Globe Life (GL) 23 Jul 202020 Q2 Earnings call transcript

Good day and welcome to the Globe Life Inc.

Second Quarter 2020 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Majors, Executive Vice President of Administration and Investor Relations. Please go ahead, sir.

you. Thank everyone. morning, Good

today Officers; Coleman Financial Frank our Brian call our Officer; Larry Co-Chief Mitchell, Counsel. Executive Svoboda, General are the and Gary Hutchison, and Joining our Chief

your of yesterday. questions are Some for purposes the refer guidance Accordingly, general or release second comments answers quarter provided may forward-looking earnings statements our contain that please to only. to we issued

to release these also our non-GAAP measures. Gary reconciliations earnings comments terms our of discussion may to contain measures. turn and of now for Some see website over I'll the GAAP and Please call Coleman.

everyone. Thank you, transition Mike. like by Good very the workplace. morning, saying are that company's pleased remote with I'd we start a primarily to to

well pandemic the and share continues smoothly. $X.XX the $XX.XX. to the are $X.XX environment a X% year year ago. GAAP to In per was $XXX COVID-XX running adapted ago. or operations and compared share and decrease on was book or On quarter, $XXX $XXX While million share share, reported very million from X.X% was the $X.XX net to per income per per second million per value our current of challenges, agents a present equity employees a for share was quarter return a basis, Net operating income have or

see and collections onset crisis. revenue, ago. respect million, was the to premium $XXX per year gains persistency of the X% Excluding increased value to margin premium premium on to grew share equity and insurance been pleased down we've revenue book With fixed million and and since XX% operations, the losses In was X% a from unrealized improve maturities, return to XX.X% very on underwriting life $XX.XX. $XXX life the

related in margin COVID-XX. claims to is approximately However, incurred the due million to of $XX primarily decline

margin of year, decline due life the the grow to impact to X% revenue COVID-XX. life X%, X% to premium expect underwriting approximately to we For primarily and

$XX underwriting and million million. the in insurance we X% grew million $XX anticipate up year. midpoint was Health revenue our of approximately premium health full for margin COVID-XX $XXX a As guidance, to claims to X%

For X% and to from underwriting $XX quarter, ago. XX%. up the grow to Administrative grow year, revenue for to million margin were a expenses expect X% premium we approximately the health health year X%

full expect the grow quarter we approximately comments on I'll Larry to his call For turn X%. over year, the marketing expenses administrative operations. for second the now to

will we heightened Thank to you, to pandemic. comments the with agree Gary. I in continued clearly million, market see $XXX for Income have our a down in to the and current appointments each consumers life but were American Life, insurance. the At Gary's premiums agency virtual were company's adapt life Net to need $XX has regarding million, the sales million. $XX recruiting, response and distribution sales margin up I down XX%. life X% of life The channel. awareness trends X% underwriting now discuss was to

time increased have reflected to rise While were are resulting to policies in second quarter, is life not and obtaining the The increase down These activity. agent to the the issued, certain sales for quarter limitations we around seen in designed from in procedures. sales protect be an in company from work in data for the underwriting our activity anti-selection. process, accommodate sales changes virtual changes to due

agent was full XX% second time of count end X,XXX, the we agent improve. second count up guidance the will Average quarter. in As is X,XXX. sales the call. through I'll was at provide to work the processing for year's quarter quarter and first from later quarter XX% the the year-ago This continue incorporated up producing the in from this, our Producing

Liberty sales by agent million our quarter. Net $XX and down Liberty was XX% National, of up the year-ago X,XXX. net producing unemployment life life $XX levels. recruiting. We year-ago X,XXX, for X% from agent quarter were At quarter second XX% to count the The X% margin Overall, health premiums pool sales to was due the sales candidates up million. were first continue $X count significant XX% encouraged from high-quality from million, ended average X% producing declined quarter. quarter up down underwriting to see $XX The we're and National million to current the and at to the a at and virtual

is individual in business challenging. While we the sales, have more seen an increase worksite

While the it improved year continue said, than rest expect is see worksite to being sales sales the the more virtual That to to throughout stronger the agent of the adapt anticipated, business we of environment. activity. to persistency difficult is generate as

abundant momentum, XX% to Family The sales were quarter from the X,XXX. the gain The down from the first $XX At year-ago $XX was agent up increased was $XX producing the premiums we the million from currently health X% and to Heritage, recruiting underwriting health increased million. we will of count producing count X% margin million. available. at quarter benefit and opportunities average up Net end X,XXX, quarter. X% quarter second to agent health the for As XX%

on to to consumers to working million. of were life the in were Net million, from for $XX the need in for division will largest We've life our have discuss but Net to that crisis to health with decline can-do engage direct $XX second pandemic. consumer In compared As provide for premiums over to quarter. I very the often American years up XX% underwriting across year-ago a built highlights sales million, The agency, allow and times previous Frank our his us quarter underwriting This and protection the quarter several the X% XX% X% Life, the to declined protection, basic positioned ever agency comments. will quarter. true $XXX have all indicated margin premiums United life general direct further consumer. said year-ago were were $XXX million. is positive sales on capitalize sales Application the at attitude, $XX agents $XX million, online increased capabilities much recruit and have proven confident and consumer families. XX% this continue up margins I'm life call, the up needed they sell. down owners has Globe encourage channels. opportunity phone the to sales million, insurance activity and XX% health that to while to increased At last to and us with direct we the to on margin

more have generally the heavily predict competitive are this end the sales individual year. While and weighted over difficult the improving to is supplement marketplace. volatile results of always are we towards several in Medicare sales seen even it Medicare weeks, last Group

on sales knowledge it's in the environment, While our still now projections I we uncertain difficult activity trends to current are full-year and business provide of this seeing. predict will based

an for an XX% for Income, year XXXX We the of increase expected end the sales follows. an life as sales X,XXX; be Liberty American increase expect XX% a X%; count consumer, follows. expected to health are flat to the be decrease to XXXX XXXX XX%. an year to National, as be increase American full direct of X% Net of an decrease a American following to Medicare decrease at agency producing decrease ranges. Liberty of decrease to Life, to Liberty Net agent to a of Family now are Gary. increase of of increase in to Income a X,XXX to full to National, National, will supplement, X%; of X,XXX. the for I X,XXX X,XXX; a to call XX% of X%; United individual turn X,XXX back of X% each to X%; of the Heritage, Family to Heritage, flat.

Thanks, over On income policy and reflecting per program, the interest we year-ago quarter. a investment which a impact our less share Larry. debt, define basis, declined decrease as net $XX liabilities income, excess was million, investment the of X% Excess income share on investment repurchase X%. required net

expect we about investment be per year, excess flat share and full to X% the down income a dollars in on be basis. For

regarding second X.XX%, industrial rating municipal an and in in at the primarily life grade the average A-minus maturities, average invested an million Now, average of invested XX yield, investment $XXX fixed quarter, years. investment of financial, yield of we We sectors. and an in

yield quarter in the points the was portfolio, X.XX%, from second down second yield the For XXXX. quarter entire the of XX basis

portfolio June including X.XX%. approximately fixed $XX.X amortized As at $XX.X cost. maturities XX, yield was billion, billion Invested assets are of the of

rating For fixed XX. billion. a are ago. year to we portfolio. below is March at the Overall, in Bonds fixed A-minus and same investment the $XXX average BBB-plus, investment have unrealized grade bonds X.X% of gains fixed XX% of at below BBB million is of as maturity maturities, maturities million March of X.X% the fixed grade to bonds are $XX.X maturity at the portfolio right portfolio net compared And an $X with rated billion the percentage total investment grade $XXX are to XX. compared And

to While this line relative overall with the ratio our high in is peers. is market, bond it

we ability to a sector. in interest multiple hold an in markets. to However, ability or the in our particularly asset-backed key risk we best part the and We mortgages, and invest in exposure true utilizing CLOs investment survive securities. fluctuations criteria the equities, the cycles. other higher residential securities to rates little have is acquire large BBB provide such returns that our assets of This long, is that as unique believe risk-adjusted maturity, to or issuer process equity regardless Because of no we securities capital-adjusted due derivatives, to energy

energy depressed less is subsectors to issuers. issuers well portfolio vulnerable It prices. are Our diversified heavily commodity and towards is across that weighted

sector Less As energy our sectors. than refiner was fair energy call, our during are in in $XXX discussed driller service, the increased auto midstream holdings and and is unchanged XX% composition XX% second we and exploration essentially our the the value of XX% of The approximately by last the portfolio million. in approximately of production. quarter, on portfolio energy our is and

this comfortable our no are to holdings. in sector, our While holdings we energy we current have intent increase with

for an investment interest rates continue of lower around we're At half the of guidance, pressure to assuming year. second our midpoint average X.X% X.X% the income. money new to rate of the Finally,

translate an X.XX% for rate XXXX. compared full that year, the would X.XX% For new money to average to of

GAAP non-interest going we rules under environment. see higher interest products. rates the can interest impact current sheets sell rate like balance Extended accounting the Globe thrive protection interest forward, Life lower statutory or While we a prolonged would will sensitive since rates in not low to

money in limited average new the somewhat lower for an years. our of less than our we investment X% per is investment impact income turnover as have of on rates next expect five the to portfolio Fortunately, year

I'll Frank Now, the turn liquidity. and his for over capital call to comments on

Thanks, Gary.

being of discussing I million. million year-to-date less quarter. of amount of term the This the repurchase excess paper than loan liquidity our First, flows available is with spend the issued by million and million company. a position at million members liquid position, to due second few did The cash in second approximately than to the the enhance $XXX higher our the parent through liquidity to in $XXX parent $XXX June, repurchases parent taken the to not quarter the ended minutes of any want shares capital of assets increase share $XXX receipt commercial available company The borrowings line. bank and normal $XXX

to remainder second cash remainder roughly the on the this to of amount be to the debt to parent assets, operations. $XXX anticipate a to the our remainder levels of dividend the the parent company's have still these cash dividend common million. the our company available in cash we but during Globe The in excess capital shareholders. its remainder of more flow the we the the flow during necessary XXXX. addition rate from results paid of the liquid received the insurance available dividends Thus, moments, of I'll the few quarter, year parent liquid at In primarily Keeping $XXX interest we support believe by year. little for the just Life $XX define discuss excess available company's we paid excess the the more assets to year, flow, this $XXX including its level million of as less current million subsidiaries for parent to it, of and is will within around the targeted from generate parent this at than expect detail a million range in end million company $XXX of assets additional

the access necessary ready funding through commercial ability if issue parent commercial the paper and the the the public debt markets, flexibilities that still the ability the market, issue Given new debt long-term to commercial in government's paper remainder paper has we substantial of have year. to the facility over to

expected cash keenly higher policy been premium excess and be We subsidiaries. see operations. ability to operating to our liquidity, insurance insurance operations we will over general, payments parent our of we regarding strong. our year, at continued any health be In within obligations. anticipate the to largely have all fund not to remaining to Now and offset million remainder insurance do the current higher of very issues the generate XXXX higher insurance to respect are environment, on collections claim liquidity payments. over expect company levels $XXX our while dividends of by payable lower with focused the invested liquidity capital we COVID-related In enough flows acquire claim future during capital and With assets claims life flows these do fund to and their cash course the

RBC near Life RBC downgrades our a of in range. previous XXX%. December future end along the expect the At calls, Taking to needs. on level respect that the consolidated $XXX losses RBC $XXX to million to of to excess range provide of the have million subsidiaries to the occurred available XXX%, declined slightly quarter, XXX%. be at low XXX%. ratio $XXX with and capital, required account through $XX parent, RBC million approximately assets that our second of estimate This XXX% with the ratio of XXX%, this has insurance approximately amount our the of of an the we high of Now assets consolidated consolidated fund action discussed credit capital, have capital, XX, into ratio point nearly available ratio target was million At end of to at Globe company our as liquid targets over capital XXXX, we the

our last to increase other lower the realized or due investment on losses, acquired statutory same capital losses factors, related XXXX defaults and to before approximately credit parent investment discussed be income downgrades investments. the particular that of needs At of income statutory we Thus, time, this into XXXX. our our any additional capital. we credit income losses dictated be eventual our primary are or views the that such will we as The the drivers and strength and needs we As on the account lower call, of the COVID-XX anticipate To statutory portfolio gains largely future impact from a and on consensus application holdings views several the downgrades timing in that of investment the items, of the take bottoms-up economic impact capital recession. by of recovery have portfolio. amount these on scenarios estimate will modeled potential believe the

an same in a We have and RBC years, were $XXX million XXXX $XXX as requiring should the additional RBC and and XXXX ratios by range rates capital experience reduced to maintain levels two impact points the XXXX, well also these to published over various XXX% as the to analyzed RBC year-end XXXX. evaluated transition one to from ratio. our ratios in Moody's XX of and as scenarios, transition rates experienced we our we as estimate would of to XXXX default XX Under from or be million default

underwriting our by our Life's fixed negatively the capital potential adequate with and needs cash basic X assumes of $XXX in call amount It company. range do equity experienced of case are below Globe range the to total protection after-tax and quarter, Furthermore, any of in impacted losses, on In or reserves statutory rates to interest well at our the than interest statutory maturity base statutory current on aggregate, portfolio. given $XX $X.X reserves, million our credit our indicated given reserves the Through to plus our last note low The liquidity the the is Our downgrades, important over have X. not million NAIC of impact have losses available strong billion in mostly markets, products. under the category fixed rates more testing scenarios. the flow downgrades we second NAIC not is from consistent parent margin the million that products. all are $XX is

of to parent share insurance versus restart being during program repurchase at needed level available in capital we companies, anticipate our be our the levels the liquidity provide with the with beginning At position that our may potential third impact the at to at our the results. I'd Given company a this few expected those consistent a relating year. on quarter like to the of COVID-XX time, second quarter comments of

American policy COVID-XX Income direct margins As declined due to were underwriting the higher These to during both noted at by obligations. quarter. life declines and primarily consumer Larry,

relating grown an additional policy the underwriting up premium distribution, their an underwriting quarter X%. to consumer $XX estimate total to obligations and would COVID losses, over additional from the deaths been the for and underwriting incurred consumer additional premium, and grown have would million. the to losses for total, million absent in the estimated American X.X% would Income's additional incurred quarter During losses, these incurred year-ago been Income would operations, $XX the Absent these have of $X quarter. COVID, we direct have quarter, by total have In life premium been that life our due by the XX.X% XX.X% Absent margin of approximately that have of claims XX.X% million. the estimate direct our COVID American In our quarter for second we X%. margin would were margin to

the midpoint $X.XX. associated The with of debt. lower of of a December primarily $X.XX to per for the previous $X.XX Finally, The share short-term projecting income with ended over increase we be for XXXX, $.XX reflects net guidance will earnings our year respect in $XXXX. increase $X.XX this range midpoint costs guidance XX, $X.XX to are operating our to the of at attributable guidance is our midpoint borrowing the

midpoint As now premiums grow X%, our our previously noted, we Gary by by both and expect total previous at premiums our health our in indicated grow around life XXXX to the guidance, in than to of guidance. X% higher

Our become on levels. of the deaths. on geographies midpoint of total in infections, anticipated last On the of higher premium our some of COVID-XX data assumed indicated X% XXXX more granular and claims was based approximately assumption regarding be an projected Since to That approximately income assessments our XX,XXX impacted. death than has call, deaths and infection ages we around early the first quarter, related additional to million guidance available. is $XX rates, various

projection by In available better that addition, are models project deaths states.

percentage We additional models, these have the reduce life At XX.X% midpoint the guidance, rates, that be our million health account a with XXXX. to be percentage as higher XXXX claims, of as full-year to estimate. life last call. US COVID-related XXXX. approximately should XX,XXX premium will of to approximately approximately to increase applied XX.X% XX.X%. percentage experience for in per obligations, million our We for mix of beginning utilized The deaths. to we for expected expect obligations, are the by health call state from the to the we than Larry. back due XXXX our full-year of along date, approximately health policyholders policy our margin life to and estimate by my for approximately the business $X the similar share ages after-tax turn expected higher them we our that, claims our the claims at on expected claims COVID-related basis. our would will attained now estimate every at lower the and our estimate are the margin refine $X lower-than-expected into earnings I to incur XXXX These XXXX, million of what premium a percentage respect $XX on $X.XX With approximately life we of utilization our of the be the comments. midpoint, margin for benefits we now to to underwriting Those our down life of supplemental an Absent will now COVID year. underwriting life Taking underwriting the

you, Frank. Thank

will comments, our call are the questions. As those up open now we for

[Operator Instructions].

our question first Erik of Bass Research. Autonomous take We from will

Hi, from detail of of bit bit if detail, from course comments could health related lower how COVID just know results activity. but gave of you I you was impact claims year? give the you. could continue half normal much I assuming a the thank a the provide direct more little correct And benefit from hoping see and kind quarter. that some you much the on am you through more you're on you utilization how did this your lower saw levels second I

$XXX,XXX about impact positive the experienced we in second Erik, a quarter.

as, positive grow year. will we're end the to of the the in that closer be Now toward million remainder $X year, of to the expecting

Excluding fact obligations up the but policy and slightly, the $XXX,XXX had the quarter, bit a by offset or been non-deferred that's have second lower we so little commissions that amortization. for our would still

impact in see We'll again, So, of low this more it remainder had we go the quarter. year. pretty as impact the through of the

an And it. that's Got benefit. million $X net

So, offsetting with any utilization. the better higher claims

Right.

did the to And the in for make level levels you expected say buyback, the just normal when year, the be would more XQ Okay, expect the in mean overall, quarter coming that at thank then, of I'm to same of that and does the you the rate anticipated sort year to and you. resuming had year the realizing thinking you XQ. have it you to of beginning XXXX run it into correctly, sure would of first get you that a on that

to over amount. with normally be have We where, to That's we would under quarter no the that quarter thought we'd over beginning course Yeah, mandate that then remember repurchases any following at occur time And Erik. ratable somewhat And practice, $XX anticipate million levels we'd the would probably spend on of quarter. the specified – per of of in $XXX the we our basis. a starting kind repurchase and per million then, range. our historical year, be

of everything the Or economic of the good, performing to is remainder So, end the of if deteriorate us over of that gives basically really have somewhere as if to the the looks think, that in – would course will, that$XXX million we it what if repurchases the XXXX. we consensus the pretty close be by ultimately, and to cash the slow is for $XXX of level million year. by down end would indicate had total were year economy thought, it, year, should flow flexibility you the of not we excess conditions do the to

Given that be quarter, already level. out everything the could at that see, to million we've $XXX spent first in – we not works that we'd million if exceed that $XXX

Got it. you much. Thank very

you. Thank

We of will take our next question from KBW. Ryan Krueger

Good thanks. Hi, morning.

of short-term capital how what debt permanent rates long-term what point your guess position? and would short-term of this low spread – would I is point terms more In you point, some you for debt, and consider at debt issuing given the at a retain are at

Ryan. Hi, have of markets really Yeah. significantly are months. over capital couple And good last debt question. right a the now. That's very come the favorable And obviously, rates down

anticipate soon. take loan out at the we of that in And to few bankers. continue we conversations then, that that of will the $XXX senior a several issuing here long-term we least assuming quarter. favorable, our in quite Or some would been third to that million conditions term in the with earlier the proceeds And refinance be did have We relatively considering market debt do year. using be

you would level? that grow this Thanks. to it. to I you're expect a standpoint at level any given then, direct if Got the positive consumer continues from experiencing the this on scale business, point, of guess, And at growth

I'd – it this answer is question the think I way.

are For to our direct costs business, mostly consumer fixed. marketing

offset sales provide those mortality generally greater the are could help which For that higher planned additional costs. than margin,

it. you. Got Thank

Thank you.

John We Sandler. of will from take our Piper next Barnidge question

during job quarter? of the a percent went through What hi. Yeah, insureds loss

available of to better percentage What insureds. know I during don't our is that our what quarter. actually was expected persistency think that we we information have say than the

to was life thing the of kind said, the to policyholders. which, importance were their in the of persistency, I reiterate we've accelerating would seen fewer our our also view minds, claims that Larry And our it is saw of we add actually of greater situation and the premiums. insurance kind – where as policyholders But that other

seeing higher ahead we've than premiums, bit seen little policies. people acceleration a actually of rather on time paying their of So, and lapses, of

challenges follow-up, of remind my business now, you given then And percent your the what in-force Texas COVID. life me with Okay. that can state? is seen being right in in

I I in don't me. have front that of think

you We on have with to get that one. back

All right. Great. Thanks.

you. Thank

Tom Gallagher of question Evercore. take will We our next from

on How but you during consumer adverse –admittedly, slowed against in development Thanks. more direct sales the protecting pretty sales business I selling the to of a deliberately. they're life potential market, are other affluent dramatically pandemic? know they've to companies the number

changes Or I majority whether of in more policies? of is looked at been older curious that And looks COVID-related you mortality? how near-term just segment. sales you're the know the impacts related were felt Have any about recent a that. have been you thinking I to cause it there's the of that. So, mentioned question underwriting. It some to the then, just guess, like

or we've monitor sales the geography. to that for the the profile, profile. is marketing And our includes on could and observe in in changes of insurance material date. to put applications This other ability limitations point, negative This have monitoring At very place we're with the still like in underwriting have we should things incoming comfortable a we change and change amount incoming a profitability. indications applications risk age, not seen the insurance in effect risk of We Larry. the this

spread through The either or policies COVID Tom, issued there's XXXX. been in throughout they're really come claims, have XXXX fairly hadn't as in out prior little far XXXX. issued as XXXX XXXX and not the very issued it from policies And, to are clients evenly that the but years,

Can as you on implemented you. underwriting changes. you've had are And Got underwriting to what the a changed side? what – mentioned you you've bit elaborate

we've insurance consumer, with ages. insurance upper issuing also health additionally, And some the applicants the On those add-on temporarily limited in stopped direct and to upper amount we've the of underlying We've to policies discontinued ages. certain conditions.

that's So, items steps in our we've underwriting process. specific the taken of three

how quantify the COVID And of claims to million received $XX IBNR? you million you versus then, that thanks. much mortality Okay, of adverse quarter can that was in $XX highlighted,

million $XX paid, paid $XX.X to been the million has of that actual of roughly in $XX Out cash. million we've

you. thank Okay,

[Operator you. Thank Instructions].

We Credit from of will take Andrew our next Suisse. question Kligerman

to to Hey, good about direct the morning. ask outlook. consumer first sales I wanted

think I had quarter you're year-over-year. that a to after XX% for guiding to the XX% XX% year you

little So, outlook? growth higher why on not a that sales go bit

third If the think XX% quarter, even If up will channels, different in you were quarter. at sales quarters in be sales basically first fourth increases We look the in across quarter. we're we and channels our we the will and all flat fourth as just think remember, second the we don't be they quarter. were in and second the robust the in third as

it. Got got it. Got it,

guess, I doctor's policyholders And then, to utilization I like up margins might utilization, pick lower your pretty with the and shouldn't may have stable think couldn't utilization were and to seems that but filing quarter, gets year-over-year, the second guidance the office, the imply Okay. it just whereas, they – given health even the the that conceptually, claims. probably had issues get looked

go health improve as the might you the we underwriting in balance of why the think through should So, margin that year?

quarter requested that haven't sup increases. get Offsetting higher full Well, continued increasing the business, the the clients least We year we've from there. at rate of noted in and seen the is, COVID year, we first benefit this XXXX, the of gotten we'll we last through have benefit claims rate the claims yet increases. and Med

from the see obligations won't policy increase that's of us still full COVID benefit, We'll the COVID. on bit little that slight the benefit. payroll business. the combination And offsetting the of Med caused a it sup in has getting but we're benefits an have those the a two things So, be to

$XXX is I guidance quarter The see. million midpoint just maybe you've I with your to looked $XXX really in narrowed of the slightly to The great. band. higher. then regard million, see. And

so Just you What's so much different that in much the guidance? narrow many stability so places. on band giving confidence the to

modeling just we a related where Yeah, a just impact We're to about better really of where do have of we that able be. – decent feel turn claims might we of sense the better for out COVID the us. do will to much where job

or so range $X.XX kind call, on range, typically this historically. the So, do this a time, as of particular about we kind think of we have

of money amount and around But what this it in some COVID sales have time of the GAAP we the new claims. have life of year, on of because We does point the greater expanding investments typically ultimate between than impact. are the uncertainty an just on then overall don't our that now have not significant the earnings, as impact of rates much at

is variable time. our claims So, what COVID happened at around this in with really point primary our

in you Got as question. seeing Recruiting we the that quarter? a see you Maybe one recruitment the last forward, the first that What high-quality the are Can in kind mentioned get recruits. throw saw of into of of year? it. increases half the you're going we of back lot thinking just call kind we on

The – Income American in looking the recruiting number There really all that underemployed not development in we'll driving the and really just opportunity. a are unemployed, better three is I another about Year-to-date, virtual is the of think, that agencies. the are recruiting but is a really second up And have of strong underemployed. impetus. what's XX%. It's for recruiting of the people half year,

has in to strengthened make process and virtual and selling people in they developed they presentations. career virtual when people set reach the it's recruiting, more we've recruiting three have agencies appointments because interested can because it positive all appeals flexibility their are the more we been more on a As because that

the of So, the I half year the second just will think have recruiting, quarter. strong second like

so you much. thank Excellent,

Thank Instructions]. you. [Operator

from will Bhullar next We our Morgan. question Jimmy J.P. take of

through had of as on Heritage they went your an you sales sort and the question I improvement second morning. how Liberty see Can about did Income, agency the a you sales Family or talk throughout American the progressed fairly in through good has quarter quarter as were Like, well? at first Hi, quarter? you the channels. stable

We from the to beginning of saw improvement we we not were just for making sales transition a new At worked virtual real through the quarter, agents, all the agents, as quarter. in-person sales.

urban and lead happened more in Of Liberty have National, person. Heritage, there have easiest Income individual the been products necessary sources. non-union or fairly American in using they leads. to areas course, union At that same sources sales lead Their usually presentations the because the been and have quickly. the virtual sell training in The they transition Family don't was

what of second period was the it two little saw was by So, of slower equal to for time XXXX. the submitted quarter, same weeks process. the it last a But we in roughly business

trends And do in much versus from change rates of rates in response being more and people just seeing sales business? getting and a comfortable of home benefit a that of direct then, higher maybe you're sustainable on response, how think an you sort not being and meeting response with agent

inbound across Well, increased Internet, need over years, call can All the life And or channels, because meet life for paid they immediately insurance. last we've the meet awareness of demand that immediately has the were to particularly off because of the having investment we constrained train our really, increased able made really pandemic phone for change all need by four to really virtual. couple increases we center, new and weren't insurance. the in agents to the the

seem downgrades or doesn't last impact week deployment? into terms an your of that like But your in see either in capital. are impacting or the business thinking you on about on how capital lastly, any impact gone the that having just then, action do has And you're AM way Best thinking

much. will won't our We really Yeah. really given nature of have much really cost kind marketing it And impact that don't at of Jimmy, an capital too you have just it it of on all. then, our as kind mentioned, overall hasn't products. effect our efforts, the on the of think

on have we'd we're really not happen, had don't it So, not having our business. meaningful rather a it while see impact – we

Thank you.

to up across State follow regarding I on to of like Tom's come amount exposure I'd did of thing the one that. question Larry, Texas,

face our within amount State in have We X.X% Texas. of force total our of policies are of the about

American than by some Texas important vary Does In less is company. Income, other states.

You're But for consumer. I talking largest direct state overall, Texas, I is to with agree the that. believe,

Right. by Don't breakdown the company. have

no At you. time, have Instructions]. Thank queue. [Operator persons in this we

right. again quarter. you we'll next Those and talk are to you this our joining All comments us Thank morning. for

gentlemen, and ladies you, Thank for your participation in call. today's

disconnect. You may now