Income ...........................................................................................................
Family Heritage...............................................................................................................
196,336
113,087
387,897
196,783
111,102
363,226
196,534
104,701
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. These products are designed to supplement health coverage that
applicants already own. Medicare Supplements are offered to enrollees in the traditional fee-for-service Medicare
program. Medicare Supplement plans are standardized by federal regulation and are designed to pay deductibles
and co-payments not paid by Medicare.
The following table presents supplemental health annualized premium in force information for the three years ended
December 31, 2022 by product category.
Annualized Premium in Force
(Dollar amounts in thousands)
2022
2021
2020
Limited-benefit plans..................................................... $
735,858
Medicare Supplement...................................................
591,996
Amount
% of
Total
55
45
Amount
$
700,767
585,311
% of
Total
54
46
Amount
$
617,759
575,603
$ 1,327,854
100
$ 1,286,078
100
$ 1,193,362
% of
Total
52
48
100
Annuities
Annuity products include single-premium and flexible-premium deferred annuities. 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. These assumptions are based on
Company experience and projected investment earnings rates. Revenues for individual life and health insurance
products are primarily derived from premium income, and, to a lesser extent, through policy charges to the
policyholder account values on annuity products and certain individual life products. Profitability is affected by actual
experience deviations from the established assumptions and to the extent investment income varies from that
required for policy reserves.
Collections for annuity products and certain life products are not recognized as revenues, but are added to
policyholder account values. Revenues from these products are derived from charges to the account balances for
insurance risk and administrative costs. Profits are earned to the extent these revenues exceed actual costs. Profits
are also earned from investment income in excess of the amounts required for policy reserves.
4
GL 2022 FORM 10-K
Underwriting
The underwriting standards of Globe Life's insurance subsidiaries are established by management. 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. This information is used to determine whether a policy should be issued in
accordance with the application, with a different rating, with a rider, with reduced coverage, or rejected.
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. 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. The assumptions used in the calculation of Globe Life's reserves are reported in Note
1—Significant Accounting Policies. Reserves for annuity products and certain life products consist of
the
policyholders’ account values and are increased by policyholder deposits and interest credited and are decreased
by policy charges and benefit payments.
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. 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. 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.
The Company effectively competes with other carriers, in part, due to its ability to operate at lower policy acquisition
and administrative expense levels than peer companies. This allows Globe Life to have competitive rates while
maintaining higher underwriting margins.
Regulation
Insurance—Insurance companies are subject to regulation and supervision in the states in which they do business.
The laws of the various states establish agencies with broad administrative and supervisory powers which include,
among other things, granting and revoking licenses to transact business, regulating trade practices, licensing
agents, approving policy forms, approving certain premium rates, setting minimum reserve and loss ratio
requirements, determining the form and content of required financial statements, and prescribing the type and
amount of investments permitted. 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
National Association of Insurance Commissioners (NAIC), insurance companies are examined periodically by one
or more of the supervisory agencies.
Risk-Based Capital (RBC)—The NAIC requires that a risk-based capital formula be applied to all life and health
insurers. The risk-based capital formula is a threshold formula rather than a target capital formula. It is designed
only to identify companies that require regulatory attention and is not to be used to rate or rank companies that are
adequately capitalized. All Globe Life's insurance subsidiaries are more than adequately capitalized under the risk-
based capital formula. See further discussion of RBC in Capital Resources.
Holding Company—States have enacted legislation requiring registration and periodic reporting by insurance
companies domiciled within their respective jurisdictions that control or are controlled by other corporations so as to
constitute a holding company system. Globe Life Inc. and its subsidiaries have registered as a holding company
system pursuant to such legislation in Indiana, Nebraska, Ohio, and New York.
Insurance holding company system statutes and regulations impose various limitations on investments in
subsidiaries, and may require prior regulatory approval for material transactions between insurers and affiliates and
for the payment of certain dividends and other distributions.
Environmental, Social, and Governance (ESG)
Globe Life’s sustainable business practices are a driver of the success and longevity that our Company has
experienced since its origin. We plan to advance our sustainable business practices by further developing the
Company's ESG strategy and have aligned disclosures with the Sustainability Accounting Standards Board (SASB)
standards and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
Environmental responsibility and sustainability are key components of our overall corporate responsibility efforts.
We strive to reduce our impact on the environment by implementing green building initiatives at our corporate
facilities, placing a company-wide emphasis on recycling and reducing waste generally, and focusing on efforts to
reduce the use of paper and water. With respect to social matters, our focus continues to be on supporting a culture
that is inclusive and attractive for all of our employees and independent sales agents. We are committed to
maintaining a diverse workforce that reflects the communities in which we work. In addition, to enable the Company
the Company has in place an ESG
to appropriately respond to ESG-related challenges and opportunities,
Committee, and the Board and its committees regularly engage with senior management on relevant ESG-related
issues.
Human Capital Management
Globe Life's talent base encompasses a broad range of experience that possesses the depth of critical skills to
efficiently and effectively accomplish our business purpose and mission, serve our policyholders, and protect our
shareholders' interests. 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. 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.
People, Culture, and Community
At Globe Life, we are united by our mission to—Make Tomorrow Better1 and this starts with our employees and
agents. Beyond providing insurance protection for millions of individuals, serving our policyholders and generating
financial results for our shareholders, we focus on cultivating a healthy, positive culture and a thriving community
within and among our campuses that is inclusive of and attractive for all. Globe Life promotes a diverse work force,
where differences are celebrated and inclusiveness is embraced, to better enable our employees to consistently
achieve outstanding individual and collective results. 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.
1Per 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
As of December 31, 2022 and 2021, the Globe Life employees, (excluding independently-contracted agents)
identify as follows:
Ethnicity/Race
2022
Gender
Generations
White......................................................................
54 % Female ..............
68 % Baby Boomers (1946-1964) .............
18 %
Black or African American ..................................
Hispanic or Latino................................................
Asian......................................................................
American Indian or Alaskan Native...................
22
13
9
1
Native Hawaiian or Pacific Islander .................. —
Other or Not Specified ........................................
1
Male...................
32
Gen X (1965-1977)............................
Millennials (1978-1995).....................
Gen Z (1996-2012) ............................
30
43
9
Total
100 %
100 %
100 %
Ethnicity/Race
2021
Gender
Generations
White......................................................................
56 % Female ..............
66 % Baby Boomers (1946-1964) .............
20 %
Black or African American ..................................
Hispanic or Latino................................................
Asian......................................................................
American Indian or Alaskan Native...................
21
12
9
1
Native Hawaiian or Pacific Islander .................. —
Other or Not Specified ........................................
1
Male...................
34
Gen X (1965-1977)............................
Millennials (1978-1995).....................
Gen Z (1996-2012) ............................
31
41
8
Total
100 %
100 %
100 %
We conduct a confidential survey biennially to give our employees the opportunity to provide candid feedback about
their experiences at
limited to, confidence in the Company and leadership,
competitiveness of our compensation and benefit package, and departmental relationships. The results are shared
with our employees, reviewed by senior leadership, and used to identify areas for improvement and create action
plans based on the employee feedback received.
including but not
the Company,
We strive to Make Tomorrow Better, in part by giving financial and service contributions to programs that provide
hands-on assistance in the communities where we live, work, serve, and visit. We focus our charitable giving on
organizations that support children, families, veterans, and seniors, as well as those that work to ensure people are
able to live full, healthy lives. These categories align with our mission to help families Make Tomorrow Better by
working to protect their financial future. 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
includes a multitude of professional development
success. We have developed a learning ecosystem that
opportunities,
topics. An education
assistance program is also offered to facilitate growth in an area related to one's current position with the Company.
including online, self-directed, and instructor-led courses on a variety of
Health, Safety, and Wellness
We strive to provide a safe and healthy work environment
for every employee. We furnish employees with
numerous tools and trainings throughout the year to help ensure they have, at their fingertips, the best information
to safely engage with co-workers, customers, and third parties. 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
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.
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. 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
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.
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. 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. In
addition, if we do not provide an attractive career opportunity with competitive compensation as well as motivation
for producing agents to increase sales of our products, our growth could be impeded. 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.
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.
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. 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.
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:
•
•
•
•
limitations in the virtual sales and agent recruiting process or
Reduced sales resulting from potential
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.
Actual or alleged misclassification of independent contractors at our insurance subsidiaries could result in
adverse legal, tax or financial consequences.
A significant portion of our sales agents are independent contractors. Although we believe we have properly
classified such individuals, a risk nevertheless exists that a court, the Internal Revenue Service or other authority
will take the position that our sales agents are employees. 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. 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
Financial and Strategic Risks
Our investments are subject to market and credit risks. Significant downgrades, delinquencies and defaults
in our investment portfolio could potentially result in lower net investment income and increased realized
and unrealized investment losses.
individual
Our invested assets are subject to the customary risks of defaults, downgrades, and changes in market values. Our
investment portfolio consists predominately of fixed maturity and short-term investments, where we are exposed to
the risk that
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. Factors that may affect both market and credit risks include interest rate levels (consisting
of both treasury rate and credit spread), financial market performance, disruptions in credit markets, general
economic conditions, legislative changes, particular circumstances affecting the businesses or industries of each
issuer and other factors beyond our control.
Additionally, as the majority of our investments are long-term fixed maturities that we typically hold until maturity, a
significant increase in interest rates and/or credit spreads could cause a material temporary decline in the fair value
of our fixed investment portfolio, even with regard to performing assets. These declines could cause a material
increase in unrealized losses in our investment portfolio. Significant unrealized losses could substantially reduce our
capital position and shareholders’ equity. It is possible our investment in certain of these securities with unrealized
losses could experience a credit event where an allowance for credit loss is recorded, reducing net income.
We cannot be assured that any particular issuer, regardless of industry, will be able to make required interest and
principal payments on a timely basis or at all. Significant downgrades or defaults of issuers could negatively impact
our risk-based capital ratios,
the Company by rating agencies, potential
reduction in future dividend capacity from our insurance subsidiaries, and/or higher financing costs at Globe Life Inc.
(Parent Company) should additional statutory capital be required.
leading to potential downgrades of
Changes in interest rates could negatively affect 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 net policy liabilities, which
could have a negative impact on income. Significant decreases in interest rates could result in calls by issuers of
investments, where such features are available to issuers. Any such calls could result in a decline in our investment
income, as reinvestment of the proceeds would likely be at lower interest rates.
An increase in interest rates could result in certain policyholders surrendering their life or annuity policies for cash,
thereby potentially requiring our insurance subsidiaries to liquidate invested assets if other sources of liquidity are
not available to meet their obligations. 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
Our ability to fund operations is substantially dependent on available funds from our insurance
subsidiaries.
As a holding company with no direct operations, our principal asset
is the capital stock of our insurance
subsidiaries, which periodically declare and distribute dividends on their capital stock. Moreover, our liquidity,
including our ability to pay our operating expenses and to make principal and interest payments on debt securities
or other indebtedness owed by us, as well as our ability to pay dividends on our common stock or any preferred
stock, depends significantly upon the surplus and earnings of our insurance subsidiaries and the ability of these
subsidiaries to pay dividends or to advance or repay funds to us. 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.
loans, and advances that
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. Our insurance subsidiaries are subject to
various state statutory and regulatory restrictions applicable to insurance companies that limit the amount of cash
dividends,
including laws establishing minimum
those subsidiaries may pay to us,
solvency and liquidity thresholds. 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. Accordingly,
impairments in assets or disruptions in our insurance
subsidiaries’ operations that reduce their capital or cash flow could limit or disallow the payment of dividends, a
principal source of our cash flow, to us.
Changes in laws or regulations in the states in which our companies are domiciled could constrain the ability of our
insurance subsidiaries to pay dividends or to advance or repay funds to us in sufficient amounts and at times
necessary to pay our debt obligations, corporate expenses, or dividends on our capital stock.
Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs or
access capital, as well as affect our cost of capital.
Should interest rates increase in the future, the higher interest expense on any newly issued debt may reduce net
income. 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 the unlikely event that current sources of liquidity do not satisfy our needs, we may have to seek additional
financing or raise capital. The availability and cost of additional financing or capital depend on a variety of factors
such as market conditions, the general availability of credit or capital, the volume of trading activities, the overall
availability of credit to the insurance industry and our credit ratings and credit capacity. Additionally, customers,
lenders or investors could develop a negative perception of our financial prospects if we were to incur large
investment losses or if the level of our business activity decreased due to a market downturn. Our access to funds
may also be impaired if regulatory authorities or rating agencies take negative actions against us. If our internal
sources of liquidity prove to be insufficient, we may not be able to successfully obtain additional financing on
favorable terms or at all. As such, we may be forced to delay raising capital, issue shorter term securities than we
would prefer or bear an unattractive cost of capital which could decrease our profitability and significantly reduce our
financial flexibility. If so, our results of operations, financial condition, consolidated RBC, and cash flows could be
materially negatively affected.
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. 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 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
timing of premium and benefit payments. 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.
Various rating agencies review the financial performance and condition of
including our insurance
subsidiaries, and publish their financial strength ratings as indicators of an insurer’s ability to fulfill its contractual
obligations. These ratings are important to maintaining public confidence in our insurance products. A downgrade or
other negative action by a rating agency with respect to the financial strength ratings of our insurance subsidiaries
could negatively affect us by limiting or restricting the ability of our insurance subsidiaries to pay dividends to us and
reducing our sales by adversely affecting our ability to sell
insurance products through independent insurance
agencies.
insurers,
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.
Obtaining timely and appropriate premium rate increases for certain supplemental health insurance policies
is critical.
A significant percentage of the supplemental health insurance premiums that our insurance subsidiaries earn is from
Medicare Supplement insurance. Medicare Supplement insurance, including conditions under which the premiums
for such policies may be increased, is highly regulated at both the state and federal level. 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. 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.
Our business is subject to the risk of the occurrence of catastrophic events that could adversely affect our
financial condition or operations.
Our insurance policies are issued to and held by a large number of policyholders throughout the United States in
relatively low-face amounts. Accordingly, it is unlikely that a large portion of our policyholder base would be affected
by a single natural disaster. 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. 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.
Our life and health insurance products are particularly exposed to risks of catastrophic mortality, such as a
pandemic or other events that result in a large number of deaths. In addition, the occurrence of such an event in a
concentrated geographic area could have a severe disruptive effect on our workforce and business operations. The
likelihood and severity of such events cannot be predicted and are difficult to estimate. 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 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
Our business is subject to the risk of direct or indirect effects of climate change.
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 also influence investor
sentiment with respect to the Company and investments in our portfolio.
Legal, Regulatory, and Compliance Risks
Our businesses are heavily regulated and changes in regulation may reduce our profitability and growth.
Insurance companies, including our insurance subsidiaries, are subject to extensive supervision and regulation in
the states in which they conduct business. 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. Also, regulatory authorities have relatively broad discretion to grant, renew or
revoke licenses or approvals. The insurance laws, regulations and policies currently affecting our companies may
change at any time, possibly having an adverse effect on our business. Should regulatory changes occur, we may
be unable to maintain all required licenses and approvals, or fully comply with the wide variety of applicable laws
and regulations or the relevant authority’s interpretation of such laws and regulations. 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.
Changes to the Internal Revenue Code, administrative rulings, or court decisions affecting the insurance industry,
including the products insurers offer, could increase our effective tax rate and lower our net income, adversely
impact our insurance subsidiaries' capital, or limit the ability of our insurance subsidiaries to sell certain of their
products.
Changes in accounting standards issued by accounting standard-setting bodies may affect our financial
statements, reduce our reported profitability and change the timing of profit recognition.
Our financial statements are subject to the application of GAAP and accounting practices as promulgated by the
National Association of Insurance Commissioners’ statutory accounting practices (NAIC SAP), which principles are
periodically revised and/or expanded. Accordingly, from time to time we are required to adopt new or revised
accounting standards or guidance issued by recognized authoritative bodies. Future accounting standards that we
are required to adopt could change the current accounting treatment that we apply to our consolidated financial
statements. These changes, including underlying assumptions, projections, estimates or judgments/interpretations
by management, could have a material adverse effect on our business,
financial condition, and results of
operations. (Refer to Note 1—Significant Accounting Policies under the caption Accounting Pronouncements Yet to
be Adopted)
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GL 2022 FORM 10-K
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 collection, maintenance, use, disclosure and disposal of personally identifiable information by our insurance
subsidiaries are regulated at the international, federal, and state levels. Applicable laws and rules are subject to
change by legislation or administrative or judicial interpretation. 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). HIPAA also requires that we impose privacy and security requirements on our business associates (as that
term is defined in the HIPAA regulations). 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.
General 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. 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. 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. 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.
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. 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. 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.
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.
14
GL 2022 FORM 10-K
We may fail to meet expectations relating to environmental, social, and governance standards and
practices.
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. 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. 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. 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
As of December 31, 2022, Globe Life had no unresolved SEC staff comments.
Item 1B. Unresolved Staff Comments
Item 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.
Discussion regarding litigation and unclaimed property audits is provided in Note 6—Commitments and
Contingencies.
Item 3. Legal Proceedings
Not Applicable.
Item 4. Mine Safety Disclosures
16
GL 2022 FORM 10-K
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
The principal market in which Globe Life's common stock is traded is the New York Stock Exchange (NYSE: GL).
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. Globe Life's stock is
included within the S&P 500 Index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Globe Life Inc., the S&P 500 Index and the Life Insurance Index
$250
$200
$150
$100
$50
$0
12/17
12/18
12/19
12/20
12/21
12/22
Globe Life Inc.
S&P 500
S&P Life & Health Insurance
*$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. All rights reserved.
17
GL 2022 FORM 10-K
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
$
November 1-30, 2022................
December 1-31, 2022................
605,700
310,000
110.68
113.57
118.98
122,082
605,700
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. The program has no defined expiration date or maximum number of shares to be
purchased.
Item 6. [Reserved]
18
GL 2022 FORM 10-K
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. Any statement that is not a historical fact, or that might
otherwise be considered an opinion or projection concerning the Company or its business, whether express or
is meant as and should be considered a forward-looking statement. Such statements represent
implied,
management's opinions concerning future operations, strategies,
financial results or other developments. We
specifically disclaim any obligation to update or revise any forward-looking statement because of new information,
future developments, or otherwise.
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. If these estimates or assumptions prove to be incorrect, the actual results of Globe
Life may differ materially from the forward-looking statements made on the basis of such estimates or assumptions.
Whether or not actual results differ materially from forward-looking statements may depend on numerous
foreseeable and unforeseeable events or developments, which may be national in scope, related to the insurance
industry generally, or applicable to the Company specifically. Such events or developments could include, but are
not necessarily limited to:
1. 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. Regulatory developments,
regulations
(particularly those impacting taxes and changes to the Federal Medicare program that would affect
Medicare Supplement);
including changes in accounting standards or governmental
3. Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such
as Health Maintenance Organizations and other managed care or private plans) and that could affect the
sales of traditional Medicare Supplement insurance;
Interest rate changes that affect product sales, financing costs, and/or investment portfolio yield;
4.
5. 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. 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. The ability to obtain timely and appropriate premium rate increases for health insurance policies from our
regulators;
10. The customer response to new products and marketing initiatives;
11. Reported amounts in the consolidated financial statements which are based on management estimates and
judgments which may differ from the actual amounts ultimately realized;
12. 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. The 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.
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
GLOBE LIFE INC.
Management's Discussion & Analysis
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with Globe Life's Consolidated Financial Statements and
Notes thereto appearing elsewhere in this report. The following management discussion will only include
comparison to prior year. For discussion regarding activity from 2020, please refer to the prior filed Form 10-Ks at
www.sec.gov.
"Globe Life" and the "Company" refer to Globe Life Inc. and its subsidiaries and affiliates.
Results of Operations
How Globe Life Views Its Operations. Globe Life Inc. is the holding company for a group of
insurance companies that market primarily individual life and supplemental health insurance to lower
middle to middle-income households throughout the United States. We view our operations by
segments, which are the insurance product lines of life, supplemental health, and annuities, and the
investment segment that supports the product lines. Segments are aligned based on their common
characteristics, comparability of the profit margins, and management techniques used to operate
each segment.
Insurance Product Line Segments. The insurance product line segments involve the marketing,
underwriting, and administration of policies. Each product line is further segmented by the various
distribution channels that market the insurance policies. 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. 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
Long-Duration Targeted Improvements. As discussed in further detail within 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. The Company has selected the
modified retrospective transition method upon adoption as of the transition date (the “Transition Date”) of January 1,
2021. The accounting adoption will have no economic impact on the cash flows of our business nor influence our
business model of providing basic protection-oriented products to the underserved and lower middle to middle-
income market. In addition, it will not impact our statutory earnings, statutory capital, nor our capital management
philosophies.
The adoption will, however, modify the timing of when profits emerge on our insurance policies and result in the
restatement of 2021 and 2022 key figures in the 2023 consolidated financial statements. We are anticipating GAAP
net income and net operating income to increase significantly under the new standard primarily due to a reduction in
deferred acquisition cost (DAC) amortization in the near to intermediate term. Additionally, future policy benefits on
our life insurance business for 2021 and 2022, as restated to reflect the new standard, will be adjusted to reflect
updated assumptions used to determine the reserves as well as the treatment of adverse claims experience
incurred in 2021 and 2022, which gets spread out over future periods from transition, including those relating to
COVID-19. This will result in slightly higher future policy benefits, as a percentage of premium, in future years than
what would have been expected under existing guidance. Finally, we expect some modest decreases to future
policy benefits, as a percentage of premium, in our health business on some of our limited benefit plans under the
new standard.
With respect to future policy benefits, we anticipate an increase of between $9.5 billion and $11.0 billion on the
Transition Date, which will be reflected in other comprehensive income. This change reflects an unrealized interest
rate loss at transition and is a result of several primary factors:
a. Life insurance future policy benefit cash flows tend to be long as death benefits, which are greater than
premium amounts, are typically paid to beneficiaries many years after a policy is issued. This results in a
generally longer overall liability duration than the overall asset duration.
b. The new methodology requires the use of current discount rates (upper-medium grade) rather than locked-
in discount rates, which are determined when a policy is issued. Current discount rates are generally lower
than the locked-in discount rates used to determine net income. The required current discount rate is
inconsistent with historical practices, the current asset portfolio and current investment strategy.
c. The methodology requires the net premium ratio1 used to determine future policy benefits be based on
locked-in rates rather than permitting the redetermination of the net premium ratio using current discount
rates. This restricts the level of gross premiums allowed in the calculation, as well as the level of gross
premiums available to offset the impact of current discount rates to the extent these rates are realized in
future years. Because of this requirement, the change in future policy benefits results in a measure of
unrealized gain (loss) due to differences in discount rates only.
For Globe Life, discount rates lower than the locked-in discount rate under LDTI have the effect of increasing the
level of reserves carried due to the use of net premiums in the calculation as compared to current GAAP, which in
the loss recognition test, uses the total gross premium. Once implemented, future policy benefits will be sensitive to
changes in current discount rates for the reasons stated above. To demonstrate this sensitivity to discount rates, to
the extent current discount rates were consistent with rates as of December 31, 2022, we estimate future policy
benefits as of the Transition Date would have only increased between $1.5 billion and $2.3 billion.
With respect to shareholders’ equity, as of the end of 2020, reported shareholders’ equity on the Consolidated
Balance Sheets was $8.8 billion. We anticipate a decrease in the range of $7.5 billion to $8.5 billion, net of tax, as a
result of the requirement to use current discount rates to remeasure the future policy benefits and record the offset
through accumulated other comprehensive income (AOCI) at adoption.
If we hold all else equal as of the Transition Date but use current discount rates as of December 31, 2022, the after-
tax decrease in AOCI due solely to the increase in future policy benefits would have been in the range of $1.2 billion
1 The net premium ratio is the ratio between the present value of benefits and the present value of gross premium.
21
GL 2022 FORM 10-K
to $1.8 billion. AOCI would also be impacted by fluctuations in the valuation of the fixed maturity bond portfolio in
this situation.
Another item impacting shareholders’ equity relates to increases in the liability for future policy benefits on smaller,
older blocks of business with a minimum floor or net premium ratios capped at 100%. For blocks of business that
require increases in future policy benefits to minimum levels, or a net premium ratio capped at 100% on the
Transition Date, any difference between the future policy benefits calculated using the discount rate immediately
before the Transition Date, and the existing carrying value as of the Transition Date is recorded as an adjustment
(decrease) to opening retained earnings. At the Transition Date, we expect an immaterial decrease to opening
retained earnings related to these items.
As noted above, we expect GAAP net income and net operating income to increase under the new standard due to
a significant decrease in the annual amortization of DAC in the near and intermediate term. This is a result of
changes to the calculation of amortization rate, including use of only deferred costs through the valuation date. For
business with deferrals of renewal commissions, as is the case with our captive agency channels, the expected
amortization rate as a percentage of premium will no longer be level, but will increase over the period of time during
which commissions are deferred. The decrease in amortization in the near term will primarily impact our life
insurance line of business. In total, we expect the increase in net income in 2023, largely due to the decrease in
amortization, to fall within a range of $105 million and $115 million, net of tax.
Regarding our measure of excess investment income, we expect a significant decrease in the figure as a result of
the updated standard. This is driven by the removal of interest in the computation of DAC. Although non-GAAP
measures, the review of underwriting margin and excess investment income will remain an important part of the
Company’s measurement of performance.
Inflation Reduction Act. The Inflation Reduction Act (the Act) was enacted on August 16, 2022, and included a
new corporate alternative minimum tax (CAMT). The Act and CAMT go into effect for tax years beginning after
2022. The Company is in the process of evaluating the impact the Act will have, if any, on the financial statements.
22
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Current Highlights, comparing year-to-date 2022 with 2021.
•
•
•
•
•
•
•
Net income as a return on equity (ROE) for the year ended December 31, 2022 was 12.3% and net
operating income as an ROE, excluding net unrealized gains or losses on the fixed maturity portfolio(1) was
13.4%.
Total premium increased 5% over the prior year. Life premium increased 4% for the period from $2.9 billion
in 2021 to $3.0 billion in 2022. Life underwriting margin increased 23% from $624 million in 2021 to $769
million in 2022.
Net investment income increased 4% over the same period in the prior year.
Total net sales increased 2% over the same period in the prior year from $706 million in 2021 to $722
million in 2022.
Book value per share declined 42% below the same period in the prior year from $85.97 to $49.65. Book
value per share, excluding net unrealized gains or losses on the fixed maturity portfolio(1), increased 9%
over the prior year from $58.50 in 2021 to $64.01 in 2022.
The Company incurred $49 million of COVID-19 net life claims (net of reserves released upon death) for the
year ended December 31, 2022 compared with $140 million during the same period last year.
For the year ended December 31, 2022, the Company repurchased 3.3 million shares of Globe Life Inc.
common stock at a total cost of $335 million for an average share price of $100.90.
The following graphs represent net income and net operating income for the three years ended December 31, 2022.
Net Income
(Dollar amounts in thousands)
Net Operating Income
(Dollar amounts in thousands)
$731,773
$744,959
$739,704
$1,000,000
$750,000
$500,000
$250,000
$0
$737,592
$707,497
$806,345
$1,000,000
$750,000
$500,000
$250,000
$0
2020
2021
2022
2020
2021
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. It has been used consistently by Globe Life's management for many years to evaluate the operating performance of the
Company. It differs from net income primarily because it excludes certain non-operating items such as realized gains and losses and certain
significant and unusual items included in net income. Net income is the most directly comparable GAAP measure.
Net operating income as an ROE, excluding net unrealized gains or losses on the fixed maturity portfolio, is considered a non-GAAP
measure. Management utilizes this measure to view the business without the effect of the net unrealized gains or losses, which are primarily
attributable to fluctuation in interest rates on the available-for-sale portfolio. The impact of the adjustment to exclude net unrealized gains or
losses on fixed maturities, net of tax is $(1.4) billion and $2.8 billion for the year ended December 31, 2022 and 2021, respectively.
Book value per share, excluding net unrealized gains or losses on the fixed maturity portfolio, is also considered a non-GAAP measure.
Management utilizes this measure to view the book value of the business without the effect of net unrealized gains or losses, which are
primarily attributable to fluctuation in interest rates on the available-for-sale portfolio. The impact of the adjustment to exclude net unrealized
gains or losses on fixed maturities is $(14.36) and $27.47 for the year ended December 31, 2022 and 2021, respectively.
Refer to Analysis of Profitability by Segment for non-GAAP reconciliation to GAAP.
23
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Summary of Operations. Net income declined 1% to $740 million in 2022, compared with $745 million in 2021.
This decrease was primarily related to an increase in realized losses on the fixed maturity portfolio offset by lower
COVID-19 life claims. On a diluted per common share basis, net income per common share for 2022 increased
from $7.22 to $7.47. Included in net income were after-tax realized losses of $60 million in 2022, compared with
realized after-tax gains of $47 million for 2021. Realized gains and losses are presented more fully under the
caption Realized Gains and Losses in this report.
Net operating income from operations increased 14% to $806 million in 2022, compared with $707 million in 2021.
On a diluted per common share basis, net operating income per common share increased from $6.86 to $8.15, a
19% increase. Net operating income is the consolidated total of segment profits after tax and as such is considered
a non-GAAP measure. Net income is the most directly comparable GAAP measure. We do not consider realized
gains and losses to be a component of our core insurance operations or operating segments. Net income was also
impacted by certain significant and unusual non-operating items in 2021 and 2022. We do not view these items as
components of core operating results because they are not indicative of past performance or future prospects of the
insurance operations. 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 Company continues to see positive signs in its core operations, including strong sales, favorable persistency,
and a strong ROE, excluding net unrealized gains or losses on the fixed maturity portfolio.
COVID-19. For the year ended December 31, 2022, the Company incurred $49 million of COVID-19 net life claims,
compared to $140 million in 2021. Per the Centers for Disease Control and Prevention (CDC),
there were
approximately 243 thousand U.S. COVID-19 deaths in 2022, down from approximately 460 thousand in 2021. The
Company’s level of COVID-19 net life claims, on average for the year, was approximately $2 million per 10,000 U.S.
deaths, a decrease from $3 million per 10,000 U.S. deaths in 2021.
Going forward, we anticipate approximately $45 million in impact from excess life claims in 2023 from both
COVID-19 and related non-COVID-19 causes at the mid-point of our guidance. We define excess life claims as the
additional claims that arose over what would have been expected based on pre-COVID experience. The projected
life claims are dependent on many variables, including, but not limited to, projected U.S. deaths from COVID-19, the
timing and availability of effective treatments for the disease, vaccination rates and effectiveness of vaccines, impact
from potential variants, and the ages and geographic areas in which infections and deaths occur.
24
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Globe Life's operations on a segment-by-segment basis are discussed in depth below. Net operating income has
been used consistently by management for many years to evaluate the operating performance of the Company and
is a measure commonly used in the life insurance industry. It differs from GAAP net income primarily because it
excludes certain non-operating items such as realized gains and losses and other significant and unusual items
included in net income. Management believes an analysis of net operating income is important in understanding the
profitability and operating trends of the Company’s business. Net income is the most directly comparable GAAP
measure.
Analysis of Profitability by Segment
(Dollar amounts in thousands)
2022
2021
2020
2022
Change
%
2021
Change
%
Life insurance underwriting margin .................. $ 768,546
Health insurance underwriting margin .............
320,712
$ 623,675
$
674,946
$ 144,871
23
$ (51,271)
304,302
272,369
16,410
Annuity underwriting margin..............................
8,226
8,704
9,029
Excess investment income ................................
238,083
238,528
244,424
(478)
(445)
Other insurance:
Other income..................................................
1,246
1,216
1,325
30
Administrative expense.................................
(299,341)
(271,631)
(250,947)
(27,710)
Corporate and other............................................
(46,806)
(39,825)
(45,783)
(6,981)
Pre-tax total................................................
990,666
864,969
905,363
125,697
Applicable taxes ..................................................
(184,321)
(157,472)
(167,771)
(26,849)
Net operating income ..............................
806,345
707,497
737,592
98,848
Reconciling items, net of tax:
Realized gain (loss)—investments .............
(60,473)
54,220
(1,915)
(114,693)
Realized loss—redemption of debt.............
Administrative settlements ...........................
—
—
Non-operating expenses ..............................
(4,196)
Legal proceedings .........................................
(1,972)
Net income .............................................. $ 739,704
(7,358)
(1,047)
(1,923)
(6,430)
(501)
—
(816)
(2,587)
7,358
1,047
(2,273)
4,458
5
(5)
—
2
10
18
15
17
14
31,933
(325)
(5,896)
(109)
(20,684)
(8)
12
(4)
(2)
(8)
8
5,958
(13)
(40,394)
10,299
(30,095)
(4)
(6)
(4)
56,135
(6,857)
(1,047)
(1,107)
(3,843)
$ 744,959
$
731,773
$
)
(
(5,255)
( )
(1) $ 13,186
2
The life insurance segment is our primary segment and is the largest contributor to earnings in each year presented.
The life insurance segment underwriting margin increased $145 million compared with the prior year, primarily due
to lower life claims related to COVID-19 and growth in premiums. The health segment contributed to growth in
income in both years, contributing $16 million of additional underwriting margin in 2022 and $32 million in 2021, a
result of sustained premium growth.
25
GL 2022 FORM 10-K
GLOBE LIFE INC.
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.
2022
Total Underwriting Margin
by Segment
2022
Total Underwriting Margin
by Distribution Channel
29%
1%
70%
Life
Health
Annuity
52%
13%
11%
9%
8%
7%
American Income Life Division
Liberty National Division
Direct to Consumer Division
Family Heritage Division
United American Division
Other
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.
Life insurance premium income increased 4% to $3.0 billion over the prior-year total of $2.9 billion. Life net sales
rose 2% to $531 million for the year ended 2022. First-year collected life premium declined 3% to $410 million. Life
underwriting margins, as a percent of premium, increased to 25% in 2022 from 22%. Underwriting margin increased
to $769 million in 2022, 23% over the same period in 2021, largely a result of a significant decline in COVID-19 net
life claims and an increase in premium growth.
Health insurance premium income increased 6% to $1.3 billion over the prior-year total of $1.2 billion. Health net
sales rose 4% to $191 million for the year ended 2022. First-year collected health premium rose 5% to $168 million.
Health underwriting margins, as a percent of premium, were 25% in 2022 and 2021. Health underwriting margin
increased to $321 million for the year ended 2022, 5% over the same period in 2021.
Excess investment income, the measure of profitability of our investment segment, declined slightly during 2022 to
$238.1 million from $238.5 million in the same period in 2021. Excess investment income per common share,
reflecting the impact of our share repurchase program, increased 4% to $2.41 from $2.31 when compared with the
same period in 2021.
Insurance administrative expenses increased 10% in 2022 when compared with the prior-year period. These
expenses were 7.0% as a percent of premium during 2022 compared with 6.6% a year earlier.
For the year ended December 31, 2022, the Company repurchased 3.3 million Globe Life Inc. shares at a total cost
of $335 million for an average share price of $100.90.
26
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
The discussions of our segments are presented in the manner we view our operations, as described in Note 14—
Business Segments.
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 considers net sales to be a better indicator of the rate of premium growth than
annualized premium issued.
First-year collected premium is defined as the premium collected during the reporting period for all policies
in their first policy year. First-year collected premium takes lapses into account in the first year when lapses
are more likely to occur, and thus is a useful indicator of how much new premium is expected to be added
to premium income in the future.
See further discussion of the distribution channels below for Life and Health.
27
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
LIFE INSURANCE
Life insurance is the Company's predominant segment. During 2022,
total
premium and life underwriting margin represented 70% of the total underwriting margin. Additionally, investments
supporting the reserves for life products produce the majority of excess investment income attributable to the
investment segment.
life premium represented 70% of
The following table presents the summary of results of life insurance. Further discussion of the results by distribution
channel is included below.
Life Insurance
Summary of Results
(Dollar amounts in thousands)
Premium and policy charges ....................... $ 3,023,296
100
$ 2,898,210
100
$ 2,672,804
100
2022
2021
2020
Amount
% of
Premium
Amount
% of
Premium
Amount
% of
Premium
Policy obligations...........................................
2,045,730
Required interest on reserves .....................
(771,914)
Net policy obligations.................................
1,273,816
Commissions, premium taxes, and non-
deferred acquisition expenses ....................
Amortization of acquisition costs ................
256,546
724,388
Total expense..............................................
2,254,750
Insurance underwriting margin .............. $
768,546
68
(26)
42
9
24
75
25
2,070,485
(735,282)
1,335,203
234,033
705,299
2,274,535
$
623,675
71
(25)
46
8
24
78
22
1,809,373
(698,112)
1,111,261
212,859
673,738
1,997,858
$
674,946
68
(26)
42
8
25
75
25
The higher life insurance underwriting margins, as well as the higher underwriting margins as a percentage of
premium, for the year ended December 31, 2022 are primarily a result of growth in premiums along with a decrease
in net policy obligations. Net policy obligations amounted to 42% of premiums for the year ended December 31,
2022, compared to 46% in the year-ago period, due to approximately $49 million in COVID-19 net life claims
incurred during the year as compared to $140 million in 2021.
28
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Life insurance products are marketed through several distribution channels. Premium income by distribution
channel for each of the last three years is as follows:
Life Insurance
Premium by Distribution Channel
(Dollar amounts in thousands)
2022
2021
2020
American Income........................................................ $ 1,505,425
Direct to Consumer ....................................................
981,517
Liberty National ...........................................................
326,642
Other.............................................................................
209,712
Total ......................................................................... $ 3,023,296
Amount
% of
Total
Amount
$ 1,402,878
971,461
311,081
212,790
% of
Total
48
34
11
7
Amount
$ 1,257,726
906,959
293,897
214,222
% of
Total
47
34
11
8
50
32
11
7
100
$ 2,898,210
100
$ 2,672,804
100
Annualized life premium in force was $3.1 billion at December 31, 2022, an increase of 4% over $2.9 billion a year
earlier.
The following table shows net sales information for each of the last three years by distribution channel.
Life Insurance
Net Sales by Distribution Channel
(Dollar amounts in thousands)
2022
2021
2020
Amount
% of
Total
American Income........................................................ $
316,715
Direct to Consumer ....................................................
125,979
Liberty National ...........................................................
Other.............................................................................
78,390
9,844
59
24
15
2
Amount
$
290,512
148,846
71,184
11,055
% of
Total
56
28
14
2
Amount
$
253,276
165,426
54,931
10,371
% of
Total
52
34
12
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
First-Year Collected Premium by Distribution Channel
(Dollar amounts in thousands)
2022
2021
2020
Amount
% of
Total
American Income........................................................ $
Direct to Consumer ....................................................
Liberty National ...........................................................
Other.............................................................................
257,584
86,854
56,085
8,988
63
21
14
2
Amount
$
250,937
111,761
50,336
9,705
% of
Total
59
27
12
2
Amount
$
214,566
104,262
42,435
10,190
% of
Total
58
28
11
3
Total ......................................................................... $
409,511
100
$
422,739
100
$
371,453
100
29
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
A discussion of life operations by distribution channel follows.
The American Income Life Division markets to members of labor unions and continues to diversify its lead
sources by building relationships with other affinity groups, utilizing third-party internet vendor leads and obtaining
referrals to facilitate sustainable growth. This division is Globe Life's largest contributor of life premium of any
distribution channel at 50% of the Company's 2022 total life premium. Net sales increased 9% to $317 million in
2022 over the 2021 total of $291 million. The increase in life net sales is due to increased productivity plus an
improvement in issue rates as some challenges in underwriting, such as staffing and speed to obtain medical
records and other information resolved, during the year. The underwriting margin, as a percent of premium, was
33% for the year ended December 31, 2022, up from 30% in the prior year.
This division incurred $16 million in COVID-19 net life claims, representing approximately 1% of premium, for the
year ended December 31, 2022, compared with $36 million in COVID-19 net life claims during the prior year.
Below is the average producing agent count at the end of the period for the American Income Life Division. The
average producing agent count is based on the actual count at the end of each week during the year. Despite the
division's ability to recruit both virtually and in-person, retention challenges still exist. 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.
American Income.......................................................
9,444
9,971
8,738
(527)
(5)
1,233
2022
2021
2020
2022
Change
%
2021
Change
%
14
incentives and training opportunities,
American Income Life continues to focus on growing and strengthening the agency force, specifically through
emphasis on agency middle-management growth and additional agency office openings. In addition to offering
the agency has made considerable investments in information
financial
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. 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. We find this flexibility to be enticing for new recruits as well as a driver of sustainability for our
agency force.
including direct mailings,
insert media, and electronic media.
The Direct to Consumer Division (DTC) offers adult and juvenile life insurance through a variety of marketing
approaches,
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. The proportion of sales from the internet and inbound phone calls had been steadily increasing prior to
COVID-19, but accelerated after the start of the pandemic. The different approaches support and complement one
another in the division's efforts to reach the consumer. The DTC's long-term growth has been fueled by constant
innovation and name recognition. We continually introduce new initiatives in this division in an attempt to increase
response rates.
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. 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. After experiencing higher than normal life net sales in the prior year, sales in the current year are
returning to pre-pandemic levels. The decline is also due in part to the impact of recent record inflation on the cost
of our direct mailings and on our customers, who generally have less discretionary income to purchase and retain
life insurance. DTC incurred $24 million of COVID-19 net life claims, representing approximately 2% of premium, in
2022 compared with $69 million in 2021. DTC’s underwriting margin, as a percent of premium, was 12% for the year
30
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
ended December 31, 2022 and 7% for the same period in 2021, reflecting the lessening impact of COVID-19 on the
division's underwriting results.
The Liberty National Division markets individual
life insurance to middle-income household and worksite
customers. Recent investments in new sales technologies as well as recent growth in middle management within
the agency are expected to help continue this growth. The underwriting margin as a percent of premium was 22%,
up from 17% for the year ended 2021. The increase is primarily attributable to lower net policy obligations in relation
to premium during the year compared with the same period a year ago. This division incurred $7 million of
COVID-19 net life claims, representing approximately 2% of premium, for the year ended December 31, 2022
compared with $28 million in 2021. Net sales increased 10% in 2022 over 2021.
Below is the average producing agent count at the end of the period for Liberty National Division.
Liberty National ..........................................................
2,775
2,716
2,575
59
2022
2021
2020
2022
Change
%
2
2021
Change
141
%
5
The Liberty National Division average producing agent count was up slightly compared with the prior year. We
continue to execute our long-term plan to grow this agency through expansion from small-town markets in the
Southeast to more densely populated areas with larger pools of potential agent recruits and customers. Continued
expansion of this agency’s presence into more heavily populated, less-penetrated areas will help create long-term
agency growth. 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. 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. The Other Agencies contributed $210 million of life premium income, or 7% of Globe
Life's total in 2022, but contributed only 2% of net sales for the year.
HEALTH INSURANCE
Health insurance sold by the Company primarily includes Medicare Supplement insurance, accident coverage, and
other limited-benefit supplemental health products including cancer, critical
illness, heart, and intensive care
coverage.
Health premium accounted for 30% of our total premium in 2022, while the health underwriting margin accounted for
29% of total underwriting margin. Health underwriting margin increased 5% to $321 million primarily due to higher
premium growth. The Company continues to emphasize life insurance sales relative to health due to life’s superior
long-term profitability and its greater contribution to excess investment income.
31
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
The following table presents underwriting margin data for health insurance.
Health Insurance
Summary of Results
(Dollar amounts in thousands)
Premium ............................................................ $ 1,279,412
100
$ 1,201,676
100
$ 1,141,097
100
2022
2021
2020
Amount
% of
Premium
Amount
% of
Premium
Amount
% of
Premium
Policy obligations .............................................
Required interest on reserves........................
791,809
(109,789)
Net policy obligations ...................................
682,020
Commissions, premium taxes, and non-
deferred acquisition expenses .......................
Amortization of acquisition costs ...................
Total expense.................................................
117,815
158,865
958,700
Insurance underwriting margin ................ $
320,712
62
(9)
53
9
13
75
25
758,745
(102,574)
656,171
97,453
143,750
897,374
$
304,302
63
(8)
55
8
12
75
25
733,481
(93,475)
640,006
91,959
136,763
868,728
$
272,369
64
(8)
56
8
12
76
24
Health premium increased 6% from $1.20 billion in 2021 to $1.28 billion in 2022. Health underwriting margin
increased 5% from $304 million in 2021 to $321 million in 2022 primarily due to growth in premiums. Further
discussion is included below by distribution channel.
Globe Life markets supplemental health insurance products through a number of distribution channels. The
following table is an analysis of our health premium by distribution channel for each of the last three years.
Health Insurance
Premium by Distribution Channel
(Dollar amounts in thousands)
2022
2021
2020
United American....................................................... $
538,428
Family Heritage ........................................................
Liberty National ........................................................
American Income .....................................................
366,820
185,761
117,308
Direct to Consumer..................................................
71,095
Total ....................................................................... $ 1,279,412
Amount
% of
Total
Amount
$
481,614
343,839
187,327
114,950
73,946
% of
Total
40
29
16
9
6
Amount
$
452,980
317,021
188,835
105,734
76,527
% of
Total
40
28
16
9
7
42
29
14
9
6
100
$ 1,201,676
100
$ 1,141,097
100
Of total health premium of $1.3 billion, premium from limited-benefit plans comprise $701 million, or 55% of the
total,
for 2022 compared with $639 million in the prior year. Premium from Medicare Supplement products
comprises the remaining 45% or $578 million for 2022 compared with $563 million in 2021.
Annualized health premium in force was $1.33 billion at December 31, 2022, an increase of 3% over the prior year
balance of $1.29 billion.
32
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Presented below is a table of health net sales by distribution channel for the last three years.
Health Insurance
Net Sales by Distribution Channel
(Dollar amounts in thousands)
2022
2021
2020
United American........................................................................ $
Family Heritage.........................................................................
Liberty National .........................................................................
American Income......................................................................
58,601
82,529
28,916
17,555
Direct to Consumer ..................................................................
3,825
Total ....................................................................................... $ 191,426
Amount
% of
Total
Amount
$
63,551
72,600
26,512
18,230
3,465
% of
Total
35
39
14
10
2
Amount
$
61,690
70,665
22,905
18,817
3,594
% of
Total
35
40
13
10
2
31
43
15
9
2
100
$ 184,358
100
$ 177,671
100
Of total net sales of $191 million, sales of limited-benefit plans comprise $137 million, or 71% of the total, for 2022
compared with $118 million in 2021. 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.
Health Insurance
First-Year Collected Premium by Distribution Channel
(Dollar amounts in thousands)
2022
2021
2020
United American ........................................................................ $
Family Heritage..........................................................................
Liberty National..........................................................................
American Income ......................................................................
64,410
60,699
22,415
17,294
Direct to Consumer ...................................................................
3,115
Total ........................................................................................ $ 167,933
Amount
% of
Total
Amount
$
60,386
57,427
20,348
18,939
3,253
% of
Total
37
36
13
12
2
Amount
$
79,628
54,242
20,169
18,536
3,051
% of
Total
45
31
11
11
2
39
36
13
10
2
100
$ 160,353
100
$ 175,626
100
First-year collected premium related to limited-benefit plans comprise $108 million, or 64% of
first-year
collected premium for 2022 compared with $99 million in 2021. First-year collected premium from Medicare
Supplement policies make up the remaining 36%, or $60 million for 2022 compared with $61 million in 2021.
total
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. The United American Independent Agency was Globe Life's largest health agency in terms of
health premium income.
This division is also Globe Life's largest producer of Medicare Supplement insurance, responsible for 83% of the
Company's Medicare Supplement premium and 93% of Medicare Supplement net sales. Medicare Supplement
premium in this agency rose 5% to $482 million in 2022 over the prior period premium of $460 million. Medicare
Supplement net sales declined 19% to $51 million in 2022 from the prior year. The Medicare Supplement market is
highly competitive and thus sales will fluctuate over the years. Underwriting margin as a percent of premium was flat
at 15% for 2022 compared with 2021.
33
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
The Family Heritage Division primarily markets limited-benefit supplemental health insurance in non-urban areas.
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.
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.
Below is the average producing agent count at the end of the indicated periods for the Family Heritage Division.
While the agency was relatively flat in agent count as compared with 2021, we anticipate that as COVID-19 and the
job market stabilize, agent recruitment opportunities will continue to trend upward.
Average producing agents .......................................
1,210
1,213
1,325
(3)
—
(112)
(8)
2022
2021
2020
2022
Change
%
2021
Change
%
The Liberty National Division represented 14% of all Globe Life health premium income at $186 million in 2022.
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. Health net sales for 2022 increased by $2 million or
9% from 2021. We anticipate an increase in health net sales going forward at this division as the Company
becomes more able to interact face-to-face with customers.
Other distribution. While some of the Company's other distribution channels market health products, selling life
insurance is the main emphasis. On a combined basis, they accounted for 15% of health premium in 2022 and 15%
in 2021. The American Income Life Division primarily markets accident plans. The Direct to Consumer Division
markets primarily Medicare Supplements to employer or union-sponsored groups, adding $4 million of Medicare
Supplement net sales in 2022 and $3 million in 2021.
ANNUITIES
Our fixed annuity balances at
Underwriting margin was $8.2 million for 2022 and $8.7 million for 2021.
the end of 2022 and 2021 were $953.3 million and $1.0 billion, respectively.
We do not currently market stand-alone fixed or deferred annuity products, favoring instead protection-oriented life
and supplemental health insurance products. Therefore, we do not expect that annuities will be a significant portion
of our business or marketing strategy going forward.
34
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
INVESTMENTS
We manage our capital resources including investments, debt, and cash flow through the investment segment.
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.
It is defined as net investment income less both the required interest on net insurance policy liabilities and the
interest cost associated with capital funding or “financing costs.”
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. 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. If we had not used this excess cash to repurchase shares, but had instead invested it in interest-
bearing assets, we would have earned more investment income and had more shares outstanding. As excess
investment income per diluted common share incorporates all capital resources, we view excess investment income
per diluted common share as a useful measure to evaluate the investment segment.
Excess Investment Income. The following table summarizes Globe Life's investment income, excess investment
income, and excess investment income per diluted common share.
Analysis of Excess Investment Income
(Dollar amounts in thousands except per share data)
Net investment income .................................................................................................. $
Interest on net insurance policy liabilities:
2022
2021
2020
987,499
$
952,447
$
927,062
Required interest on reserves(1) ................................................................................
(919,864)
(877,822)
(833,000)
Required interest on deferred acquisition costs .....................................................
Net required interest..................................................................................................
Financing costs ...............................................................................................................
260,843
(659,021)
(90,395)
247,389
(630,433)
(83,486)
237,066
(595,934)
(86,704)
Excess investment income .................................................................................. $
238,083
$
238,528
$
244,424
Excess investment income per diluted common share ............................... $
2.41
$
2.31
$
2.28
Mean invested assets (at amortized cost).................................................................. $ 19,714,027
Average net insurance policy liabilities(2) ....................................................................
Average debt and preferred securities (at amortized cost)......................................
11,377,104
2,127,305
$ 18,939,317
$ 17,987,502
10,954,500
10,460,539
2,053,935
1,859,298
(1) Includes $71 thousand of required interest on Federal Home Loan Bank (FHLB) funding agreements in 2022.
(2) Net of deferred acquisition costs, excluding the associated unrealized gains and losses thereon.
Excess investment income declined slightly in 2022 when compared with 2021. Excess investment income per
diluted common share increased 4% during 2022 when compared with 2021. 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
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. Generally, investment income grows at a
slower rate than the assets when the yield on new investments is lower than the yield on dispositions or the average
portfolio yield. It also increases at a faster rate than the assets when new investment yields exceed the yield on
dispositions or the average portfolio yield. 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. 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. The following chart presents the growth in net investment income and the growth in mean
invested assets.
Growth in net investment income .......................................................................
Growth in mean invested assets (at amortized cost) ......................................
3.7 %
4.1 %
2.7 %
5.3 %
1.8 %
5.6 %
2022
2021
2020
Globe Life's net investment income benefits from higher interest rates on new investments. 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.
Required interest on net insurance policy liabilities reduces net investment income, as it is the amount of net
investment income considered by management necessary to “fund” required interest on net insurance policy
liabilities, which is the net of the benefit reserve liability and the deferred acquisition cost asset. As such, it is
removed from the investment segment and applied to the insurance segments to offset the effect of the required
interest from the insurance segments. As discussed in Note 14—Business Segments, management regards this as
a more meaningful analysis of the investment and insurance segments. Required interest is based on the actuarial
interest assumptions used in discounting the benefit reserve liability and the amortization of deferred acquisition
costs for our insurance policies in force.
The great majority of our life and health insurance policies are fixed interest rate protection policies, not investment
products, and are accounted for under current GAAP accounting guidance for long-duration insurance products
which mandate that interest rate assumptions for a particular block of business be “locked in” for the life of that
block of business. Each calendar year, we set the discount rate to be used to calculate the benefit reserve liability
and the amortization of the deferred acquisition cost asset for all insurance policies issued that year. That rate is
based on the new money yields that we expect to earn on cash flow received in the future from policies of that issue
year and cannot be changed. The discount rate used for policies issued in the current year has no impact on the in
force policies issued in prior years as the rates of all prior issue years are also locked in. As such, the overall
discount rate for the entire in force block of 5.8% is a weighted average of the discount rates being used from all
issue years. Changes in the overall weighted-average discount rate over time are caused by changes in the mix of
the reserves and the deferred acquisition cost asset by issue year on the entire block of in force business. Business
issued in the current year has little impact on the overall weighted-average discount rate due to the size of our in
force business. In 2023, new guidance will become effective that will significantly impact the accounting for our long
duration contracts including the determination of required interest. Please see Note 1—Significant Accounting
Policies for additional information.
Since actuarial discount rates are locked in for life on essentially all of our business, benefit reserves and deferred
acquisition costs are not affected by interest rate fluctuations unless a loss recognition event occurs. Due to the
strength and consistency of our underwriting margins, we do not expect an extended low interest rate environment
will cause a loss recognition event.
36
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Information about interest on net policy liabilities is shown in the following table.
Required Interest on Net Insurance Policy Liabilities
(Dollar amounts in thousands)
Required
Interest
Average Net
Insurance
Policy
Liabilities
Average
Discount
Rate
2022
Life and Health......................................................................................................... $
Annuity ......................................................................................................................
FHLB Funding Agreement......................................................................................
Total............................................................................................................................ $
Increase in 2022......................................................................................................
614,361
$ 10,373,972
5.9 %
44,589
1,000,440
71
2,692
659,021
$ 11,377,104
4.5 %
3.9 %
4.5
2.6
5.8
2021
Life and Health......................................................................................................... $
Annuity ......................................................................................................................
Total............................................................................................................................ $
Increase in 2021......................................................................................................
583,996
$
9,912,914
5.9 %
46,437
1,041,586
630,433
$ 10,954,500
4.5
5.8
5.8 %
4.7 %
2020
Life and Health......................................................................................................... $
Annuity ......................................................................................................................
Total............................................................................................................................ $
Increase in 2020......................................................................................................
548,066
$
9,391,680
5.8 %
47,868
1,068,859
595,934
$ 10,460,539
4.5
5.7
4.8 %
3.9 %
37
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Financing costs for the investment segment consist primarily of interest on our various debt instruments. The table
below presents the components of financing costs and reconciles interest expense per the Consolidated Statements
of Operations.
Analysis of Financing Costs
(Dollar amounts in thousands)
Interest on funded debt .................................................................................................... $
Interest on term loan.........................................................................................................
Interest on short-term debt ..............................................................................................
Other....................................................................................................................................
2022
2021
2020
80,481
$
78,183
$
73,157
—
9,875
39
—
5,270
33
4,193
9,302
52
Financing costs ........................................................................................................ $
90,395
$
83,486
$
86,704
In 2022, financing costs increased 8% compared with prior year primarily due to rates on the short-term debt. In
addition, interest on funded debt was higher in 2022 than the prior year as a result of the 4.80% Senior Notes
issued in May 2022, prior the repayment of the 3.80% Senior Notes on September 15, 2022. More information on
our debt transactions is disclosed in the Financial Condition section of this report and in Note 11—Debt.
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. For this reason, we hold a significant investment portfolio as a part of our core
insurance operations. This portfolio consists primarily of high-quality fixed maturities containing an adequate yield to
provide for the cost of carrying these long-term insurance product obligations. As a result, fixed maturities are
generally held for long periods to support the liabilities. Expected yields on these investments are taken into account
when setting insurance premium rates and product profitability expectations.
Despite our intent to hold fixed maturity investments for a long period of time, investments are occasionally sold,
exchanged, called, or experience a credit loss event, resulting in a realized gain or loss. Gains or losses are only
secondary to our core insurance operations of providing insurance coverage to policyholders. In a bond exchange
offer, bondholders may consent to exchange their existing bonds for another class of debt securities. The Company
also has investments in certain limited partnerships, held under the fair value option, with fair value changes
recognized in Realized gains (losses) in the Consolidated Statements of Operations.
Realized gains and losses can be significant in relation to the earnings from core insurance operations, and as a
result, can have a material positive or negative impact on net income. The significant fluctuations caused by gains
and losses can cause period-to-period trends of net income that are not indicative of historical core operating results
or predictive of the future trends of core operations. Accordingly, they have no bearing on core insurance operations
or segment results as we view operations. 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
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.
Analysis of Realized Gains (Losses), Net of Tax
(Dollar amounts in thousands, except for per share data)
Year Ended December 31,
2022
2021
2020
Amount
Per
Share
Amount
Per
Share
Amount
Per
Share
Fixed maturities:
Sales.................................................................................... $ (44,792) $
Matured or other redemptions(1)......................................
19,076
Provision for credit losses................................................
Fair value option—change in fair value .............................
Other(2) ....................................................................................
306
(23,189)
(11,874)
0.19
—
(0.23)
(0.12)
35,684
2,337
18,105
6,194
Total Realized investment gains (losses)—
investments .................................................................
(60,473)
(0.61)
54,220
Loss on redemption of debt .................................................
—
—
(7,358)
(0.45) $ (8,100) $
(0.08) $ (28,844) $
(0.27)
0.34
0.02
0.18
0.06
11,712
(2,643)
826
17,034
0.52
(0.07)
(1,915)
(501)
0.11
(0.03)
0.01
0.16
(0.02)
—
)
(
(0.02)
Total realized gains (losses) ................................... $ (60,473) $
(
)
(
(0.61) $ 46,862
)
$
0.45
$ (2,416) $
(
)
(1) During the three years ended December 31, 2022, 2021, and 2020, the Company recorded $147.6 million, $109.2 million, and $219.8 million
of exchanges of fixed maturity securities (noncash transactions) that resulted in $1.5 million, $19.9 million, and $6.2 million, respectively, in
realized gains (losses), net of tax.
(2) Other realized gains (losses) are primarily a result of changes in the fair value of exchange traded funds.
As investment yields increased in 2022, the Company disposed of certain fixed maturity investments to improve the
risk-adjusted, capital-adjusted returns on the portfolio. While we realized losses, we were able to enhance the yield,
credit quality and diversification of the portfolio.
Investment Acquisitions. Globe Life's investment policy calls for investing primarily in investment grade fixed
maturities that meet our quality and yield objectives. We generally invest in securities with longer maturities because
they more closely match the long-term nature of our policy liabilities. 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. 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
GLOBE LIFE INC.
Management's Discussion & Analysis
call date and call price after acquisition ("first call date"). For all other callable bonds, the yield is calculated to
maturity date.
Fixed Maturity Acquisitions Selected Information
(Dollar amounts in thousands)
Cost of acquisitions(1):
Investment-grade corporate securities ............................................................... $
Investment-grade municipal securities ...............................................................
Other investment-grade securities.......................................................................
7,577
Total fixed maturity acquisitions ............................................................. $ 1,420,220
Year Ended December 31,
2022
2021
2020
812,697
$
566,400
$
686,844
599,946
434,482
10,465
543,088
34,171
$ 1,011,347
$ 1,264,103
Effective annual yield (one year compounded)(2) .................................................
Average life (in years to next call) ..........................................................................
Average life (in years to maturity)...........................................................................
Average rating............................................................................................................
5.18%
13.5
22.8
A
3.39%
21.7
31.7
A+
3.73%
15.8
26.3
A
(1) Fixed maturity acquisitions included unsettled trades of $0 in 2022, $7 million in 2021 and $2 million in 2020.
(2) Tax-equivalent basis, where the yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable
securities.
For investments in callable bonds, the actual
life of the investment will depend on whether the issuer calls the
investment prior to the maturity date. Given our investments in callable bonds, the actual average life of our
investments cannot be known at the time of the investment. Absent sales and "make-whole calls," however, the
average life will not be less than the average life to next call and will not exceed the average life to maturity. Data for
both of these average life measures is provided in the above chart.
During 2021 and 2022, acquisitions consisted of securities spanning a diversified range of issuers, industry sectors,
and geographical regions. All of the acquired securities were investment grade. In addition to the fixed maturity
acquisitions, Globe Life invested $290 million in other long-term investments in 2022 and $258 million in 2021.
These investments include primarily investment funds. See Note—4 Investments for further discussion.
New cash flow available for investment has been primarily provided through our insurance operations, cash
received on existing investments, and proceeds from dispositions. While dispositions increase funds available for
investment, as noted earlier in this discussion, they can also have a negative impact on investment income if the
proceeds from the dispositions are reinvested at lower yields than the bonds that were disposed. Dispositions were
$852 million in 2022 and $428 million in 2021.
Since fixed maturities represent such a significant portion of our investment portfolio,
discussion of portfolio composition will
focus on fixed maturities. See a breakdown of
investments in Other Investment Information within Note 4—Investments.
the remainder of
the
the Company's other
40
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Selected information concerning the fixed maturity portfolio is as follows:
Fixed Maturity Portfolio Selected Information
Average annual effective yield(1) ........................................................................................................
Average life, in years, to:
Next call(2) .......................................................................................................................................
Maturity(2) ........................................................................................................................................
Effective duration to:
Next call(2,3) .....................................................................................................................................
Maturity(2,3) ......................................................................................................................................
At December 31,
2022
5.19%
14.7
18.5
8.8
10.4
2021
5.17%
15.7
19.0
10.6
12.2
(1) Tax-equivalent basis. The yield on tax-exempt securities is adjusted to produce a yield equivalent to the pretax yield on taxable securities.
(2) Globe Life calculates the average life and duration of the fixed maturity portfolio two ways:
(a) based on the next call date which is the next call date for callable bonds and the maturity date for noncallable bonds, and
(b) based on the maturity date of all bonds, whether callable or not.
(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
GLOBE LIFE INC.
Management's Discussion & Analysis
Credit Risk Sensitivity. 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.
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
Banks...............................
Other financial ................
26,944
74,963
84
1
(192)
26,836
1,336,868
14,035
(100,038)
1,250,865
(22,026)
52,938
1,195,293
4,513
(187,513)
1,012,293
Total financial..............
209,262
107
(36,184)
173,185
4,907,794
63,126
(504,489)
4,466,431
(10,168)
34,555
1,436,598
—
—
—
—
1,090,309
2,146,003
(522)
24,939
1,212,674
(2,253)
26,246
—
—
(27,822)
121,643
—
—
857,375
520,029
592,657
247,996
22,637
14,913
20,427
19,107
(101,923)
1,357,312
(95,958)
1,009,264
(232,196)
1,934,234
(121,540)
1,110,241
7,779
(110,132)
755,022
11,684
4,903
(34,269)
497,444
(85,005)
512,555
90
(59,672)
188,414
(40,765)
207,383
8,103,641
101,540
(840,695)
7,364,486
(3,173)
32,756
1,924,190
36,670
(125,713)
1,835,147
(80,122)
413,324
14,935,625
201,336
(1,470,897) 13,666,064
Industrial
Energy .............................
44,723
Basic materials...............
Consumer, non-cyclical
Other industrials
Communications ............
Transportation ................
—
—
25,461
28,499
—
Consumer. cyclical.........
149,465
Technology......................
Total industrial.............
Utilities
—
248,148
35,496
Total corporates ..........
492,906
States, municipalities,
and political divisions:
General obligations ..........
Revenues...........................
Total states,
municipalities, and
political divisions...............
Other fixed maturities:
Government (U.S. and
foreign)...............................
Collateralized debt
obligations .........................
Other asset-backed
securities............................
—
—
—
—
—
—
—
—
—
—
—
—
—
433
540
—
—
—
—
915,725
5,041
(167,393)
753,373
1,875,305
19,287
(338,054)
1,556,538
2,791,030
24,328
(505,447)
2,309,911
15
14
—
—
—
—
—
—
—
—
—
37,098
13,266
50,364
37,098
13,266
—
50,364
449,603
33
(51,674)
397,962
Total fixed maturities . $
542,497 $
13,806 $
(
(81,740) $ 474,563
)
$ 18,301,692 $
238,967 $(2,037,294) $16,503,365
(
)
12,493
—
(1,618)
10,875
88,336
4
(9,276)
79,064
13
7
7
27
8
6
12
6
5
3
3
1
44
11
82
5
10
13
8
6
27
8
6
12
7
5
3
3
1
45
11
83
5
9
2
—
1
2
—
1
100
100
42
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Fixed Maturities by Sector
December 31, 2021
(Dollar amounts in thousands)
Below Investment Grade
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Amortized
Cost
Total Fixed Maturities
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
% of Total Fixed
Maturities
At
Amortized
Cost, net
At
Fair
Value
13
6
7
26
9
6
13
7
5
3
3
1
47
11
84
4
9
13
6
7
26
9
7
13
7
5
3
3
1
48
11
85
4
8
2
—
1
2
—
1
Corporates:
Financial
Insurance - life, health,
P&C .................................... $
57,470 $
3,825 $
(4,807) $ 56,488
$ 2,345,116 $
513,844 $
(5,553) $ 2,853,407
Banks .................................
Other financial...................
26,980
97,800
614
547
— 27,594
983,317
(1,103)
97,244
1,240,340
Total financial ................
182,250
4,986
(5,910) 181,326
4,568,773
Industrial
Energy................................
118,538
15,941
(1,445) 133,034
1,587,892
Basic materials .................
Consumer, non-cyclical...
Other industrials
Communications...............
Transportation...................
—
84,106
25,565
28,699
25,555
3,182
3,002
5,588
Technology ........................
Total industrial................
Utilities
—
433,087
36,284
—
59,577
3,888
—
—
—
1,145,222
13,059
(2,697)
94,468
2,256,802
— 28,747
1,254,243
— 31,701
— 31,143
—
—
876,058
559,399
575,597
212,138
Consumer. cyclical ...........
150,624
18,805
(3,429) 166,000
207,466
186,431
907,741
346,780
279,175
475,012
286,889
153,295
135,581
106,438
18,074
(1,635)
1,189,148
(2,161)
1,424,610
(9,349)
5,467,165
(1,683)
1,932,989
(50)
1,424,347
(3,397)
2,728,417
(589)
1,540,543
(3,610)
1,025,742
(38)
694,942
(3,594)
(2,084)
678,441
228,129
Total corporates .............
651,621
68,451
(13,481) 706,591
14,967,515
3,199,104
(25,406) 18,141,213
(7,571) 485,093
8,467,351
1,801,244
(15,045) 10,253,550
— 40,172
1,931,391
490,119
(1,012)
2,420,498
States, municipalities, and
political divisions:
General obligations .............
Revenues .............................
Total states,
municipalities, and
political divisions...........
Other fixed maturities:
Government (U.S.,
municipal, and foreign).......
Collateralized debt
obligations ............................
Other asset-backed
securities ..............................
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
736,853
56,163
(2,060)
790,956
1,516,144
182,972
(847)
1,698,269
2,252,997
239,135
(2,907)
2,489,225
13
12
442,944
65,413
(5,296)
503,061
36,468
27,037
— 63,505
36,468
27,037
—
63,505
13,457
—
(414)
13,043
104,998
3,715
(430)
108,283
Total fixed maturities .... $
701,546 $
95,488 $
(
(13,895) $783,139
)
$ 17,804,922 $ 3,534,404 $
(
(34,039) $21,305,287
)
100
100
43
GL 2022 FORM 10-K
GLOBE LIFE INC.
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.
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.
Fixed maturities had a fair value of $16.5 billion at December 31, 2022, compared with $21.3 billion at December
31, 2021. The net unrealized gain (loss) position in the fixed-maturity portfolio decreased from a $3.5 billion gain
position at December 31, 2021 to a loss position of $1.8 billion at December 31, 2022 due to an increase in market
rates during the period.
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.
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. 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 quality rating is created utilizing a methodology developed by Globe Life using ratings from the various
rating agencies noted above. The composite quality rating is not a Standard & Poor's credit rating. Standard &
Poor's does not sponsor, endorse, or promote the composite quality rating and shall not be liable for any use of the
composite quality rating. 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.
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................................................................. $
AA ...................................................................
A ......................................................................
BBB+ ..............................................................
BBB.................................................................
BBB-................................................................
828,315
2,779,587
4,752,633
3,934,053
4,254,730
1,209,877
Total investment grade ..........................
17,759,195
Below investment grade:
BB ...................................................................
B ......................................................................
Below B ..........................................................
Total below investment grade ..............
462,356
43,044
37,097
542,497
5
$
733,524
15
26
21
23
7
97
3
—
—
3
2,260,257
4,438,913
3,639,118
3,844,182
1,112,808
16,028,802
389,132
35,067
50,364
474,563
4
14
27
22
23
7
97
3
—
—
3
$ 18,301,692
100
$ 16,503,365
100
Weighted average composite quality rating ......................................................................................
A-
BB-
A-
44
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Fixed Maturities by Rating
At December 31, 2021
(Dollar amounts in thousands)
Amortized
Cost
% of
Total
Fair
Value
% of
Total
Average Composite
Quality Rating on
Amortized Cost
Investment grade:
AAA................................................................. $
AA ...................................................................
A ......................................................................
BBB+ ..............................................................
BBB.................................................................
BBB-................................................................
761,526
2,215,179
4,487,607
3,779,051
4,289,044
1,570,969
Total investment grade ..........................
17,103,376
Below investment grade:
BB ...................................................................
B ......................................................................
Below B ..........................................................
Total below investment grade ..............
537,064
128,402
36,080
701,546
4
$
867,728
13
25
21
24
9
96
3
1
—
4
2,412,947
5,584,588
4,616,977
5,174,667
1,865,241
20,522,148
583,608
136,026
63,505
783,139
4
11
26
22
24
9
96
3
1
—
4
$ 17,804,922
100
$ 21,305,287
100
Weighted average composite quality rating ......................................................................................
A-
BB-
A-
The overall quality rating of the portfolio is A-, the same as year-end 2021. Fixed maturities rated BBB are 51% of
the total portfolio at December 31, 2022 compared with 54% at year-end 2021, and the percentage of BBB bonds to
the overall portfolio has been declining since the end of 2018. While this ratio is high relative to our peers, we have
limited exposure to higher-risk assets such as derivatives, equities, and asset-backed securities. Additionally, the
Company does not participate in securities lending and has no off-balance sheet investments as of December 31,
2022. Of our fixed maturity purchases, BBB securities generally provide the Company with the best risk-adjusted,
capital-adjusted returns largely due to our ability to hold securities to maturity regardless of fluctuations in interest
rates or equity markets.
An analysis of changes in our portfolio of below-investment grade fixed maturities at amortized cost, net of
allowance for credit losses is as follows:
Below-Investment Grade Fixed Maturities
(Dollar amounts in thousands)
Balance at beginning of period ....................................................................................................... $
Downgrades by rating agencies........................................................................................................
Upgrades by rating agencies.............................................................................................................
Dispositions ..........................................................................................................................................
Provision for credit losses ..................................................................................................................
Amortization and other........................................................................................................................
Year Ended
December 31,
2022
2021
701,546
$
840,739
50,147
(97,462)
(116,791)
(31)
5,088
—
(67,078)
(78,712)
2,959
3,638
Balance at end of period ................................................................................................................... $
542,497
$
701,546
45
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Our investment policy calls for investing primarily in fixed maturities that are investment grade and meet our quality
and yield objectives. Thus, any increases in below-investment grade issues are typically a result of ratings
downgrades of existing holdings. Below-investment grade bonds at amortized cost, net of allowance for credit
losses, were 9% of our shareholders’ equity, excluding the effect of unrealized gains or losses on fixed maturities as
of December 31, 2022. Globe Life invests long term and as such, one of our key criterion in our investment process
is to select issuers that have the ability to weather multiple financial cycles.
Market Risk Sensitivity. Globe Life's investment securities are exposed to interest rate risk, meaning the effect of
changes in financial market interest rates on the current fair value of the Company’s investment portfolio. Since 91%
of the carrying value of our investments is attributable to fixed maturity investments and these investments are
predominately fixed-rate investments, the portfolio is highly subject to market risk. Declines in market interest rates
generally result in the fair value of the investment portfolio rising, and increases in interest rates cause the fair value
to decline. Under normal market conditions, we are not concerned about unrealized losses that are interest rate
driven since we would not expect to realize them. Globe Life does not generally intend to sell the securities prior to
maturity and, likely, will not be required to sell the securities prior to recovery of amortized cost. The long-term
nature of our insurance policy liabilities and strong operating cash-flow substantially mitigate any future need to
liquidate portions of the portfolio. The increase or decrease in the fair value of insurance liabilities and debt due to
increases or decreases in market interest rates largely offsets the impact of rates on the investment portfolio.
However, as is permitted by GAAP, these liabilities are not recorded at fair value.
The following table illustrates the interest rate risk sensitivity of our fixed maturity portfolio at December 31, 2022
and 2021. This table measures the effect of a parallel shift in interest rates (as represented by the U.S. 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.
Market Value of Fixed Maturity Portfolio
(Dollar amounts in thousands)
Change in Interest Rates(1)
(200)
At December 31,
2022
2021
$
20,059,000
$
26,939,000
(100)
0
100
200
(1) In basis points.
18,177,000
16,503,000
15,015,000
13,690,000
23,916,000
21,305,000
19,045,000
17,082,000
46
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
OPERATING EXPENSES
Operating expenses are included in the "Corporate and Other" segment and are classified into two categories:
insurance administrative expenses and expenses of the Parent Company. Insurance administrative expenses
generally include expenses incurred after a policy has been issued. As these expenses relate to premium for a
given period, management measures the expenses as a percentage of premium income. The Company also views
stock-based compensation expense as a Parent Company expense. Expenses associated with the issuance of our
insurance policies are reflected as acquisition expenses and included in the determination of underwriting margin.
The following table is an analysis of operating expenses for the three years ended December 31, 2022.
Operating Expenses Selected Information
(Dollar amounts in thousands)
2022
% of
2021
% of
Amount
Premium Amount
Premium Amount
Insurance administrative expenses:
Salaries ............................................................................ $ 129,711
Other employee costs....................................................
42,319
Information technology costs........................................
Legal costs ......................................................................
Other administrative costs ............................................
55,526
12,056
59,729
Total insurance administrative expenses..................
299,341
3.0
1.0
1.3
0.3
1.4
7.0
$ 115,852
41,841
47,923
15,494
50,521
271,631
2.8
1.0
1.2
0.4
1.2
6.6
$ 105,935
39,885
45,742
11,256
48,129
250,947
Parent company expense ................................................
Stock compensation expense .........................................
Legal proceedings.............................................................
Non-operating expenses..................................................
11,156
35,650
2,496
5,311
Total operating expenses, per Consolidated
Statements of Operations ....................................... $ 353,954
9,553
30,272
8,139
2,434
9,891
35,892
3,275
1,033
$ 322,029
$ 301,038
2020
% of
Premium
2.8
1.0
1.2
0.3
1.3
6.6
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. Insurance administrative expenses increased $28 million primarily due to higher information technology
costs,
including associated information technology salaries, higher employee costs in general, and higher
administrative costs associated with the acquisition of Globe Life Benefits, which occurred in late 2021. Insurance
administrative expenses as a percent of premium were 7.0%, compared to 6.6% for the same period in 2021.
47
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
SHARE REPURCHASES
Globe Life has an ongoing share repurchase program that began in 1986, and is reviewed with the Board of
Directors by management quarterly and annually reaffirmed by the Board of Directors. 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. Excess cash flow at the Parent Company is primarily comprised of dividends received from the insurance
subsidiaries less interest expense paid on its debt and other limited operating activities. The majority of our share
repurchases are made from excess cash flow after the payment of shareholder dividends. 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. On August 10, 2022,
the Board of Directors reauthorized the Parent Company’s share repurchase program in amounts and with timing
that management, in consultation with the Board, determines to be in the best interest of the Company and its
shareholders.
The following table summarizes share purchase activity for each of the last three years.
Analysis of Share Purchases
(Amounts in thousands)
Purchases with:
Shares
Amount
Shares
Amount
Shares
Amount
Share repurchase program ..................................
3,322
$ 335,145
4,784
$ 455,030
4,459
$ 380,112
Option proceeds......................................................
1,103
119,493
858
86,405
676
63,754
Total .....................................................................
4,425
$ 454,638
5,642
$ 541,435
5,135
$ 443,866
2022
2021
2020
Throughout the remainder of this discussion, share purchases refer only to those made from excess cash flow at
the Parent Company.
FINANCIAL CONDITION
Liquidity. Liquidity provides Globe Life with the ability to meet on demand the cash commitments required to
support our business operations and meet our financial obligations. Our liquidity is primarily derived from multiple
facility,
sources: positive cash flow from operations, a portfolio of marketable securities, a revolving credit
commercial paper and the Federal Home Loan Bank.
Insurance Subsidiary Liquidity. The operations of our
insurance subsidiaries have historically generated
substantial cash inflows in excess of immediate cash needs. Cash inflows for the insurance subsidiaries primarily
include premium and investment income. In addition to investment income, maturities and scheduled repayments in
the investment portfolio are cash inflows. Cash outflows from operations include policy benefit payments,
commissions, administrative expenses, and taxes. A portion of the excess cash inflows in the current year will
provide for the payment of future policy benefits and are invested primarily in long-term fixed maturities as they
better match the long-term nature of these obligations. Excess cash available from the insurance subsidiaries’
operations is generally distributed as a dividend to the Parent Company, subject to regulatory restrictions. The
dividends are generally paid in amounts equal to the subsidiaries’ prior year statutory net income excluding realized
capital gains. While the leading source of the excess cash is investment income, a significant portion of the excess
cash also comes from underwriting income due to our high underwriting margins and effective expense control.
While the insurance subsidiaries annually generate more operating cash inflows than cash outflows, the companies
also have the entire available-for-sale fixed maturity investment portfolio available to create additional cash flows if
required.
Four of our insurance subsidiaries are members of the FHLB of Dallas. FHLB membership provides the insurance
subsidiaries with access to various low-cost collateralized borrowings and funding agreements. 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
GLOBE LIFE INC.
Management's Discussion & Analysis
Parent Company Liquidity. An important source of Parent Company liquidity is the dividends from its insurance
subsidiaries. These dividends are received throughout the year and are used by the Parent Company to pay
dividends on common and preferred stock, interest and principal repayment requirements on Parent Company debt,
and operating expenses of the Parent Company.
Year Ended December 31,
(Amounts in Thousands)
Projected
2023
2022
2021
2020
Liquidity Sources:
Dividends from Subsidiaries............................................................. $
465,000
$
407,042
$
478,535
$
485,871
Excess Cash Flows ...........................................................................
345,000
278,434
370,120
387,606
For more information on the restrictions on the payment of dividends by subsidiaries, see the Restrictions section of
Note 12—Shareholders' Equity. Although these restrictions exist, dividend availability from subsidiaries historically
has been more than sufficient for the cash flow needs of the Parent Company.
liquidity for
Additional sources of
intercompany
borrowings, public debt markets, term loans, and a revolving credit facility. At December 31, 2022, the Parent
Company had access to $91 million of invested cash, net intercompany receivables, and other liquid assets. The
credit facility is discussed below.
the Parent Company are cash,
intercompany receivables,
Short-Term Borrowings. 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. 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. 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. 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. 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.
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. 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. 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.
As noted above, the Parent Company had access to $91 million of liquid assets available as of December 31, 2022.
This liquidity is available to the Company in the event additional funds are needed to support the targeted capital
levels within our insurance subsidiaries.
Consolidated Liquidity. Consolidated net cash inflows provided from operations were $1.42 billion in 2022,
compared with $1.44 billion in 2021. In addition to cash inflows from operations, our companies received proceeds
49
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
from maturities, calls, and repayments of fixed maturities in the amount of $462 million in 2022, compared with $311
million in 2021. As noted under the caption Credit Facility in Note 11, the Parent Company has in place a revolving
credit facility. The insurance companies have no additional outstanding credit facilities.
Cash and short-term investments were $207 million at the end of 2022 compared with $161 million at the end of
2021. In addition to these liquid assets, the entire $16.5 billion (fair value at December 31, 2022) portfolio of fixed
income securities is available for sale in the event of an unexpected need. 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. 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.
Debt: The carrying value of the long-term debt was $1.6 billion at December 31, 2022, an increase from $1.5 billion
a year earlier. A complete analysis and description of long-term debt issues outstanding is presented in Note 11—
Debt.
Subsidiary Capital: The National Association of Insurance Commissioners (NAIC) has established a risk-based
factor approach for determining threshold risk-based capital levels for all insurance companies. This approach was
designed to assist the regulatory bodies in identifying companies that may require regulatory attention. A Risk-
Based Capital (RBC) ratio is typically determined by dividing adjusted total statutory capital by the amount of risk-
based capital determined using the NAIC’s factors. If a company’s RBC ratio approaches two times the RBC
amount, the company must file a plan with the NAIC for improving its capital levels (this level is commonly referred
to as “Company Action Level” RBC). Companies typically hold a multiple of the Company Action Level RBC
depending on their particular business needs and risk profile.
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%. The
Company concludes that this capital level is more than adequate and sufficient to support its current ratings, given
the nature of its business and its risk profile. As of December 31, 2022, our consolidated Company Action Level
RBC ratio was 321%, compared to 315% in the prior year. The Parent Company is committed to maintaining the
liquidity available to provide
targeted consolidated RBC ratio at
additional capital if necessary.
its insurance subsidiaries and has sufficient
In August 2022, the NAIC fully adopted new and expanded C-2 life insurance mortality risk factors. The adoption of
these factors resulted in higher amounts of required capital related to our life insurance liabilities. The Parent
Company is committed to maintaining the targeted consolidated RBC ratio at its insurance subsidiaries and has
sufficient liquidity available to provide additional capital if necessary.
Shareholder's Equity: As noted under the caption Analysis of Share Purchases within this report, we have an
ongoing share repurchase program.
Globe Life has continually increased the quarterly dividend on its common shares over the past three years.
Year Ended December 31,
Projected
2023
2022
2021
2020
Quarterly dividend by annual year ..................................................... $
0.2250
$
0.2075
$
0.1975
$
0.1875
Shareholders’ equity was $4.9 billion at December 31, 2022, compared with $8.6 billion at December 31, 2021, a
decrease of $3.7 billion or 43%. Since December 31, 2021, shareholders’ equity was reduced by $4.2 billion due to
after-tax unrealized losses in the fixed-maturity portfolio as interest rates increased over the period offset by $740
million of net income during this period. In addition, shareholders' equity was reduced by $335 million in share
50
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
purchases under the repurchase program and an additional $119 million in share purchases to offset the dilution
from stock option exercises.
We plan to use excess cash available at the Parent Company as efficiently as possible in the future. Excess cash
flow, as we define it, results primarily from the dividends received by the Parent Company from its subsidiaries less
the interest paid on debt. The cash received by the Parent Company from our insurance subsidiaries is after they
have made substantial
investments during the year to grow the business. 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. 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. The accounting adoption will have no economic impact on the cash flows of our business nor
influence our business model of providing basic protection oriented products to the underserved and low to middle-
income market. In addition, the adoption will not impact our capital management philosophies. It will, however,
modify the timing of when profits emerge on our insurance policies. We are anticipating GAAP net income and net
operating income to increase under the new standard primarily due to the significant reduction in DAC amortization
in the near or intermediate term. With respect to equity, we anticipate a significant decrease as a result of the
requirement to use current discount rates to remeasure the policy liabilities and record the offset through AOCI at
adoption. Since current rates (upper-medium grade) are lower than the locked-in rates assumed in valuing our
policy liabilities, we will have unrealized interest rate loss recognized through AOCI.
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. Changes in the fair value of the portfolio can result from changes in
market rates.
While a majority of invested assets are revalued, accounting rules do not permit interest-bearing insurance policy
liabilities to be valued at fair value in a consistent manner as that of assets, with changes in value applied directly to
shareholders’ equity. Due to the size of our policy liabilities in relation to our shareholders’ equity, an inconsistency
exists in measurement, which may have a material
impact on the reported value of shareholders’ equity.
Fluctuations in interest rates cause undue volatility in the period-to-period presentation of our shareholders’ equity,
capital structure, and financial ratios. Due to the long-term nature of our fixed maturities and liabilities and the strong
cash flows consistently generated by our insurance subsidiaries, we have the general intent and ability to hold our
securities to maturity. As such, we do not expect to incur losses due to fluctuations in market value of fixed
maturities caused by market rate changes and temporarily illiquid markets. Accordingly, our management, credit
rating agencies, lenders, many industry analysts, and certain other financial statement users prefer to remove the
effect of this accounting rule when analyzing our balance sheet, capital structure, and financial ratios.
51
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
The following table presents selected data related to our capital resources. Additionally, the table presents the effect
of this accounting guidance on relevant line items, so that investors and other financial statement users may
determine its impact on Globe Life's capital structure. Excluding the effect of unrealized gains or losses on the fixed
maturity portfolio from shareholders' equity is considered non-GAAP. Below we include the reconciliation to GAAP.
Selected Financial Data
(Dollar amounts in thousands, except per share data)
At
December 31, 2022
December 31, 2021
December 31, 2020
Effect of
Accounting
Rule
Requiring
Revaluation(1)
Effect of
Accounting
Rule
Requiring
Revaluation(1)
Effect of
Accounting
Rule
Requiring
Revaluation(1)
GAAP
GAAP
GAAP
Fixed maturities................................... $ 16,503,365
Deferred acquisition costs(2)..............
5,249,907
$ (1,798,327)
$ 21,305,287
$ 3,500,365
$ 21,213,509
$ 4,019,710
5,380
4,914,728
(4,327)
4,595,444
(5,955)
Total assets..........................................
25,537,159
(1,792,947)
29,768,048
3,496,038
29,046,731
4,013,755
Short-term debt ...................................
449,103
Long-term debt....................................
1,627,952
—
—
Shareholders' equity...........................
4,895,861
(1,416,428)
479,644
1,546,494
8,642,806
—
—
2,761,870
254,918
1,667,886
8,771,092
—
—
3,170,866
Book value per diluted share ............
Debt to capitalization(3).......................
49.65
29.8 %
(14.36)
5.0 %
85.97
19.0 %
27.47
(6.6)%
83.19
18.0 %
30.07
(7.6)%
Diluted shares outstanding................
Actual shares outstanding.................
98,615
96,740
100,535
99,567
105,429
103,797
(1) Amount added to (deducted from) comprehensive income to produce the stated GAAP item, per accounting rule ASC 320-10-35-1.
(2) Includes the value of business acquired (VOBA).
(3) Globe Life's debt covenants require that the effect of this accounting rule be removed to determine this ratio. This ratio is computed by
dividing total debt by the sum of total debt and shareholders’ equity.
Financial Strength Ratings. The financial strength of our major insurance subsidiaries is rated by Standard &
Poor’s and A. M. Best. The following table presents these ratings for our five largest insurance subsidiaries at
December 31, 2022.
Liberty National Life Insurance Company............................................................................
Globe Life And Accident Insurance Company.....................................................................
United American Insurance Company..................................................................................
American Income Life Insurance Company.........................................................................
Family Heritage Life Insurance Company of America........................................................
Standard
& Poor’s
AA-
AA-
AA-
AA-
NR
A.M.
Best
A
A
A
A
A
A.M. Best states that it assigns an A (Excellent) rating to insurance companies that have, in its opinion, an excellent
ability to meet their ongoing insurance obligations.
The AA financial strength rating category is assigned by Standard & Poor’s Corporation (S&P) to those insurers
which have very strong capacity to meet its financial commitments which differs from the highest-rated insurers only
to a small degree. 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.
52
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
OTHER ITEMS
Litigation. For more information concerning litigation, please refer to Note 6—Commitments and Contingencies.
CRITICAL ACCOUNTING POLICIES
Application of Critical Accounting Estimates. The preparation of financial statements in conformity with GAAP
requires the application of accounting policies that often involve a significant degree of judgment. Management
reviews these key estimates and assumptions used in the preparation of financial statements on a timely basis. If
management determines that modifications are necessary due to current facts and circumstances, the Company’s
results of operations and financial position as reported in the consolidated financial statements could possibly
change significantly.
The following accounting policies are deemed critical to the preparation of the financial statements and include
accounting estimates that management believes are most subjective or have complex judgments.
Future Policy Benefits. Due to the long-term nature of insurance contracts, our insurance companies are liable for
policy benefit payments that will be made in the future. The liability for future policy benefits is determined by
standard actuarial procedures common to the life insurance industry. The accounting policies for determining this
liability are disclosed in Note 1—Significant Accounting Policies.
Approximately 90% of our liabilities for future policy benefits at December 31, 2022 were traditional
insurance
liabilities where the liability is determined as the present value of future benefits less the present value of the portion
of the gross premium required to pay for such benefits. The assumptions used in estimating the future benefits for
this portion of business are set at the time of contract issue. These assumptions are “locked in” and are not revised
for the lifetime of the contracts, except where there is a premium deficiency, as defined in Note 1—Significant
Accounting Policies under the caption Future Policy Benefits. Otherwise, variability in the accrual of policy reserve
liabilities after policy issuance is caused only by variability of the inventory of in force policies.
The remaining portion of liabilities for future policy benefits pertains to business accounted for as deposit business,
where the recorded liability is the fund balance attributable to the benefit of policyholders as determined by the
policy contract at
there are no assumptions used to
determine the future policy benefit liability for deposit business.
the consolidated financial statement date. Accordingly,
Refer to Note 1—Significant Accounting Policies for discussion on the significant changes to future policy benefits
with an effective date of January 1, 2023.
Deferred Acquisition Costs. Certain costs of acquiring new business are deferred and recorded as an asset.
Deferred acquisition costs consist primarily of sales commissions and other underwriting costs such as advertising
related to the successful
issuance of a new insurance contract as indicated in Note 1—Significant Accounting
Policies under the caption Deferred Acquisition Costs in the Notes to Consolidated Financial Statements.
Additionally, the cost of acquiring blocks of insurance business or insurance business through the purchase of other
companies, known as the value of insurance acquired (VOBA), is included in deferred acquisition costs. Our policies
for accounting for deferred acquisition costs and the associated amortization are reported under the same caption in
Note 1—Significant Accounting Policies.
Over 99% of our deferred acquisition costs at December 31, 2022 were related to traditional products and are being
amortized over the premium-paying period in proportion to the present value of actual historic and estimated future
gross premiums. The projection assumptions for this business are set at
issue. These
assumptions are “locked-in” at that time and, except where there is a loss recognition issue, are not revised for the
lifetime of the contracts. Absent a premium deficiency, variability in amortization after policy issuance is caused only
by variability in premium volume. We have not recorded a deferred acquisition cost loss recognition event for assets
related to this business for any period in the three years ended December 31, 2022.
the time of contract
53
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Less than 1% of deferred acquisition costs pertain to deposit business for which deferred acquisition costs are
amortized over the estimated lives of the contracts.
Policy Claims and Other Benefits Payable. This liability consists of known benefits currently payable and an
estimate of claims that have been incurred but not yet reported to us. The estimate of unreported claims is based on
prior experience and is made after careful evaluation of all information available to us. However, the factors upon
which these estimates are based can be subject to change from historical patterns. Factors involved include the
litigation environment, regulatory mandates, and the introduction of policy types for which claim patterns are not well
established, and medical trend rates and medical cost inflation as they affect our health claims. Changes in these
estimates, if any, are reflected in the earnings of the period in which the adjustment is made. The Company
concludes that the estimates used to produce the liability for claims and other benefits, including the estimate of
unsubmitted claims, are the most appropriate under the circumstances. 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. We hold a substantial investment in high-quality fixed maturities to provide for the
funding of our future policy contractual obligations over long periods of time. While these securities are generally
expected to be held to maturity, they are classified as available for sale and are sold from time to time to maximize
risk-adjusted, capital-adjusted returns. We report this portfolio at fair value. Fair value is the price that we would
expect to receive upon sale of the asset in an orderly transaction. The fair value of the fixed maturity portfolio is
primarily affected by changes in interest rates in financial markets. Because of the size of our fixed maturity portfolio
and the long average life, small changes in rates can have a significant effect on the portfolio and the reported
financial position of the Company. This impact is disclosed in 100 basis point increments under the caption Market
Risk Sensitivity in this report. However, as discussed under the caption Financial Condition in this report, the
Company regards these unrealized fluctuations in value as having no meaningful impact on our actual financial
condition and, as such, we remove them from consideration when viewing our financial position and financial ratios.
At times, the values of our fixed maturities can also be affected by illiquidity in the financial markets. Illiquidity would
contribute to a spread widening, and accordingly to unrealized losses, on many securities that we would expect to
be fully recoverable. Even though our fixed maturity portfolio is available for sale, we have the ability and general
intent to hold the securities until maturity as a result of our strong and stable cash flows generated from our
insurance products. 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. We continually monitor our investment portfolio for investments where
fair value has declined below carrying value to determine if a credit loss event has occurred. When a credit event
does occur, an allowance for credit
loss is recorded and the corresponding provision is recognized in the
Consolidated Statements of Operations in Realized Gains or Losses. Non-credit related fluctuations in the fair value
are recorded in Other Comprehensive Income. The policies and procedures that we use to evaluate and account for
allowance for credit losses are disclosed in Note 1—Significant Accounting Policies and the discussions under the
captions Investments and Realized Gains and Losses in this report. While every effort is made to make the best
estimate of status and value with the information available regarding an allowance for credit loss, it is difficult to
predict the future prospects of a distressed or impaired security.
54
GL 2022 FORM 10-K
GLOBE LIFE INC.
Management's Discussion & Analysis
Defined benefit pension plans. 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. In accordance with GAAP, an
expense is recorded each year as these pension obligations grow due to the increase in the service period of
employees and the interest cost associated with the passage of time. These obligations are offset, at least in part,
by the growth in value of the assets in the funded plans. 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. Additionally, a corridor approach is used to amortize any unrecognized
gains or losses outside the corridor (the standard 10% of the greater of plan PBO and fair value assets) and have
an amortization service period of approximately nine years. These assumptions have an important effect on the
pension obligation. A decrease in the discount rate will cause an increase in the pension obligation. A decrease in
projected salary increases will cause a decrease in this obligation. Small changes in assumptions may cause
significant differences in reported results for these plans. 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.
Discount Rate(2):
Assumption
Pension Assumptions
(Dollar amounts in thousands)
Change(1)
Impact on
Expense
Impact on
Projected Benefit
Obligation
Increase.............................................................................................................
25
$
(2,020) $
Decrease ...........................................................................................................
Expected Return(3):
Increase.............................................................................................................
Decrease ...........................................................................................................
(25)
25
(25)
882
(1,381)
1,381
(18,163)
19,148
—
—
(1) In basis points.
(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. 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. While we
have used our best efforts to determine the most reliable assumptions, given the information available from
Company experience, economic data, independent consultants and other sources, we cannot be certain that actual
results will be the same as expected. The assumptions are reviewed annually and revised, if necessary, based on
more current information available to us. 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
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Information required by this item is found under the heading Market Risk Sensitivity in Item 7 of this report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Financial Statements Index
Report of Independent Registered Public Accounting Firm (PCAOB No. 34)............................................
Consolidated Financial Statements: .................................................................................................................
Consolidated Balance Sheets at December 31, 2022, and 2021 ..........................................................
Consolidated Statements of Operations for each of
the three years in the period ended
December 31, 2022 ........................................................................................................................................
Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the
period ended December 31, 2022................................................................................................................
Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended
December 31, 2022 ........................................................................................................................................
Consolidated Statements of Cash Flows for each of
the three years in the period ended
December 31, 2022 ........................................................................................................................................
Notes to Consolidated Financial Statements..............................................................................................
Page
57
59
60
61
62
63
64
56
GL 2022 FORM 10-K
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Globe Life Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Globe Life Inc. and subsidiaries (the
"Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive
income (loss), shareholders’ equity, and cash flows, for each of the three years in the period ended December 31,
2022, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in
the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on
criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 22, 2023, expressed an unqualified
opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of
the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Investments in Fixed Maturities Classified as Available for Sale — Significant Unobservable Inputs - Refer
to Notes 1 and 4 to the Financial Statements
Critical Audit Matter Description
Investments in fixed maturities classified as available for sale are reported at fair value in the financial statements.
The investments without readily determinable market values are valued using significant unobservable inputs such
as credit ratings and discount rates. The balance of investments without readily determinable market values was
$528 million as of December 31, 2022. These inputs involve considerable judgment by management.
57
GL 2022 FORM 10-K
We identified investments in fixed maturities classified as available for sale without readily determinable market
values as a critical audit matter because of the unobservable inputs used by management to estimate fair value.
Auditing these inputs required especially subjective judgment and required the involvement of our fair value
specialists to fully evaluate them.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the unobservable inputs used by management to estimate the fair value of
investments in fixed maturities classified as available for sale included the following, among others:
• We tested the effectiveness of controls over investments in fixed maturities classified as available for sale,
including management’s controls over the determination of unobservable inputs and fair value.
• We tested the accuracy and completeness of underlying data used in the determination of the fair value
(e.g., investments owned at the balance sheet date and relevant security attributes).
• With the assistance of our fair value specialists, we developed independent estimates of fair value for a
selection of securities and compared our estimates to management’s estimates.
Future Policy Benefits and Amortization of Deferred Acquisition Costs — Certain Underlying Assumptions -
Refer to Note 1 to the Financial Statements
Critical Audit Matter Description
The Company’s management sets assumptions in (1) recording a liability for policy benefit payments that will be
made in the future (future policy benefits) and (2) determining amortization of deferred acquisition costs. The most
significant assumptions include mortality, morbidity, and persistency. Assumptions are determined based upon
published studies and analysis of Company specific experience, adjusted for changes in exposure and other
relevant factors. Given the inherent uncertainty of these significant assumptions, auditing the development of such
assumptions involved especially subjective judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s judgments regarding the assumptions used in the development of
future policy benefits and the amortization of deferred acquisition costs included the following, among others:
• We tested the effectiveness of controls over the assumption development process and the valuation of
future policy benefits.
• We tested the underlying data used in the development of the assumptions as well as in the determination
of the liability for future policy benefits and the amortization of deferred acquisition costs.
• We evaluated management’s selected actuarial assumptions,
including testing the accuracy and
completeness of the supporting experience studies.
• With the assistance of our actuarial specialists, we evaluated management’s judgments regarding the
assumptions used in the development of future policy benefits and the amortization of deferred acquisition
costs.
• We evaluated whether the assumptions used were consistent with evidence obtained in other areas of the
audit.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
February 22, 2023
We have served as the Company’s auditor since 1999.
58
GL 2022 FORM 10-K
Globe Life Inc.
Consolidated Balance Sheets
(Dollar amounts in thousands, except per share data)
December 31,
2022
2021
Assets:
Investments:
Fixed maturities—available for sale, at fair value (amortized cost: 2022—$18,301,692;
2021—$17,805,309, allowance for credit losses: 2022— $0; 2021— $387)............................ $
16,503,365
$
21,305,287
Policy loans..........................................................................................................................................
614,866
589,634
Other long-term investments (includes: 2022—$768,689; 2021—$640,263 under the fair
value option) ........................................................................................................................................
Short-term investments......................................................................................................................
976,016
114,121
793,925
69,145
Total investments...........................................................................................................................
18,208,368
22,757,991
Cash........................................................................................................................................................
Accrued investment income ................................................................................................................
Other receivables..................................................................................................................................
92,559
259,581
484,887
92,163
251,307
487,443
Deferred acquisition costs ...................................................................................................................
5,249,907
4,914,728
Goodwill..................................................................................................................................................
Other assets...........................................................................................................................................
481,791
760,066
481,791
782,625
Total assets .................................................................................................................................... $
25,537,159
$
29,768,048
Liabilities:
Future policy benefits ........................................................................................................................... $
16,721,846
$
16,034,727
Unearned and advance premium.......................................................................................................
Policy claims and other benefits payable..........................................................................................
Other policyholders' funds ...................................................................................................................
60,742
430,027
123,362
65,472
412,940
98,935
Total policy liabilities.........................................................................................................................
17,335,977
16,612,074
Current and deferred income taxes ...................................................................................................
Short-term debt .....................................................................................................................................
686,172
449,103
1,765,021
479,644
Long-term debt (estimated fair value: 2022—$1,440,277; 2021—$1,667,009)..........................
1,627,952
1,546,494
Other liabilities.......................................................................................................................................
542,094
722,009
Total liabilities.................................................................................................................................
20,641,298
21,125,242
Commitments and Contingencies (Note 6)
Shareholders' equity:
Preferred stock, par value $1 per share—5,000,000 shares authorized; outstanding: 0 in
2022 and 2021 ......................................................................................................................................
—
—
Common stock, par value $1 per share—320,000,000 shares authorized; outstanding:
(2022—105,218,183 issued; 2021—109,218,183 issued).............................................................
Additional paid-in-capital......................................................................................................................
105,218
529,661
Accumulated other comprehensive income (loss)...........................................................................
(1,415,714)
Retained earnings.................................................................................................................................
6,466,220
109,218
520,564
2,677,583
6,182,100
Treasury stock, at cost: (2022—8,478,288 shares; 2021—9,650,845 shares)...........................
(789,524)
(846,659)
Total shareholders' equity ............................................................................................................
4,895,861
8,642,806
Total liabilities and shareholders' equity.................................................................................... $
25,537,159
$
29,768,048
See accompanying Notes to Consolidated Financial Statements.
59
GL 2022 FORM 10-K
Globe Life Inc.
Consolidated Statements of Operations
(Dollar amounts in thousands, except per share data)
Year Ended December 31,
2022
2021
2020
Revenue:
Life premium................................................................................................................ $ 3,023,296
$ 2,898,210
$ 2,672,804
Health premium...........................................................................................................
1,279,412
1,201,676
1,141,097
Other premium ............................................................................................................
1
1
4
Total premium........................................................................................................
4,302,709
4,099,887
3,813,905
Net investment income ..............................................................................................
Realized gains (losses)..............................................................................................
Other income ...............................................................................................................
987,499
(76,548)
1,246
952,447
59,319
1,216
927,062
(4,371)
1,325
Total revenue .........................................................................................................
5,214,906
5,112,869
4,737,921
Benefits and expenses:
Life policyholder benefits ...........................................................................................
2,045,730
2,071,810
1,809,373
Health policyholder benefits......................................................................................
Other policyholder benefits .......................................................................................
791,809
27,917
758,745
29,061
733,481
30,030
Total policyholder benefits ...................................................................................
2,865,456
2,859,616
2,572,884
Amortization of deferred acquisition costs..............................................................
Commissions, premium taxes, and non-deferred acquisition costs ...................
Other operating expense ...........................................................................................
Interest expense .........................................................................................................
624,407
374,383
353,954
90,395
603,838
331,510
322,029
83,486
575,770
304,841
301,038
86,704
Total benefits and expenses ...............................................................................
4,308,595
4,200,479
3,841,237
Income before income taxes..........................................................................................
906,311
912,390
896,684
Income tax benefit (expense) ........................................................................................
(166,607)
(167,431)
(164,911)
Net income ............................................................................................................ $
739,704
$
744,959
$
731,773
Basic net income per common share .................................................................... $
7.55
$
7.30
$
6.90
Diluted net income per common share ................................................................. $
7.47
$
7.22
$
6.82
See accompanying Notes to Consolidated Financial Statements.
60
GL 2022 FORM 10-K
Globe Life Inc.
Consolidated Statements of Comprehensive Income (Loss)
(Dollar amounts in thousands)
Net income ....................................................................................................................... $
739,704
$
744,959
$
731,773
Year Ended December 31,
2022
2021
2020
Other comprehensive income (loss):
Investments:
Unrealized gains (losses) on fixed maturities:
Unrealized holding gains (losses) arising during period...................................
(5,332,818)
(492,267)
1,493,200
Other reclassification adjustments included in net income ..............................
Foreign exchange adjustment on fixed maturities recorded at fair value ......
32,377
1,749
(31,710)
4,632
32,809
2,330
Unrealized gains (losses) on fixed maturities..................................................
(5,298,692)
(519,345)
1,528,339
Unrealized gains (losses) on other investments......................................................
—
—
(18,306)
Total unrealized investment gains (losses).........................................................
(5,298,692)
(519,345)
1,510,033
Less applicable tax (expense) benefit............................................................
1,112,730
109,063
(317,111)
Unrealized gains (losses) on investments, net of tax .............................................
(4,185,962)
(410,282)
1,192,922
Deferred acquisition costs:
Unrealized gains (losses) attributable to deferred acquisition costs..................
Less applicable tax (expense) benefit ..............................................................
Unrealized gains (losses) attributable to deferred acquisition costs, net of
tax.................................................................................................................................
9,707
(2,039)
1,628
(342)
1,533
(321)
7,668
1,286
1,212
Foreign exchange translation:
Foreign exchange translation adjustments, other than securities......................
Less applicable tax (expense) benefit ..............................................................
Foreign exchange translation adjustments, other than securities, net of tax ...
Pension:
Amortization of pension costs..................................................................................
Plan amendments......................................................................................................
Experience gain (loss)...............................................................................................
Pension adjustments.................................................................................................
Less applicable tax (expense) benefit...............................................................
Pension adjustments, net of tax ..............................................................................
(25,219)
5,296
(19,923)
13,754
—
119,055
132,809
(27,889)
104,920
(4,955)
1,040
(3,915)
20,797
(4,565)
61,299
77,531
(16,281)
61,250
14,230
(2,986)
11,244
16,632
—
(43,169)
(26,537)
5,573
(20,964)
Other comprehensive income (loss)...............................................................................
(4,093,297)
(351,661)
1,184,414
Comprehensive income (loss) ............................................................................ $ (3,353,593) $
(
)
393,298
$ 1,916,187
See accompanying Notes to Consolidated Financial Statements.
61
GL 2022 FORM 10-K
Globe Life Inc.
Consolidated Statements of Shareholders' Equity
(Dollar amounts in thousands, except per share data)
Preferred
Stock
Common
Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Treasury
Stock
Total
Shareholders'
Equity
Year Ended December 31, 2020
Balance at December 31, 2019.......... $
— $ 117,218
$ 531,554
$
1,844,830
$ 5,551,329
$ (750,624) $
7,294,307
Adoption of ASU 2016-13....................
Balance at January 1, 2020 .............
Comprehensive income (loss)............
Common dividends declared
($0.75 per share) ..................................
Acquisition of treasury stock ...............
Stock-based compensation.................
Exercise of stock options.....................
Retirement of treasury stock...............
Balance at December 31, 2020 ....
Year Ended December 31, 2021
Balance at January 1, 2021 .............
Comprehensive income (loss)............
Common dividends declared
($0.79 per share) ..................................
Acquisition of treasury stock ...............
Stock-based compensation.................
Exercise of stock options.....................
Retirement of treasury stock...............
Balance at December 31, 2021 ....
Year Ended December 31, 2022
Balance at January 1, 2022 .............
Comprehensive income (loss)............
Common dividends declared
($0.83 per share) ..................................
Acquisition of treasury stock ...............
Stock-based compensation.................
Exercise of stock options.....................
Retirement of treasury stock...............
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(454)
—
(454)
117,218
531,554
1,844,830
5,550,875
(750,624)
7,293,853
—
—
—
—
—
—
—
—
14,410
—
(4,000)
(18,529)
1,184,414
731,773
(79,067)
—
—
1,916,187
(79,067)
—
(443,866)
(443,866)
(482)
(26,908)
21,964
75,001
(302,082)
324,611
35,892
48,093
—
113,218
527,435
3,029,244
5,874,109
(772,914)
8,771,092
113,218
527,435
3,029,244
5,874,109
(772,914)
8,771,092
—
—
—
—
—
—
—
—
12,103
—
(4,000)
(18,974)
(351,661)
744,959
(80,247)
—
—
(29,398)
—
—
393,298
(80,247)
(541,435)
(541,435)
18,169
99,224
30,272
69,826
—
(327,323)
350,297
109,218
520,564
2,677,583
6,182,100
(846,659)
8,642,806
109,218
520,564
2,677,583
6,182,100
(846,659)
8,642,806
—
—
—
—
—
—
—
—
29,119
—
(4,000)
(20,022)
(4,093,297)
739,704
(80,956)
—
—
(3,353,593)
(80,956)
—
(454,638)
(454,638)
(345)
6,876
(29,838)
136,430
(344,445)
368,467
35,650
106,592
—
4,895,861
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Balance at December 31, 2022 .... $
— $ 105,218
$ 529,661
$
(
(1,415,714) $ 6,466,220
)
$ (789,524) $
(
)
See accompanying Notes to Consolidated Financial Statements.
62
GL 2022 FORM 10-K
Globe Life Inc.
Consolidated Statement of Cash Flows
(Dollar amounts in thousands)
Net income ........................................................................................................................ $
Adjustments to reconcile net income to cash provided from operations:
Increase (decrease) in future policy benefits.........................................................
Increase (decrease) in other policy benefits ..........................................................
Deferral of policy acquisition costs ..........................................................................
Amortization of deferred policy acquisition costs ..................................................
Change in current and deferred income taxes ......................................................
Realized (gains) losses .............................................................................................
Other, net.....................................................................................................................
Cash provided from (used for) operating activities ...............................................
Year Ended December 31,
2021
744,959
2022
739,704
$
$
2020
731,773
828,028
36,784
(960,583)
624,407
50,718
76,548
26,588
1,422,194
854,770
18,144
(906,247)
603,838
71,919
(59,319)
109,616
1,437,680
798,936
33,810
(822,985)
575,770
88,157
4,371
66,602
1,476,434
Cash provided from (used for) investing activities:
Investments sold or matured:
Fixed maturities available for sale—sold.................................................................
Fixed maturities available for sale—matured or other redemptions ...................
Other long-term investments.....................................................................................
Total investments sold or matured......................................................................
390,392
462,002
83,151
935,545
Acquisition of investments:
Fixed maturities—available for sale.........................................................................
Other long-term investments.....................................................................................
Total investments acquired...................................................................................
Net (increase) decrease in policy loans..................................................................
Net (increase) decrease in short-term investments..............................................
Additions to property and equipment ......................................................................
Other investing activities ...........................................................................................
Investments in low-income housing interests ........................................................
Cash provided from (used for) investing activities ................................................
(1,420,220)
(290,482)
(1,710,702)
(25,232)
(44,976)
(27,929)
—
(69,721)
(943,015)
Cash provided from (used for) financing activities:
Issuance of common stock.............................................................................................
Cash dividends paid to shareholders ...........................................................................
Repayment of debt ..........................................................................................................
Proceeds from issuance of debt....................................................................................
Payment for debt issuance costs ..................................................................................
Net borrowing (repayment) of commercial paper.......................................................
Acquisition of treasury stock ..........................................................................................
Net receipts (payments) from deposit-type products.................................................
Cash provided from (used for) financing activities ...............................................
106,592
(80,547)
(150,000)
250,492
(5,272)
(46,289)
(454,638)
(112,791)
(492,453)
116,656
310,991
36,346
463,993
(1,004,384)
(258,296)
(1,262,680)
(5,255)
38,637
(38,244)
(56,700)
(53,121)
(913,370)
69,826
(80,043)
(300,000)
325,000
(7,687)
74,974
(541,435)
(64,238)
(523,603)
Effect of foreign exchange rate changes on cash .........................................................
Net increase (decrease) in cash ......................................................................................
Cash at beginning of year.................................................................................................
Cash at end of year............................................................................................................ $
13,670
396
92,163
92,559
$
(3,391)
(2,684)
94,847
92,163
$
52,681
416,321
42,990
511,992
(1,262,434)
(266,230)
(1,528,664)
(8,887)
(69,497)
(41,756)
(7,051)
(37,867)
(1,181,730)
48,093
(78,192)
(386,875)
700,000
(5,844)
(34,445)
(443,866)
(72,928)
(274,057)
(1,733)
18,914
75,933
94,847
See accompanying Notes to Consolidated Financial Statements.
63
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 1—Significant Accounting Policies
Business: (Globe Life), (the Company), refers to Globe Life Inc., an insurance holding company incorporated in
Delaware in 1979, and Globe Life Inc. subsidiaries and affiliates. Globe Life Inc.'s direct or indirect primary
subsidiaries are Globe Life And Accident Insurance Company, American Income Life Insurance Company, Liberty
National Life Insurance Company, Family Heritage Life Insurance Company of America, and United American
Insurance Company. The underwriting companies are owned by their ultimate corporate parent, Globe Life Inc.
(Parent Company)
Globe Life provides a variety of life and supplemental health insurance products and annuities to a broad base of
customers. The Company is organized into four reportable segments: life insurance, supplemental health insurance,
annuities, and investments.
Basis of Presentation: The accompanying consolidated financial statements of Globe Life have been prepared in
conformity with accounting principles generally accepted in the United States of America (GAAP), under guidance
issued by the Financial Accounting Standards Board (FASB). The preparation of consolidated financial statements
in conformity with GAAP requires management
the reported
amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period.
to make estimates and assumptions that affect
Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates. See further
documentation in the significant accounting policies or the accompanying notes.
Principles of Consolidation: The consolidated financial statements include the results of Globe Life Inc. and its
intercompany accounts and transactions have been eliminated in consolidation.
wholly-owned subsidiaries. All
When Globe Life acquires a subsidiary or a block of business, the assets acquired and the liabilities assumed are
measured at fair value at the acquisition date. Any excess of acquisition cost over the fair value of net assets is
recorded as goodwill. Expenses incurred to effect the acquisition are charged to earnings as of the acquisition date.
Upon acquisition, the accounts and results of operations are consolidated as of and subsequent to the acquisition
date.
Inc.
for $59.2 million.
In conjunction with this agreement,
Acquisition: On August 1, 2021, the Company acquired Beazley Benefits, an operating unit of Beazley Insurance
the Company also executed a 100%
Company,
coinsurance agreement assuming the remaining inforce business produced by the unit. The acquisition was
accounted for under the acquisition method of accounting as required by GAAP. This guidance requires the assets
acquired and liabilities assumed be based on their fair values at the acquisition date. The goodwill related to the
purchase is due to expected synergies as a result of combining operations with other factors. The results of
operations since the acquisition date have been consolidated. The cash flows associated with the purchase are
recorded in the Consolidated Statement of Cash Flows in "Other investing activities."
Investments: Globe Life classifies all of its fixed maturity investments as available for sale. Investments classified as
available for sale are carried at fair value with unrealized gains and losses, net of taxes, reflected directly in
accumulated other comprehensive income (AOCI).
investment
income" on the Consolidated Statements of Operations. Gains and losses from sales, maturities, or other
redemptions of investments are recorded in "Realized gains (losses)". Interest income and prepayment fees are
recognized when earned. Premiums and discounts are amortized using the effective yield method. When amortized
cost of a callable debt security exceeds the first call price, the premium is amortized to the earliest call date.
Otherwise, the period of amortization or accretion generally extends from the purchase date to the maturity date.
Income from investments is recorded in "Net
64
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
"Other
"Policy loans", which represent loans provided to policyholders using cash values as collateral, are carried at unpaid
principal balances.
include limited partnerships, commercial mortgage loan
participations ("commercial mortgage loans"), equity securities, and real estate. Investments in equity securities are
reported at fair value with changes in fair value, net of taxes, reflected directly in "Realized gains (losses)" in the
Consolidated Statements of Operations.
less accumulated
depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life.
Investments in real estate are reported at cost
long-term investments"
The investment funds consist of limited partnerships whereby the Company has a pro-rata share of ownership
ranging from less than 1% to 20%. For each investment, the Company has elected the fair value option, but would
have been otherwise accounted for as an equity method investment. The fair value option is assessed for each
individual investment and concluded at the inception of the investment.
Each limited partnership investment is evaluated under applicable GAAP to determine if it is a variable interest
entity (VIE) and would qualify for consolidation. Only primary beneficiaries are required or allowed to consolidate
VIEs. The investments are not consolidated because the Company has no power to control the activities that most
significantly affect the economic performance of these entities and therefore the Company is not the primary
beneficiary of any of these interests. Globe Life's involvement is limited to its limited partnership interest in the
entities. The Company has not provided any other financial support to the entities beyond its commitments to fund
its limited partnership interests, and there are no arrangements or agreements with any of the interests to provide
other financial support. The maximum loss exposure relative to these interests is limited to their carrying value. The
Company has approximately 2% of total assets in low-income housing tax credits and certain limited partnerships
(investment funds) that qualify as unconsolidated VIEs.
The limited partnership investments are reported at the Company's pro-rata share of the investment fund's net asset
value or its equivalent (NAV), as a practical expedient for fair value. Operating results provided by the partnerships
can be on a lag up to 3 months; however, the Company makes adjustments for any material transactions occurring
within the lag period. Changes in the net asset value are recorded in "Realized gains (losses)" on the Consolidated
Statements of Operations. Distributions received from the funds arise from income generated by the underlying
investments as well as the liquidation of the underlying investments. Periodic distributions are recorded in net
investment income until cumulative distributions exceed our pro-rata share of cumulative operating earnings at
which point the distributions will reduce carrying value. Our maximum exposure to loss is equal to the outstanding
carrying value and future funding commitments. The Company had $201 million of capital called during the year
from existing investment funds, reducing our unfunded commitments. Our unfunded commitments were $487 million
as of December 31, 2022.
Commercial mortgage loan participations, a type of investment where the mortgage loan is shared among investors,
are accounted for as financing receivables. The commercial mortgage loans are managed by a third-party. The
Company purchased the legal rights to interests in commercial mortgage loans which are secured by properties
such as hotels, retail, multiple family, or offices. The commercial mortgage loans typically have a term of three years
with the option to extend up to two years. The commercial mortgage loans are recorded at unpaid principal balance,
net of unamortized origination fees and net of allowance for loan losses. Interest income, net of the amortization of
origination fees, is recorded in "Net investment income" under the effective yield method. Our unfunded commitment
balance to the commercial loan borrowers was $38 million as of December 31, 2022.
"Short-term investments" include investments in interest-bearing assets with original maturities of twelve months or
less. Gains and losses realized on the disposition of investments are determined on a specific identification basis.
65
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fair Value Measurements, Investments in Securities: Globe Life measures the fair value of its "fixed maturities"
based on a hierarchy consisting of three levels which indicate the quality of the fair value measurements as
described below:
•
•
•
Level 1—fair values are based on quoted prices in active markets for identical assets or liabilities
that the Company has the ability to access as of the measurement date.
Level 2—fair values are based on inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices
for similar assets or liabilities in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, inputs other than quoted prices that are observable for the
asset or liability, or inputs that can otherwise be corroborated by observable market data.
Level 3—fair values are based on inputs that are considered unobservable where there is little, if
any, market activity for the asset or liability as of the measurement date. In this circumstance, the
Company has to rely on values derived by independent brokers or
internally-developed
assumptions. Unobservable inputs are developed based on the best information available to the
Company which may include the Company’s own data or bid and ask prices in the dealer market.
Net Asset Value—Certain investments, such as investment funds, that are measured at fair value using the net
asset value per share or its equivalent, as a practical expedient, have not been classified in the fair value hierarchy.
The net asset value is usually provided by general partners or managers.
The great majority of Globe Life's "fixed maturities" are not actively traded and direct quotes are not generally
available. Management therefore determines the fair values of these securities after consideration of data provided
by third-party pricing services,
the
Company's investments in fixed maturities were primarily composed of the following significant security types:
corporate securities, state and municipal securities, U.S. government direct, guaranteed, and government-
sponsored enterprises securities. The remaining security types represented approximately 1% of the total in the
aggregate.
independent broker/dealers, and other resources. At December 31, 2022,
Approximately 97% of the fair value of "fixed maturities" reported at December 31, 2022 was determined using data
provided by third-party pricing services. Prices provided by these services are not binding offers, but are estimated
exit values. Third-party pricing services use proprietary pricing models to determine security values by discounting
cash flows using a market-adjusted spread to a benchmark yield.
For all asset classes within Globe Life's significant security types, third-party pricing services use a common
valuation technique to model the price of the investments using observable market data. The foundation for these
models consists of developing yield spreads based on multiple observable market inputs, including but not limited
to: benchmark yield curves, actual trading activity, new issue yields, broker-dealer quotes, issuer spreads, two-sided
markets, benchmark securities, bids, offers, sector-specific data, economic data, and other inputs that are
corroborated in the market. Pricing vendors monitor and review their pricing data continuously with current market
and economic data feeds, augmented by ongoing communication within the dealer community.
Using the observable market inputs described above, spreads to an appropriate benchmark yield are further
developed by the vendors for each security based on security-specific and/or sector-specific risk factors, such as a
security’s terms and conditions (coupon, maturity, and call features), credit rating, sector, liquidity, collateral or other
cash flow options, and other factors that could impact the risk of the security. Embedded repayment options, such
as call and redemption features, are also taken into account in the pricing models. When the spread is determined,
it is added to the security’s benchmark yield. The security's expected cash flows are discounted using this spread-
adjusted yield, and the resulting present value of the discounted cash flows is the evaluated price.
66
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
When third-party vendor prices are not available, the Company attempts to obtain valuations from other sources,
including but not limited to broker/dealers, broker quotes, and prices on comparable securities.
When valuations have been obtained for all securities in the portfolio, management reviews and analyzes the prices
to ensure their reasonableness, taking into account available and observable information. When two or more
valuations are available for a security and the variance between the prices is 10% or less, the close correlation
suggests similar observable inputs were used in deriving the price, and the mean of the prices is used. Securities
valued in this manner are classified as Level 2. When the variance between two or more valuations for a security
exceeds 10%, additional analysis is performed to determine the most appropriate value for that security, using
resources such as broker quotes, prices on comparable securities, recent trades, and any other observable market
data. Further review is performed on the available valuations to determine if they can be corroborated within
reasonable tolerance to any other observable evidence. If one of the valuations or the mean of the available
valuations for a security can be corroborated with other observable evidence, then the corroborated value is used
and reported as Level 2. The Company uses information and analytical
techniques deemed appropriate for
determining the point within the range of reasonable fair value estimates that is most representative of fair value
under current market conditions. Valuations that cannot be corroborated within a reasonable tolerance are classified
as Level 3.
Globe Life invests in a portfolio of private placement fixed maturities. Private placement fixed maturities are
generally not an active market. This portfolio is managed by third-parties. The portfolio managers provide valuations
for the bonds based on a pricing matrix utilizing observable inputs, such as the benchmark treasury rate and
published sector indices, and unobservable inputs such as an internally-developed credit rating. If observable inputs
cannot be corroborated, the fair values are classified as Level 3. Refer to Note 4—Investments under the caption
Quantitative Information about Level 3 Fair Value Measurements.
The fair values for each class of security and by valuation hierarchy level are indicated in Note 4—Investments
under the caption Fair value measurements, and Note 9—Postretirement Benefits under the caption Pension
Assets.
Fair Value Measurements, Other Financial Instruments: Fair values for cash and cash equivalents, short-term
investments, short-term debt, receivables, and payables approximate carrying value. Cash and cash equivalents
are classified as Level 1. Fair values of commercial mortgage loans are determined based upon expected cash
flows discounted at an appropriate risk-adjusted rate and are classified as Level 3. The fair value of investments in
limited partnerships that provide low-income housing tax credits is based on discounted projected cash flows and
are classified as Level 3. Policy loans are an integral part of Globe Life's subsidiaries’ life insurance policies in force
and their fair values cannot be valued separately from the insurance contracts. Investment funds are based on net
asset value and are excluded from the fair value hierarchy.
The fair values of Globe Life's long and short term debt issues are based on the same methodology as investments
in fixed maturities. At December 31, 2022, observable inputs were available for these debt securities and as such
were classified as Level 2 in the valuation hierarchy. The fair value for each debt instrument as of December 31,
2022 is disclosed in Note 11—Debt.
As described in Note 9—Postretirement Benefits, Globe Life maintains a nonqualified supplemental retirement plan.
Accordingly, the assets that support the liability for this plan are considered general assets of the Company. These
assets consist of the cash value of corporate-owned life insurance policies (COLI) and exchange traded funds
(ETFs). The fair value of the insurance cash values approximates carrying value. Fair values for the ETFs are
derived from direct quotes and are considered Level 1 in the fair value hierarchy.
Current Expected Credit Loss Reserve (fixed maturities): At the onset of the evaluation, the Company individually
assesses each fixed maturity, on a quarterly basis, to determine whether it intends to sell, or it is more likely than not
that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria are met,
the Company will write down the fixed maturity's amortized cost basis to fair value through "Realized gains
(losses)".
67
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
If neither of the aforementioned criteria are met, the Company will evaluate whether the decline in fair value has
resulted from a credit event. The Company will evaluate many factors, as further described below, to determine the
present value of the expected cash flows. A credit loss occurs when the present value of the expected cash flows is
less than the amortized cost basis. This will result in the recording of an allowance for credit losses as a contra
asset account to the amortized cost basis with an offsetting provision for credit losses in "Realized gains (losses)"
on the Consolidated Statements of Operations. Additionally, the CECL methodology includes a fair value floor where
the allowance for credit loss for a security cannot exceed the difference between fair value and amortized cost.
When it is determined that there is not a credit loss, the decline in fair value is recognized in Other Comprehensive
Income.
All changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.
Losses recorded to the allowance for credit losses are management's best estimate of the uncollectibility of principal
and interest of a fixed maturity.
The evaluation of Globe Life's securities for credit losses is a process that is undertaken at least quarterly and is
overseen by a team of investment and accounting professionals. The process for making this determination is highly
subjective and involves the careful consideration of many factors. The factors considered include, but are not limited
to:
•
•
•
•
•
The Company’s lack of intent to sell the debt security before recovery;
Whether it is more likely than not the Company will be required to sell prior to maturity;
The reason(s) for the credit related losses;
The financial condition of the issuer and the prospects for recovery in fair value of the security;
Expected future cash flows.
The relative weight given to each of these factors can change over time as facts and circumstances change. In
many cases, management believes it is appropriate to give more consideration to prospective factors than to
retrospective factors. Prospective factors that are given more weight include prospects for recovery, the Company’s
ability and general intent to hold the security until anticipated recovery, and expected future cash flows.
Among the facts and information considered in the process are:
•
•
•
•
•
•
•
•
•
Financial statements of the issuer
Changes in credit ratings of the issuer
The value of underlying collateral
News and information included in press releases issued by the issuer
News and information reported in the media concerning the issuer
News and information published by or otherwise provided by securities, economic, or research
analysts
The nature and amount of recent and expected future sources and uses of cash
Default on a required payment
Issuer bankruptcy filings
The expected cash flows are determined using judgment and the best information available to the Company. Inputs
used to derive expected cash flows generally include expected default rates, current levels of subordination, and
estimated recovery rate. The discount rate utilized in the discounted cash flows is the effective interest rate, which is
the rate of return implicit in the asset at acquisition.
68
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Current Expected Credit Loss Reserve (commercial mortgage loans): The Company evaluates the performance and
credit quality of the commercial mortgage loan portfolio at least on a quarterly basis, or as needed, by utilizing
local market conditions,
common metrics such as loan-to-value or debt-service ratios as well as covenants,
borrower quality, and underlying collateral. The fair value of the underlying collateral
is based on a third-party
appraisal of the property at origination of the loan. The fair value is assessed on an annual basis or more frequently
when a loan is materially underperforming, 30 days delinquent, or in technical default. The Company determines the
probability of estimated losses for the commercial mortgage loan portfolio on a pool basis each quarter and records
an allowance. The allowance for credit losses is based on estimates, historical experience, probability of loss, value
of the underlying collateral, and macro factors that affect the collectability of the loan.
If management determines that foreclosure of a particular property is probable, the Company may elect the practical
expedient for an individual mortgage loan to estimate the expected credit losses, which are based on the fair value
of the property less amortized cost, adjusted for selling and other associated costs. See Note 4 for current activity.
Cash: "Cash" consists of balances on hand and on deposit in banks and financial institutions.
Accrued investment income: "Accrued investment income" consists of interest income or dividends earned on the
investment portfolio, but which are yet to be received as of the balance sheet date. The Company will write-off
accrued investment income that is deemed to be uncollectible related to the fixed maturities.
"Accrued investment income" also consists of interest income earned on the commercial mortgage loan portfolio,
but which is yet to be received as of the balance sheet date. Accrued investment income will be placed in
nonaccrual status at
the time the loan is 90 days delinquent or otherwise deemed to be uncollectible by
management. Any currently accrued investment income will subsequently be written off. As of December 31, 2022,
the accrued interest receivable for commercial mortgage loans was $903 thousand. Commercial mortgage loans
generally pay interest monthly, therefore accrued interest is typically for a period of less than 30 days.
As a practical expedient, the Company excludes the accrued investment income from the amortized cost basis of
the investment and separately reports it in another financial statement line item, "Accrued investment income."
Additionally, the amount will be excluded from disclosures within Note 4—Investments.
Other Receivables: Agent debit balances primarily represent commissions advanced to insurance agents, a
common industry practice. These balances are repaid to the Company over time, generally one year, as the
premiums associated with the advanced commissions are collected by the Company and a portion of the agents'
commissions on such premiums are retained in order to repay the balances. The balances were $460 million at
December 31, 2022 and $467 million at December 31, 2021. When an agent sells a policy, commissions are
advanced to the agent, and the collection of the advance is made as long as the policy stays in force. While there is
a susceptibility to loss should an agent terminate or excessive policy lapses occur, the ability of the Company to
continue to collect an agent's commission streams over time from prior sales of policies reduces the Company's
exposure to loss.
The Company has a very low inherent risk with regards to the collection of agent debit balances and views these
balances as recoverable since they are, in aggregate, less than the estimated present value of future commissions
discounted at a conservative rate which includes assumptions for lapses and mortality. The Company’s security, or
collateral, is in the form of future commission streams collected over the life of the policies sold by the respective
agents, which ultimately revert to the Company in the event an agent is terminated. The Company evaluated the
agent debit balances on a pool basis to determine the allowance for credit losses, as the loans have similar
characteristics. A provision for credit losses will be recorded in "Realized gains (losses)" on the Consolidated
Statements of Operations and the asset balance will be reflected in agent debit balances, net of allowance for credit
losses ("Other receivables"). Based on factors considered by management, there were no additional credit losses
recorded during the year ended December 31, 2022. As of December 31, 2022, the allowance for credit losses was
$1.0 million.
Deferred Acquisition Costs: Certain costs of acquiring new insurance business are deferred and recorded as an
asset. These costs are essential for the acquisition of new insurance business and are directly related to the
69
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
successful
issuance of an insurance contract including sales commissions, policy issue costs, and underwriting
costs. Additionally, deferred acquisition costs (DAC) include the value of business acquired (VOBA), which are the
costs of acquiring blocks of insurance from other companies or through the acquisition of other companies. These
costs represent the difference between the fair value of the contractual insurance assets acquired and liabilities
assumed compared against the assets and liabilities for insurance contracts that the Company issues or holds
measured in accordance with GAAP.
DAC and VOBA are amortized in a systematic manner which matches these costs with the associated revenues.
Policies other than universal life-type policies are amortized with interest over the estimated premium-paying period
of the policies in a manner which charges each year’s operations in proportion to the receipt of premium income.
Universal life-type policies are amortized with interest in proportion to estimated gross profits. The assumptions
used to amortize acquisition costs include interest, mortality, and persistency, and are consistent with those used to
estimate the liability for future policy benefits. For interest-sensitive and deposit-type products, these assumptions
are reviewed on a regular basis and are revised if actual experience differs significantly from original expectations.
For all other products, amortization assumptions are generally not revised once established.
DAC and VOBA are subject to periodic recoverability and loss recognition testing to determine if there is a premium
deficiency. These tests evaluate whether the present value of future contract-related cash flows will support the
capitalized DAC and VOBA assets. These cash flows consist primarily of premium income, less benefits and
expenses. The present value of these cash flows, less the benefit reserve, is then compared with the unamortized
deferred acquisition cost balance. In the event the estimated present value of net cash flows is less, the deficiency
would be recognized by a charge to earnings and either a reduction of unamortized acquisition costs or an increase
in the liability for future benefits, as described under the caption Future Policy Benefits. Refer to Note 5—Deferred
Acquisition Costs.
Advertising Costs: Costs related to advertising are generally charged to expense as incurred. However, certain
Direct
to Consumer advertising costs are capitalized when there is a reliable and demonstrated relationship
between total costs and future benefits that is a direct result of incurring these costs. Direct to Consumer advertising
costs consist primarily of the production and distribution costs of direct mail advertising materials, and when
capitalized are included as a component of DAC. Additionally, they are amortized in the same manner as other
DAC. Direct to Consumer advertising costs charged to earnings and included in commissions, premium taxes, and
non-deferred acquisition costs were $9.4 million, $10.0 million, and $9.8 million in 2022, 2021, and 2020,
respectively. Unamortized capitalized advertising costs included within DAC were $1.5 billion at December 31, 2022
and $1.4 billion at December 31, 2021.
Goodwill: The excess cost of a business acquired over the fair value of net assets acquired is reported as goodwill.
In accordance with the guidance, goodwill is subject to impairment testing on an annual basis, or whenever potential
impairment triggers occur. Impairment testing involves the performance of a qualitative analysis, which involves
assessing current events and circumstances to determine if it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. In the event the fair value is less than the carrying value, further testing is
required to determine the amount of impairment, if any. If there is an impairment in the goodwill of any reporting unit,
it is written down and charged to earnings in the period of the test. Globe Life tests its goodwill annually as of June
30th for each of the years 2020 through 2022. The Company's goodwill was not impaired in any of those periods.
Low-Income Housing Tax Credit Interests: Globe Life invests in limited partnerships that provide low-income
housing tax credits and other related federal income tax benefits to the Company. Globe Life holds passive interests
in limited partnerships that provide investment returns through the provision of tax benefits (principally from the
transfer of federal or state tax credits related to federal low-income housing). These investments are considered to
be VIEs and do not qualify for consolidation. The carrying value of the Company's investment in these entities was
$315 million and $328 million at December 31, 2022 and 2021, respectively, and was included in "Other assets" on
the Consolidated Balance Sheets. As of December 31, 2022, Globe Life was obligated under future commitments of
$137 million, which are recorded in "Other liabilities". For guaranteed investments acquired prior to January 1, 2015,
the Company utilizes the effective-yield method of amortization, while the proportional method of amortization is
70
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
utilized for all non-guaranteed and guaranteed investments acquired on or after January 1, 2015. All amortization
expense is recorded in "Income tax benefit (expense)" on the Consolidated Statements of Operations.
Property and Equipment: Property and equipment, included in “Other assets,” is reported at cost less accumulated
depreciation. Depreciation is recorded primarily on the straight line method over the estimated useful lives of these
assets which range from three to ten years for equipment and fifteen to forty years for buildings and improvements.
Ordinary maintenance and repairs are charged to income as incurred. Impairments, if any, are recorded when
certain events and circumstances become evident that the fair value of the asset is less than its carrying amount.
Original cost of property and equipment was $406 million at December 31, 2022 and $378 million at December 31,
2021. Accumulated depreciation was $194 million at the end of 2022 and $173 million at the end of 2021.
Depreciation expense was $21 million in 2022, $20 million in 2021, and $17 million in 2020. Internally generated
software costs are expensed as incurred in the preliminary project phase and post-implementation phase, and are
capitalized during the application development stage. Additionally, implementation costs incurred in a hosting
arrangement that is a service contract are capitalized.
life-type products is
Future Policy Benefits: The liability for future policy benefits for annuity and universal
represented by policy account value. The liability for future policy benefits for all other life and health products,
approximately 90% of total liabilities for future policy benefits, is determined on the net level premium method. This
method provides for the present value of expected future benefit payments less the present value of expected future
net premiums, based on estimated investment yields, mortality, morbidity, persistency, and other assumptions which
were considered appropriate at the time the policies were issued. For limited-payment contracts, a deferred profit
liability is also recorded which causes profits to emerge over the life of the contract in proportion to the amount of
insurance in force.
Assumptions used for traditional life and health insurance products are based primarily on Company experience.
Assumptions for interest rates range from 2.5% to 7.0% for Globe Life's insurance companies with an overall
weighted average assumed rate of 5.8%. Mortality tables used for individual life insurance include various industry
tables and reflect modifications of a variety of generally accepted actuarial tables based on Company experience.
Morbidity assumptions for individual health are based on Company experience and industry data. Lapse and
persistency assumptions are based on Globe Life's experience. Once established, assumptions for these products
are generally not changed. An additional provision is made on most products to allow for possible adverse deviation
from the assumptions. These estimates are reviewed annually and compared with actual experience. If it is
determined that existing contract liabilities, together with the present value of future gross premiums, will not be
sufficient to cover the present value of future benefits and to recover unamortized deferred acquisition costs, then a
premium deficiency exists. Such a deficiency would be recognized immediately by a charge to earnings and either a
reduction of unamortized deferred acquisition costs or an increase in the liability for future policy benefits. From that
point forward, the liability for future policy benefits would be based on revised assumptions.
Reinsurance: In the normal course of business, Globe Life insurance subsidiaries will enter into reinsurance
agreements to limit their exposure to the risk of loss as well as enhance their capital position. To qualify for
reinsurance accounting in accordance with applicable guidance, the assuming company (reinsurer) must have the
“reasonable possibility” that it may realize a “significant loss.” In instances where the ceding company does not
transfer significant insurance risk to the reinsurer, deposit accounting is utilized. Deposits received are reported in
Other Assets on the Consolidated Balance Sheets rather than income in the Consolidated Statements of
Operations. As amounts are paid or received in accordance with the agreements, the deposit balance will be
adjusted. Any risk charges payable related to reinsurance agreements where deposit accounting is applicable are
recorded as an Other Liability.
Unearned and Advanced Premium: Premium collected from both life and health policies that have not been earned
and recognized in accordance with applicable GAAP. Refer to Recognition of Premium Revenue below.
Policy Claims and Other Benefits Payable: Globe Life establishes a liability for known policy benefits payable and
an estimate of claims that have been incurred but not yet reported to the Company. Globe Life makes an estimate of
unreported claims after careful evaluation of all information available to the Company. This estimate is based on
71
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
prior experience and is reviewed quarterly. However, there is no certainty the stated liability for claims and other
benefits, including the estimate of unsubmitted claims, will be Globe Life's ultimate obligation. For more information,
see Note 7—Liability for Unpaid Claims.
Current and Deferred Income Taxes: Current and deferred income taxes are accounted for under the asset and
liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the consolidated financial statement book values and tax bases of assets and liabilities.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Postretirement Benefits: Globe Life accounts for its postretirement defined benefit plans by recognizing the funded
status of those plans on its Consolidated Balance Sheets in accordance with accounting guidance. Periodic gains
and losses attributable to changes in plan assets and liabilities that are not recognized as components of net
periodic benefit costs are recognized as components of other comprehensive income, net of tax. The supplemental
executive retirement plan is accounted for consistent with the qualified noncontributory pension plan. The net assets
are included in a Rabbi Trust and recorded in Other Assets on the Consolidated Balance Sheets. More information
concerning the accounting and disclosures for postretirement benefits is found in Note 9—Postretirement Benefits.
Treasury Stock: Globe Life accounts for purchases of treasury stock on the cost method. Issuance of treasury stock
is accounted for using the weighted-average cost method. More information is found in Note 12—Shareholders'
Equity.
long-duration life and
Recognition of Premium Revenue and Related Expenses: Premium income for traditional
health insurance products is recognized evenly over the contract period and when due from the policyholder.
Premiums for short-duration health contracts are recognized as revenue over the contract period in proportion to the
insurance protection provided. Premiums for universal
life-type and annuity contracts are added to the policy
account value, and revenues for such products are recognized as charges to the policy account value for mortality,
administration, and surrenders (retrospective deposit method). Life premium includes policy charges of $13.5
million, $14.2 million, and $14.7 million for the years ended December 31, 2022, 2021, and 2020, respectively.
Other premium consists of annuity policy charges in each year. For most insurance products, the related benefits
and expenses are matched with revenues by means of the provision of future policy benefits and the amortization of
DAC in a manner which recognizes profits as they are earned over the revenue recognition period. For limited-
payment life insurance products, the profits are recognized over the contract period.
Stock-Based Compensation: Globe Life accounts for stock-based compensation by recognizing an expense in the
consolidated financial statements based on the “fair value method.” The fair value method requires that a fair value
be assigned to a stock option or other stock grant on its grant date and that this value be amortized over the
grantees’ service period.
The fair value method requires the use of an option valuation model to value employee stock options. Globe Life
has elected to use the Black-Scholes valuation model for option expensing. A summary of assumptions for options
granted in each of the three years 2020 through 2022 is as follows:
Volatility factor ..........................................................................................................................
22.3 %
21.8 %
15.7 %
Dividend yield ...........................................................................................................................
Expected term (in years).........................................................................................................
Risk-free rate ............................................................................................................................
0.8 %
5.12
1.9 %
0.8 %
5.11
0.6 %
0.7 %
5.12
1.2 %
2022
2021
2020
The expected term is generally derived from Company experience. However, expected terms are determined based
on the simplified method as permitted under the ASC 718, Stock Compensation, topic when Company experience is
insufficient. On April 26, 2018, the shareholders approved the Globe Life Inc. 2018 Incentive Plan, formerly the
Torchmark Corporation 2018 Incentive Plan (the "2018 Incentive Plan"). The 2018 Incentive Plan replaced all
72
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
previous plans. The 2018 Incentive Plan allows for option grants for employees with a seven-year contractual term
which vest over three years in addition to ten-year grants which vest over five years as permitted by the previous
plans. Director grants vest over six months. The Company has sufficient experience with seven-year grants that
vest in three years, but insufficient historical experience with five-year vesting. Therefore, the Company has used
the simplified method to determine the expected term for the ten-year grants with five-year vesting and will do so
until adequate experience is developed. Volatility and risk-free interest rates are assumed over a period of time
consistent with the expected term of the option. Volatility is measured on a historical basis. Monthly data points are
utilized to derive volatility for periods greater than three years. Expected dividend yield is based on current dividend
yield held constant over the expected term. Once the fair value of an option has been determined, it is amortized on
a straight-line basis over the employee’s service period for that grant (from the grant date to the date the grant is
fully vested). Expenses for restricted stock and restricted stock units are based on the grant date fair value allocated
on a straight-line basis over the service period. Performance share expense is recognized based on management’s
estimate of the probability of meeting the metrics identified in the performance share award agreement, assigned to
each service period as these estimates develop.
Stock-based compensation expense is included in “Other operating expense” in the Consolidated Statements of
Operations. Globe Life management views all stock-based compensation expense as a Corporate and Other
expense and, therefore, presents it as such in its segment analysis. More information concerning the Company's
segments is provided in Note 14—Business Segments.
Earnings per Share: Globe Life presents basic and diluted earnings per common share (EPS) on the face of the
Consolidated Statements of Operations for income from operations. Basic EPS is computed by dividing income
available to common shareholders by the weighted average common shares outstanding for the period. Diluted
EPS is calculated by adding to shares outstanding the additional net effect of potentially dilutive securities or
contracts, such as stock options, which could be exercised or converted into common shares. For more information
on earnings per share, see Note 12—Shareholders' Equity.
73
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Accounting Pronouncements Yet to be Adopted
ASU No. 2018-12 / 2019-09 / 2020-11, Financial Services - Insurance (Topic 944): Targeted Improvements to the
Accounting for Long-Duration Contracts, with clarification guidance issued in November 2019 and 2020.
ASU 2018-12 is a significant change to the accounting and disclosure of long-duration life and health insurance
contracts. The guidance was issued primarily to: 1) improve the timeliness of recognizing changes in the liability for
future policy benefits and modify the rate used to discount future cash flows, 2) simplify and improve the accounting
for certain market-based options or guarantees associated with deposit (or account balance) contracts, 3) simplify
the amortization of deferred acquisition costs, and 4) improve the effectiveness of the required disclosures.
As a result of the issuance of ASU 2020-11 in November 2020, the effective date for this standard was changed to
January 1, 2023. Early adoption is available; however, the Company will not early adopt the standard and has
selected the modified retrospective transition method upon adoption as of the transition date (“Transition Date”) of
January 1, 2021. The modified retrospective transition method requires the amended guidance be applied to
contracts issued after the beginning of the earliest period presented, or the Transition Date, which will result in the
restatement of the 2021 and 2022 consolidated financial statements.
In summary, the Company continues to assess the impact the adoption will have on the consolidated financial
statements and has determined it will have a significant impact on the Consolidated Balance Sheets, Consolidated
Statements of Operations, Consolidated Statements of Shareholders’ Equity, and the Consolidated Statements of
Comprehensive Income (Loss). On a quarterly basis, the Company’s future policy benefits will be remeasured
utilizing an upper-medium grade fixed-income instrument yield and the effects of the change will be recognized in
Accumulated Other Comprehensive Income (AOCI), a component of shareholders’ equity. At least annually, the
Company will update its estimate of cash flows used for establishing reserves using actual historical experience and
updated future cash flow assumptions, such as mortality, morbidity, and persistency. Finally, the adoption requires
changes in the future treatment of our Deferred Acquisition Cost (DAC) asset and is expected to result in a
significant reduction to DAC amortization in the near to intermediate term.
On the Transition Date, the Company expects a decrease in AOCI due to the requirement to re-measure future
policy benefits using a discount rate currently lower than what is used in valuing the future policy benefits under
existing guidance. The methodology for determining current discount rates consists of constructing a discount rate
curve intended to be reflective of the currency and tenor of the insurance liability cash flows. Discount rates reflect
upper-medium grade fixed-income instrument yields, which generally consist of single-A rated fixed income
instruments. The methodology is designed to prioritize observable inputs based on market data available in the local
debt markets denominated in the same currency as the policies. For the discount rates applicable to tenors for
which the single-A debt market is not liquid or there is little or no observable market data, the Company will use
estimation techniques consistent with the fair value guidance in ASC 820. It is important to note that the impact to
AOCI is sensitive to the discount rate assumption and associated fluctuations.
On the Transition Date, using current discount rates applicable at that time, we expect the after-tax impact to AOCI
to be a decrease in the range of $7.5 billion to $8.5 billion due to a $9.5 billion to $11.0 billion increase in future
policy benefits. Holding all else equal as of the Transition Date, but using discount rates as of December 31, 2022,
the after-tax decrease in AOCI would have been $1.2 billion to $1.8 billion due to a $1.5 billion to $2.3 billion
increase in future policy benefits. Under the new standard, the future policy benefits recorded on the Consolidated
Balance Sheets are different than those used in the determination of net income. Future policy benefits recorded
within the Consolidated Balance Sheets are determined using current discount rates as of the valuation date, while
future policy benefits used for the determination of net income are determined using locked-in discount rates1 based
on policy issue dates. On the Transition Date, two significant drivers of the increase in future policy benefits and
decrease in AOCI within the Consolidated Balance Sheets are the lower level of current discount rates as compared
to the locked-in discount rates used under prior guidance and the long average life of the Company’s life insurance
1 Locked-in discount rates are those discount rates which are established at issue and locked-in for each year of issue for use in establishing
reserves to compute net income.
74
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
cash flows. Another driver of the large increase in future policy benefits is the required use of the same net premium
ratio2 using locked-in discount rates and current discount rates.
The new guidance requires a more granular assessment of the net premium ratio. Any blocks of business that
require increases in future policy benefits to minimum levels, or that have a net premium ratio greater than 100%,
will require an adjustment to the opening balance of retained earnings (decrease). At the Transition Date, we expect
an immaterial decrease to opening retained earnings related to these items.
Under the new standard, the annual amortization of DAC in our Consolidated Statements of Operations will be
significantly lower in the near and intermediate term due to: 1) the requirement
to no longer defer renewal
commissions until such year as the commissions are actually incurred, 2) the requirement to no longer accrue and
amortize interest on our DAC balances, and 3) the modification of the method for amortizing DAC including the
updating of assumptions. For business with deferrals of renewal commissions, as is the case with our captive
agency channels, the expected amortization rate, as a percentage of premium, for certain blocks of business will no
longer be level but will increase over the period of time during which commissions are deferred. The decrease in
amortization in the near term will primarily impact our life insurance line of business. In total, we expect the impact
on net income, largely from the decrease in amortization, to be in the range of $105 million to $115 million, net of
tax, for 2023.
While the requirements of the new guidance represent a change from existing GAAP, the new guidance will not
impact capital and surplus or net income under statutory accounting practices, cash flows on our policies, or the
underlying economics of our business.
ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to
Contractual Sale Restrictions
ASU 2022-03 adds disclosure requirements specific to equity securities subject to contractual sale restrictions. The
disclosures clarify the nature of the contractual sale as well as the duration of the restriction and the circumstances
that could cause a lapse in the restriction.
This standard is effective for the Company on January 1, 2024, and will be implemented on a prospective basis.
Early adoption is available. The Company does not expect the standard will have a material
impact on the
Consolidated Financial Statements.
2 The net premium ratio is the ratio between the present value of benefits and the present value of gross premium.
75
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 2—Statutory Accounting
Life insurance subsidiaries of Globe Life are required to file statutory financial statements with state insurance
regulatory authorities. Accounting principles used to prepare these statutory financial statements differ from GAAP.
Consolidated net income and shareholders’ equity (capital and surplus) on a statutory basis for the insurance
subsidiaries were as follows:
Net Income
Year Ended December 31,
Shareholders’ Equity
At December 31,
2022
2021
2020
2022
2021
Life insurance subsidiaries .......................... $
444,294
$
373,703
$
441,589
$
1,632,018
$
1,523,247
The excess, if any, of shareholders' equity of the insurance subsidiaries on a GAAP basis over that determined on a
statutory basis is not available for distribution by the insurance subsidiaries to the Parent Company without
regulatory approval.
Insurance subsidiaries’ statutory capital and surplus necessary to satisfy regulatory
requirements in the aggregate was $588 million at December 31, 2022. More information on the restrictions on the
payment of dividends can be found in Note 12—Shareholders' Equity.
The Company's statutory financial statements are presented on the basis of accounting practices prescribed by the
insurance department of the state of domicile of each insurance subsidiary. While all states have adopted the
National Association of Insurance Commissioners’ (NAIC) statutory accounting practices (NAIC SAP) as the basis
for statutory accounting, certain states have retained prescribed practices of their respective insurance code or
administrative code which can differ from NAIC SAP. For Globe Life's life insurance companies, there are no
significant differences between NAIC SAP and the accounting practices prescribed by the states of domicile.
76
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 3—Supplemental Information about Changes to Accumulated Other Comprehensive Income
Components of Accumulated Other Comprehensive Income: An analysis of the change in balance by component of
Accumulated Other Comprehensive Income is as follows for each of the years 2020 through 2022:
For the year ended December 31, 2020:
Balance at January 1, 2020 .................................. $ 1,982,650
$
(5,916) $
12,058
$
(143,962) $ 1,844,830
Available
for Sale
Assets
Deferred
Acquisition
Costs
Foreign
Exchange
Pension
Adjustments
Total
Other comprehensive income (loss) before
reclassifications, net of tax....................................
Reclassifications, net of tax ..................................
Other comprehensive income (loss)....................
Balance at December 31, 2020 ..............................
1,167,003
25,919
1,192,922
3,175,572
For the year ended December 31, 2021:
Other comprehensive income (loss) before
reclassifications, net of tax....................................
Reclassifications, net of tax ..................................
Other comprehensive income (loss)....................
(385,231)
(25,051)
(410,282)
Balance at December 31, 2021 ..............................
2,765,290
For the year ended December 31, 2022:
Other comprehensive income (loss) before
reclassifications, net of tax....................................
(4,211,540)
Reclassifications, net of tax ..................................
25,578
Other comprehensive income (loss)....................
(4,185,962)
Balance at December 31, 2022 .............................. $ (1,420,672) $
)
(
1,212
—
1,212
(4,704)
1,286
—
1,286
(3,418)
11,244
(34,103)
1,145,356
—
11,244
23,302
13,139
39,058
(20,964)
1,184,414
(164,926)
3,029,244
(3,915)
—
(3,915)
19,387
44,819
16,431
61,250
(343,041)
(8,620)
(351,661)
(103,676)
2,677,583
7,668
—
7,668
(19,923)
—
94,055
10,865
(4,129,740)
36,443
(19,923)
104,920
(4,093,297)
4,250
$
)
(536) $
(
1,244
)
$ (1,415,714)
(
77
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Reclassification adjustments: Reclassification adjustments out of Accumulated Other Comprehensive Income are
presented below for the three years ended December 31, 2022.
Component Line Item
Unrealized investment (gains) losses on
available for sale assets:
Year Ended December 31,
2021
2022
2020
Affected line items in the
Statement of Operations
Realized (gains) losses.............................................. $ 32,165
$ (37,874) $ 26,345 Realized (gains) losses
Amortization of (discount) premium .........................
212
6,164
6,464 Net investment income
Total before tax..........................................................
32,377
(31,710)
32,809
Tax...............................................................................
(6,799)
6,659
(6,890)
Income tax benefit (expense)
Total after-tax..........................................................
25,578
(25,051)
25,919
Pension adjustments:
Amortization of prior service cost .............................
Amortization of actuarial (gain) loss.........................
Total before tax..........................................................
1,077
12,677
13,754
631
20,166
20,797
632 Other operating expense
16,000 Other operating expense
16,632
Tax...............................................................................
(2,889)
(4,366)
(3,493)
Income tax benefit (expense)
Total after-tax..........................................................
10,865
Total reclassification (after-tax) .............................. $ 36,443
16,431
13,139
)
$ (8,620) $ 39,058
(
78
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 4—Investments
Portfolio Composition: Summaries of fixed maturities available for sale by amortized cost, fair value, and allowance
for credit losses at December 31, 2022 and 2021, 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 December 31, 2022
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 ............................................. $
States, municipalities, and political
subdivisions ...........................................
Foreign governments ...........................
Corporates, by sector:
Financial............................................
Utilities ...............................................
Energy ...............................................
Other corporate sectors..................
2,791,030
55,164
4,907,794
1,924,190
1,436,598
6,667,043
Total corporates ............................
14,935,625
Collateralized debt obligations............
Other asset-backed securities............
37,098
88,336
394,439
$
— $
27
$
(38,968) $
355,498
—
—
—
—
—
—
—
—
—
24,328
(505,447)
2,309,911
6
(12,706)
42,464
63,126
36,670
22,637
78,903
(504,489)
4,466,431
(125,713)
1,835,147
(101,923)
1,357,312
(738,772)
6,007,174
201,336
(1,470,897)
13,666,064
13,266
—
4
(9,276)
50,364
79,064
Total fixed maturities ................... $18,301,692 $
— $
238,967
(1) Amount reported in the balance sheet.
(2) At fair value.
$ (2,037,294) $ 16,503,365
)
(
2
14
—
27
11
8
37
83
—
1
100
79
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
At December 31, 2021
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 .............................................. $
States, municipalities, and political
subdivisions ............................................
Foreign governments ............................
Corporates, by sector:
Financial.............................................
Utilities ................................................
Energy ................................................
Other corporate sectors...................
383,083
$
— $
64,513
$
(164) $
447,432
2,252,997
59,861
4,569,160
1,931,391
1,587,892
6,879,459
—
—
239,135
900
(2,907)
(5,132)
2,489,225
55,629
(387)
—
—
907,741
490,119
346,780
(9,349)
(1,012)
(1,683)
5,467,165
2,420,498
1,932,989
— 1,454,464
(13,362)
8,320,561
Total corporates .............................
14,967,902
(387)
3,199,104
(25,406)
18,141,213
Collateralized debt obligations.............
Other asset-backed securities.............
36,468
104,998
—
—
27,037
3,715
—
(430)
63,505
108,283
2
12
—
26
11
9
39
85
—
1
Total fixed maturities .................... $17,805,309 $
(
(387) $ 3,534,404
)
$
(
(34,039) $21,305,287
)
100
(1) Amount reported in the balance sheet.
(2) At fair value.
A schedule of fixed maturities available for sale by contractual maturity date at December 31, 2022, 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 December 31, 2022
Amortized
Cost, net
Fair
Value
Fixed maturities available for sale:
Due in one year or less ......................................................................................................................... $
Due after one year through five years.................................................................................................
Due after five years through ten years................................................................................................
Due after ten years through twenty years ..........................................................................................
Due after twenty years...........................................................................................................................
Mortgage-backed and asset-backed securities.................................................................................
164,857
$
165,085
1,068,265
1,670,440
7,785,675
7,486,945
125,510
1,067,454
1,664,710
7,349,267
6,127,343
129,506
$ 18,301,692
$ 16,503,365
80
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Analysis of investment operations: "Net investment income" for the three years ended December 31, 2022, is
summarized as follows:
Year Ended December 31,
2022
2021
2020
Fixed maturities available for sale............................................................................ $
910,284
$
892,421
$
873,352
Policy loans..................................................................................................................
Other long-term investments(1) .................................................................................
Short-term investments..............................................................................................
46,586
50,556
2,156
1,009,582
Less investment expense..........................................................................................
(22,083)
45,318
35,838
24
973,601
(21,154)
44,801
26,196
545
944,894
(17,832)
Net investment income ....................................................................................... $
987,499
$
952,447
$
927,062
(1) For the years ended 2022, 2021 and 2020, the investment funds, accounted for under the fair value option method, recorded $40.3 million,
$26.7 million, and $15.3 million, respectively, in net investment income.
An analysis of "realized gains (losses)" is as follows:
Realized investment gains (losses):
Fixed maturities available for sale:
Year Ended December 31,
2022
2021
2020
Sales and other(1)................................................................................................... $
(32,552) $
34,916
$
(22,999)
Provision for credit losses ....................................................................................
Investment funds—fair value option .....................................................................
Other investments ...................................................................................................
Realized gains (losses) from investments ..................................................
Realized loss on redemption of debt(2) ...........................................................
Applicable tax...........................................................................................................
387
(29,353)
(15,030)
(76,548)
—
(76,548)
16,075
2,959
22,918
7,840
68,633
(9,314)
59,319
(12,457)
Realized gains (losses), net of tax ................................................................. $
(
(60,473) $
)
46,862
$
(3,346)
1,045
21,563
(3,737)
(634)
(4,371)
1,955
)
(
(2,416)
(1) For the years ended 2022, 2021 and 2020, the Company recorded $147.6 million, $109.2 million, and $219.8 million of exchanges of fixed
maturities (noncash transactions) that resulted in $1.9 million, $25.2 million, and $7.9 million, respectively, in realized gains (losses).
(2) Refer to Note 11—Debt for further discussion.
An analysis of the net change in unrealized investment gains (losses) is as follows:
Change in unrealized investment gains (losses) on:
Fixed maturities available for sale......................................................................... $
(5,298,692) $
(519,345) $
1,528,339
Year Ended December 31,
2022
2021
2020
81
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Selected information about sales of fixed maturities available for sale is as follows:
Fixed maturities available for sale:
Proceeds from sales(1) ............................................................................................ $
390,392
$
116,656
$
Gross realized gains ...............................................................................................
Gross realized losses..............................................................................................
1,296
(57,996)
1,848
(12,101)
52,681
2,642
(39,153)
(1) There were no unsettled sales in the periods ended December 31, 2022, 2021 and 2020.
Year Ended December 31,
2022
2021
2020
Fair value measurements: The following tables represent the fair value of fixed maturities measured on a recurring
basis at December 31, 2022 and 2021:
Fair Value Measurement at December 31, 2022:
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 ..................... $
States, municipalities, and political subdivisions
Foreign governments .............................................
Corporates, by sector:
Financial .................................................................
Utilities ....................................................................
Energy ....................................................................
Other corporate sectors .......................................
Total corporates .................................................
Collateralized debt obligations .............................
Other asset-backed securities ..............................
Total fixed maturities ......................................... $
—
—
—
—
—
—
—
—
—
—
—
$
355,498
$
2,309,911
42,464
4,332,495
1,723,832
1,346,212
5,785,442
13,187,981
—
79,064
—
—
—
$
355,498
2,309,911
42,464
133,936
111,315
11,100
221,732
478,083
50,364
—
4,466,431
1,835,147
1,357,312
6,007,174
13,666,064
50,364
79,064
$
15,974,918
$
528,447
$ 16,503,365
Percentage of total ..................................................
— %
97 %
3 %
100 %
82
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fair Value Measurement at December 31, 2021:
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 ....................... $
States, municipalities, and political subdivisions .
Foreign governments ...............................................
Corporates, by sector:
Financial ...................................................................
Utilities ......................................................................
Energy ......................................................................
Other corporate sectors .........................................
Total corporates ...................................................
Collateralized debt obligations ...............................
Other asset-backed securities ................................
Total fixed maturities ........................................... $
—
—
—
—
—
—
—
—
—
—
—
$
447,432
$
2,489,225
55,629
5,303,547
2,266,231
1,919,416
8,010,331
17,499,525
—
108,283
—
—
—
$
447,432
2,489,225
55,629
163,618
154,267
13,573
310,230
641,688
63,505
—
5,467,165
2,420,498
1,932,989
8,320,561
18,141,213
63,505
108,283
$
20,600,094
$
705,193
$ 21,305,287
Percentage of total .......................................................
— %
97 %
3 %
100 %
83
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
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, 2020 ............................................ $
13,177
$
74,104
$
672,128
$
759,409
Included in realized gains/losses ...................................
Included in other comprehensive income .....................
Acquisitions(1) ....................................................................
Sales...................................................................................
Amortization.......................................................................
Other(2)................................................................................
Transfers into Level 3(3) ...................................................
Transfers out of Level 3(3)................................................
—
(173)
—
—
—
(134)
—
—
Balance at December 31, 2020 .....................................
12,870
Included in realized gains/losses ...................................
Included in other comprehensive income .....................
Acquisitions(1) ....................................................................
(82)
63
—
Sales...................................................................................
(12,851)
Amortization.......................................................................
Other(2)................................................................................
Transfers into Level 3(3) ...................................................
Transfers out of Level 3(3)................................................
Balance at December 31, 2021 .....................................
Included in realized gains/losses ...................................
Included in other comprehensive income .....................
Acquisitions(1) ....................................................................
Sales...................................................................................
Amortization.......................................................................
Other(2)................................................................................
Transfers into Level 3(3) ...................................................
Transfers out of Level 3(3)................................................
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,523)
—
—
4,551
(4,534)
—
—
71,598
(6,787)
12,447
—
(13,213)
4,505
(5,045)
—
—
63,505
—
(13,771)
—
—
4,519
(3,889)
—
—
1,579
17,082
67,820
—
12
1,579
14,386
67,820
—
4,563
(44,116)
(48,784)
—
—
714,505
3,275
(20,818)
25,000
—
9
(80,283)
—
—
—
—
798,973
(3,594)
(8,308)
25,000
(26,064)
4,514
(85,328)
—
—
641,688
705,193
—
—
(91,385)
(105,156)
—
—
7
(72,227)
—
—
—
—
4,526
(76,116)
—
—
Balance at December 31, 2022 ..................................... $
— $
50,364
$
478,083
$
528,447
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the
reporting period:
Asset-
backed
Securities
Collateralized
Debt
Obligations
Corporates
Total
2020 ................................................................................ $
(173) $
(2,523) $
17,082
$
2021 ................................................................................
2022 ................................................................................
63
—
12,447
(13,771)
(20,818)
(91,385)
14,386
(8,308)
(105,156)
(1) Acquisitions of Level 3 investments in each of the years 2020 through 2022 are comprised of private placement fixed maturities and equities.
(2) Includes capitalized interest, foreign exchange adjustments, and principal repayments.
(3) Considered to be transferred at the end of the period.
84
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Transfers between levels within the hierarchy occur when there are changes in the observability of the inputs and
market data. Transfers into Level 3 occur when there is little unobservable market activity for the asset/liability as of
the measurement date and the Company is required to rely upon internally-developed assumptions or third-parties.
Transfers out of Level 3 occur when quoted prices in active markets becomes available for identical assets/
liabilities or the ability to corroborate by observable market data.
The following table represents quantitative information about Level 3 fair value measurements:
Quantitative Information about Level 3 Fair Value Measurements
As of December 31, 2022
Fair Value
Private placement fixed maturities............... $
395,037
Other corporate bonds...................................
83,046
Collateralized debt obligations .....................
50,364
$
528,447
Valuation
Techniques
Determination
of credit spread
Discounted
Cash Flows
Discounted
Cash Flows
Significant
Unobservable
Input
Range
Weighted-
Average(1)
Credit rating
A+ to B-
BBB-
Discount rate
6.35%
6.35%
Discount rate
10.25%
10.25%
(1) Unobservable inputs were weighted by the relative fair value of the instruments.
The private placement fixed maturities reported as Level 3, are managed by third-party investment managers.
These securities are valued based on the contractual cash flows discounted by a yield determined as a treasury
benchmark adjusted for a credit spread. The credit spread is developed from observable indices for similar public
fixed maturities and unobservable indices for private fixed maturities for corresponding credit ratings. However, the
credit ratings for the securities are considered unobservable inputs, as they are assigned by the third-party
investment manager based on a quantitative and qualitative assessment of the credit underwritten. A higher (lower)
credit rating would result in a higher (lower) valuation.
The collateral underlying collateralized debt obligations consists primarily of trust preferred securities issued by
banks and insurance companies. Collateralized debt obligations are valued at the present value of expected future
cash flows using an unobservable discount rate. Expected cash flows are determined by scheduling the projected
repayment of the collateral assuming no future defaults, deferrals, or recoveries. The discount rate is risk-adjusted
to take these items into account. A significant increase (decrease) in the discount rate will produce a significant
decrease (increase) in fair value. Additionally, a significant increase (decrease) in the cash flow expectations would
result in a significant increase (decrease) in fair value. For more information regarding valuation procedures, please
refer to Note 1—Significant Accounting Policies under the caption Fair Value Measurements,
Investments in
Securities.
Other corporate bonds consist of obligations issued out of a special purpose vehicle (SPV). The discount rate is
derived using an unobservable spread over an observable index. An increase (decrease) in spread will produce a
decrease (increase) in fair value.
Unrealized Loss Analysis: The following table discloses information about fixed maturities available for sale in an
unrealized loss position.
Number of issues (CUSIPs) held:
As of December 31, 2022.......................................................................................
As of December 31, 2021.......................................................................................
1,819
138
157
42
1,976
180
Less than
Twelve
Months
Twelve
Months or
Longer
Total
85
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Globe Life's entire fixed maturity portfolio consisted of 2,328 issues by 979 different issuers at December 31, 2022
and 2,060 issues by 843 different issuers at December 31, 2021. The weighted-average quality rating of all
unrealized loss positions at amortized cost was A- as of December 31, 2022 and December 31, 2021.
The following tables disclose unrealized investment losses by class and major sector of fixed maturities available for
sale at December 31, 2022 and December 31, 2021.
Analysis of Gross Unrealized Investment Losses
Less than Twelve Months
At December 31, 2022
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 .............................................. $
States, municipalities, and political
subdivisions ............................................
349,887
$
(38,218) $
3,424
$
(750) $
353,311
$
(38,968)
Foreign governments ............................
6,297
(201)
Corporates, by sector:
1,767,624
(453,149)
95,124
25,134
(52,298)
1,862,748
(505,447)
(12,505)
31,431
(12,706)
Financial...............................................
2,837,918
(426,132)
109,784
(42,173)
2,947,702
Utilities ..................................................
1,088,219
(116,272)
21,636
(6,268)
1,109,855
Energy ..................................................
855,853
(91,755)
—
—
855,853
(468,305)
(122,540)
(91,755)
Other corporate sectors.....................
4,155,986
(665,831)
94,299
(42,344)
4,250,285
(708,175)
Total corporates ...............................
8,937,976
(1,299,990)
225,719
(90,785)
9,163,695
(1,390,775)
Collateralized debt obligations.............
—
—
Other asset-backed securities.............
60,157
(5,223)
—
7,960
—
—
—
(2,435)
68,117
(7,658)
Total investment grade securities..........
11,121,941
(1,796,781)
357,361
(158,773)
11,479,302
(1,955,554)
Below investment grade securities:
States, municipalities, and political
subdivisions ............................................
Corporates, by sector:
—
—
—
—
—
—
Financial...............................................
120,377
(18,901)
38,348
(17,283)
158,725
Utilities ..................................................
Energy ..................................................
Other corporate sectors.....................
Total corporates ...............................
Collateralized debt obligations.............
Other asset-backed securities.............
Total below investment grade
securities...................................................
27,722
14,480
166,159
328,738
—
—
(3,173)
(2,182)
(25,962)
(50,218)
—
—
—
20,075
6,670
65,093
—
—
(7,986)
(4,635)
(29,904)
—
27,722
34,555
172,829
393,831
—
10,874
(1,618)
10,874
(1,618)
(36,184)
(3,173)
(10,168)
(30,597)
(80,122)
—
328,738
(50,218)
75,967
(31,522)
404,705
(81,740)
Total fixed maturities .............................. $11,450,679 $(1,846,999) $ 433,328
)
(
)
$ (190,295) $11,884,007 $ (2,037,294)
)
(
(
86
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Gross unrealized losses may fluctuate quarter over quarter due to adverse 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 likely
that management will not 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, 2021
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............. $
118
$
(1) $
3,867
$
(163) $
3,985
$
(164)
States, municipalities, and political
subdivisions .....................................................
141,310
Foreign governments .....................................
12,567
(2,824)
(561)
Corporates, by sector:
Financial........................................................
133,654
(1,507)
Utilities ...........................................................
Energy ...........................................................
25,447
6,519
Other corporate sectors..............................
115,444
Total corporates ........................................
281,064
Collateralized debt obligations......................
—
Other asset-backed securities......................
10,489
(692)
(238)
(3,566)
(6,003)
—
(16)
2,436
23,144
52,864
2,372
—
40,249
95,485
—
1
(83)
143,746
(4,571)
35,711
(2,907)
(5,132)
(1,932)
186,518
(320)
—
(3,670)
(5,922)
—
—
27,819
6,519
155,693
376,549
—
10,490
(3,439)
(1,012)
(238)
(7,236)
(11,925)
—
(16)
Total investment grade securities...................
445,548
(9,405)
124,933
(10,739)
570,481
(20,144)
Below investment grade securities:
States, municipalities, and political
subdivisions .....................................................
Corporates, by sector:
—
—
—
—
—
—
Financial........................................................
15,695
(272)
56,897
(5,638)
72,592
(5,910)
Utilities ...........................................................
Energy ...........................................................
Other corporate sectors..............................
—
—
700
Total corporates ........................................
16,395
Collateralized debt obligations......................
Other asset-backed securities......................
—
—
—
—
(11)
(283)
—
—
—
26,639
26,581
—
(1,445)
(6,115)
—
26,639
27,281
—
(1,445)
(6,126)
110,117
(13,198)
126,512
(13,481)
—
13,043
—
—
(414)
13,043
—
(414)
Total below investment grade securities .......
16,395
(283)
123,160
(13,612)
139,555
(13,895)
Total fixed maturities ....................................... $ 461,943
$
(
(9,688) $ 248,093
)
)
$ (24,351) $ 710,036
(
)
$ (34,039)
(
Gross unrealized losses increased from $34.04 million at December 31, 2021, to $2.04 billion at December 31,
2022, an increase of $2.00 billion. The increase in the gross unrealized losses from the prior year was primarily
attributable to the increase in market interest rates.
87
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Fixed Maturities, Allowance for Credit Losses: A summary of the activity in the allowance for credit losses is as
follows. Refer to Note 1 for factors considered in the recording of the allowance for credit losses.
Year Ended December 31,
2022
2021
Allowance for credit losses beginning balance ........................................................................... $
387 $
3,346
Additions to allowance for which credit losses were not previously recorded................................
Additions (reductions) to allowance for fixed maturities that previously had an allowance .........
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 ................................................................................. $
—
—
387
—
(387)
— $
(3,346)
387
As of December 31, 2022 and December 31, 2021, the Company did not have any fixed maturities in non-accrual
status.
Concentrations of Credit Risk: Globe Life maintains a diversified investment portfolio with limited concentration in
any given issuer. At December 31, 2022, the investment portfolio, at fair value, consisted of the following:
Investment grade fixed maturities:
Corporates .............................................................................................................................................................................................
73 %
States, municipalities, and political subdivisions .............................................................................................................................
13
U.S. Government direct, guaranteed, and government-sponsored enterprises.........................................................................
Other.......................................................................................................................................................................................................
Below investment grade fixed maturities:
Corporates .............................................................................................................................................................................................
2
1
2
States, municipalities, and political subdivisions ............................................................................................................................. —
U.S. Government direct, guaranteed, and government-sponsored enterprises......................................................................... —
Other....................................................................................................................................................................................................... —
Other
Policy loans, which are secured by the underlying insurance policy values...............................................................................
Other investments ................................................................................................................................................................................
91
3
6
100 %
As of December 31, 2022, state and municipal governments represented 13% of invested assets at fair value. Such
investments are made throughout the U.S. At December 31, 2022, the state and municipal bond portfolio at fair
value was invested in securities issued within the following states: Texas (25%), California (10%), New York (8%),
Michigan (5%), Pennsylvania (4%), and Ohio (4%). Otherwise, there was no concentration within any given state
greater than 4%.
88
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Corporate fixed maturities represent 75% of Globe Life's invested assets. These investments are spread across a
wide range of industries. Below are the ten largest industry concentrations held in the portfolio of corporate fixed
maturities at December 31, 2022, based on fair value:
Insurance..................................................................................................................................................................................................... 16 %
Electric utilities............................................................................................................................................................................................ 10
Banks ...........................................................................................................................................................................................................
Oil and natural gas pipelines....................................................................................................................................................................
Chemicals....................................................................................................................................................................................................
Transportation.............................................................................................................................................................................................
Food .............................................................................................................................................................................................................
Telecommunications..................................................................................................................................................................................
Real estate investment trusts...................................................................................................................................................................
Gas utilities..................................................................................................................................................................................................
9
6
4
4
3
3
3
3
At December 31, 2022, 2% of invested assets at fair value were represented by fixed maturities rated below
investment grade. Par value of these investments was $645 million, amortized cost was $542 million, and fair value
was $475 million. While these investments could be subject to additional credit risk, such risk should generally be
reflected in their fair value.
Securities, cash, and short-term investments held on deposit with various state and federal regulatory authorities
had an amortized cost and fair value, respectively, of $975 million and $889 million at December 31, 2022 and $969
million and $1.1 billion at December 31, 2021.
89
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Other Long-Term Investments: Other long-term investments consist of the following assets:
December 31,
2022
2021
Investment funds ..................................................................................................................................... $
768,689
$
Commercial mortgage loan participations ...........................................................................................
Other..........................................................................................................................................................
181,305
26,022
640,263
141,843
11,819
Total ...................................................................................................................................................... $
976,016
$
793,925
The following table presents additional information about the Company's investment funds as of December 31, 2022
and December 31, 2021 at fair value:
December 31,
Fair Value
Unfunded
Commitments
2022
2021
2022
Redemption Term/Notice
Investment Category
Commercial mortgage
loans............................... $
431,405 $
423,776 $
345,780
Fully redeemable and non-redeemable with
varying terms.
Initial 2 year lock on each new investment/
semi-annual
thereafter/full
withdrawals
redemption within 36 month period.
Opportunistic credit......
158,524
178,215
—
Infrastructure.................
159,534
Other ..............................
Total investment
funds ........................ $
19,226
768,689 $
640,263 $
486,865
22,664
15,608
20,988
Fully redeemable and non-redeemable with
varying terms.
120,097
The Company had $201 million of capital called during the year from existing investment funds. Our unfunded
commitments were $487 million as of December 31, 2022.
90
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Commercial Mortgage Loan Participations (Commercial Mortgage Loans): Summaries of commercial mortgage
loans at December 31, 2022 and 2021 are as follows:
2022
2021
Carrying
Value
% of Total
Carrying
Value
% of Total
Property type:
Mixed use................................................................................... $
Multi-family .................................................................................
Hospitality...................................................................................
Industrial.....................................................................................
Retail...........................................................................................
Office...........................................................................................
Total recorded investment .....................................................
Less allowance for credit losses.............................................
62,375
42,232
27,796
27,248
15,342
8,101
183,094
(1,789)
$
34
23
15
15
9
5
101
(1)
57,996
14,872
23,186
17,900
19,811
8,905
142,670
(827)
Carrying value, net of valuation allowance .................. $
181,305
100
$
141,843
41
11
16
13
14
6
101
(1)
100
2022
2021
Carrying
Value
% of Total
Carrying
Value
% of Total
Geographic location:
California .................................................................................... $
Florida.........................................................................................
Texas...........................................................................................
New York ....................................................................................
Washington ................................................................................
Arizona........................................................................................
Other ...........................................................................................
Total recorded investment .....................................................
Less allowance for credit losses.............................................
64,477
33,182
22,905
19,167
14,925
9,940
18,498
183,094
(1,789)
36
18
13
11
8
5
10
101
(1)
$
67,659
8,213
5,898
18,374
—
—
42,526
142,670
(827)
Carrying value, net of valuation allowance .................. $
181,305
100
$
141,843
48
6
4
13
—
—
30
101
(1)
100
91
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The following tables are reflective of the key factors, debt service coverage ratios and loan-to-value ratios (LTVs),
that are utilized by management to monitor the performance of the portfolios. The Company only invests in
commercial mortgage loans that have a loan-to-value ratio less than 80%. Generally, a higher LTV ratio and a lower
debt service coverage ratio can potentially equate to higher risk of loss.
December 31, 2022
Recorded Investment
Debt Service Coverage Ratios(1)
<1.00x
1.00x—1.20x
>1.20x
Total
% of Total
Loan-to-value ratio(2):
Less than 70% ......................................................... $
23,984 $
107,099 $
11,900 $
142,983
70% to 80% ..............................................................
81% to 90% ..............................................................
Greater than 90% ....................................................
—
8,226
6,966
21,904
1,226
—
—
—
—
23,130
8,226
6,966
Total......................................................................... $
39,176 $
129,003 $
13,126 $
181,305
79
13
4
4
100
(1) Annual net operating income divided by annual mortgage debt service (principal and interest).
(2) Loan balance divided by the fair value of the property. LTVs are generally assessed on an annual basis, or more frequently when a loan is
materially underperforming, 30 days delinquent, or in technical default.
December 31, 2021
Recorded Investment
Debt Service Coverage Ratios(1)
<1.00x
1.00x—1.20x
>1.20x
Total
% of Total
Loan-to-value ratio(2):
Less than 70% ......................................................... $
13,650 $
80,672 $
— $
70% to 80% ..............................................................
81% to 90% ..............................................................
Greater than 90% ....................................................
6,255
8,166
8,754
19,780
—
4,566
—
—
—
94,322
26,035
8,166
13,320
Total ....................................................................... $
36,825 $
105,018 $
— $
141,843
67
18
6
9
100
(1) Annual net operating income divided by annual mortgage debt service (principal and interest).
(2) Loan balance divided by the fair value of the property. LTVs are generally assessed on an annual basis, or more frequently when a loan is
materially underperforming, 30 days delinquent, or in technical default.
As of December 31, 2022, 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 22 loans in the portfolio. For
the year ended December 31, 2022, the allowance for credit losses increased by $1 million to $1.8 million. The
provision for credit losses is included in "Realized gains (losses)" in the Consolidated Statements of Operations.
Allowance for credit losses beginning balance ........................................................................... $
Provision (reversal) for credit losses.....................................................................................................
827 $
962
Allowance for credit losses ending balance ................................................................................. $
1,789 $
3,505
(2,678)
827
There were no delinquent commercial mortgage loans as of December 31, 2022 and December 31, 2021. As of
December 31, 2022, the Company had no commercial mortgage loan in non-accrual status, compared to one in
non-accrual status at December 31, 2021.
Year Ended December 31,
2022
2021
92
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 5—Deferred Acquisition Costs
An analysis of "DAC" is as follows:
Balance at beginning of year .............................................................................. $
4,914,728
$
4,595,444
$
4,341,941
Year Ended December 31,
2022
2021
2020
Additions:
Deferred during period:
Commissions......................................................................................................
Other expenses .................................................................................................
Total deferred ..................................................................................................
Value of business acquired(1)..............................................................................
Foreign exchange adjustment............................................................................
Adjustment attributable to unrealized investment losses(2)............................
Total additions.................................................................................................
710,659
249,924
960,583
—
—
9,707
970,290
678,517
227,730
906,247
16,500
—
1,628
600,577
222,408
822,985
—
4,755
1,533
924,375
829,273
Deductions:
Amortized during period ........................................................................................
Foreign exchange adjustment..............................................................................
Total deductions..............................................................................................
(624,407)
(10,704)
(635,111)
(603,838)
(575,770)
(1,253)
—
(605,091)
(575,770)
Balance at end of year .......................................................................................... $
5,249,907
$
4,914,728
$
4,595,444
(1) Refer to Note 1—Significant Accounting Policies for the discussion on the acquisition of Globe Life Benefits.
(2) Represents amounts pertaining to investments relating to universal life-type products.
93
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 6—Commitments and Contingencies
Reinsurance: Insurance affiliates of Globe Life reinsure a portion of insurance risk that is in excess of their retention
limits. Current retention limits for new business written on ordinary life insurance range up to $500 thousand per life.
Life insurance ceded represented 0.3% of total life insurance in force at December 31, 2022 and 2021. Insurance
ceded on life and accident and health products represented 0.2% of premium income for 2022 and 2021. The
insurance affiliates of Globe Life would be liable for the reinsured risks ceded to other companies to the extent that
such reinsuring companies are unable to meet their obligations.
Insurance affiliates also assume insurance risks of other external companies. Life reinsurance assumed
represented 1.0% and 1.1% of
life insurance in force at December 31, 2022 and 2021, respectively, and
reinsurance assumed on life and accident and health products represented 1.5% and 0.8% of premium income for
2022 and 2021, respectively.
Leases: Globe Life primarily leases office space, aviation equipment, and other equipment under a variety of
operating lease arrangements.
Rental expense for the three years ended December 31, 2022 is as follows:
Year Ended December 31,
2022
2021
2020
Rental expense ............................................................................................................................... $
4,239
$
4,674
$
4,674
Future minimum rental commitments required under operating leases having remaining noncancelable lease terms
in excess of one year at December 31, 2022 were as follows:
Operating lease commitments ......................... $
3,706
$
2,848
$
1,307
$
1,148
$
853
$
5,275
2023
2024
2025
2026
2027
Thereafter
Year Ended December 31,
Purchase Commitments: Globe Life has various long-term noncancelable purchase commitments as well as
commitments to provide capital for low-income housing tax credit interests. See further discussion related to tax
credits in Note 1—Significant Accounting Policies.
Purchase commitments ..................................... $
95,410
$
41,447
$ 14,569
$
16,121
$
9,168
$
214,040
2023
2024
2025
2026
2027
Thereafter
Year Ended December 31,
Investments: Globe Life is committed to invest under certain contracts related to investments in limited partnerships.
See Note 4—Investments for unfunded commitment table.
Guarantees: At December 31, 2022, Globe Life had in place three guarantee agreements which were either Parent
Company guarantees of subsidiary obligations to a third party or Parent Company guarantees of obligations
between wholly-owned subsidiaries. As of December 31, 2022, Globe Life had no liability with respect to these
guarantees.
Letters of Credit: Globe Life has guaranteed letters of credit in connection with its credit facility with a group
of banks as disclosed in Note 11—Debt. The letters of credit were issued by TMK Re, Ltd., a wholly-owned
subsidiary, to secure TMK Re, Ltd.’s obligation for claims on certain policies reinsured by TMK Re, Ltd. that
were assumed from other Globe Life insurance companies. These letters of credit facilitate TMK Re, Ltd.’s
ability to reinsure the business of Globe Life's insurance carriers. The agreement was amended on
September 30, 2021 and now expires in 2026. The maximum amount of letters of credit available is $250
94
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
million. The Parent Company would be liable to the extent that TMK Re, Ltd. does not pay the reinsured
party. On October 26, 2021, the letters of credit were amended to reduce the current amount outstanding to
$125 million from $135 million outstanding.
Equipment leases: Globe Life has guaranteed performance of certain of its subsidiaries as lessees under
two aviation leasing arrangements. At December 31, 2022, total remaining undiscounted payments under
the leases were approximately $3 million. The Parent Company would be responsible for any subsidiary
obligation in the event the subsidiary did not make payments or otherwise perform under the terms of the
lease.
Unclaimed Property Audits: Globe Life subsidiaries are currently the subject of audits regarding the identification,
reporting and escheatment of unclaimed property arising from life insurance policies and a limited number of annuity
contracts. These audits are being conducted by private entities that have contracted with forty-seven states through
their respective Departments of Revenue, and have not resulted in any financial assessment from any state nor
indicated any liability. The audits are wide-ranging and seek large amounts of data regarding claims handling,
procedures, and payments of contract benefits arising from unreported death claims. No estimate of range can be
made at this time for loss contingencies related to possible administrative penalties or amounts that could be
payable to the states for the escheatment of abandoned property.
Litigation: Globe Life Inc. (formerly Torchmark Corporation) and its subsidiaries, in common with the insurance
industry in general, are subject to litigation, including putative class action litigation, alleged breaches of contract,
torts, including bad faith and fraud claims based on alleged wrongful or fraudulent acts of agents of the Parent
Company's insurance subsidiaries, employment discrimination, and miscellaneous other causes of action. Based
upon information presently available, and in light of legal and other factual defenses available to the Parent
Company and its subsidiaries, management does not believe that it is reasonably possible that such litigation will
have a material adverse effect on Globe Life's financial condition, future operating results or liquidity; however,
assessing the eventual outcome of litigation necessarily involves forward-looking speculation as to judgments to be
made by judges,
juries and appellate courts in the future. This bespeaks caution, particularly in states with
reputations for high punitive damage verdicts. Globe Life's management recognizes that large punitive damage
awards bearing little or no relation to actual damages continue to be awarded by juries in jurisdictions in which the
Company has substantial business, creating the potential for unpredictable material adverse judgments in any given
punitive damage suit.
On August 5, 2020, putative class and collective action litigation was filed against American Income Life Insurance
Company (“American Income”) and National Income Life Insurance Company (“National Income”) in United States
District Court for the Central District of California (Natalie Bell, Gisele Mobley, Ashly Rai, and John Turner v.
Income Life Insurance Company, Case No. 2:20-
American Income Life Insurance Company and National
cv-07046). On December 18, 2020, the plaintiffs voluntarily dismissed Mr. Turner’s claims and all claims against
defendant National Income. Following the dismissal, the complaint alleged that insurance agent trainees should
have been classified as employees, and after contracting should have been classified as employees instead of
independent contractors. Plaintiff Bell was a former California trainee and plaintiff Rai was a former California agent.
They asserted claims under California law on behalf of a putative California class for the four years prior to February
13, 2020 through case conclusion. They made claims under (a) the California Labor Code for alleged meal and rest
break violations, overtime, minimum wage, alleged failure to pay wages at the time of termination, expense
reimbursement, and alleged failure to provide accurate wage statements; and (b) the California Business and
Professions Code for alleged unfair business practices. They also sought liquidated damages, penalties and
attorney’s fees under California law. Plaintiff Mobley was a former Florida agent who asserted a claim under Florida
law on behalf of a putative Florida class for the five years prior to February 13, 2020 through case conclusion. She
made a claim under the Florida General Labor Regulations, including the Florida Minimum Wage Act, for alleged
failure to pay all wages owed. The plaintiffs also asserted a national collective action on behalf of all “similarly
situated” individuals for minimum wage, overtime, liquidated damages, penalties, an accounting and attorney’s fees
and costs under the Fair Labor Standards Act for the three years prior to February 13, 2020 through case
conclusion. American Income responded to the complaint with a motion to compel the named plaintiffs to arbitrate
their individual claims and other procedural challenges. On April 6, 2021, the court granted American Income’s
95
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
motion to compel arbitration as to plaintiffs Mobley and Rai, and denied the motion without prejudice as to plaintiff
Bell. American Income subsequently renewed its motion to compel arbitration as to plaintiff Bell. On November 30,
2021, the court granted American Income’s motion to compel arbitration as to plaintiff Bell. Thereafter, the parties
negotiated the settlement of the named plaintiffs’ individual claims for a non-material amount. The case was then
dismissed on January 5, 2023 with prejudice as to the named plaintiffs’ individual claims, and without prejudice as to
the claims of any putative class or collective members.
On September 30, 2022, putative class action litigation was filed against American Income, Giglione-Ackerman
Agency, LLC, Eric Giglione and David Ackerman (collectively, “Defendants”) in New Jersey Superior Court (Atiya
Bell, et al. v. American Income Life Insurance Company, et al., Case No. MID-L-004928-22). American Income
subsequently removed the case to United States District Court for the District of New Jersey (Case No. 2:22-
cv-06913-CCC-MAH). Plaintiffs Atiya Bell and Abel Flores (“Plaintiffs”) are former New Jersey independent sales
agents who allege they should have been classified as employees, and assert claims under New Jersey state law
on behalf of (i) a putative class of registered agents in New Jersey who have worked remotely for at least one week
since March 9, 2020, and (ii) a putative class of registered agents in New Jersey who trained for at least one week
to become sales agents for American Income in New Jersey during the six years prior to September 30, 2022.
Plaintiffs make claims under the New Jersey Wage and Hour Law and the New Jersey Wage Payment Law for the
alleged failure to pay minimum wages and overtime pay, including for time spent in training, liquidated damages and
attorney’s fees and costs. American Income intends to vigorously dispute the individual and class claims, including
enforcing the class action waiver and right to individual arbitration found in American Income’s agent contracts,
which has been recognized by other courts.
On March 27, 2020, Combined Insurance Company of America (“Combined”) filed a lawsuit in the Circuit Court of
the 11th Judicial Circuit in and for Miami-Dade County, Florida against Family Heritage Life Insurance Company of
America (“Family Heritage”) and two former Combined employees who became appointed as insurance sales
agents with Family Heritage (Combined Insurance Company of America v. Reineldo Urgelles, Antonio Pineda, and
Family Heritage Life Insurance Company of America, Case No. 2020-007330-CA-01). On May 8, 2020, Combined
filed a lawsuit in the 67th District Court of Tarrant County, Texas against Family Heritage and two different former
Combined employees who became appointed as insurance sales agents with Family Heritage (Combined Insurance
Company of America v. Stephen Hernandez, Francisco Azuero, and Family Heritage Life Insurance Company of
America, Case No. 067-316824-20). The lawsuits alleged that the individual insurance sales agents, in violation of
their
restrictive covenants with Combined, conspired with Family Heritage to improperly solicit Combined
policyholders to purchase Family Heritage products, and recruit Combined employees to contract as Family
Heritage insurance sales agents. As to Family Heritage, the lawsuits alleged claims for conspiracy and tortious
interference with business relations, and sought compensatory damages, as well as injunctive and equitable relief.
On July 8, 2020 and July 10, 2020, the Texas and Florida courts, respectively, granted Combined’s requests for a
temporary injunction. The Texas temporary injunction was subsequently vacated on appeal as to Family Heritage.
Combined’s non-equitable claims in both lawsuits were referred to confidential arbitration. On November 12, 2021,
Family Heritage filed a motion for summary judgment and Combined filed motions for partial summary judgment. On
December 31, 2021, the arbitrator denied Family Heritage’s motion for summary judgment, and on January 2, 2022,
the arbitrator granted Combined’s partial motions for summary judgment. On November 28, 2022, the arbitrator
awarded Combined non-material damages related to lost profits and disgorgement, attorneys’ fees and costs, which
Family Heritage paid on December 9, 2022.
96
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 7—Liability for Unpaid Claims
Activity in the liability for unpaid health claims is summarized as follows:
Year Ended December 31,
2022
2021
2020
Balance at beginning of period .......................................................................... $
167,832
$
162,261
$
163,808
Incurred related to:
Current year ..........................................................................................................
Prior years .............................................................................................................
Total incurred......................................................................................................
Paid related to:
Current year ..........................................................................................................
Prior years .............................................................................................................
Total paid ............................................................................................................
675,785
(15,631)
660,154
517,855
131,610
649,465
638,054
(22,477)
615,577
487,096
122,910
610,006
Balance at end of period ...................................................................................... $
178,521
$
167,832
$
584,936
(14,829)
570,107
442,127
129,527
571,654
162,261
At the end of each period, the liability for unpaid health claims includes an estimate of claims incurred but not yet
reported to the Company. Such estimates are updated regularly based upon the Company’s most recent claims
data with recognition of emerging experience trends. Due to the nature of the Company’s health business, the
payment lags are relatively short and most claims are fully paid within a year from the time incurred. Fluctuations in
claims experience can lead to either over or under estimation of the liability for any given year. The difference
between the estimate made at the end of the prior period and the actual experience during the period is reflected
above under the caption “Incurred related to: Prior years.”
Below is the reconciliation of the liability of "Policy claims and other benefits payable" in the Consolidated Balance
Sheets.
Policy claims and other benefits payable:
Life insurance .................................................................................................................................... $
251,506
$
Health insurance ...............................................................................................................................
178,521
Total............................................................................................................................................... $
430,027
$
245,108
167,832
412,940
December 31,
2022
2021
97
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 8—Income Taxes
The following table discloses significant components of income taxes for each year presented:
Year Ended December 31,
2022
2021
2020
Income tax expense (benefit) from operations:
Current income tax expense (benefit) ................................................................ $
138,248
$
144,718
$
129,647
Deferred income tax expense (benefit)..............................................................
28,359
166,607
22,713
167,431
Shareholders’ equity:
Other comprehensive income (loss)...................................................................
(1,088,098)
(93,480)
$
(
(921,491) $
)
73,951
$
35,264
164,911
314,845
479,756
In each of the years 2020 through 2022, deferred income tax expense (benefit) was incurred because of certain
differences between net income before income tax expense (benefit) as reported on the Consolidated Statements of
Operations and taxable income as reported on Globe Life's income tax returns. As explained in Note 1—Significant
Accounting Policies, these differences caused the consolidated financial statement book values of some assets and
liabilities to be different from their respective tax bases.
The effective income tax rate differed from the expected U.S. federal statutory rate of 21% as shown below:
Expected federal income tax expense (benefit) .......... $ 190,325
21.0
$ 191,602
21.0
$ 188,304
21.0
Year Ended December 31,
2022
%
2021
%
2020
%
Increase (reduction) in income taxes resulting from:
Low income housing investments........................................
(11,443)
Share-based awards..............................................................
Tax-exempt investment income............................................
Other.........................................................................................
(5,251)
(8,961)
1,937
(1.2)
(0.6)
(1.0)
0.2
(12,115)
(5,597)
(6,977)
518
(1.3)
(0.6)
(0.8)
0.1
(11,913)
(5,013)
(5,830)
(637)
(1.3)
(0.6)
(0.6)
(0.1)
Income tax expense (benefit) ........................................... $ 166,607
18.4
$ 167,431
18.4
$ 164,911
18.4
98
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred
tax liabilities are presented below:
December 31,
2022
2021
Deferred tax assets:
Unrealized losses................................................................................................................................. $
373,175
$
Carryover of tax losses........................................................................................................................
Total gross deferred tax assets ....................................................................................................
Deferred tax liabilities:
Unrealized gains...................................................................................................................................
Employee and agent compensation..................................................................................................
Deferred acquisition costs...................................................................................................................
Future policy benefits, unearned and advance premiums, and policy claims ............................
Other liabilities ......................................................................................................................................
2,470
375,645
—
86,063
764,813
216,268
17,479
—
5,962
5,962
713,879
93,738
723,337
226,943
15,738
Total gross deferred tax liabilities.................................................................................................
1,084,623
1,773,635
Net deferred tax liability ....................................................................................................................... $
708,978
$
1,767,673
Income Tax Return: Globe Life Inc. and its subsidiaries file a life-nonlife consolidated federal income tax return. The
statutes of limitations for the Internal Revenue Service's examination and assessment of additional tax are closed
for all tax years prior to 2017 with respect to Globe Life's consolidated federal income tax returns. Management
concludes that adequate provision has been made in the consolidated financial statements for any potential
assessments that may result from current or future tax examinations and other tax-related matters for all open
years.
Valuations: Globe Life has a $11.8 million net operating loss (NOL) carryforward at December 31, 2022, of which
$7.8 million was created prior to 2017 and will begin to expire in 2032 if not otherwise used to offset future taxable
income. The remaining NOL carryforward of $4.0 million may be carried forward indefinitely. A valuation allowance is
to be recorded when it is more likely than not that deferred tax assets will not be realized by the Company. No
valuation allowance has been recorded relating to Globe Life's deferred tax assets as management has determined
that Globe Life will more likely than not have sufficient taxable income in future periods to fully realize its existing
deferred tax assets.
Globe Life's tax liability is adjusted to include a provision for uncertain tax positions taken or expected to be taken in
a tax return. However, during the years 2020 through 2022, Globe Life did not have any uncertain tax positions
which resulted in unrecognized tax benefits.
Tax penalties and interest: Globe Life's continuing practice is to recognize penalties and interest related to income
tax matters in income tax expense. The Company recognized no interest income or expense in its Consolidated
Statements of Operations for 2022, 2021 or 2020. The Company had no accrued interest or penalties at December
31, 2022 or 2021.
99
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 9—Postretirement Benefits
Globe Life has qualified noncontributory defined benefit pension plans (Pension Plans) and contributory savings
plans that cover substantially all employees. There is also a nonqualified noncontributory supplemental executive
retirement plan (SERP) that covers a limited number of officers. The tables included herein will focus on the Pension
Plans and SERP.
The total cost of these retirement plans charged to operations was as follows:
Year Ended December 31,
2022
2021
2020
Plan Type:
Defined Contribution Plans(1).................................................................................. $
Defined Benefit Pension Plans(2) ...........................................................................
5,824 $
5,188
$
37,040
41,778
4,855
33,826
(1) 401K plans.
(2) Qualified pension plans and SERP.
Globe Life accrues expense for the defined contribution plans based on a percentage of
the employees’
contributions. The plans are funded by the employee contributions and a Globe Life contribution equal to the
amount of accrued expense. Plan contributions are both mandatory and discretionary, depending on the terms of
the plan.
Pension Plans: Cost for the pension plans has been calculated on the projected unit credit actuarial cost method. All
plan measurements for the pension plans are as of December 31 of the respective year. The pension plans
covering the majority of employees are qualified and funded. Contributions are made to funded pension plans
subject to minimums required by regulation and maximums allowed for tax purposes.
Globe Life's SERP provides an additional supplemental defined pension benefit to a limited number of officers. The
supplemental benefit is based on the participant’s qualified plan benefit without consideration to the regulatory limits
on compensation and benefit payments applicable to qualified plans, except that eligible compensation is capped at
$1 million. The SERP is nonqualified and unfunded. However, a Rabbi Trust has been established to support the
liability for this plan. The Rabbi Trust consists of life insurance policies on the lives of plan participants with an
unaffiliated insurance carrier as well as an investment account. Since this plan is nonqualified, the investments and
the policyholder value of the insurance policies in the Rabbi Trust are not included as defined benefit plan assets,
but rather assets of the Company. They are included in “Other Assets” in the Consolidated Balance Sheets.
Defined benefit and SERP plan contributions were $29.8 million in 2022, $17.9 million in 2021, and $21.9 million in
2020. In 2023, the Company does not expect to increase contributions to the plans from what was contributed in
2022.
100
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Pension Assets: Plan assets in the funded plans consist primarily of investments in marketable fixed maturities and
equity securities that are valued at fair value. Globe Life measures the fair value of its financial assets, including the
assets in its benefit plans, in accordance with accounting guidance which establishes a hierarchy for asset values
and provides a methodology for the measurement of value. Please refer to Note 1—Significant Accounting Policies
under the caption Fair Value Measurements, Investments in Securities for a complete discussion of valuation
procedures. The following table presents the assets of the Company's pension plans at December 31, 2022 and
2021.
Pension Assets by Component at December 31, 2022
Fair Value Determined by:
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Amount
% of
Total
Corporate bonds:
Financial .................................................. $
— $
35,649
$
— $
35,649
Utilities .....................................................
Energy......................................................
Other corporates ....................................
Total corporate bonds ..............................
Exchange traded fund(1)...........................
U.S. Government and Agency................
Other bonds...............................................
Guaranteed annuity contract(2) ...............
Short-term investments............................
Other...........................................................
—
—
—
—
258,297
—
—
—
4,467
6,547
23,436
12,776
56,786
128,647
—
44,213
200
43,116
—
—
—
—
—
—
—
—
—
—
—
—
—
Other long-term investments(3).............................................................................................................................
269,311
216,176
$
$
$
23,436
12,776
56,786
128,647
258,297
44,213
200
43,116
4,467
6,547
485,487
14,288
Total pension assets .................................................................................................................................. $
499,775
7
5
3
11
26
52
9
—
8
1
1
97
3
100
(1) A fund including marketable securities that mirror the S&P 500 index.
(2) Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the
obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3) Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited
partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns
less than 1% of the investment fund. As of December 31, 2022, the expected term of the investment fund is approximately 2 years and the
commitment of the investment is fully funded. The investment is non-redeemable.
101
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Pension Assets by Component at December 31, 2021
Fair Value Determined by:
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Total
Amount
% of
Total
Corporate bonds:
Financial................................................... $
— $
52,522
$
— $
52,522
Utilities......................................................
Energy......................................................
Other corporates.....................................
Total corporate bonds ............................
Exchange traded fund(1)...........................
Other bonds ...............................................
Guaranteed annuity contract(2)................
Short-term investments............................
Other ...........................................................
—
—
—
—
315,720
—
—
13,731
10,388
43,663
22,719
88,673
207,577
—
239
34,743
—
—
—
—
—
—
—
—
—
—
—
—
Other long-term investments(3).............................................................................................................................
242,559
339,839
$
$
$
43,663
22,719
88,673
207,577
315,720
239
34,743
13,731
10,388
582,398
15,149
Total pension assets ..................................................................................................................................... $
597,547
9
7
4
15
35
52
—
6
2
2
97
3
100
(1) A fund including marketable securities that mirror the S&P 500 index.
(2) Representing a guaranteed annuity contract issued by Globe Life Inc.'s subsidiary, American Income Life Insurance Company, to fund the
obligations of the American Income Life Insurance Company Collective Bargaining Agreement Employees Pension Plan.
(3) Included in other long-term investments is an investment fund that reports the Globe Life Inc. Pension Plan's pro-rata share of the limited
partnership's net asset value per share or its equivalent (NAV), as a practical expedient for fair value. The Globe Life Inc. Pension Plan owns
approximately 1% of the investment fund. As of December 31, 2021, the expected term of the investment fund was approximately 3 years
and the commitment of the investment is fully funded. The investment is non-redeemable.
Globe Life's investment objectives for its plan assets include preservation of capital and purchasing power as well
as long-term growth. Globe Life seeks to preserve capital through investments made in high quality securities with
adequate diversification by issuer and industry sector to minimize risk. The portfolio is monitored continuously for
changes in quality and diversification mix. The preservation of purchasing power is intended to be accomplished
through asset growth, exclusive of contributions and withdrawals in excess of the rate of inflation. Globe Life intends
to maintain investments that when combined with future plan contributions will produce adequate long-term growth
to provide for all plan obligations. It is also Globe Life's objective that the portfolio’s investment return will meet or
exceed the return of a balanced market index.
The majority of the securities in the portfolio are highly marketable so that there will be adequate liquidity to meet
projected payments. There are no specific policies calling for asset durations to match those of benefit obligations.
Allowed investments are limited to equities, fixed maturities, and short-term investments (invested cash). The assets
are to be invested in a mix of equity and fixed income investments that best serve the objectives of the pension
plan. Factors to be considered in determining the asset mix include funded status, annual pension expense, annual
pension contributions, and balance sheet liability. Equities can include common and preferred stocks, securities
convertible into equities, mutual funds and exchange traded funds that invest in equities, equity interests in limited
partnerships, and other equity-related investments. Primarily, equities are listed on major exchanges and adequate
market liquidity is required. Fixed maturities primarily consist of marketable debt securities rated investment grade
at purchase by a major rating agency. Short-term investments include fixed maturities with original maturities of less
than one year and invested cash. Investments outside of the aforementioned list are not permitted, except by prior
approval of the Plan’s Trustees.
102
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
The investment portfolio is well diversified to avoid undue exposure to a single sector, industry, business, or security.
The equity and fixed maturity portfolios are not permitted to invest in any single issuer that would exceed 10% of
total plan assets at the time of purchase. The Company does not employ any other special risk management
techniques, such as derivatives, in managing the pension investment portfolio.
Globe Life's equity securities include an exchange traded fund that mirrors the S&P 500 index which better aligns
with a passive approach rather than an actively managed portfolio. At December 31, 2022, there were no restricted
investments contained in the portfolio. Plan contributions have been invested primarily in fixed maturity and equity
securities during the three years ended December 31, 2022.
SERP: The following tables include premiums paid for the company owned life insurance (COLI) for the three years
ended December 31, 2022 and investments of the Rabbi Trust for the two years ended December 31, 2022.
Premiums paid for insurance coverage.................................................................. $
443
$
2,193
$
2,480
Year Ended December 31,
2022
2021
2020
Total investments:
COLI ...................................................................................................................................................... $
54,681
$
Exchange traded funds ......................................................................................................................
71,258
52,791
87,133
$
125,939
$
139,924
Pension Liability: The following table presents projected benefit obligation (PBO) and accumulated benefit obligation
(ABO) for the pension plans and SERP at December 31, 2022 and 2021.
At December 31,
2022
2021
Pension Liability
December 31,
2022
2021
PBO
ABO
PBO
ABO
Pension plans.............................................................................. $
492,103
$
458,510
$
686,917
$
601,647
SERP............................................................................................
70,464
67,776
92,017
87,915
Benefit Obligation ................................................................ $
562,567
$
526,286
$
778,934
$
689,562
For the year-ended December 31, 2022, the pension plans have plan assets with fair values in excess of projected
benefit obligations. The projected benefit obligations and the fair value of plan assets were as follows:
Funded benefit pension plans PBO........................................................................................................ $
492,103
$
Funded benefit pension plans fair value of plan assets......................................................................
499,775
686,917
597,547
At December 31,
2022
2021
103
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
For the year-ended December 31, 2022, the funded benefit pension plans have plan assets with fair value in excess
of the accumulated benefit obligations. The accumulated benefit obligations and the fair value of plan assets were
as follows:
At December 31,
2022
2021
Funded benefit pension plans ABO........................................................................................................ $
458,510
$
Funded benefit pension plans fair value of plan assets......................................................................
499,775
601,647
597,547
The following table discloses the assumptions used to determine Globe Life's pension liabilities and costs for the
appropriate periods. The discount and compensation increase rates are used to determine current year projected
benefit obligations and subsequent year pension expense. The long-term rate of return is used to determine current
year expense. Differences between assumptions and actual experience are included in actuarial gain or loss.
Weighted Average Pension Plan Assumptions
For Benefit Obligations at December 31:
Discount rate .........................................................................................................................................
Rate of compensation increase..........................................................................................................
2022
2021
5.71 %
4.40
3.19 %
4.43
For Periodic Benefit Cost for the Year:
2022
2021
2020
Discount rate ............................................................................................................
3.19 %
2.92 %
3.49 %
Expected long-term returns....................................................................................
Rate of compensation increase.............................................................................
6.98
4.43
6.67
3.97
6.67
3.97
The discount rate is determined based on the expected duration of plan liabilities. A yield is then derived based on
the current market yield of a hypothetical portfolio of high quality corporate bonds that match the liability's average
life. The rate of compensation increase is projected based on Company experience, modified as appropriate for
future expectations. The expected long-term rate of return on plan assets is management’s best estimate of the
average rate of earnings expected to be received on the assets invested in the plan over the benefit period. In
determining this assumption, consideration is given to the historical rate of return earned on the assets, the
projected returns over future periods, and the discount rate used to compute benefit obligations.
Net periodic benefit cost for the defined benefit plans by expense component was as follows:
Year Ended December 31,
2022
2021
2020
Service cost—benefits earned during the period .................................................. $
Interest cost on projected benefit obligation...........................................................
Expected return on assets ........................................................................................
Amortization of prior service cost (credit) ...............................................................
Recognition of actuarial gain (loss)..........................................................................
34,624
$
31,672
$
24,445
(35,539)
1,077
12,433
21,957
(32,331)
631
19,849
Net periodic benefit cost .................................................................................... $
37,040
$
41,778
$
24,461
22,825
(29,561)
632
15,469
33,826
104
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
An analysis of the impact on other comprehensive income (loss) concerning pensions and other postretirement
benefits is as follows:
Year Ended December 31,
2022
2021
2020
Balance at January 1 .............................................................................................. $
(131,239) $
(208,770) $
(182,233)
Amortization of:
Prior service cost (credit)......................................................................................
Net actuarial (gain) loss(1).....................................................................................
Total amortization................................................................................................
Plan amendments....................................................................................................
Experience gain (loss)(2) .........................................................................................
1,077
12,677
13,754
—
119,055
631
20,166
20,797
(4,565)
61,299
632
16,000
16,632
—
(43,169)
Balance at December 31 ........................................................................................ $
1,570
$
(
(131,239) $
)
)
(208,770)
(
(1) Includes amortization of postretirement benefits other than pensions of $289 thousand in 2022, $228 thousand in 2021, and $302 thousand in
2020.
(2) The increase in the experience gain (loss) is related to an increase discount rate.
The following table presents a reconciliation from the beginning to the end of the year of the PBO and plan assets
for the pension plans and SERP. This table also presents the amounts previously recognized as a component of
accumulated other comprehensive income.
Pension Benefits
Year Ended December 31,
2022
2021
Changes in PBO:
PBO at beginning of year...................................................................................................................... $
778,934
$
763,313
Service cost...........................................................................................................................................
Interest cost...........................................................................................................................................
Plan amendments ................................................................................................................................
Actuarial loss (gain) .............................................................................................................................
Benefits paid .........................................................................................................................................
PBO at end of year.................................................................................................................................
Changes in plan assets:
Fair value at beginning of year.............................................................................................................
Return on assets ..................................................................................................................................
Contributions.........................................................................................................................................
Benefits paid .........................................................................................................................................
Fair value at end of year .......................................................................................................................
34,624
24,445
—
(241,995)
(33,441)
562,567
597,547
(94,175)
29,844
(33,441)
499,775
31,672
21,957
4,565
(16,938)
(25,635)
778,934
529,532
75,792
17,858
(25,635)
597,547
Funded status at year end ................................................................................................................... $
(
(62,792) $
)
)
(
(181,387)
Changes in the PBO related to actuarial losses (gains) are primarily attributed to changes in the discount rate.
Amounts recognized in accumulated other comprehensive income consist of:
2022
2021
Net loss (gain)......................................................................................................................................... $
(4,497) $
120,217
Prior service cost....................................................................................................................................
7,569
8,647
Net amounts recognized at year end .................................................................................................. $
3,072
$
128,864
Year Ended December 31,
105
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Globe Life has estimated its expected pension benefits to be paid over the next ten years as of December 31, 2022.
These estimates use the same assumptions that measure the benefit obligation at December 31, 2022, taking
estimated future employee service into account. Those estimated benefits are as follows:
For the year(s):
2023............................................................................................................................................................................................. $
26,882
2024.............................................................................................................................................................................................
2025.............................................................................................................................................................................................
2026.............................................................................................................................................................................................
2027.............................................................................................................................................................................................
29,653
30,948
33,242
35,359
2028-2032..................................................................................................................................................................................
207,853
Note 10—Supplemental Disclosures of Cash Flow Information
The following table summarizes Globe Life's noncash transactions, which are not reflected on the Consolidated
Statements of Cash Flows:
Year Ended December 31,
2022
2021
2020
Stock-based compensation not involving cash...................................................... $
35,650
$
30,272
$
Commitments for low-income housing interests....................................................
Exchanges of fixed maturity investments ...............................................................
Net unsettled security trades ....................................................................................
Noncash tax credits....................................................................................................
136,882
147,612
—
1,000
177,010
109,226
6,963
1,883
35,892
161,503
219,807
1,669
—
The following table summarizes certain amounts paid during the period:
Interest paid................................................................................................................. $
88,814
$
83,072
$
Income taxes paid ......................................................................................................
114,888
96,218
83,518
76,701
Year Ended December 31,
2022
2021
2020
106
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 11—Debt
The following table presents information about the terms and outstanding balances of Globe Life's debt.
Selected Information about Debt Issues
As of December 31,
Maturity
Date
Coupon
Rate
Par
Value
2022
Unamortized
Discount &
Issuance
Costs
December 31,
2021
Book
Value
Fair
Value
Book
Value
5/15/2023
7.875% $ 165,612
$
(112) $ 165,500
$ 166,819
$
Instrument
Issue Date
Senior notes...... 5/27/1993
Senior notes(2)... 9/24/2012
165,216
149,752
544,949
395,778
—
9/15/2022
3.800%
—
—
Senior notes...... 9/27/2018
9/15/2028
4.550%
Senior notes...... 8/21/2020
Senior notes(1)... 5/19/2022
8/15/2030
2.150%
6/15/2032
4.800%
550,000
400,000
250,000
(4,399)
(3,781)
(4,507)
—
545,601
396,219
245,493
—
534,501
314,996
236,263
Junior
subordinated
debentures ........ 11/17/2017
Junior
subordinated
debentures ........ 6/14/2021
11/17/2057
5.275%
125,000
(1,590)
123,410
121,817
123,396
6/15/2061
4.250%
325,000
(7,771)
317,229
232,700
317,155
1,815,612
(22,160)
1,793,452
1,607,096
1,696,246
Less current maturity of long-term debt ...........................
165,612
(112)
165,500
166,819
149,752
Total long-term debt ...................................................
1,650,000
(22,048)
1,627,952
1,440,277
1,546,494
Current maturity of long-term debt ....................................
Commercial paper ...............................................................
Total short-term debt ..................................................
165,612
285,000
450,612
(112)
165,500
(1,397)
(1,509)
283,603
449,103
166,819
283,604
450,423
149,752
329,892
479,644
Total debt ................................................................. $ 2,100,612
$
(
(23,557) $2,077,055
)
$1,890,700
$
2,026,138
(1) An additional $150 million par value and book value is held by insurance subsidiaries that eliminates in consolidation.
(2) The $300 million of 3.80% Senior notes matured on September 15, 2022, of which $150 million was owned by Globe Life affiliates.
The commercial paper has the highest priority of all the debt, followed by senior notes then junior subordinated
debentures. The senior notes due 2023 are noncallable, the remaining senior notes are callable under a make-
whole provision, and the junior subordinated debentures are subject to an optional redemption five years from
issuance. Interest on the 4.25% junior subordinated debentures is payable quarterly while all other long-term debt is
payable semi-annually.
Contractual Debt Obligations: The following table presents expected scheduled principal payments under our
contractual debt obligations:
Debt obligations......................................... $
450,612
$
— $
— $
— $
— $ 1,650,000
2023
2024
2025
2026
2027
Thereafter
Year Ended December 31,
107
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Credit Facility: On September 30, 2021, Globe Life amended the credit agreement dated August 24, 2020, which
provides for a $750 million revolving credit facility that may be increased to $1 billion upon approval of the
participating banks. The amended credit facility matures September 30, 2026, and may be extended up to two one-
year periods upon the Company's request. Pursuant to this agreement, the participating lenders have agreed to
make revolving loans to Globe Life and to issue secured or unsecured letters of credit. The Company has not drawn
on any of the credit to date. The facility is further designated as a back-up credit line for a commercial paper
program under which the Company may either borrow from the credit line or issue commercial paper at any time,
with total commercial paper outstanding not to exceed the facility maximum of $750 million, less any letters of credit
issued. Interest is charged at variable rates. In accordance with the agreement, Globe Life is subject to certain
covenants regarding capitalization. As of December 31, 2022, the Company was in full compliance with these
covenants.
Commercial paper outstanding and any long-term debt due within one year are reported as short-term debt on the
Consolidated Balance Sheets. A table presenting selected information concerning Globe Life's commercial paper
borrowings is presented below.
Credit Facility - Commercial Paper
At December 31,
Balance at end of period (at par value).................................................................................................. $
285,000
Annualized interest rate............................................................................................................................
4.78 %
Letters of credit outstanding .................................................................................................................... $
125,000
Remaining amount available under credit line......................................................................................
340,000
2022
$
$
2021
330,033
0.29 %
125,000
294,967
Average balance outstanding during period........................................................... $
322,531
Daily-weighted average interest rate (annualized)................................................
1.89 %
Maximum daily amount outstanding during period................................................ $
500,529
2022
2021
311,049
0.23 %
465,033
$
$
2020
318,409
1.50 %
482,000
$
$
Year Ended December 31,
Long-term Debt: On May 19, 2022, Globe Life completed the issuance of $400 million principal amount of 4.8%
Senior notes due June 15, 2032, of which $150 million is owned by Globe Life affiliates. Total proceeds received by
the Parent from the issuance, net of the underwriters’ discount, were $395 million. The proceeds were used to fund
$300 million of 3.8% Senior notes, of which $150 million was owned by Globe Life affiliates, that matured on
September 15, 2022, as well as for the reduction of commercial paper and other general corporate purposes.
Federal Home Loan Bank (FHLB): In 2021, four of our insurance subsidiaries became members of the FHLB of
Dallas. FHLB membership provides the insurance subsidiaries with access to various low-cost collateralized
borrowings and funding agreements. The membership requires ownership of FHLB common stock, as well as the
purchase of activity-based common stock equal to approximately 4.1% of outstanding borrowings.
Globe Life owns $14.3 million in FHLB common stock as of December 31, 2022 and $7.9 million as of December
31, 2021. The FHLB stock is restricted for the duration of the membership and recorded at cost (par) as required by
applicable guidance. The FHLB stock is included in "Other long-term investments" in the Consolidated Balance
Sheets.
Borrowings with the FHLB are subject to the availability of pledged assets at Globe Life. As of December 31, 2022,
Globe Life's maximum borrowing capacity under the FHLB facility was approximately $597 million, based on
pledged assets with a fair value of $746 million. As of December 31, 2022, $23 million was outstanding with the
FHLB, and was included in "Other policyholders' funds" on the Consolidated Balance Sheets.
108
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 12—Shareholders' Equity
Share Data: A summary of common share activity is presented in the following chart.
Common Stock
Issued
Treasury
Stock
2020:
Balance at January 1, 2020..................................................................................................................
117,218,183
(9,497,940)
Grants of restricted stock ......................................................................................................................
Vesting of performance shares ............................................................................................................
Issuance of common stock due to exercise of stock options ..........................................................
Treasury stock acquired ........................................................................................................................
—
—
—
—
4,548
271,843
936,289
(5,135,439)
Retirement of treasury stock.................................................................................................................
(4,000,000)
4,000,000
Balance at December 31, 2020 ......................................................................................................
113,218,183
(9,420,699)
2021:
Grants of restricted stock ......................................................................................................................
Vesting of performance shares ............................................................................................................
Issuance of common stock due to exercise of stock options ..........................................................
Treasury stock acquired ........................................................................................................................
—
—
—
—
10,031
210,155
1,191,704
(5,642,036)
Retirement of treasury stock.................................................................................................................
(4,000,000)
4,000,000
Balance at December 31, 2021 ......................................................................................................
109,218,183
(9,650,845)
2022:
Grants of restricted stock ......................................................................................................................
Vesting of performance shares ............................................................................................................
Issuance of common stock due to exercise of stock options ..........................................................
Treasury stock acquired ........................................................................................................................
—
—
—
—
10,746
66,751
1,519,728
(4,424,668)
Retirement of treasury stock.................................................................................................................
(4,000,000)
4,000,000
Balance at December 31, 2022 ......................................................................................................
105,218,183
)
(8,478,288)
(
There was no activity related to the preferred stock in years 2020 through 2022.
Acquisition of Common Shares: Globe Life shares are acquired through open market purchases under the Globe
Life stock repurchase program when it is determined to be the best use of Globe Life's excess cash flows. This
yields a return that is better than available alternatives and exceeds our cost of equity. When stock options are
exercised, proceeds from the exercises are generally used to repurchase approximately the number of shares
available with those funds in order to reduce dilution. See the following summary below:
Globe Life Share Repurchase Program
Share Repurchase for Dilution Purposes
Shares
Acquired
(in thousands)
Total Cost
Average
Price
Shares
Acquired
(in thousands)
Total Cost
Average
Price
2022 ................................................
3,322
$
335,145
$ 100.90
1,103
$
119,493
$ 108.33
2021 ................................................
2020 ................................................
4,784
4,459
455,030
380,112
95.11
85.24
858
676
86,405
100.75
63,754
94.28
109
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Restrictions: Restrictions exist on the flow of funds to Globe Life Inc. from its insurance subsidiaries. Statutory
regulations require life insurance subsidiaries to maintain certain minimum amounts of capital and surplus.
Dividends from insurance subsidiaries of Globe Life Inc. are restricted based on regulations by their states of
domicile. Additionally, insurance company distributions are generally not permitted in excess of statutory surplus.
Subsidiaries are also subject
to certain minimum capital requirements. Subsidiaries of Globe Life paid cash
dividends to the Parent Company in the amount of $407 million in 2022, $479 million in 2021, and $486 million in
2020. As of December 31, 2022, dividends from insurance subsidiaries to the Parent Company available to be paid
in 2023 are limited to the amount of $420 million without regulatory approval, such that $1.2 billion was considered
restricted net assets of the subsidiaries. Dividends exceeding these limitations may be available during the year
pending regulatory approval. While there are no legal restrictions on the payment of dividends to shareholders from
Globe Life's retained earnings, retained earnings as of December 31, 2022, were restricted by lenders’ covenants
which require the Company to maintain and not distribute $4.3 billion from its total consolidated retained earnings of
$6.5 billion.
Earnings per Share: A reconciliation of basic and diluted weighted-average shares outstanding used in the
computation of basic and diluted earnings per share is as follows:
Year Ended December 31,
2022
2021
2020
Basic weighted average shares outstanding ........................................................
97,927,770
102,069,781
106,075,267
Weighted average dilutive options outstanding....................................................
1,056,874
1,100,351
1,149,327
Diluted weighted average shares outstanding......................................................
98,984,644
103,170,132
107,224,594
Antidilutive shares .....................................................................................................
31,269
2,412,884
2,476,019
Antidilutive shares are excluded from the calculation of diluted earnings per share. All antidilutive shares noted
above result from outstanding out of the money employee and Director stock options.
Note 13—Stock-Based Compensation
Globe Life's stock-based compensation consists of stock options, restricted stock, restricted stock units, and
performance shares. Certain employees and members of the board of directors (directors) have been granted fixed
equity options to buy shares of Globe Life stock at the market value of the stock on the date of grant, under the
provisions of the Globe Life stock option plans. The options are exercisable during the period commencing from the
date they vest until expiring according to the terms of the grant. Options generally expire the earlier of employee
termination or option contract term, which are either seven-year or ten-year terms. Options generally vest in
accordance with the following schedule:
Contract
Period
6 Months
Year 1
Year 2
Year 3
Year 4
Year 5
Shares vested by period
Directors ........................................
7 years
Employees .....................................
7 years
Employees ....................................
10 years
100%
—%
—%
—%
—%
—%
—%
50%
25%
—%
50%
25%
—%
—%
25%
—%
—%
25%
All employee options vest immediately upon retirement on or after the attainment of age 65, upon death, or
disability. Globe Life generally issues shares for the exercise of stock options from treasury stock. The Company
generally uses the proceeds from option exercises to buy shares of Globe Life common stock in the open market to
reduce the dilution from option exercises.
110
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
An analysis of shares available for grant is as follows:
Balance at January 1, ....................................................................................................
Options expired and forfeited during year(1) ............................................................
Performance shares expired and forfeited during year(2) ......................................
Options granted during year(1) ...................................................................................
Restricted stock, restricted stock units, and performance shares granted(2) .....
Available for Grant
2022
2021
2020
4,727,088
5,984,418
7,167,718
13,405
23,250
5,304
34,255
3,325
35,495
(1,105,180)
(1,091,495)
(1,127,610)
(480,677)
(205,394)
(94,510)
Balance at December 31, .............................................................................................
3,177,886
4,727,088
5,984,418
(1) Plan allows for grant of options such that each grant reduces shares available for grant in a range from 0.85 share to 1.0 share.
(2) Plan allows for grant of restricted stock such that each stock grant reduces shares available for grant in a range from 3.10 shares to 3.88
shares.
A summary of stock compensation activity for each of the three years ended December 31, 2022, is presented
below:
Stock-based compensation expense recognized(1) ..................................................... $
35,650
$
30,272
$
Tax benefit recognized......................................................................................................
12,738
11,954
35,892
12,550
2022
2021
2020
(1) No stock-based compensation expense was capitalized in any period in accordance with applicable GAAP.
Additional stock compensation information is as follows at December 31:
Unrecognized compensation(1) .................................................................................................................... $
Weighted average period of expected recognition (in years)(1) ..............................................................
33,977
$
26,602
0.56
0.57
2022
2021
(1) Includes restricted stock and performance shares.
No equity awards were cash settled during the three years ended December 31, 2022.
Options: The following table summarizes information about stock options outstanding at December 31, 2022.
Range of
Exercise Prices
$37.40 - $83.17
87.60 - 90.21
92.40 - 98.32
100.74
103.23 - 105.56
$37.40 - $105.56
Options Outstanding
Options Exercisable
Weighted-
Average
Remaining
Contractual
Life (Years)
Weighted-
Average
Exercise
Price
2.65 $
3.30
4.98
4.03
6.10
4.08 $
77.06
87.64
98.27
100.74
103.29
91.73
Number
Exercisable
2,091,530
$
910,379
14,613
619,080
31,269
3,666,871
$
Weighted-
Average
Exercise
Price
77.06
87.65
93.57
100.74
105.56
84.00
Number
Outstanding
2,091,530
1,025,535
1,283,538
1,237,167
1,324,604
6,962,374
111
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
An analysis of option activity for each of the three years ended December 31, 2022, is as follows:
2022
2021
2020
Weighted-
Average
Exercise
Price
Options
Weighted-
Average
Exercise
Price
Options
Weighted-
Average
Exercise
Price
Options
Outstanding—beginning of year ..............
7,197,662
$
85.11
7,111,231
$
78.28
6,724,358
$
70.07
Granted:
7-year term................................................
1,300,211
103.20
1,284,112
Exercised........................................................
(1,519,728)
Expired and forfeited ....................................
(15,771)
Outstanding—end of year ..........................
6,962,374
Exercisable at end of year ..........................
3,666,871
70.14
96.54
91.73
(1,191,704)
(5,977)
7,197,662
84.00
3,659,755
$
$
$
$
1,326,599
100.85
98.28
58.59
74.15
85.11
(936,289)
(3,437)
7,111,231
75.55
3,389,399
51.37
75.27
78.28
67.19
$
$
Additional information about Globe Life's stock option activity as of December 31, 2022 and 2021 is as follows:
Outstanding options:
Weighted-average remaining contractual term (in years)................................................................
4.08
4.31
Aggregate intrinsic value....................................................................................................................... $
200,681
$
77,329
2022
2021
Exercisable options:
Weighted-average remaining contractual term (in years)................................................................
3.01
3.27
Aggregate intrinsic value....................................................................................................................... $
134,033
$
66,978
Selected stock option activity for the three years ended December 31, 2022, is presented below:
Weighted-average grant-date fair value of options granted
(per share) ................................................................................................................... $
22.03
$
18.01
$
Intrinsic value of options exercised..........................................................................
Cash received from options exercised....................................................................
Actual tax benefit received........................................................................................
58,201
106,592
11,907
50,641
69,826
10,545
14.64
40,517
48,093
8,508
2022
2021
2020
Additional information concerning Globe Life's unvested options is as follows at December 31:
Number of shares outstanding................................................................................................................
3,295,503
3,537,907
Weighted-average exercise price (per share)....................................................................................... $
100.33
$
Weighted-average remaining contractual term (in years)...................................................................
5.26
94.99
5.37
Aggregate intrinsic value.......................................................................................................................... $
66,647
$
10,352
2022
2021
Globe Life expects that substantially all unvested options will vest.
Restricted Stock: Restricted stock grants consist of time-vested grants, restricted stock units, and performance
shares. Time-vested restricted stock is available to directors and vests over six months. Restricted stock units are
also available to directors. The restricted stock units vest over six months and are not converted to shares until the
directors’ retirement, death, or disability. Director restricted stock and restricted stock units are generally granted on
the first business day of the year. Performance shares are granted to a limited number of senior executives.
Performance shares have a three-year performance period and are not settled in shares until the certification of the
112
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
three-year performance period. While the grant specifies a stated target number of shares, the determination of the
actual settlement in shares will be based on the achievement of certain performance objectives of Globe Life over
the three-year performance period. Certain executive restricted stock and performance share grants contain terms
related to age that could accelerate vesting.
Following are the restricted stock units outstanding for each of the three years ended December 31, 2022.
2020...........................................................................................................................................................................
2021...........................................................................................................................................................................
2022...........................................................................................................................................................................
Year of grants
Outstanding as of
year end
77,167
84,426
93,381
Below is the final determination of the performance share grants in 2018 to 2020:
Year of grants
Final settlement of
shares
Final settlement date
2018.............................................................................................................................
210,155
February 24, 2021
2019.............................................................................................................................
2020.............................................................................................................................
66,751
84,298
February 23, 2022
February 22, 2023
For the 2021 and 2022 performance share grants, actual shares that could be distributed range from 0 to 209
thousand for the 2021 grants and 0 to 220 thousand shares for the 2022 grants.
A summary of restricted stock grants for each of the years in the three-year period ended December 31, 2022, is
presented in the table below.
2022
2021
2020
Directors restricted stock:
Shares............................................................................................................................
10,746
Price per share ............................................................................................................. $
Aggregate value ........................................................................................................... $
94.94
1,020
Percent vested..............................................................................................................
100%
Directors restricted stock units (including dividend equivalents):
Shares............................................................................................................................
Price per share ............................................................................................................. $
Aggregate value ........................................................................................................... $
8,956
95.62
856
Percent vested..............................................................................................................
100%
Performance shares:
Target shares................................................................................................................
146,500
Target price per share ................................................................................................. $
103.23
Aggregate value ........................................................................................................... $
15,123
10,031
92.40
927
97%
7,258
92.60
672
96%
139,500
98.32
13,716
$
$
$
$
$
$
4,548
105.56
480
100%
6,161
103.32
637
100%
151,200
100.74
15,232
$
$
$
$
$
$
Percent vested..............................................................................................................
—%
—%
—%
Time-vested restricted stockholders are entitled to dividend payments on the unvested stock. Restricted stock unit
holders are entitled to dividend equivalents. These equivalents are granted in the form of additional restricted stock
immediately upon grant. Dividend equivalents are applicable only to restricted stock units.
units and vest
Performance shareholders are not entitled to dividend equivalents and are not entitled to dividend payments until
the shares are vested and settled.
113
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
An analysis of nonvested restricted stock is as follows:
Executive
Restricted
Stock
Executive
Performance
Shares
Directors
Restricted
Stock
Directors
Restricted
Stock
Units
2020:
Balance at December 31, 2019....................
Grants ....................................................................
Additional performance shares(1).......................
Restriction lapses.................................................
Forfeitures .............................................................
Balance at December 31, 2020....................
2021:
Grants ....................................................................
Additional performance shares(1).......................
Restriction lapses.................................................
Forfeitures .............................................................
Balance at December 31, 2021....................
2022:
Grants ....................................................................
Additional performance shares(1).......................
Restriction lapses.................................................
Forfeitures .............................................................
Balance at December 31, 2022....................
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
716,542
151,200
(65,473)
(271,843)
(11,450)
518,976
139,500
(94,883)
(210,155)
(11,050)
342,388
146,500
(16,102)
(66,751)
(7,500)
398,535
—
4,548
—
—
6,161
—
(4,548)
(6,161)
—
—
7,258
—
Total
716,542
161,909
(65,473)
(282,552)
(11,450)
518,976
156,789
(94,883)
(6,969)
(226,866)
—
289
8,956
—
(9,245)
—
—
(11,050)
342,966
166,202
(16,102)
(87,031)
(7,500)
398,535
—
—
10,031
—
(9,742)
—
289
10,746
—
(11,035)
—
—
(1) Estimated additional (reduced) share grants expected due to achievement of performance criteria.
An analysis of the weighted-average grant-date fair values per share of nonvested restricted stock is as follows for
the year 2022:
Executive
Restricted
Stock
Executive
Performance
Shares
Directors
Restricted
Stock
Directors
Restricted
Stock Units
Grant-date fair value per share at January 1, 2022 ............... $
— $
94.75
$
92.56
$
Grants..................................................................................................
Estimated additional performance shares.....................................
Restriction lapses..............................................................................
Forfeitures ..........................................................................................
Grant-date fair value per share at December 31, 2022 .........
—
—
—
—
—
103.23
(81.42)
(82.56)
(82.56)
100.68
94.94
—
(94.88)
—
—
92.56
94.94
—
(94.94)
—
—
114
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Note 14—Business Segments
Globe Life is organized into four segments:
investments. In addition, other expenses not included in these segments are reported in "Corporate & Other."
life insurance, supplemental health insurance, annuities, and
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 which
manages the investment portfolio, debt, and cash flow for the insurance segments and the corporate function. 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, critical
illness, accident, and limited-benefit
supplemental hospital and surgical coverage. Annuities include fixed-benefit contracts.
Globe Life markets its insurance products through a number of distribution channels, each of which sells the
products of one or more of Globe Life's insurance segments. Our distribution channels consist of the following
exclusive agencies: American Income Life Division (American Income), Liberty National Division (Liberty National)
and Family Heritage Division (Family Heritage); an independent agency, United American Division (United
American); and our Direct to Consumer Division (Direct to Consumer). The following tables present segment
premium revenue by each of Globe Life's distribution channels.
Premium Income by Distribution Channel
For the Year 2022
Life
Health
Annuity
Total
Distribution Channel
Amount
% of
Total
American Income ................................ $ 1,505,425
Direct to Consumer.............................
Liberty National ...................................
United American..................................
Family Heritage ...................................
981,517
326,642
7,913
5,587
Other .....................................................
196,212
50
32
11
—
—
7
Amount
$
117,308
71,095
185,761
538,428
366,820
—
% of
Total
Amount
% of
Total
Amount
% of
Total
—
—
—
1
—
—
1
— $ 1,622,733
—
—
100
—
—
1,052,612
512,403
546,342
372,407
196,212
38
24
12
13
9
4
100
$ 4,302,709
100
$ 3,023,296
100
$ 1,279,412
100
$
Life
Health
Annuity
Total
For the Year 2021
% of
Total
Amount
% of
Total
Amount
% of
Total
Distribution Channel
Amount
% of
Total
American Income ................................ $ 1,402,878
Direct to Consumer.............................
Liberty National ...................................
United American..................................
Family Heritage ...................................
971,461
311,081
8,822
4,957
Other .....................................................
199,011
48
34
11
—
—
7
Amount
$
114,950
73,946
187,327
481,614
343,839
—
$ 2,898,210
100
$ 1,201,676
100
$
—
—
—
1
—
—
1
— $ 1,517,828
—
—
100
—
—
1,045,407
498,408
490,437
348,796
199,011
37
25
12
12
9
5
100
$ 4,099,887
100
$
9
6
14
42
29
—
$
9
6
16
40
29
—
115
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Life
Health
Annuity
Total
For the Year 2020
Distribution Channel
Amount
% of
Total
American Income ................................. $ 1,257,726
Direct to Consumer ..............................
Liberty National.....................................
United American ...................................
Family Heritage.....................................
906,959
293,897
9,688
4,253
Other.......................................................
200,281
47
34
11
—
—
8
Amount
$
105,734
76,527
188,835
452,980
317,021
—
$
9
7
16
40
28
—
$ 2,672,804
100
$ 1,141,097
100
$
—
—
—
4
—
—
4
— $ 1,363,460
—
—
100
—
—
983,486
482,732
462,672
321,274
200,281
36
26
13
12
8
5
100
$ 3,813,905
100
% of
Total
Amount
% of
Total
Amount
% of
Total
Due to the nature of the life insurance industry, Globe Life has no individual or group which 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 insurance segments is
underwriting margin before other income and administrative expenses,
in accordance with the manner the
segments are managed. This measure 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 net policy liabilities (benefit reserves less deferred acquisition costs) 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
net policy liabilities.
The measure of profitability for the Investment segment is excess investment income, which represents the income
earned on the investment portfolio in excess of net policy requirements and financing costs associated with Globe
Life's debt. Other than the above-mentioned interest allocations and an intersegment commission, there are no
other intersegment revenues or expenses. 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, 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 of its insurance products. From time to time,
investments are sold, called, or experience a credit loss event, each of which are 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 its 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 the administrative settlements noted in the paragraphs above, all of these items are included in “Other
operating expense” in the Consolidated Statements of Operations for the appropriate year. See additional detail
below in the tables.
116
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
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.
Year Ended December 31, 2022
Life
Health
Annuity
Investment
Corporate
& Other
Adjustments
Consolidated
Revenue:
Premium................................................... $ 3,023,296
$1,279,412
$
1
$
— $
— $
Net investment income ..........................
Other income...........................................
—
—
—
—
Total revenue .....................................
3,023,296
1,279,412
—
—
1
987,499
—
987,499
—
1,246
1,246
Expenses:
Policy obligations....................................
2,045,730
791,809
27,846
71
Required interest on reserves ..............
(771,914)
(109,789)
(38,090)
919,793
Required interest on DAC .....................
229,957
30,695
191
(260,843)
Amortization of acquisition costs..........
494,431
128,170
1,806
Commissions, premium taxes, and
non-deferred acquisition costs .............
Insurance administrative expense(1) ....
Parent expense.......................................
Stock-based compensation expense ..
Interest expense .....................................
256,546
117,815
—
—
—
—
—
—
—
—
22
—
—
—
—
—
—
—
—
—
299,341
11,156
35,650
—
—
—
—
—
90,395
—
—
—
—
—
—
—
—
—
—
8,175
(368)
(2,3)
(3)
—
—
7,807
(7,807)
$ 4,302,709
987,499
1,246
5,291,454
2,865,456
—
—
624,407
374,383
307,516
10,788
35,650
90,395
4,308,595
982,859
7,807
Total expenses ..................................
2,254,750
958,700
(8,225)
749,416
346,147
Subtotal .......................................................
768,546
320,712
8,226
238,083
(344,901)
Non-operating items...............................
—
—
—
—
—
7,807
(2,3)
Measure of segment profitability
(pretax) ............................................. $ 768,546
$ 320,712
$ 8,226
$ 238,083
$ (344,901) $
)
(
—
990,666
Realized gain (loss)—investments ..........................................................................................................................................................
Legal proceedings......................................................................................................................................................................................
Non-operating expenses...........................................................................................................................................................................
(76,548)
(2,496)
(5,311)
Income before income taxes per Consolidated Statements of Operations ............................................................................
$
906,311
(1) Administrative expense is not allocated to insurance segments.
(2) Legal proceedings.
(3) Non-operating expenses.
117
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Life
Health
Annuity
Investment
Corporate
& Other
Adjustments
Consolidated
Year Ended December 31, 2021
—
—
—
—
$ 4,099,887
952,447
1,216
5,053,550
1,325
(2)
2,859,616
Revenue:
Premium ...................................................... $2,898,210
$1,201,676
$
1
$
— $
— $
Net investment income .............................
Other income ..............................................
—
—
—
—
Total revenue ........................................
2,898,210
1,201,676
—
—
1
952,447
—
952,447
—
1,216
1,216
Expenses:
Policy obligations .......................................
2,070,485
758,745
29,061
—
Required interest on reserves..................
(735,282)
(102,574)
(39,966)
877,822
Required interest on DAC ........................
218,575
28,556
258
(247,389)
Amortization of acquisition costs.............
486,724
115,194
1,920
Commissions, premium taxes, and non-
deferred acquisition costs.........................
Insurance administrative expense(1) .......
Parent expense ..........................................
Stock-based compensation expense......
Interest expense ........................................
234,033
97,453
—
—
—
—
—
—
—
—
24
—
—
—
—
—
—
—
—
—
83,486
—
—
—
—
—
—
—
—
—
271,631
10,398
9,553
30,272
—
175
—
—
(3,4)
(4)
Total expenses......................................
2,274,535
897,374
(8,703)
713,919
311,456
11,898
Subtotal...........................................................
623,675
304,302
8,704
238,528
(310,240)
(11,898)
—
—
603,838
331,510
282,029
9,728
30,272
83,486
4,200,479
853,071
Non-operating items ..................................
—
—
—
—
—
11,898
(2,3,4)
11,898
Measure of segment profitability
(pretax) ................................................. $ 623,675
$ 304,302
$ 8,704
$ 238,528
$ (310,240) $
)
(
—
864,969
Realized gain (loss)—investments ...........................................................................................................................................................
Realized loss—redemption of debt...........................................................................................................................................................
Administrative settlements .........................................................................................................................................................................
Legal proceedings .......................................................................................................................................................................................
Non-operating expenses ............................................................................................................................................................................
68,633
(9,314)
(1,325)
(8,139)
(2,434)
Income before income taxes per Consolidated Statements of Operations ..............................................................................
$
912,390
(1) Administrative expense is not allocated to insurance segments.
(2) Administrative settlements.
(3) Legal proceedings.
(4) Non-operating expenses.
118
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Year Ended December 31, 2020
Life
Health
Annuity
Investment
Corporate
& Other
Adjustment
s
Revenue:
Premium ...................................................... $2,672,804
$1,141,097
$
Net investment income .............................
Other income ..............................................
—
—
—
—
Total revenue ......................................... 2,672,804
1,141,097
4
—
—
4
$
— $
— $
927,062
—
927,062
—
1,325
1,325
Expenses:
Policy obligations ........................................ 1,809,373
733,481
30,030
—
Required interest on reserves...................
(698,112)
(93,475)
(41,413)
833,000
Required interest on DAC .........................
210,152
26,586
328
(237,066)
Amortization of acquisition costs..............
463,586
110,177
2,007
Commissions, premium taxes, and non-
deferred acquisition costs..........................
Insurance administrative expense(1) .......
Parent expense ...........................................
Stock-based compensation expense.......
Interest expense .........................................
212,859
91,959
—
—
—
—
—
—
—
—
23
—
—
—
—
—
—
—
—
—
250,947
9,891
35,892
—
—
—
—
—
86,704
—
Consolidated
$ 3,813,905
927,062
1,325
4,742,292
2,572,884
—
—
575,770
304,841
254,932
10,214
35,892
86,704
3,841,237
901,055
4,308
—
—
—
—
—
—
—
—
—
3,985
323
—
—
4,308
(4,308)
4,308
(2,3)
(3)
(2,3)
Total expenses....................................... 1,997,858
868,728
(9,025)
682,638
296,730
Subtotal............................................................
674,946
272,369
9,029
244,424
(295,405)
Non-operating items ...................................
—
—
—
—
—
Measure of segment profitability
(pretax) ................................................. $ 674,946
$ 272,369
$ 9,029
$ 244,424
$(295,405) $
(
)
—
905,363
Realized gain (loss)—investments ........................................................................................................................................................
Realized loss—redemption of debt........................................................................................................................................................
Legal Proceedings....................................................................................................................................................................................
Non-operating expenses .........................................................................................................................................................................
(3,737)
(634)
(3,275)
(1,033)
Income before income taxes per Consolidated Statements of Operations ...........................................................................
$
896,684
(1) Administrative expense is not allocated to insurance segments.
(2) Legal proceedings.
(3) Non-operating expenses.
119
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Assets for each segment are reported based on a specific identification basis. The insurance segments’ assets
contain DAC. The investment segment includes the investment portfolio, cash, and accrued investment income.
is assigned to the insurance segments at the time of purchase. All other assets are included in the
Goodwill
Corporate & Other category. The tables below reconcile segment assets to total assets as reported in the
consolidated financial statements.
Assets by Segment
At December 31, 2022
Life
Health
Annuity
Investment
Corporate &
Other
Consolidated
Cash and invested assets......... $
Accrued investment income .....
— $
—
— $
—
Deferred acquisition costs.........
4,517,577
Goodwill .......................................
309,609
Other assets................................
—
722,366
172,182
—
— $ 18,300,927
$
— $ 18,300,927
—
9,964
—
259,581
—
—
—
—
—
—
259,581
5,249,907
481,791
1,244,953
1,244,953
Total assets ......................... $ 4,827,186
$
894,548
$
9,964
$ 18,560,508
$ 1,244,953
$ 25,537,159
Life
Health
Annuity
Investment
Corporate &
Other
Consolidated
At December 31, 2021
Cash and invested assets......... $
Accrued investment income .....
— $
—
— $
—
Deferred acquisition costs.........
4,236,401
Goodwill .......................................
309,609
Other assets................................
—
675,871
172,182
—
— $ 22,850,154
$
— $ 22,850,154
—
2,456
—
251,307
—
—
—
—
—
—
251,307
4,914,728
481,791
1,270,068
1,270,068
Total assets ......................... $ 4,546,010
$
848,053
$
2,456
$ 23,101,461
$ 1,270,068
$ 29,768,048
120
GL 2022 FORM 10-K
Globe Life Inc.
Notes to Consolidated Financial Statements
(Dollar amounts in thousands, except per share data)
Liabilities for each segment are reported also on a specific identification basis similar to the assets. The insurance
segments' liabilities contain future policy benefits, unearned and advance premiums, and policy claims and other
benefits payable. Other policyholders' funds are included in Other as well as current and deferred income taxes
payable. Debt represents both short and long-term. The tables below reconcile segment liabilities to total liabilities
as reported in the consolidated financial statements.
Liabilities by Segment
At December 31, 2022
Future policy benefits................. $ 13,320,773
$ 2,447,605
$
953,468
$
— $
— $ 16,721,846
Life
Health
Annuity
Investment
Corporate &
Other
Consolidated
Unearned and advance
premiums.....................................
Policy claims and other
benefits payable .........................
Debt ..............................................
Other.............................................
18,830
41,912
251,506
178,521
—
—
—
—
—
—
—
—
—
—
2,077,055
—
—
—
23,000
1,328,628
60,742
430,027
2,077,055
1,351,628
Total liabilities .................... $ 13,591,109
$ 2,668,038
$
953,468
$ 2,100,055
$ 1,328,628
$ 20,641,298
Life
Health
Annuity
Investment
Corporate &
Other
Consolidated
At December 31, 2021
Future policy benefits................. $ 12,686,851
$ 2,315,507
$ 1,032,369
$
— $
— $ 16,034,727
Unearned and advance
premiums.....................................
Policy claims and other
benefits payable .........................
Debt ..............................................
Other.............................................
19,874
45,598
245,108
167,832
—
—
—
—
—
—
—
—
—
—
2,026,138
—
—
—
—
2,585,965
65,472
412,940
2,026,138
2,585,965
Total liabilities .................... $ 12,951,833
$ 2,528,937
$ 1,032,369
$ 2,026,138
$ 2,585,965
$ 21,125,242
121
GL 2022 FORM 10-K
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures: Globe Life, under the direction of the Chief Executive Officers
and the Executive Vice President and Chief Financial Officer, has established disclosure controls and procedures
that are designed to ensure that information required to be disclosed by Globe Life in the reports that it files or
submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to
ensure that such information is accumulated and communicated to Globe Life's management, including the Chief
Executive Officers and the Executive Vice President and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosures.
As of the end of the fiscal year completed December 31, 2022, an evaluation was performed under the supervision
and with the participation of Globe Life management, including the Chief Executive Officers and the Executive Vice
President and Chief Financial Officer, of the disclosure controls and procedures (as those terms are defined in Rule
13a-15(e) under the Securities Exchange Act of 1934). Based upon their evaluation, the Chief Executive Officers
and the Executive Vice President and Chief Financial Officer have concluded that disclosure controls and
procedures are effective as of the date of this Form 10-K. In compliance with Section 302 of the Sarbanes Oxley Act
of 2002 (18 U.S.C. § 1350), each of these officers executed a Certification included as an exhibit to this Form 10-K.
Management's Annual Report on Internal Control over Financial Reporting: Management
is responsible for
establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under
the Securities Exchange Act of 1934. Management evaluated the design and operating effectiveness of
the
Company's internal control over financial reporting based on the criteria established in Internal Control—Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Based upon their evaluation as of December 31, 2022, the Chief Executive Officers, and the Executive Vice
President and Chief Financial Officer have concluded that Globe Life's internal control over financial reporting is
effective as of the date of this Form 10-K. In compliance with Section 302 of the Sarbanes-Oxley Act of 2002 (18
U.S.C. § 1350), each of these officers executed a Certification included as an exhibit to this Form 10-K.
Changes in Internal Control over Financial Reporting: As of the period ended December 31, 2022, there have not
been any changes in Globe Life Inc.'s internal control over financial reporting or in other factors that could
significantly affect this control over financial reporting subsequent to the date of their evaluation which have
materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
Refer to Deloitte & Touche LLP's,
Company's internal controls over financial reporting.
independent registered public accounting firm, attestation report on the
122
GL 2022 FORM 10-K
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management at Globe Life is responsible for establishing and maintaining adequate internal control over financial
reporting for the Company and for assessing the effectiveness of internal control on an annual basis. As a
framework for assessing internal control over financial reporting, the Company utilizes the criteria for effective
internal control over financial reporting described in Internal Control—Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and
the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable
the
assurance with respect
effectiveness of internal control may vary over time.
to financial statement preparation. Further, because of changes in conditions,
Management evaluated the Company’s internal control over financial reporting, and based on its assessment,
determined that the Company’s internal control over financial reporting was effective as of December 31, 2022. The
Company’s independent registered public accounting firm has issued an attestation report on the Company’s
internal control over financial reporting as stated in their report which is included herein.
/s/ J. Matthew Darden
J. Matthew Darden
Co-Chief Executive Officer
/s/ Frank M. Svoboda
Frank M. Svoboda
Co-Chief Executive Officer
/s/ Thomas P. Kalmbach
Thomas P. Kalmbach
Executive Vice President and Chief Financial Officer
February 22, 2023
123
GL 2022 FORM 10-K
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Globe Life Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Globe Life Inc. and subsidiaries (the “Company”) as
of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022,
based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year
ended December 31, 2022 of the Company and our report dated February 22, 2023, expressed an unqualified
opinion on those financial statements and financial statement schedules.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
February 22, 2023
124
GL 2022 FORM 10-K
There were no items required.
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information required by this item is incorporated by reference from the sections entitled “PROPOSAL NUMBER 1 -
Election of Directors,” “Director Nominee Profiles,” "Director Nominee Skills and Qualifications," “Executive Officers,”
“AUDIT COMMITTEE REPORT,” “Governance Guidelines and Codes of Ethics,” "Committees of the Board of
Directors," “Qualifications of Directors,” “Procedures for Director Nominations by Shareholders,” and “DELINQUENT
SECTION 16(a) REPORTS” in the Proxy Statement for the Annual Meeting of Shareholders to be held April 27,
2023 (the Proxy Statement), which is to be filed with the Securities and Exchange Commission (SEC).
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is incorporated by reference from the sections entitled “EXECUTIVE
COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS,” “COMPENSATION COMMITTEE REPORT,”
“SUMMARY COMPENSATION TABLE,” “2022 GRANTS OF PLAN-BASED AWARDS,” “OUTSTANDING EQUITY
AWARDS AT FISCAL YEAR-END 2022,” “OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR
ENDED DECEMBER 31, 2022,” “PENSION BENEFITS AT DECEMBER 31, 2022,” “POTENTIAL PAYMENTS
UPON TERMINATION OR CHANGE-IN-CONTROL,” "PAY VERSUS PERFORMANCE," "CEO PAY RATIO," “2022
DIRECTOR COMPENSATION,” and “PAYMENTS TO DIRECTORS” in the Proxy Statement, which is to be filed with
the SEC.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
1.
Equity Compensation Plan Information as of December 31, 2022
(a)
(b)
(c)
Number of securities
to be issued
upon exercise of
outstanding options,
warrants, and rights
Weighted-average
exercise price of
outstanding options,
warrants, and rights
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities in
column (a))
6,962,374
$
91.73
3,177,886
Plan Category
Equity compensation plans approved by
security holders...............................................
Equity compensation plans not approved
by security holders..........................................
Total ..................................................................
6,962,374
$
91.73
3,177,886
2.
3.
4.
Security ownership of certain beneficial owners:
Information required by this item is incorporated by reference from the section entitled “PRINCIPAL
SHAREHOLDERS” in the Proxy Statement, which is to be filed with the SEC.
Security ownership of management:
Information required by this item is incorporated by reference from the section entitled “Stock Ownership” in
the Proxy Statement, which is to be filed with the SEC.
Changes in control:
Globe Life knows of no arrangements, including any pledges by any person of its securities, the operation
of which may at a subsequent date result in a change of control.
125
GL 2022 FORM 10-K
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information required by this item is incorporated by reference from the sections entitled “RELATED PARTY
TRANSACTION POLICY AND TRANSACTIONS” and “Director
in the Proxy
Statement, which is to be filed with the SEC.
Independence Determinations”
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required by this Item is incorporated by reference from the section entitled “PRINCIPAL ACCOUNTING
FIRM FEES” and “PRE-APPROVAL POLICY FOR ACCOUNTING FEES” in the Proxy Statement, which is to be
filed with the SEC.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Index of documents filed as a part of this report:
Financial Statements:
Globe Life Inc. and Subsidiaries:
Page of
this report
Report of Independent Registered Public Accounting Firm..............................................................
Consolidated Balance Sheets at December 31, 2022 and 2021.....................................................
Consolidated Statements of Operations for each of the three years in the period ended
December 31, 2022 ................................................................................................................................
Consolidated Statements of Comprehensive Income for each of the three years in the period
ended December 31, 2022 ....................................................................................................................
Consolidated Statements of Shareholders’ Equity for each of the three years in the period
ended December 31, 2022 ....................................................................................................................
Consolidated Statements of Cash Flows for each of the three years in the period ended
December 31, 2022 ................................................................................................................................
Notes to Consolidated Financial Statements......................................................................................
Schedules Supporting Financial Statements for each of the three years in the period ended
December 31, 2022:
II. Condensed Financial Information of Registrant (Parent Company)..............................................
IV. Reinsurance (Consolidated) ...............................................................................................................
Schedules not referred to have been omitted as inapplicable or not required by Regulation S-X.
57
59
60
61
62
63
64
132
136
126
GL 2022 FORM 10-K
EXHIBITS
Exhibit No.
Description
Form
Filing Date
Related
Exhibit
Page of
this Report
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Restated Certificate of Incorporation of Globe Life Inc.
Amended and Restated By-Laws of Globe Life Inc., as
amended February 24, 2021
Trust Indenture dated as of February 1, 1987 between
Torchmark Corporation and Morgan Guaranty Trust
Company of New York, as Trustee
Fourth Supplemental Indenture dated as of September 24,
2012 between Torchmark Corporation and The Bank of
New York Mellon Trust Company, N. A., as Trustee,
supplementing the Indenture dated February 1, 1987
Junior Subordinated Indenture, dated November 2, 2001,
between Torchmark Corporation and The Bank of New York
defining the rights of the 7 3/4% Junior Subordinated
Debentures
Third Supplemental Indenture dated as of November 17,
2017 between Torchmark Corporation and Regions Bank,
as Trustee, supplementing the Junior Subordinated
Indenture dated as of November 2, 2001
Fourth Supplemental Indenture dated as of June 14, 2021
between Globe Life Inc. and Regions Bank, as Trustee,
supplementing the Junior Subordinated Indenture dated as
of November 2, 2001
Senior Indenture, dated as of September 24, 2018,
between Torchmark Corporation and Regions Bank, as
Trustee
First Supplemental Indenture, dated as of September 27,
2018, between Torchmark Corporation and Regions Bank,
as Trustee
Second Supplemental Indenture, dated as of August 21,
2020, between Globe Life Inc. and Regions Bank, as
Trustee
8-K
8-K
August 8, 2019
February 25, 2021
10-K
February 27, 2018
3.2
3.2
4.1
8-K
September 24, 2012
4.2
8-K
November 2, 2001
4.3
8-K
November 17, 2017
4.4
8-K
June 14, 2021
4.2
S-3
September 24, 2018
4.1
8-K
September 27, 2018
4.2
8-K
August 21, 2020
4.2
Third Supplemental Indenture, dated as of May 19, 2022,
between Globe Life Inc. and Regions Bank, as Trustee
8-K
May 19, 2022
4.2
Form of Retirement Life Insurance Benefit Agreement
($1,995,000 face amount limit)*
Form of Retirement Life Insurance Benefit Agreement
($495,000 face amount limit)*
10-K
March 22, 2002
10.Z
10-K
March 22, 2002
10.AA
Torchmark Corporation Supplemental Executive Retirement
Plan*
8-K
January 25, 2007
10.1
Amendment No. 1 to the Torchmark Corporation
Supplemental Executive Retirement Plan*
Amendment No. 2 to the Torchmark Corporation
Supplemental Executive Retirement Plan*
Amendment Three to the Torchmark Corporation
Supplemental Executive Retirement Plan*
Amendment Four to the Torchmark Corporation
Supplemental Executive Retirement Plan*
Amendment Five to the Torchmark Corporation
Supplemental Executive Retirement Plan*
Amendment Six to the Torchmark Corporation
Supplemental Executive Retirement Plan*
10-K
February 29, 2008
10.53
10-K
February 29, 2008
10.54
10-K
February 27, 2009
10.53
10-K
February 27, 2020
10.10
8-K
May 5, 2015
10.1
10-K
March 1, 2019
10.11
10.10
Amendment Seven to the Torchmark Corporation
Supplemental Executive Retirement Plan*
10-Q
November 5, 2020
10.2
127
GL 2022 FORM 10-K
Form
8-K
Filing Date
April 29, 2008
Related
Exhibit
10.1
Page of
this Report
10-K
February 29, 2008
10.58
8-K
January 6, 2009
10.1
10-K
February 28, 2014
10.58
10-K
March 1, 2019
10.17
8-K
8-K
8-K
8-K
May 4, 2011
April 29, 2014
May 4, 2011
May 4, 2011
10.1
10.1
10.4
10.5
10-K
February 27, 2017
10.75
10-K
February 27, 2017
10.76
10-K
February 27, 2017
10.78
Exhibit No.
Description
10.11
10.12
10.13
10.14
10.15
Torchmark Corporation Non-Employee Director
Compensation Plan, as amended and restated*
Form of Restricted Stock Unit Award Notice under
Torchmark Corporation Non-Employee Director
Compensation Plan*
Receivables Purchase Agreement dated as of December
31, 2008 among AILIC Receivables Corporation, American
Income Life Insurance Company and TMK Re, Ltd.
Amendment No.1 to Receivables Purchase Agreement
dated as of December 31, 2008 among AILIC Receivables
Corporation, American Income Life Insurance Company,
and TMK Re, Ltd.
Amendment No.2 to Receivables Purchase Agreement
dated as of December 31, 2008 among AILIC Receivables
Corporation, American Income Life Insurance Company,
and TMK Re, Ltd.
10.16
Torchmark Corporation 2011 Incentive Plan*
First Amendment to Torchmark Corporation 2011 Incentive
Plan*
Form of Ten year Stock Option under Torchmark
Corporation 2011 Incentive Plan*
Form of Seven year Stock Option under Torchmark
Corporation 2011 Incentive Plan*
Form of Seven Year Stock Option Grant Agreement under
Torchmark Corporation 2011 Incentive Plan, as amended
with Non-Compete, Non-Solicit and Confidentiality
Provisions*
Form of Ten Year Stock Option Grant Agreement under
Torchmark Corporation 2011 Incentive Plan, as amended
with Non-Compete, Non-Solicit and Confidentiality
Provisions*
Form of Seven Year Stock Option Grant Agreement
(Special) under Torchmark Corporation 2011 Incentive Plan,
as amended with Non-Compete, Non-Solicit and
Confidentiality Provisions*
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
Torchmark Corporation Amended 2011 Non-Employee
Director Compensation Plan, effective January, 2017*
10-K
February 27, 2017
10.55
Form of Stock Option under Torchmark Corporation 2011
Non-Employee Director Compensation Plan*
10-K
February 28, 2011
10.57
Form of Restricted Stock Unit Award Notice under
Torchmark Corporation 2011 Non-Employee Director
Compensation Plan*
10-K
February 28, 2011
10.59
10.26
Torchmark Corporation 2018 Incentive Plan*
10.27
10.28
10.29
10.30
10.31
10.32
10.33
First Amendment to Torchmark Corporation 2018 Incentive
Plan*
Amended Globe Life Inc. Non-Employee Director
Compensation Plan*
Form of Performance Share Award under Torchmark
Corporation 2018 Incentive Plan*
Form of Performance Share Award under Globe Life Inc.
2018 Incentive Plan*
Form of Performance Share Award under Globe Life Inc.
2018 Incentive Plan (2021)*
Form of Performance Share Award under Globe Life Inc.
2018 Incentive Plan (2022)*
Form of Seven Year Stock Option under Globe Life Inc.
2018 Incentive Plan*
8-K
10-K
May 2, 2018
10.1
February 27, 2020
10.31
10-Q
November 4, 2021
10.1
8-K
May 2, 2018
10.3
10-K
February 27, 2020
10.34
10-K
February 25, 2021
10.56
10-K
February 23, 2022
10.33
10-K
February 27, 2020
10.36
128
GL 2022 FORM 10-K
Exhibit No.
10.34
Description
Form of Seven Year Stock Option under Torchmark
Corporation 2018 Incentive Plan with Non-Compete, Non-
Solicit and Confidentiality Provisions*
Form
8-K
Filing Date
May 2, 2018
Related
Exhibit
10.5
Page of
this Report
10.35
10.36
10.37
10.38
10.39
10.40
10.41
10.42
10.43
10.44
10.45
10.46
10.47
10.48
10.49
10.50
10.51
10.52
21
23
24
Form of Seven Year Stock Option under Globe Life Inc.
2018 Incentive Plan with Non-Compete, Non-Solicit and
Confidentiality Provisions*
Form of Seven Year Stock Option under Globe Life Inc.
2018 Incentive Plan with Non-Compete, Non-Solicit and
Confidentiality Provisions (Special)*
Form of Ten Year Stock Option under Torchmark
Corporation 2018 Incentive Plan*
Form of Ten Year Stock Option under Torchmark
Corporation 2018 Incentive Plan with Non-Compete, Non-
Solicit and Confidentiality Provisions*
10-K
February 27, 2020
10.38
10-K
February 27, 2020
10.39
8-K
8-K
May 2, 2018
May 2, 2018
10.6
10.7
Form of Stock Option under Globe Life Inc. 2018 Non-
Employee Director Compensation Plan*
10-K
February 27, 2020
10.44
Form of Restricted Stock under Globe Life Inc. 2018 Non-
Employee Director Compensation Plan*
10-K
February 27, 2020
10.45
Form of Restricted Stock Unit Award Notice under Globe
Life Inc. 2018 Non-Employee Director Compensation Plan*
10-K
February 27, 2020
10.46
Torchmark Corporation 2019 Management Incentive Plan
(effective as of January 1, 2019)*
8-K
March 4, 2019
10.1
The Globe Life Inc. Amended and Restated Pension Plan
Generally Effective as of January 1, 2020*
10-Q
November 5, 2020
10.1
Globe Life Inc. Savings and Investment Plan*
Amended and Restated Credit Agreement dated as of
September 30, 2021 among Bank of America, N.A., the
Lenders party thereto, Globe Life Inc. and TMK RE, LTD.
First Amendment to Amended and Restated Credit
Agreement dated January 10, 2023 among Bank of
America, N.A., the Lenders party thereto, Globe Life Inc.
and TMK RE, LTD.
10-K
8-K
February 27, 2020
10.52
October 1, 2021
10.1
10-K
February 23, 2023
10.46
Form of Performance Share Award Certificate under Globe
Life Inc. 2018 Incentive Plan (2023)*
10-K
February 23, 2023
10.47
Form of Seven Year Stock Option under Globe Life Inc.
2018 Incentive Plan (2023)*
Form of Seven Year Stock Option under Globe Life Inc.
2018 Incentive Plan with Non-Compete, Non-Solicit and
Confidentiality Provisions (2023)*
Form of Seven Year Stock Option under Globe Life Inc.
2018 Incentive Plan with Non-Compete, Non-Solicit and
Confidentiality Provisions (Special) (2023)*
Form of Restricted Stock Unit Award Certificate under
Globe Life Inc. 2018 Incentive Plan*
Form of Restricted Stock Unit Award Certificate under
Globe Life Inc. 2018 Incentive Plan with Non-Compete,
Non-Solicit and Confidentiality Provisions*
10-K
February 23, 2023
10.48
10-K
February 23, 2023
10.49
10-K
February 23, 2023
10.50
10-K
February 23, 2023
10.51
10-K
February 23, 2023
10.52
Subsidiaries of the registrant
Consent of Deloitte & Touche LLP
Powers of Attorney
10-K
10-K
10-K
February 23, 2023
February 23, 2023
February 23, 2023
21
23
24
131
129
GL 2022 FORM 10-K
Exhibit No.
Description
Rule 13a-14(a)/15d-14(a) Certification by J. Matthew
Darden
Rule 13a-14(a)/15d-14(a) Certification by Frank M.
Svoboda
Rule 13a-14(a)/15d-14(a) Certification by Thomas P.
Kalmbach
31.1
31.2
31.3
32.1
Form
10-K
Filing Date
Related
Exhibit
Page of
this Report
February 23, 2023
31.1
10-K
February 23, 2023
31.2
10-K
February 23, 2023
31.3
Section 1350 Certification by J. Matthew Darden, Frank M.
Svoboda, and Thomas P. Kalmbach
10-K
February 23, 2023
32.1
101.INS
XBRL Instance Document- the instance document does not
appear in the Interactive Data file because the XBRL tags
are embedded within the Inline XBRL document.
10-K
February 23, 2023
101.INS
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
Document.
10-K
10-K
February 23, 2023
101.SCH
February 23, 2023
101.CAL
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase
Document.
10-K
February 23, 2023
101.LAB
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
Document.
10-K
February 23, 2023
101.PRE
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
Document.
10-K
February 23, 2023
101.DEF
104
Cover Page Interactive Data File (formatted as inline XBRL
with applicable taxonomy extension information contained
in Exhibits 101).
10-K
February 23, 2023
104
* Compensatory plan or arrangement.
130
GL 2022 FORM 10-K
Exhibit 21. Subsidiaries of the Registrant: The following table lists subsidiaries of the registrant which meet the
definition of “significant subsidiary” according to Regulation S-X:
Name Under Which Company Does
Business
Globe Life And Accident
Insurance Company
American Income Life
Insurance Company
Liberty National Life
Insurance Company
Family Heritage Life
Insurance Company of America
State of
Incorporation
Nebraska
Indiana
Nebraska
Ohio
Distribution Channel (Division)
Direct to Consumer
American Income Life Division
Liberty National Division
Family Heritage Division
While United American Insurance Company (Nebraska) does not qualify as a significant subsidiary in accordance
with Regulation S-X, management views this subsidiary as significant to our operations.
All other exhibits required by Regulation S-K are listed as to location in the “Index of documents filed as a part of
this report” in this report. Exhibits not referred to have been omitted as inapplicable or not required.
131
GL 2022 FORM 10-K
Globe Life Inc.
(PARENT COMPANY)
SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Condensed Balance Sheets
(Dollar amounts in thousands)
December 31,
2022
2021
Assets:
Investments:
Long-term investments ....................................................................................................................... $
31,651
$
31,384
Short-term investments.......................................................................................................................
Total investments...............................................................................................................................
Cash .........................................................................................................................................................
15,001
46,652
58
—
31,384
20,228
Investment in affiliates ...........................................................................................................................
6,886,870
10,618,826
Due from affiliates ..................................................................................................................................
Taxes receivable from affiliates............................................................................................................
Other assets............................................................................................................................................
131,353
14,161
173,044
170,983
33,229
185,143
Total assets ........................................................................................................................................ $
7,252,138
$ 11,059,793
Liabilities:
Short-term debt....................................................................................................................................... $
449,103
$
629,607
Long-term debt .......................................................................................................................................
1,777,490
1,546,494
Other liabilities ........................................................................................................................................
129,684
240,886
Total liabilities.....................................................................................................................................
2,356,277
2,416,987
Shareholders’ equity:
Preferred stock .......................................................................................................................................
Common stock........................................................................................................................................
Additional paid-in capital .......................................................................................................................
351
105,218
880,172
Accumulated other comprehensive income.......................................................................................
(1,415,714)
Retained earnings ..................................................................................................................................
6,466,220
351
109,218
871,075
2,677,583
6,182,100
Treasury stock ........................................................................................................................................
(1,140,386)
(1,197,521)
Total shareholders’ equity ................................................................................................................
4,895,861
8,642,806
Total liabilities and shareholders’ equity ........................................................................................ $
7,252,138
$ 11,059,793
See Notes to Condensed Financial Statements and accompanying Report of Independent Registered
Public Accounting Firm.
132
GL 2022 FORM 10-K
Globe Life Inc.
(PARENT COMPANY)
SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (continued)
Condensed Statement of Operations
(Dollar amounts in thousands)
Net investment income........................................................................................................ $
Realized gains (losses).......................................................................................................
Total revenue .............................................................................................................
General operating expenses..............................................................................................
Reimbursements from affiliates .........................................................................................
Interest expense...................................................................................................................
Total expenses ..........................................................................................................
Operating income (loss) before income taxes and equity in earnings of affiliates ....
Income tax expense ............................................................................................................
Net operating loss before equity in earnings of affiliates...............................................
Equity in earnings of affiliates, net of tax..........................................................................
Net income ..................................................................................................................
Year Ended December 31,
2022
2021
2020
33,664
$
32,816
$
(9,643)
24,021
(5,682)
27,134
30,199
12,792
42,991
59,307
(51,312)
97,051
105,046
(81,025)
12,426
(68,599)
808,303
739,704
51,378
(57,504)
86,751
80,625
57,679
(68,556)
90,197
79,320
(53,491)
(36,329)
9,682
7,773
(43,809)
(28,556)
788,768
744,959
760,329
731,773
Other comprehensive income (loss):
Attributable to Parent Company .....................................................................................
75,076
58,903
(21,477)
Attributable to affiliates.....................................................................................................
(4,168,373)
(410,564)
1,205,891
Comprehensive income (loss) ................................................................................... $ (3,353,593) $
)
(
393,298
$ 1,916,187
See Notes to Condensed Financial Statements and accompanying Report of Independent Registered
Public Accounting Firm.
133
GL 2022 FORM 10-K
Globe Life Inc.
(PARENT COMPANY)
SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT—(continued)
Condensed Statement of Cash Flows
(Dollar amounts in thousands)
Year Ended December 31,
2022
2021
2020
Net income ......................................................................................................................... $
Equity in earnings of affiliates..........................................................................................
739,704
$
744,959
$
731,773
(808,303)
(788,768)
(760,329)
Cash dividends from subsidiaries...................................................................................
Other, net............................................................................................................................
Cash provided from operations .................................................................................
407,042
26,444
364,887
478,535
58,617
493,343
485,871
21,129
478,444
Cash provided from (used for) investing activities:
Net decrease (increase) in short-term investments..................................................
Investment in subsidiaries.............................................................................................
Other long-term investments ........................................................................................
(15,001)
(10,010)
(2,000)
19,300
(159,924)
(2,500)
(15,899)
(7,875)
—
Loaned money to affiliates............................................................................................
(846,002)
(1,049,932)
(1,008,860)
Repayments from affiliates ...........................................................................................
886,002
1,200,932
782,860
Cash provided from (used for) investing activities ..............................................
12,989
7,876
(249,774)
Cash provided from (used for) financing activities:
Repayment of debt.........................................................................................................
(300,000)
(300,000)
(386,875)
Proceeds from issuance of debt ..................................................................................
Payment for debt issuance costs.................................................................................
Net issuance (repayment) of commercial paper .......................................................
Issuance of stock............................................................................................................
400,000
(5,272)
(46,289)
111,970
325,000
700,000
(7,687)
74,974
69,826
(5,844)
(34,445)
48,093
Acquisitions of treasury stock.......................................................................................
(454,638)
(541,435)
(443,866)
Borrowed money from affiliate .....................................................................................
Repayments to affiliates................................................................................................
Payment of dividends ....................................................................................................
Cash provided from (used for) financing activities ..............................................
22,400
(22,400)
(103,817)
(398,046)
32,000
(32,000)
(103,313)
(482,635)
76,000
(79,500)
(101,462)
(227,899)
Net increase (decrease) in cash .....................................................................................
Cash balance at beginning of period..............................................................................
(20,170)
20,228
18,584
1,644
771
873
Cash balance at end of period ........................................................................................ $
58
$
20,228
$
1,644
See Notes to Condensed Financial Statements and accompanying Report of Independent Registered
Public Accounting Firm.
134
GL 2022 FORM 10-K
Globe Life Inc.
(PARENT COMPANY)
SCHEDULE II. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (continued)
Notes to Condensed Financial Statements
(Dollar amounts in thousands)
Note A—Dividends from Subsidiaries
Cash dividends paid to Globe Life from the subsidiaries were as follows:
Dividends from subsidiaries............................................................................................. $
407,042
$
478,535
$
485,871
Note B—Supplemental Disclosures of Cash Flow Information
The following table summarizes non-cash transactions, which are not reflected on the Condensed Statements of
Cash Flows:
Year Ended December 31,
2022
2021
2020
Year Ended December 31,
2022
2021
2020
Stock-based compensation not involving cash ............................................................ $
35,650
$
30,272
$
35,892
Contribution of property to subsidiary ............................................................................
—
5,004
—
The following table summarizes certain amounts paid (received) during the period:
Interest paid........................................................................................................................ $
Income taxes paid (received) ..........................................................................................
96,903
$
86,206
$
86,504
(11,537)
(11,838)
(12,744)
Year Ended December 31,
2022
2021
2020
Note C—Preferred Stock
As of December 31, 2022, Globe Life had 351 thousand shares of Cumulative Preferred Stock, Series A, issued and
outstanding, of which 280 thousand shares were 6.50% Cumulative Preferred Stock, Series A, and 71 thousand
shares were 7.15% Cumulative Preferred Stock, Series A (collectively, the “Series A Preferred Stock”). All issued
and outstanding shares of Series A Preferred Stock were held by wholly-owned insurance subsidiaries. In the event
of liquidation, the holders of the Series A Preferred Stock at the time outstanding would be entitled to receive a
liquidating distribution out of the assets legally available to stockholders in the amount of $1 thousand per share or
$351 million in the aggregate, plus any accrued and unpaid dividends, before any distribution is made to holders of
Globe Life common stock. Holders of Series A Preferred Stock do not have any voting rights nor have rights to
convert such shares into shares of any other class of Globe Life capital stock.
See accompanying Report of Independent Registered Public Accounting Firm.
135
GL 2022 FORM 10-K
Globe Life Inc.
SCHEDULE IV. REINSURANCE (CONSOLIDATED)
(Dollar Amounts in thousands)
Gross
Amount
Ceded
to Other
Companies(1)
Assumed
from Other
Companies
Net
Amount
Percentage
of Amount
Assumed
to Net
For the Year Ended December 31, 2022
Life insurance in force .................................. $ 222,098,389
Premiums(2):
$
662,569
$
2,172,728
$ 223,608,548
Life insurance.............................................. $
Health insurance.........................................
2,995,104
$
4,361
$
19,009
$
3,009,752
1,235,493
3,091
47,010
1,279,412
Total premium ........................................ $
4,230,597
$
7,452
$
66,019
$
4,289,164
For the Year Ended December 31, 2021
Life insurance in force .................................. $ 217,350,660
Premiums(2):
$
648,766
$
2,371,163
$ 219,073,057
Life insurance.............................................. $
Health insurance.........................................
2,868,759
$
4,286
$
19,502
$
2,883,975
1,192,567
3,312
12,421
1,201,676
Total premium ........................................ $
4,061,326
$
7,598
$
31,923
$
4,085,651
For the Year Ended December 31, 2020
Life insurance in force .................................. $ 203,894,460
Premiums(2):
$
669,063
$
2,551,770
$ 205,777,167
Life insurance.............................................. $
Health insurance.........................................
2,642,555
$
4,241
$
19,775
$
2,658,089
1,144,470
3,373
—
1,141,097
Total premium ........................................ $
3,787,025
$
7,614
$
19,775
$
3,799,186
(1) No amounts have been netted against ceded premium.
(2) Excludes policy charges of $13.5 million, $14.2 million, and $14.7 million in each of the years 2022, 2021, and 2020, respectively.
1.0
0.6
3.7
1.5
1.1
0.7
1.0
0.8
1.2
0.7
—
0.5
See accompanying Report of Independent Registered Public Accounting Firm.
136
GL 2022 FORM 10-K
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
By:
By:
By:
By:
Globe Life Inc.
/s/
J. MATTHEW DARDEN
J. Matthew Darden
Co-Chief Executive Officer
/s/ FRANK M. SVOBODA
Frank M. Svoboda
Co-Chief Executive Officer
/s/ THOMAS P. KALMBACH
Thomas P. Kalmbach
Executive Vice President and Chief Financial Officer
/s/ M. SHANE HENRIE
M. Shane Henrie
Corporate Senior Vice President and Chief Accounting Officer
Date: February 22, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
By:
By:
By:
By:
By:
By:
/s/ LINDA L. ADDISON *
Linda L. Addison
Director
/s/ CHERYL D. ALSTON *
Cheryl D. Alston
Director
/s/ JAMES P. BRANNEN *
James P. Brannen
Director
Alice S. Cho
Director
/s/ LARRY M. HUTCHISON *
Larry M. Hutchison
Director
/s/ STEVEN P. JOHNSON *
Steven P. Johnson
Director
David A. Rodriguez
Director
Date: February 22, 2023
*By:
/s/ THOMAS P. KALMBACH
Thomas P. Kalmbach
Attorney-in-fact
By:
By:
By:
By:
By:
By:
By:
/s/ MARILYN A. ALEXANDER *
Marilyn A. Alexander
Director
/s/ MARK A. BLINN *
Mark A. Blinn
Director
/s/ JANE BUCHAN *
Jane Buchan
Director
/s/ GARY L. COLEMAN *
Gary L. Coleman
Director
/s/ ROBERT W. INGRAM *
Robert W. Ingram
Director
/s/ DARREN M. REBELEZ *
Darren M. Rebelez
Director
/s/ MARY E. THIGPEN *
Mary E. Thigpen
Director
137
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3700 S Stonebridge Dr
3700 S Stonebridge Dr
McKinney, Texas 75070
McKinney, Texas 75070
GlobeLifeInsurance.com
GlobeLifeInsurance.com