Globe Life (GL) 2 Feb 232022 Q4 Earnings call transcript

Hello, and welcome to the Globe Life Fourth Quarter 2022 Earnings Call. My name is George. I'll be your coordinator for today's event. Please note, this conference is being recorded, and for duration of the call your lines will be in a listen-only mode.

However, you will have the opportunity to ask questions at the end of the call. Instructions] [Operator

to Mota, over go Investor like today, your ahead, the Stephen Mr. Relations hand now to call host sir. I'd Director. Please

Good you. morning, Thank everyone.

Co-Chief Svoboda Joining Officer; Financial General our and Matt are Counsel. call Officer; Majors, Tom Frank Strategy Mitchell, the Darden, our today Mike our Brian Executive Chief Chief Officers; Kalmbach, and our

refer release, general Some statements that forward-looking XX-K questions may guidance only. subsequent on of purposes contain Forms our earnings comments SEC. file or answers to Accordingly, any and with please provided XXXX your for our to XX-Q are the

Some contain a our discussion see comments to of for terms earnings these our reconciliations and may non-GAAP measures. of website GAAP also release and measures. Please

will I the Frank. turn now call over to

good everyone. and morning, Thank you, Stephen,

to know the you started, Before this that DFW we want getting storms ice from are I to call area, doing the in locations. due multiple let

please So, with are us. connections, issues with if any bear there

opportunity like accomplishments Then, Gary as would their good last Matt co-CEOs Larry and Globe acknowledge Life. Coleman XX I take Life's to Globe XXXX, over to once and year another including and the thank Hutchison again years, this for quickly

of $XXX fourth Now or million share or the of the In net from million share, ago. Net to year XX% quarter. year increase million, a the a to was was income $X.XX or for $XXX $X.XX the quarter compared results share ago. per per quarter, $XXX $X.XX income an operating per

share On equity XX.X%, was a was per book $XX.XX. and reported GAAP value on basis, return

from year gains was equity, return excess as XX.X%, $XX.XX, quarter, and lessening that of encouraging on was our equity ago. book per on fourth for Excluding It of and for life on share a fixed X% is unrealized the the XX.X%, on was the unrealized return claims XX reflecting up December excluding impact losses year losses value maturities, our full operations.

ago quarter increased fourth to life year from revenue $XXX for X% operations, the premium In the million. insurance quarter the

the growth full income XXXX, seen addition we life sales rates direct-to-consumer around X%. In year, at lower impact exchange Income. premium this X%. income in of foreign in due premium year our the XXXX, grew our Growth premiums we've American expect Canadian channel premium the to in For to to was grow challenged on primarily

be Life the differently about was to underwriting expected primarily improved million, accounting calculated will from be $XXX comments. The in the income, to XX% respect changes underwriting on year margin With accounting due higher LDTI underwriting his expected by under calls, will to the margin experience. required ago. prior margin due to we've up talked in of anticipated and claim as increase LDTI is discuss substantially new new impact is the rules Tom standards. a

margin to insurance, X% million. was $XX underwriting and premium to health grew health million, In $XXX X% up

XXXX, year American In lower full to expect grow X%. due United to General the premium our grew lower around X%, XXXX, than growth in For we premium operations. revenue health Agency and premium XXXX

a XX% million ago. $XX expenses Administrative the were up from for quarter, year

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

by employee are IT ago. costs. year, X.X% around X% and benefit pension-related we premium the be a X.X% were costs administrative decline primarily For of expect labor premium to expenses due to expected X%, be up a year costs. In administrative to to approximately in compared information be of expenses higher security Higher offset XXXX, and

the fourth comments Matt now call over marketing the for quarter turn I operations. will his to on

Thank you, Frank.

million. primarily up and claims XX% Life margin to were Income margin Income Life. premium. experience The improved higher American premiums due ago underwriting and X% underwriting life the is life over The up to is $XXX up year higher $XXX quarter American First million, to was

year ago the quarter seasonal quarter with average previously fourth sales a decline attrition The trends. the the from fourth ago quarter were The quarter reduced for average we fourth decline XXXX, third in count X% resulted the as agent the is agent year down is year consistent from count due decline to quarter from count sales life X,XXX, The third agent a net quarter. producing and million, The productivity. X% was In and XXXX, quarter. in throughout ago discussed. of X% $XX from the to agent higher-than-expected from typical down from down have

I started ago, seen also we part the While latter our I the recruiting count help this positive momentum. am have over year. beginning the of a declined I of we of new success recruiting from fourth the to optimistic potential agent momentum am into emphasize have as the to with growth retention We've have believe and year efforts. long-term agency the encouraged continue division. regarding this adjustments some made will agency compensation this retention quarter

fourth underwriting The XX% life million. $XX margin million, At XX% X% Liberty life year was up National, million, the $X improved margin X% million, quarter. count. quarter on from $XX Liberty Net life over year the the from ago to to is premiums ago build compared to growth. momentum year ago X% well increase increased due and that's $XX to past year net generated up up continues XX% agent to productivity were and and the were third for quarter quarter increased is for due sales sales underwriting The X,XXX, over primarily future average the and was the to experience. mainly to up agent positioned claims the in health the been producing quarter count and up

quarter health X% ago due sales to million increased up million. quarter producing to $XX Heritage, were up XX% the $XX margin increased premiums and $XX from compared to agent underwriting the health Net year count up the X% the million, The year fourth to third over for ago quarter. average XX% productivity. agent X,XXX, agent and and quarter health was count Family to increased At X%

middle paid off continue recruiting Family at has This trends we management as see there emphasis shift positive nicely we've discussed a in As before, to year development. was last Heritage. to and

is the flat underwriting million over in ago increase margin The $XX In at life $XXX margin down Consumer to to rate. year to decline million. sales $XX $XX consistent our X% were life to year from claims our Life, Direct from increased sales experience. with to underwriting but premiums primarily due quarter This Division response Net million, Globe quarter million, in the life and were due ago improved declines circulation is expectations.

XX% more our which approximately activity, to business has had are per previous increases to impede on generate for is calls, we circulation as compared ability am continue As is as costs and than impacted our XXXX paper sales pull for back to XX% average acquisition our year that increased XXXX. to mentioned higher in XX% years of here also the lower an There We've our postage achieve this in in was has costs and return has by each to several the the than marketing on Internet marketing electronics one resiliency facet environment. policy business direct-to-consumer offset current to encouraged somewhat XXXX. see inflationary issued of we Today, as I direct our in marketing. satisfactory specific mailings investment been in premium have and campaigns. mail some last

million health million. were down X% underwriting to Net to to United General and million, over margin health American XX% $XX $XX the Agency, increased year health sales X% At premiums increased $XXX compared Medicare this ago year to supplement XXXX, market a competitors the movement due dynamics primarily Advantage. consumer and ago quarter, on by we Medicare to throughout aggressive is decline products and saw pricing quarter the including certain

our with trends double-digit Projections: single-digit American National, that Family our Now average growth; growth. we for low we agent the be high based the on seeing single-digit experience Heritage, producing business, to as trends follows: growth; and expect XXXX Life, high Liberty are Income count

Net National, Income trends as to year growth; for are XXXX single-digit high flat; flat. double-digit low life the sales Direct Life, to to relatively American expected Liberty relatively be Consumer, follows: full

Net growth. American XXXX double-digit a single to follows: as expected Family the United sales digit single-digit be trends increase; National, increase; health General low high Agency, for high are Heritage, low single-digit a Liberty to

back Frank. turn now the call will I to

Matt. Thanks,

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

Net up up per investment income $XXX a X% quarter. income million, was from year On investment the share [XX%] (ph). net ago was basis,

as will viewing begin LDTI the income required investment only investment excess adoption interest. With income net less XXXX, in we of

a result favorable be adoption required than expect XXXX, of to changes For we of to interest, higher related investment environment. result as net the will X% XXXX rate grow a reported in as approximately full LDTI. substantially the respect to With income it the of year

LDTI discuss mentioned his As further previously, in comments. will Tom

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

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

maturity point of quarter. point basis portfolio, the the from yield and basis from third entire the fixed up the quarter quarter For X X X.XX%, fourth up fourth XXXX was

X.XX%. As portfolio yield of was December XX, the

cost. including Of assets $XX.X a A-minus, billion A-minus. are fixed the maturities, ago. the are regarding same grade $XX.X as billion, amortized year of Now fixed Overall, investment average is the with investment at Invested portfolio billion maturities total rating of portfolio. an rated $XX

due high than -- a net billion market yields. Our portfolio our has loss investment the on position approximately higher to book of $X.X current unrealized holdings rates

concerned driven. position by rate loss it and interest is not are We unrealized mostly the

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

a Bonds of from the maturity down from XX% portfolio, XX% ago. year fixed rated BBB are

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

the assets maturity returns acquire have asset-backed no to of markets. due interest fluctuations in exposure mortgages, we BBB other or little ability securities as we to residential hold in securities. securities large equities, derivatives, higher-risk believe best that such capital-adjusted regardless part to risk-adjusted, and or the rates equity that provide our We CLOs to However,

years. bonds bonds X%. compared Low more of as than This been million to is below for to maturities investment ago. a XX are The fixed is as $XXX low investment-grade had million ratio grade $XXX percentage this year

of investment-grade it below bonds rated bond eight years. ratio the BBB plus has been XX% are in maturities, addition, fixed In lowest

in with we A we because ability our utilized to portfolio, multiple must is key criterion long. the survive primarily that cycles. the Overall, invest of are have comfortable our issuer investment process quality an

XXXX, executed we and to fixed maturity yield portfolio quality. During the repositioning improve some of

sold the of BBB with $XXX higher-yielding rating with average of average approximately course rating of reinvested year, Over A-plus. million securities the and an in last we maturities fixed of proceeds an

market any a such Ukraine be withstand but to only not higher-yielding purchase also investments and have we and positioned well securities to I multinational downturn, a in do companies material that Russia are not would exposure we expect believe countries. scenario. no to we in these investments impact our in have to Overall, opportunistic mention also or that direct

for year and At expect million full guidance, yield at XXXX, in characteristics X% maturities loans approximately the $XXX at the with an of average X%. in invest an X.X% $XXX investments to yield approximately midpoint cash we and fixed mortgage of limited of partnership debt-like our to million commercial average

interest since said we've by on with positive they on rates interest impact no we see impact not our as to higher a before, benefits, income net up driving has are investment pleased this As future income operating sensitive. policy are

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

Frank. Thanks,

of quarter, million So, ended $XX of in and approximately the of XXX,XXX purchased assets million. fourth $XXX.X, at with for an common Life the Global total a the liquid average fourth stock price shares share cost of $XX company quarter Inc.

spent year, we The spent an million parent $XXX.XX. company the million liquidity. repurchases average at million of $XXX purchase amount included price to $XX on For full shares of X.X approximately total

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

its excess amount parent full dividends the the to lower higher losses thus anticipate share in and flow return company's cash result to in in repurchases. $XXX and dividends primarily XXXX, shareholders the available million to COVID incurred to through will higher This of $XXX We 'XX, received due XXXX. year be is XXXX for form million to which were 'XX approximately in parent is life compared in in than statutory that income XXXX, to as will the providing higher

assets liquid of million $XX approximately million compared million as or liquid $XX had assets -- have million we targeted. liquid we noted, previously assets historically $XX to As in $XX the of

million expected million be which to assets of excess to generated $XXX of million With the to XXXX, million we plus in flows dividend assets $XXX $XXX form anticipate of million cash approximately parent liquid of distributing million $XX XXXX, the our to having $XX we to $XXX in $XX payments. shareholders anticipate of available in the million to

will efficiently be possible. payment provide shareholder that return after the to noted on cash will as we excess repurchases repurchases We our anticipate As yield Thus, share parent's previous cash calls, use of the available alternatives. other primary we to continue still the over believe of or shareholders dividends. our as use best share flow

acquire insurance other cash substantial new levels investments insurance parent well The policies, the insurance repurchase It and company support to the should is from technology is within fund our needs. and future modernization our to our maintain operational as long-duration made capabilities, and remaining our as sufficient their subsidiaries for of XXXX. targeted new the after amount expand year by be assets received share noted program operations issue to to have during information capital operations that the the cash

guidance, year. $XXX and between million of will repurchases occur share earnings million $XXX we during the our In anticipate

Now our with regard insurance to subsidiaries. capital levels at

is targets level necessary Global a XXX% ratings. levels range our to in current capital Our goal support consolidated Life action XXX%. the to RBC company to of ratio maintain

our ratio yet not are For XXXX, our consolidated statutory not since statements yet RBC finalized, is known. financial

midpoint range this any the without RBC ratio be contributions. we near anticipate will XXXX capital additional of final the However,

effective known noted call, risk, became the XXXX also the related in to previous As NAIC factors new CX. mortality on as

product our ratios. factors will statutory result these Given our from generation RBC portfolio, consistent the at of target gains strong adequacy operations insurance simply even new stronger given in and capital

with comments of company million quarter reported COVID as Now expectations. by occurring line you fourth XX,XXX few fourth the of with policy expectations. related a in CDC obligations excess were line related claims quarter, was results. our to approximately impact in excess fourth I'd Overall, incurred life policy quarter deaths In like approximately obligations U.S. COVID the the quarter the $X the and to to on provide in

excess level due is pre-pandemic part We have pandemic. incurred due as We heart those deaths on effects including mortality to circulatory non-COVID we neurological disorders. also believe the from compared deaths the the and based levels lung to disorders, causes, to higher of and large expected of seen issues in

as had number of deaths has of from So, moderated, so the number deaths COVID the other causes.

obligations quarter, our the policy excess -- generally of In with the impact about fourth non-COVID policy at line life million. expectations in were $X

deaths, year, average approximately company U.S. of million obligations million related deaths. XXX,XXX $XX $X U.S. per approximately the For XX,XXX full life COVID to incurred COVID an the policy of

down non-COVID approximately In approximately XXXX. higher from obligations $XX higher obligations policy combined full XXXX, of million addition, total and non-COVID around The resulted in in life policy estimate in of for was we million claims the of premium COVID year. X% $XXX impact X%

approximately data million excess the obligations We COVID of U.S. at life non-COVID we and from guidance. be total have available, incurring total our XXXX. both deaths of the that reported on we the claims XXX,XXX will estimate $XX approximately currently in COVID from estimate midpoint policy Based

Finally, with earnings for respect to XXXX. guidance

and results As report point X, prior on standard bridge my these contracts the this many is with new do new accounting as forward, we are related to will the to From guidance XXXX the accounting January I noted XXXX. requirements. changes gap requirements. new effective there long-duration best calls, under

our due including LDTI we information reduction reduction both when impact estimates as share is XX, assumptions year The for the $XX.XX we projecting impact per net December of had our ending quarter is expected $XX.XX operating $XX.XX adoption from the adoption. than the be XXXX. last the primarily XXXX. of range to indicated get and LDTI have refined impacting a and The will guidance are the midpoint lower what in and XXXX common diluted per more we in So, of share to income of

financing higher are customer which In anticipate slightly costs, the agency than addition as anticipated. lower of impact, LDPI we reflective as premiums, previously well lead higher lower expenses, to yields short-term and higher

the in results net million. operating the $XXX We new of standard million XXXX an implementing the estimate to impact increase in income of range accounting after-tax $XXX in

full the it results new finalized, XXXX are Once standard. in We the could determining still process the of the XXXX -- XXXX results. under affect estimated

premium. the Going or due forward, of deferred changes largest amortization of lower expect as commissions and amortizing changes amortization the the as methods in result captive standard interest of slightly on on to commissions, certain in treatment costs the obligations of of deferred in of and agency a policy the amortization next that we in a both renewal prior Due costs, experience of of assumptions of in percent DAC. channels, to years. updating will future renewal acquisition elimination few DAC, treatment increase accounting premium increase the the the fluctuations assumptions in will driver DAC of than changes our over balances, The the under do DAC the is acquisition percent and

and the policy XXXX required updating amortization under new obligations will policyholder determined and new to affecting -- will XXXX impact of benefits reported the prior of how the restated be and to policy life to changes assumptions. in standard DAC, are addition reflect In the include be changes life up standard, the the new accounting requirements unlocking

the to to XX% obligation XX%. percentage consistent obligation average a last expect years. in Health lower percent range This average percent absent the the premium is of assumption as a as years. obligations of over health five policy of the X% five of impacts. policy than XX.X%. about last the XXXX, X.X% in will to we the be health premium life changes, will range XX.X% over is be the with ratio following For any Life obligations This

the The XX%, commissions, of premium range recent to and health For of XX.X%, expected X% health the resulting life in underwriting a lines as approximately acquisition XX% as to percent a and to the the underwriting amortization averages. premium XX%. range the XX% of of life a are to premium be and will margin of non-deferred range five-year in combined, XX% of margins as to percent than percent in be lower costs X.X%

on $XXX So, interest on reduction offsetting DAC have be historically interest. a the In elimination that standards and interest the will this under XXXX, was required excess million. underwriting $XXX balances income on In XXXX, investment zero to historical will accruals million compared be balances income interest approximately DAC increases to in million to reduced net have of under the new anticipated. accruals DAC between as we of would that GAAP, $XXX

range required the new under and addition, We in XXXX due balances in balances anticipate XXXX of $XXX requirements. to and required In reserve will million in XXXX interest in the changes million. $XXX restated will be the change to at transition that interest

tenor cash medium the fixed liability in generally -- of income the requirement effects flows. yields of upper AOCI, the company's equity. insurance rate income each a With currency in that The at respect upper future a remeasure standard, AOCI, single medium discount reflects few and change of policy the yield to component utilizing noted the the quarter, there accounting changes of of reflective quarters recognized we the grade instruments the A-rated is in -- grade consist the and to changes income benefits relative shareholders' a with be past new a that fixed instrument under affects fixed to

reported standard have billion billion. in As range on equity place, XXXX, $X.X after-tax the new the to anticipate of year-end in the accounting we impact decreased AOCI of would $X.X had been

maintain no the will that significant, we regulatory premium company's amount the future statutory changes impact in cause premium will when we're of collect While earnings of that important make profits the mind offer. purposes or changes flows for the excess to timing nor very it cash or rates, claims recognized, we changes be keep of GAAP any we -- parent the has required ultimately statutory impact the will the products the pay. it our capital to the it's to us changes of be Furthermore, on will impact and accounting in none amount

now my Matt. Those to are comments. I'll it turn over

Tom. you, our Thank Those are comments.

We for up will the now questions. call open

sir. coming first Bhullar [Operator Our you Morgan. from Thank J.P. much, is go from question Instructions] sir. Please very ahead, Jimmy

morning. good Hey,

a reduction quarters. how been I Wondering They've versus and your So, is circulations higher first much consumer had just question direct part a of response weak on demand weak sales. the several on it in with for mailings last inflation?

distribution the Yes. It's on side. really

As in actually sale my our each that's scaling past, I we've and a higher the with days talked amount mailings on paper. policy cost the up comments, basis, premium in as What the the is print amount other we're of the consumer associated on about these in postage is sale seeing actually back going for media slightly. the per mentioned side,

would more mailings indicate benefit that that of more and make each that electronic distributing, really that's going of one of we're of of things of more is over amount side. me to that our of So that what a really are And it's those the side media in versus of cost switching to sure the are reduction to the we all sales campaigns time profitable. our distribution the because

mail activity do online. call work to well does our But of the everyone other all remind support the the as together that such and as these drive with to center I channels and as -- want just channels

historical maybe pre And lapses but had they'll to retention. they the concerns Okay. up pandemic? where now about then, that do economy inflation you overall, levels, policy are there like close seems been expect and with above were it go And

actually We're of I to the fourth much they with lapses, the the the you're really quarter were third levels persistency last think around higher the trend mean, back they're level, the still pretty while right, fourth did quarter than XXXX. Jimmy, in fourth respect quarter, Yes, quarter favorably versus in I to where XXXX.

at pre-pandemic, see lasted for we've think first XXXX. Consumer I And think but those forward, do to rates slightly not higher that around what looking most Probably the of levels we the Liberty pre-pandemic during significantly. sticking Direct So, trend year back well. to most past had back part, probably pre-pandemic than would lapse as for maybe they'll to here levels

could just you change underlying it years, don't in one actually point not Okay. if your negative where results. it on But been a and the But would you -- economics. you I'm the you results? income, to five normal Do impact grow you the LDTI, a that do point more of about income, timing a it's a ask you next like Thanks. have affecting business happening if And with -- so? doesn't reach do growing could tailwind on had on really your several the obviously, I growth, three, some in think how see at LDTI the goes assuming from years being next drag or four, GAAP

a we did take Yes. look. Jimmy,

this question same year as well... think the the had last last I is asked quarter or you

Yes, last quarter.

out anticipated And the the there did it's it XX for around, end take being years a takes look we where LDTI what before at it's up that. that in historical have the -- than would up GAAP. we greater amortization under And future to actually, XX, under actually ends turn amortization

long a actually it's So, out ways there.

you. Thank Okay.

very Research. Please now you go We'll sir. to Autonomous from Thank Bass ahead. calling move Erik much,

Hi, thank you.

and come nicely but count starting turned yet. in Heritage, recruitings see like there, you're XXXX. those and agent And just the American improve more fourth steps at looks hasn't it to seeing you're you the talk have realize about can Liberty recruiting to taking and I what American it Income the was I Family and trends both at So, growth with noise Income you're through some quarter retention the holidays. in hoping in the

Yes.

very incentive we some and the had Those through at then XXXX. Income. continue of is compensation obviously, to mentioned year in late been As American adjustments in the past, in to the going the there's went side

the We a are X,XXX during seeing stages, increase early We -- are to some our it's but development a reminder, as pandemic, went seeing there. in agents had, approximately agent XX,XXX. significant in from over positive the we count

we than the little attrition higher in what here quarters And so, a been our would bit has like. recent

indications as Income. we've And recruiting our got these in to seem well be been as programs working. early, that turnaround still while that American place put at in retention a some it's early -- there's efforts We've

where a because is as strong feel that positive from we're agencies. control, we that's our do So, noted, have in two was other perspective. at like our agent headed XXXX really And growth

maintain. And so really impacted not is this to our believe factors, but really control in by environmental

Thank then, you appreciate I LDTI on of gave the And impacts. all color the you.

quick do you to updated financials? Just financial with expect release a question. When supplement an recast

Yes. with do first our We at this results would as our quarter along that intended point. plan

it. Got

guess walked on of the I of shouldn't kind so off numbers based advance, So, expect that call? we in should model you through we the

Exactly. Yes. have the When business. around lines we impact a and detail first -- various talk channels of again quite of bit after quarter, the we'll on distribution

to time the be more those will that about talk So, details.

on until the we things, can't of be numbers get and 'XX the it's restated of One is be about 'XX releasing some Erik, we have the to a little audited. careful actually bit

into get around a of bit timing, a the we So, especially little quarter. first

Tom we of So, detail said, provide the more able really said tend that we to to later -- on. as as be that, on

Got it.

KBW. Please go move ahead, very sir. you calling to Krueger We'll from sir. Ryan Thank Mr. much, now

My is Hi, guess, question the appreciate I LDTI. first guidance. all morning. ex I thanks. LDTI Good actually

we guidance, ex was -- think I it's which midpoint. the it looks LDTI, quarter's a had like $X.XX. is back impact this the last midpoint $X.XX like If more LDTI quarter, out

give us a kind you perspective can LDTI of just guidance down come that seemed bit? curious little any to ex if on So, why

mentioned. $X.XX, it dropped that about And more there Tom. growth say midpoint, drivers previously lower Hey, that we really, the $X.XX. main by the like are the -- I it's would that Ryan, premium so we had

a seeing inflation. by and we lead And higher bit expenses little then, are impacted costs agency

meetings up as increasing costs were additional some that recruiting start starts training pick travel have incurred, bit. a and had that we and just and As increasing, we

rates the the what cost in as I slightly the just higher guidance commercial estimated we previously higher then, given higher then, are had our also a bit for program, count on higher. And And prior a than mentioned debt given work. share cost repurchase paper, share just

-- then And Thanks. no, Okay. go ahead.

we're add but a just the I'd higher versus wasn't time this same -- share obviously, at fewer anticipating, with price with were on we we say share amount is one that the time just that the call, from that of count, were the higher amount last the dollars. at shares thing just the -- of back with the I'll higher where current purchased just we're getting

to on $XXX further back XXXX? would in go Good. flow level? bounce free more then, occurred be still $XXX non-COVID beyond a think a as there cash to trying to excess is guidance claims in from drag normalized XXXX of the million COVID there some that I'm and And about million, that we if

year, that Yes. about had COVID million. last 'XX, we $XXX The -- non-COVID about million. think combined $XX in in expect XXXX, combined we about way we had And that we is

kind the higher higher XXXX. should dividends between in in which lead therefore, parent two to of XXXX, earnings result statutory difference would, So, those to the in

Okay.

flow difference those be then So, to 'XX? affected would and two tax between cash basically in free the additive

yes. Exactly,

Okay, great. Thank you.

Thank Piper now John you We'll Sandler. very Please ahead. much, sir. move calling Barnidge go to from

into Consumer beyond Thank that is just around mailings. and marketing mailings postage increased Consumer there a of more and can be secular to Are cost you to efforts? developed Direct the question like very can is be much. incorporated areas the Seems Direct My that paper trend.

and And sales. in focused results Yes. our inquiries in which applications we're really Internet mentioned, on and growing I'd as media electronic -- additional

significant my that's was part four much or mentioned grow and so three the of is in a continue ago. comments, offset just business more the to it even years than I And is that, been as

in the as So direct our models, declined we've that the really, increase electronics offset mail with we've on on operation, an offset side. that's profitability based the

the out seeing dynamics based how to that quarters, plays returns depending next year on on. will the those several dynamic are that So, the profitability. going we market But the if throughout inflation, continue adjust over overall, on in we're

So, we make we're that overall, that can our we targets each as campaigns warrant. enough conditions that year throughout these sure on and flexible the to of market want maintaining adjust profitability we're

further or to know the question. Just from Great. Is I a Thank away present tapered you that that the estimate. level And in year if year? trying indirect degrades. anticipate the -- you. pandemic throughout COVID the the follow-up over that is an equal dimension is of portion mortality

XXXX, mean? For you

you. Thank correct. Yes,

Yes.

little in would the for for -- quarter second, and COVID we expect than quarter. third fourth -- the third a XXXX, So, bit first deaths the higher we for

-- during course do bit that's front-loaded of that be a little will 'XX. of So kind the we think

you. Thank Great.

very much, you Thank sir.

will sir. question Credit from Suisse. Mr. ahead, go from Andrew Next Please calling Kligerman come

Your line is open.

Good morning.

First question And having period completely kind of digestion producers. kind a Income. being American is of around understand of XXXX XX,XXX

you'll will kind to you I mean, to that mid-single-digit in get different XXXX, As is longer? track think this just it's you maybe back strategy, maybe reason I kind early it but there is sales incentive on you of to and growth, single-digit mid-upper initiatives, guidance, there get producer 'XX take in of into that growth? for a there can't new believe know do believe any reason go

question great as there. a that's No, we we can back believe get do

then, And effective onboarded, As and trained obviously, a these quarters agent indicator, the leading count a from reminder, agent the production are count been agents for and perspective. they've more here, a to new producing. longer takes they is and it time the get average

have do projected why the a on guidance and so, see in believe that growth lagging sales side, term to count toward we that we growth We the agent growth will management you'll -- flat. as but the on are in more in that 'XX. that in side bit can drive get middle And longer that's sales little XXXX our

in year, also up opening growth American to us and in good We this XXXX. anticipate five will offices set Income too that three over next for

agents. when to And clarify, sales. do the there's we two just specific And that's our we behavior. And at compensation on I also is talk throughout components commission targeted also compensation compensation then, we that for adjustments, primary history. wanted have base incentive-based the just One to about

the compensation So, profitability talk that we're changing we influence. and when really pricing that behavior compensation and overall specific total we're activities but the we're targeting about two in really, our is targets, not of to changing trying amount

consistent be just I our and going in compensation experienced acquisition So, what that the costs with we've wanted to overall, to clarify past. are

in Super I kind also other health pressures was are of that of Medicare with Advantage in to the We cover. back Med XX%, at players, a many subs some gaining pulling to particularly And look of insurers them of number think share. be to not seem due lines, the we of only helpful. and over them United down online online companies, product. Shifting MedSup, sales Advantage the like that American but

disciplined? And American seem agency so, where players competition is be to a, kind getting the competition I more I the think coming in guess, down look of as wondering, I as from the yes, the is at United I'm channel, And -- from? just it's coming where

that saw we're competitors. more was by pricing sales, And profitability underwriting to these a Advantage say been speak. program since in I'll we on just well. this -- margins time. also XXXX this I'll we're But chase really targets happen going the experiencing movement certain what and Yes. we aggressive and maintaining to over started, and market our and Medicare focused plans so and we've seen not area, throughout the business toward in say as seeing we've dynamics are

will that as anticipate that And so, some abate we forward. of we move

been you do You've quite area to anything some this for time. Mike, to want running But add that?

Yes.

I think pulled carriers low, not into carriers. there's we cost may that of entry Advantage movement business, in of a seeing while there have some mean, big plans. overall, are line this is I because small or back, capital-intensive it's The been have business. Medicare And

Advantage speak a not. side, or individual couldn't So, particularly which side plans. is I are back the there overall, on group pulling But Medicare and to move

supplement up forth Medicare would to economic Matt years. started cheaper this more that. and now plan I doesn't of to willing And the or since We've think requirements current referral people swings Medicare environment give that contribute business 'XXs. these that provider in to care. we've as I have back network in said, the the benefits assume managed over a are been [indiscernible] a to seen the go

So, it's that maintain not really to or approach. We're unusual going surprising. distant

to the the that's necessary We to right our provider fair here. rate rate lowest and We increases. It's also avoid margins. the been never having increases. think want We've have renewal That reasonable protect said, our than to cost higher customers. have price protect to it's customer to

same the our the price And to is as that our -- remember business new this have renewals. we price the is business of other thing in

prices in-force million. like new we can American [Technical block, lower impact the were go business would not profitability because if that it's we do to which around have our United and So, of that, $XXX in is Difficulty] the

again, that something So, particularly we've it's seen before not and again, surprising.

seeing little of products to Difficulty] this, is you're kind kind there further in Advantage clarification agencies MedSup? to opposed Medicare a any more of just and terms transitioning [Technical on of online. And across as the competition interest And so

was I'm Could sorry. There repeat background a lot that? noise. of you

Absolutely.

terms area? in to distribution Globe much in to that, likely as pivot Advantage of agency So, the And pretty online? more competitors, being and MedSub to historically opposed with it is across is then, Med

that Matt, to want take do want... you you or

Sure.

Okay.

me start. into have plans don't I'll to area. say Let Medicare pivot we the Advantage

of think pass. all that from little as the have are sales is competition coming online We well. I do a bit our

channels. the So, agency [Technical we in the the our do competition the in pricing, A are agency in Difficulty] see of and online sales bulk business.

to add Mike, you that? to So, want do

Sure.

and time to ago. been don't line one really, know use that'd Medicare to I Part is make I business for Advantage, that. something to Part networks think, that a players would harder sense us. At something that just -- for we I think which the for be it's not one it's plan, we don't were that And that we of we've in, long we the get do would considered and and involved think with It's undertaking for and And big it's the I in D. -- D change and a we exited time, a similar, that us. be Medicare that do. wouldn't want Advantage smaller

Seems as like a usual. thoughtful approach

Mr. Kligerman? your that question, answer Does

you. Thank Absolutely.

Mr. calling Mark ahead, Thank sir. from you very go Please much, sir. Truist. We'll now Hughes take a question from

good the [Technical year. got I kind is you perhaps goes or trend you. emergence that over obviously, rate there's by, the a the nice years? a of your But changed timing as impacts basis? line LDTI if of Is about in go-forward will so it time touched profitability, Difficulty] EPS growth Yes, deceleration Excuse just don't this accounting future your that impact anything standard me, on thank a and that benefit there natural know morning. on You, the time acceleration growth

Probably one treatment Yes, as the renewal we thing commissions. of future implementation I'll the LDTI about of answer of deferrals is that the think one.

an require method, would a new capitalize, the expenses So, are us the Under to average to amortization we rate allowed that rules additional we're was at both all future commissions of we're gap, deferred, that portion -- anticipated change now we renewal rate, look the renewal as -- as capitalization. capitalized are amortization was determine we capitalized as historical to that each first commissions renewal amortize and year extent to new an only to the well the needed only future forced expenses. upon -- in

where business kind that the have the That's we business mix some by And we'd -- so, business, do a in One DAC two on expect don't point DAC we increase some basis for our that of other capitalize. the business. we of that talked is amortization. And have is, of being really a last And AIL of renewal kind driven on amortized. we XX for things. commissions we any have line have block, quarter of had we

fully we amortization runs we that we don't block commissions as goes tick see new where have as that as rate average off, on amortization DAC on a we'll So, any is bit. But that the with deferred up little that the up. the get renewals, it are AIL, the rate amortize other

we'd and on to out we put business increase basis even kind few points as of new then would over that diminish aggregate, time In amortization probably tick that years rate up points XX and the see around books. basis over the next XX

time would gets rate I of that, then and growth thing other one I be would the to through than of to add reset, once general that the I time, think, come should just really similar. other that from that might kind somewhat is, than it Mark, changes And level assumption expect

you very Okay, Thank much. great.

further questions for Thank you, time, to Instructions] this to the over have at closing appear you, back additional do Mr. to [Operator not We turn gentlemen. Hughes. call Mr. I'd any or remarks. Mota, like any

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

that Ladies will conclude conference. much your for Thank you and this participation. gentlemen, very

You a good goodbye. day, disconnect. may now Have and