Globe Life (GL) 21 Apr 222022 Q1 Earnings call transcript

Good day, and welcome to the First Quarter 2022 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Mike Majors, Executive Vice President, 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 SEC. of subsequent on questions are Some Forms for purposes our XX-Q refer guidance file Accordingly, general or XX-K earnings comments answers release, provided may forward-looking XXXX statements our contain that please to the only. with to in any

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

ago year The margin from $XXX a primarily Thank book you, increased premium. per year ago. or life In excluding premium XX.X% unrealized was fixed increase million $X.XX first Mike, per Net share operating share due operations, quarter, a income return $XXX year on maturities, gains everyone. $X.XX the from the to return is net compared $XXX income was In or $XXX X% from losses year of good GAAP up per in and share share, million, was or up to On equity morning, a revenue per and on equity million increased a a reported million. underwriting was ago. per XX% $X.XX $XXX a Life quarter for ago. and ago. to our $XX.XX, was year per value XX% XX% book on from basis, $XX.XX, margin value and an is increase is share insurance share million X.X%,

around X% experience. premium The primarily million, $XX improved margin grew claims an midpoint margin our expect around due to $XXX life we health in guidance, grew in margin to life increase we and to premium grow X% due to to at and the and increased underwriting million. year, of decline XX% primarily underwriting health underwriting the grow XX% COVID expect expected premium insurance, revenue For claims. In is to

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

of percentage X.X% ago. a a premium, administrative As to X.X% were compared expenses year

full the XX% premium, to For of be XX% that’s X.X% higher gradual we expect due IT a to primarily year, security administrative information grow his expenses around call and employee to costs, costs, and I addition increase Larry to in for Benefits the travel first quarter operations. Life marketing over facilities Globe and comments of turn now the costs on the division. will and

and challenges In as first At up the was from net gradual recent in you, other for the quarter staffing fourth higher [indiscernible] sales agent the first count X% information net from quarter over underwriting premiums the was the The American producing sales Thank quarter agent such of XX% year count speed X,XXX, quarters. a and ago due to XX% productivity, increased and sales year records down quarter. XX%. million, in resolving. plus and $XX were primarily up producing million, to rates, medical end million. life ago down life the Gary. $XXX X% life was premium quarter to the at X,XXX. quarter some is improvement average to are up The underwriting $XXX issue in higher XXXX, life Income, of is The were in first The increase due margin

better in better recruiting gentlemen to agent we continue grow. candidates will trending sources. [ph] other this personal have retention the several and Income The American count confident last yields was also up quarter, weeks improvement of are We the seen and recruiting

X% million life National, agency life improve We've up to agent have million, introduced ago updated margin our help year quarter. made agent the and up count and due X% net to ended systems increased were At is quarter we was X% underwriting to $X agent health to to $XX productivity. ago at in quarter life presentations fourth premiums the were at over sales increase improved primarily The million to due the average claims Liberty The X% million, margin sales middle $XX to and up down [ph]. bonus improve producing the retention ago new structure producing to the National sales addition, and designed the management quarter The X,XXX, XX% training $XX for increased the X,XXX. changes underwriting quarter down Liberty to In year help was quarter compared agent agent count X% from from expense. growth. to Net productivity. first year

sales down was were for year producing due from increased end the up XX% count are due million. The is We agent average At underwriting productivity. The to the ago agent count premium X,XXX. in year at first the and quarter, Health quarter continued X% increase $XX X% of the improved and National. Net Liberty quarter. and the ago of premiums million producing the XX% margin X% with Heritage to underwriting quarter to health health claims pleased increased to from margin The down agent experience. $XX growth quarter the over fourth was to Family increased increased million, XXXX, $XX

recruiting And modified to agency of at with Family million. the level were have $XX X% forward. life to sales Life, We compensation year and management pleased record In increasing drive to are ago year $X quarter. Globe quarter $XXX were Heritage. middle on up focus from million, our increased the division down XX% X% of agency Net life productivity premiums margin over million. the our growth life We underwriting development going direct-to-consumer structure our were ago

first sales this XXXX. of due the expected to in growth sales XX% experienced We decline the quarter

American ago sales to million. At Agency, million million premiums in declined increased sales X% we and over activity our year were margin results. of compared knowledge are XXXX, seeing to flat health I we $XX underwriting uncertain now to increased are Although the health trends and Net environment. quarter's business. health United first ago General projections from difficult this $XXX this with the quarter XX% pleased sales of quarter still on sales year provide predict quarter. $XX based to will the Is

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

Larry. Thanks,

million on turn investment reflecting a a operations. debt now impact of investment program, net was which net liabilities X% share $XX the On defined year and our up to we required Excess policy share income investment the income, ago. up income as was investment per from We interest will less repurchase basis, excess X%.

but and we investment share to X% year, be up X% decline between income full the on a per excess expect around X% For basis.

we X.XX%, quarter of of in $XXX in As and million the and A, average first rating We maturities, years. to at investment of yield an grade invested yield, average fixed average in an an life financial investment invested the XX sectors. municipal primarily

yield are We also debt-like produce million conservative $XXX line and characteristics. to our investments with These that investment partnerships are philosophy. in in have expected invested additional limited

the For points quarter yield portfolio, first quarter the X first of from maturity X.XX%, fixed XXXX. was basis entire down the

was X.XX%. XX, the portfolio also March of yield As

below a fixed are investment maturities, ago. assets an grade amortized add billion, of $XX ratio fixed and the this fixed years. of million investment would has and that lowest maturities of than invested billion been for of $XX.X X.X%, bonds compared year Regarding I grade are portfolio, percentage average a billion $XXX the to bonds at is below investment million, XX and $XXX minus, $XX.X cost The are maturities A as investment grade including rating with more

XX%. net Excluding the of ago. grade a gains portfolio fixed maturity Bonds portfolio. maturity is total the of XX% low same BBB portfolio, the bonds unrealized Overall, a as in investment rated or minus, as are A equity year rated the percentage fixed

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

long, we exposure to due to we as mention is an risk interest have residential I such BBB have adjusted, exposure maturity any higher Because fluctuations countries. our little no also believe did direct a investments have large ability securities CLOs capital in utilized regardless that securities. derivatives, to would primarily companies our to And impact the no securities expect in material adjusted in we hold cycles. those in investments that must markets. or returns, assets asset-backed to Russia. provide the and ability key we we process best investment Ukraine our risk that to exposure part multinational that or in of invest survive rates that the criterion to equity not We acquire or multiple have mortgages, However, other issuer equities, to

full expect and of partnership our an X.X% of $X.X an debt fixed like at yield year, For characteristic billion with approximately average invest at X.X%. $XXX at million midpoint the to around of the in maturities we limited yield around average investments approximately guidance, in

higher We by and prospect rates in recent the the of interest rates are future. increase in the encouraged interest

unrealized are expect driving rate we a since rates operating not concerned investment them. that realize Our money income driven, by positive will income. about to will net not have losses up on potential impact We're new interest

ability intent hold have the to the maturity. We more investments importantly, our and, to

not life our have fixed addition, that benefits In are products interesting.

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

Gary. Thanks,

repurchase First, year liquidity I with liquid and began assets discussing want parent the position. our to million. capital minutes spend a share of available few The $XXX program,

less excess In the as cash its the on define parent The parent it, primarily subsidiaries, liquid the the company by assets, dividends excess parent addition the we from these to cash parent company will debt. paid in interest flows company's flow, generate from received results XXXX.

excess cash we'll that which result nearly and while receive flows. of in payments. X,XXX,XXX million will the cost XX% $XX XXXX, the During which of of of statutory thus flows, $XXX growth we $XXX.XX. flows $XX.X approximately to at shares dividends Life This to amount in available in $XXX million Globe we an Including company a in XXX,XXX million in the received average of XXXX, the is excess higher the Inc. future. repurchased to anticipate of million and of anticipate a to dividend the results flows price an the for have the payment $XXX.XX. In beginning out short during before the is COVID price million of around expect to cash common hand currently life at losses creates our million shares again parent higher in operating on $XXX exclusive quarter, $XXX in shareholders in flows lower of XXXX, the both the our $XXX shareholders we cash lower in assets cash of which the repurchased and due sales we the the form income average generate at $XXX the primarily parent million stock lower assets than of a in in excess will have of agency drag Year-to-date, flows year, to higher cash at XXXX first million sales Obviously, to the year, increase XXXX. to over million the cash sales total little the distributing an share term, parent XXXX, parents and to of $XXX in

$XXX assets anticipate the the $XX during of first capital available After a will these our to to have payments, for million made of million $XXX million the parent also we quarter. subsidiaries insurance remainder contribution year. We the

modernize with issue share the It our As and anticipate expand duration Thus, dividends. will to information cash our new shareholder be we repurchases of noted fund during that the company noted best excess insurance use cash that return assets other or operations efficiently along policies, future we operational needs. and provide to yield have as insurance a available repurchases believe their on of should shareholders made new year other to the previous from over to received cash parents cash the our by be the payment our as share will use possible. calls, capabilities is our technology substantial parent investments alternatives. continue primary still subsidiaries flows, long We acquire after and the

on historically to $XX have discussed we of parent. at calls, $XX liquid As the to be assets targeted prior million held

the evaluate such XXXX. shareholders anticipate to we on our capital earnings should excess return continue $XXX through in In will liquidity, our excess will impact share potential there including million the We shareholders approximately to the $XXX guidance, of million be needs, be will the returned company and $XXX to we $XXX anticipate between and XXXX, to repurchases. in pandemic

in company XXX%. a capital insurance range necessary capital regard to levels to our at levels level the ratings. RBC to Life consolidated current ratio targets goal our Now with XXX% our our maintain to subsidiaries, support action our of is Globe

the COVID the million consolidated quarter, to XXX%. at first For COVID percentage deaths, as have an capital mid-February. claims million of XXXX, not claims did added quickly which in deaths $XX life for previously few the US in is and the those of reported like Liberty lower a premium. IHME to average for or last incurred approximately incurred CDC, quarter. first deaths, during quarter claims premium X.X% targets $X the deaths $XX for the Disease subsidiaries IHME's our due the low the south company approximately of than in and range American million or quarter respect of Prevention, first occurring provision higher of higher on January, the utilized in The over anticipated the of million direct-to-consumer ratio of XX,XXX at have that decline on X.X% occurred IHME. approximately higher due partially first drop of [ph] off US With National, our million or this IHME reflects our XX,XXX losses $XX this latter low consolidated its the first were the the our approximately impact approximately in we premium. quarter deaths projections This end Income, of anticipated, XX,XXX XXX,XXX deaths to by COVID the approximately life our based deaths projection. by At US starting RBC reported in provided. first significant XXXX. RBC XX,XXX its income, claims anticipated, the reflected of results. cost CDC, required COVID the million not increase XX% amount anticipated projection since provide comments of estimate we in higher life of per equal on in At levels quarter age especially that COVID Control than projection highest as its a division, million first and the in of of our to time, to was deaths Obviously, expected, at first quarter, end quarter per the per The This cost ratio, The Center X% related of was were to a at deaths as but US I'd $X our deaths the XXX%. in deaths. premium In the incurred XX,XXX in or of in death of in the deaths $XX average COVID than offset quarter decrease substantially of a we based in At COVID-XX occur and quarter half include the at RBC approximately US first $XX from the quarter average deaths US call, available, quarter data we the on were of COVID currently rate quarter, time the

COVID issued low thirds Approximately claims relatively of policies counts experience the ago. years two XX policy to more claim since than of come of COVID pandemic. sold the continue We levels start on from

XXX XXXX, the with of The our claims during that X Life life expectations. These million only claims with paid line of paid Globe approximately $X.X policies issued by are policies issued a with total comprise COVID COVID we amount of levels million. not business time. since XXX of For March X.XX% out

the due deaths levels, to continued death. As over noted including COVID in on unavailable experience contracted addition effects COVID to of related, The medical previously. The either non-COVID non-COVID primarily pandemic the causes to disorders. circulatory part past causes we higher primarily health to calls, lung higher to continue in are of elevated expected, higher were we policy lapses division our obligations ailments, the or heart first non-COVID non-COVID existence than losses and life care, believe, favorable due causes least approximately In quarter, obligations at anticipated. related death losses, direct-to-consumer XXXX due of we from to be side death $X life issues, to of neurological delayed in than of and policy seeing and we lower the and lapses million are potentially and having and the from policy death increase

incurred $XX relates million life claims. of to approximately we non-COVID For in obligations, which life the million $XX policy excess quarter, approximately

of obligations will causes are total which of thirds anticipated. previously year price midpoint December our is range our we With the the full previous to anticipate the will to expected due XXXX. amount of The deaths guidance per $X.XX primarily earnings than now $X.XX the life $XX projecting non-COVID the we million respect our to our life during than are of lower XX, related higher guidance This a the in of for X.X% COVID for life that [ph] death. XXXX, For to greater midpoint of made obligations we $XX policy ended two year, premium, be net us excess to related higher income operating $X.XX policy or of higher million share approximately be $X.XX year.

overall to an deaths total estimate levels, on recent midpoint to including in With estimate life will $XX increase At data throughout we per from COVID claims US cost year. XX,XXX incur estimate now prior COVID in at or will of COVID three COVID, to continue now estimate but IHME approximately Larry. million will assuming the the remain diminish estimate. approximately deaths deaths final the US from $X.X is CDC we to for US multiple million This estimate $XX endemic XXX,XXX deaths life available over the impact respect state somewhat rate are the enforce of the XX,XXX our we of year. our back book. due an $X.X XX,XXX full those the Those per comments. This year evaluate per and million to the US. deaths sources, We of million approximately the the of million guidance, I deaths incur to to and deaths, claims, assumes our daily quarters my COVID will call we turn $X.X of

Those you, are Thank Frank. comments. our

We questions. for the will open call now

Instructions] first We'll from [Operator JPMorgan. Bhullar you. with question Thank Jimmy take our

Hi, good morning.

a had of I questions. couple So

it's factors. people did pressure into agent of talk market And But count. other in next applies Do First, year for you will you agents to jobs? the just about into you've something couple the this this for in think think departures versus if the lead of year? that and late of [ph] difficulty as labor you do the past sort new you that is this finding over get sales how could a then multiple I is what years sales? extent this hired And decline guess

agent first, quarter first holidays not the fourth Family has question so second challenging the and because opportunities. is of true from address recruiting been remind that Heritage. that part seasonality that quarter the I'll sure sequentially in of there's American because everyone also decline to Income many typically first work there's Jimmy, I'm affect I'd a count

during because also that are We our for underserved middle [indiscernible] opportunity. of the Also believe Liberty agency holidays, is National no looking continued absolutely on the shortage period. at open I enrollments a market. agency do better selling income growth enrollment underemployed have there's focused open workers people

we've historically able the know, of grow to You economic been conditions. regardless agencies

growth during low National, XXXX example, high - XXXX, strong experienced in downturn Liberty high strong unemployment, American growth. the US Income, and record had of to XXXX For have and unemployment XXXX, Family Income and Heritage economic American had very agency

depends to expanding on sales Our long management, term new growing additional openings tools office grow ability the for Jimmy, really middle agents. providing and agencies

managers think the could anticipate all providing opening additional our XXXX, three question. agencies. sales don't number sales you new increasing During Jimmy, heard of the offices, to the I in We're support general question, repeat also we agents. technology sales I

obviously, It hired, make people they that or ramped think was to both agents, hadn't about just you of extent you that and - lose the you - year? from sales the that it decline who recently hiring a leaving because optimistic don't like are was like, agent in year losing people up. then production into does do were this that lot in count how less you already later them and next difficulty the does new agents But

doesn't it What than less new veteran was agents. agents less productive [ph] make optimistic,

explained agents, across are by in the partially increases you productivity. As three in look sales increase the the

largest submitting also of XX% a have in premium increase clients XX% in As agents agents. Family had the of the example, a the we increase for written Heritage, average business, percentage

from sources. In stay American are quarter other XX% Income, in personal personal recruits increased the from - So XXXX. veteran that That's we about as because quarter versus agents, productive they first level the twice long productivity of agents. decision first or of as the important as saw twice comes that recruits recruits the

you'll we'll the even have this within year, still slower be increase agent that gave script. the sales the though will during range So confidence have the

companies seems of related COVID issues the terms And what mortality? COVID direct Because COVID or you're issues Okay. but have number not beyond related been any elevated claims? for claims potentially on of in even life other it because non-COVID comments seeing then health of like a

mentioned, level - at we're different several know, direct-to-consumer, but Jimmy. know, is but know and primarily, consistent we disorder the, in distributions, the know, really the know, what really especially various see and you heart quarter, you circulatory, far do some COVID, causes you seeing lung, just of the, deaths the of first as to all elevated neurological you the know, not areas, you across and of really side had in getting I right especially know, care type you mean, our effects I whether Yeah, are when with well attribute they the we across and, you in needed habits did it, you having know, survivors really seeing, throughout of XXXX, you and COVID. that or as health side effects for of declined and that now know, the we

we're claims thought looking XXXX. know, back those some to a, know, believe a in at, you December, we in that see that back, kind trends you of You know, in as led would XXXX, us early decrease start in looking to we

know, originally over we past, trending a had course levels, kinds quarter to again, of will you that slowly, so. you But these, We anticipated. normal bit substantially, you was anticipated, greater the revert wasn't probably but than of elevated, know, over more time, think seen more be back really what than the not know, year. originally anticipated. And do levels first in it just, that little we you had what, of to so the little normal the those but a we've back bit worse In kind

any of on And impact and initial commentary terms changes, do on expect income the balance the statement? the have what be, sort you lastly, accounting on to then, sheet, both in the you of just

will, the the second Yeah, after we more sure on of disclosure, finalizing, looking We're the here are controls will. quarter. some our anticipate you you do quarter, about of know, the our no, testing, numbers, giving doing end process no talked aspects in had if our the what from we validating is you updates if place, model in of various last the at still making quantitative

the anticipate of balance there impact perspective there to on you call, statement. clearly a interest made last favorable decrease through, I rate. the from income the respect changes reduced do on AOCI, the the the So, And said, then the the just side be earnings on on sheet operating with as we know, being primarily equity in the changes some or amortization will

you. Thank

Moving Kligerman with Credit on, we'll go Suisse. to Andrew

the good I'd to I morning. numbers. Hi, thought agent count producing go back

are to XX National negative X X to XX time. quarterly that's new last Liberty and XX at your X X XX versus last XX to positive zero X, So the Family time, Income American to guidance. is to to targets last versus then for X versus Heritage,

So was - key that's labor driving was it it You I know, in something tight the of guidance? question new what Is guess this there drivers market is, the else? primarily change this guidance? some of are the

for in Like Income, one drivers had key we growth XXXX and amount XXXX. American of the the is just of agency [ph]

stair agency growth, always process. we than agency recall, growth you a XX% step is had As greater

the XXXX agency of So expect had XXXX. in I that level in wouldn't we through growth XXXX same

COVID. do think really has agencies with the the uncertainty is two to I other around

increase a take more And business. to sells place during Now and those appointments decline. presentations difficult the the National end [indiscernible] COVID Heritage a growth was set if Again you pandemic. COVID think, Family you're the upper those worksite at of the continues business the What 'XX success. to made we are the having end a really to recall, majority And growth for set Liberty XX% would sales because The place better with be were I an agency to during really and count continues agents to with the of Heritage, National recruit insurance of I'd sell home difficult recruit of the in Likewise, at business. decline. at sales weeds encouraged 'XX. Because the Family saw Family range. to [ph] because Family Heritage, the they our pandemic. COVID expect XX% very don't the sell easy you're you're with to to sales levels the recruit the physically agent the low first life home, at Likewise, range. Heritage versus the the And doesn't had end decline. count range, to guidance that's to sale, we quarter growth the those of of or worksite quarter, able to first is at in are the of quarter home an appointments the such end sales or in they business The expect at able upper the be to with Liberty sales

easy worksite market. that's win more prospects recruit or in to So to the

on Heritage. X%. in the knew of and was Family X% That growth yet, guidance again, 'XX. American gave makes that so agency a you you Liberty lot But 'XX about I guess, sense, and of the And particularly Income, to you know, strong

it's it's that bit off changed Anything Now, three months. else, of Larry, you a might, the your know, in two they've just course or thinking sharply.

Not two months. three or

So and at large in we XXXX higher of I'd opened and number a new had XXXX, American resulted in recruited for - those agency offices remind growth Income, you in offices. that

those During offices. COVID difficult was open to new more

Again, agents agents, at and in we in say say and and with X% that had XXXX, agents, 'XX. 'XX American your me, lower 'XX, have will systems. a to 'XX So new and 'XX a that's Income office we I excuse XX,XXX large to XXX resumes bring number increase of is train than look enter and in 'XX, we approximately

startup faster the the back again, have following agent referring to So always we process, growth, growth.

years. and 'XX, accelerated in we agent zero and Then Family you growth. agent back If 'XX two almost that 'XX, you those to 'XX in Heritage American the we had see would go had growth Income to

in historically follows pattern three this seen that a all we've So agencies.

see. I

put numbers further, an you know, out color? around you could a we 'XX. Okay. little some offices increasing further through as going forward, you Could And bit then, you the any go management building it or any middle and about talked the

For to X to for because we three expect middle percentage, the the all agencies, so middle management recruiting year important, increase really all for management X agencies. most three that's drives of on

that the agent more during had Family middle accelerate, and see agent lack at some we've and of into middle move such the we put management. that agent XXXX, as American take Income. Again, So people at growth growth management American growth rapid opportunity growth Heritage, will

for assume the increase a Nationals, X% or a see to Liberty to see same reasonable management. we'll excuse range you certainly increase, I the reasonable growth XXXX. has to is - assume sales think middle the for number in I Heritage X% worksite me, that feel

COVID. is I it know, well. cetera, COVID of that cetera, know, you Anything claims some those that were COVID people kinds lastly, of getting over these and we've heard non-COVID, reverting aren't how of gives you confidence touching there, you - subside And, back over but it. just with life Got Anything revert where elevated, time aren't, that'll guess sort et kind as else sort further these just all of will reinsurers related medical situations et know, you on time? big US that you the subsides checkups, just of once from

getting the need access Andrew that I to No, you they generally getting with, to doctor's about getting care. their and know, health the to conditions. filling, you into that people care and And, getting back know, out take think, that's, more office comfortable back you think of you when just you care largely their know, know, homes getting of

know, the see, in You on, more we'll know, of to experience and I that. obviously, sense to numbers, little goes as get get you that be start think a time able better

least time, this know, I give we indicate it's, would levels. some well, care see, it's this that we you look the to that levels otherwise. where kind would you to at non-COVID in the as just that you know, - the something would would health back situation COVID it get from and of you belief in gets elevated normal get into the kind at But deaths normal where at until and start point the past know, use of numbers over That's time. level, of pandemic, as again, see think, we and you that more anticipate back

Yeah, very for and thank that seems you XXXX for much and the questions. encouraging Anyway, 'XX. answering 'XX very

Thanks.

with [Operator we'll to go Next, Instructions] Bass Research. Autonomous Eric

the thank It in the from lapses up running little looks a Hi, life bit they've you. been like ticked business. where

see to to continue? normalize? is expect starting So wondering, to you'd persistency are And you that begin just something

had we're a getting Eric, level is I favorable late had still XXXX. But American little towards rates were bit bit higher little renewal lapses. pre-pandemic National compared first lapse with that's back the that this relapse it - I are XXXX true quarter. fluctuation and where rates a higher, we're the we're we've a the in think of along Of think appears Liberty we Income, been it than direct-to-consumer more there the to - lapse side, were pre-pandemic.

The first less a over year rate little lapse than X%. was normally, XX%, which is know, you

I American like what little will rights consumer, 'XX, pre-pandemic experienced favorable levels. I think direct we still there the a be think, will down in versus forward. think bit the in we as we're Income higher than settle that I - but And go

Got it. you is other excess the can Thank driving life remind then me, the of persistency. better you. you're one claims think assuming I that factors the And

there of kind assuming and of through? that what you're works how Just a reminder provide

About is mentioned estimating of higher total and, the for know, around we the lapses. due access opening a have at policy a about you obligations, you And third, third know, $XX you comments we're in million. Yeah. know, the I've that that, year, to

will, kind I Just having that XXXX. down, mean, that levels. indicated, time persistency obligations result persistency over persistency. know, anticipate pre-pandemic the year, by still still course that And over over policy in grading favorable the the bringing you you as than that some But Gary favorable are of does normal. we of then favorable some back anticipating time, if versus are we And, we end of higher

over just the slowly, of though, of time, again, course over year. So, kind that doubt the graded we

up excess unusual of there this Thanks. decline was basis. Was $X investment I your to year-over-year for on to income quarter, in more, is this it one And and could still I your kind income, quarter? anything the think sneak if it guidance investment on

partnerships the that higher expected. about Eric, think a limited little we a the I of we bit $X.X had And had, million that's was from than income tiny thing.

the investment than the later towards So first will quarter was weighted – investment be income income the in year. that heavier

it. you. Got Thank

KBW. go we'll with on, to Ryan Moving Krueger

Hi, good morning.

quarter. it claims I'm if COVID guess of direct by curious that On division, in I like non-COVID or… your million direct-to-consumer you like the the give Can excess mortality claims - XX was more the in concentrated

I think total so higher. access $X Yeah, were indicated million about the obligations,

You know, for…

you I million and said think $XX was million mortality? million there $XX indirect looking was of from of I was was $XX the – obligations I policy the

Yes.

each Yes. DTC about to and DTC, $X million $XX from Okay. about AIO And million from was $XX from, NLL I that each related million, million $X [ph] guess, of about and

I the - is claims direct-to-consumer guess, and is more there is driven there relative in concentration data any indirect any you you're - in as there conclusions COVID direct as there the divisions? why are to agent you to dug seeing both think is, into

I you just as that know, we it, remember you higher mortality, in You a think general, know, direct-to-consumer at look know, just is business.

make time, So, you course XX% of they're up of and premium. Liberty or Whereas XX% kind in that Income, policy range, in for their a on you American to know, obligations their you XX% level. normal just of both total pre-pandemic know, XX% know, about the

proportion So just, just has perspective, from a from this you higher mortality. DTC a is know,

policyholders, anything to other You be to than to as swath will, there we if just underwriting point that in you direct-to-consumer, of the and you the see of be, DTC. because population, yet know, we just US I'm if be a specific less just tends going with really simplified don't to else know, - underwriting a to, less just healthy and being part you group just little numbers, anything broader say, tend of want specifically remember and do having

first underwriting I XX% and direct cited, COVID, and been and at XXXX, Thanks. I if looks if And your take impacts about - both income and that your life then mortality back the you indirect when I premium. add margin like it in would of quarter, in have look the the

pre-pandemic, what that to is once other expect the which back, Are fully range. offset? than pandemic XX% think everything it add which Is of was some XX% was you'd I more you ends? higher there running If in XX% more indicative

think You improved know, we're one lower is that there additional costs or improved of amortization because - seeing acquisition Ryan, the deferred I piece we're persistency.

that gets up And would XX piece with. it so we from the you that's the XX normal say XX a a into came to what you

Okay, understood. Thank you.

[Operator to Piper Instructions] Next with Barnidge go Sandler. John we'll

through very distribution sales do dynamics by up you think much. you your talk targeted Maybe persistency products environment a maybe at of changes about the holding how or Can bit inflation? differently, inflation you Thank soft how driven in demographic? economic in

I'll for of talk first inflation, agency different the in its about the channels. each impact distribution really

additional needs need need coverage. sales larger little at level expect a Remember, on face the [indiscernible] a the a a We customers basis. to due favorably impact purchase we amount, sell inflation. of impacted should client to

social the for associate premiums. is a increase only products premiums slight monthly While in

overall and to male to negative percentage rate only designed small postal channels, a cost increases of Our [indiscernible] paper due could a agencies comprise the increases. cost [ph] venture the direct-to-consumer budget. inflation premiums The inflation be for of are media

maintain we such, will to mail adjust need As volumes profit probably margins. to

email However, we the can't channels those Internet expand the decreases. offset use to and of

fixed the of lifetime to premium. Medicare ratios. trends, higher For margins improve assumed, To higher as trend than American are the Supplement United achieve will profit in over be percentage increases dollar medical time lower actually lead extent inflation rate trends the higher can may acquisition its loss to become medical a with offset costs

a rates have Is how The maybe lot. fixed Or rate then more securities at maybe on versus as all? changed up. a environments interesting investments? on portfolio follow about investment That's change rate maybe this And very helpful. the view clue your versus talk changed floating

Well, - we've do you especially of primarily we in we [ph] the you and long of quarter our John, the is seen liabilities beginning we long. CAGR that flattening. quarter know, from have the rates Yeah, the because quarter, as that's at invest are know end curve the the reason seen the we

shorter substantial take we're buying, enhancement over bonds. bonds yield spreads, provide a still providing are year that you the when the longer in XX However, - a still consideration,

investing want don't we in we - Yeah, for in, mentioned, give don't arrangement. approximately look But going And best alternatives policy the - they're assets going good for a type credit or credit will rule out you of know, going in the to shorter means partnerships structure we longer mentioned, to are - or do opportunities. the short be yield. million talk you that improve we diversification we're investors, know, - going extent XX% these We we where fact, when need shorter. long, to invest when that about be So There, to need our and today, trying are we're go they we're most liabilities, still if you shorter I us as to as the times investing limited part, certain that investing whatever to I are to we in structured support $XXX the that but - invest in to we investments. still XXXX, to the stand a especially but short. we're quality for XX%

Thank ahead. much the quarter for answering. in Best very luck you of

comments. it There to any are to for closing or Mike like Mr. back further Majors I'd turn additional questions. no

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

thank Thank for you. call. And that everyone their to does like conclude participation. We'd today's

You may disconnect. now