Globe Life (GL) 27 Jul 232023 Q2 Earnings call transcript

Good day, and welcome to Globe Life Second Quarter 2023 Earnings Release Conference Call. Today's conference is being recorded.

For the duration of the call, your lines will be in listen-only. [Operator Instructions].

I will now hand you over to Stephen Mota, Senior Director Investor Relations.

you. Thank everyone. morning Good

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

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

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

I will the to over Frank. now turn call

per Thank and Net operating a for Stephen, $X.XX from second million, an year the In the income or ago. million, X% $XXX of quarter share, quarter, a $X.XX net per per share, you year $XXX or share morning was increase to $X.XX $XXX good ago. income compared was everyone. or million,

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

Excluding from XX.X% XX% and Accumulated per on equity up value $XX.XX, or was Income, share of year Other book ago. return a AOCI Comprehensive

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

premium life to For we the year, expect grow around revenue X%.

and margin $XXX underwriting was XX%. a for At from percent a the XX% the the to second year million year as margin range underwriting life be quarter, in full Life grow ago. we of guidance, midpoint the in down X%, around expect of X% premium of to to our

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

range expect margin percent XX% of guidance, X%. to relatively and to we we to the health expect XX%. of a revenue premium For around midpoint underwriting to our premium in as At be flat be health of the the grow year,

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

quarter. As a as the administrative ago same expenses percentage X.X% year premium, of were

approximately by largely up costs. costs around of to pension-related we be administrative benefit in X.X% and year, decline For the X% expect premium. offset and Higher a expenses be to full IT expected employee labor be are

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

Thank you, Frank.

First American life quarter underwriting X% million. X% million to ago and to margin $XXX the up Life, over year where was life were premiums up Income $XXX

second the $XX quarter. sales In ago from down year of XXXX, quarter net were life a million, X%

as strong very sales quarter-over-quarter tough we comparable. sales of posting the a However, XXXX for a produced for second half XXXX. XX% and with of first in makes of the quarter AIL reminder growth This

momentum growth I this good However, half strong and I division anticipate latter sales of with year. see in this the

The the average year quarter second first and quarter. producing up count from from X% $XX,XXX, was X% up the quarter, ago the for

over I sales producing in count to as in and quarter, agent growth. recruiting seen count from excited While sequential growth agent we past declined quarters, the is average see of am future two a year driver have sales the ago the momentum growth continued

National the the year to quarter strong and the from Net The ago health and life At XX% Liberty and up sales quarter. $XX XX% over continues million were was million. to premiums margin recruiting agent producing primarily is ago $X produce up quarter up which sales second is life was year increased count to agent XX% to activities. X% sales up million which year the National, life from average X% underwriting were count. X,XXX, for ago due million, Liberty net $XX up $XX quarter increased to

to second margin the count. growth The sales in Net and primarily health $XX The increase premiums in is health the increased experience. year-ago $XX due year due Family strong higher and million $XX recruiting count quarter At to quarter was increased X% XX% generate to over to from ago to primarily health improved quarter. this XX% XX% agent margin on ongoing increased were to underwriting The premiums continues producing Heritage, up underwriting emphasis claim million, X,XXX, division. up for average the agent million.

activity. Globe $XXX due life declines sales year due In direct-to-consumer $XX acquisition year million, in the and million. at in to X% premiums life insert is from primarily life direct increased primarily $XX to X% division while the margin higher quarter mail ago million, Net The X% to margin quarter over underwriting Life, our policy declined decrease expenses. obligations ago were and underwriting down media to

an direct-to-consumer at quarter. be an represents electronic However, new Electronic as ago annual XX% important approximate channel our rate sales approximately electronic the year continue of this grown the of compounded currently XXXX. from X% since sales. sales division growth grew to has part And X% over channel

the were United sales margin quarter increased from American $XX up to General X% ago where health $XXX ago Health over underwriting compared was year On X% year Net or quarter. year ago $XX from million. to Agency premiums to the health XX% of down the XX% million premium, quarter. million

and Income year double-digit growth. low full Net flat. the expected American are General be health follows; sales mid-single-digit growth; as double-digit be seeing Now mid-teens sales trends with Life, expected we to at growth; United follows; trends mid-teens agent Family XXXX life to the in full low the Life, at the relatively full be for on year year XXXX growth; as growth; American Heritage, as are Net slightly mid-teens for projections. our direct-to-consumer, for average growth; Based business, count Liberty Liberty experience to growth. Heritage, producing Liberty we National, follows; are Income double-digit to Agency, our that low American down XXXX low on growth; at National, single-digit to National, expect Family the

turn I'll back now the to call Frank.

Matt. Thanks

ago define investments. And floating million policy short-term and income in fixed only up the $XX increase investment which commercial mortgage rates million, yield net our on million We year mortgage will loans interest investment on investment the income or partnerships. and ago an X% quarter. including investment Net quarter up we $X year was limited to on now less $XXX as to interest was turn Excess maturities income, for from required loans, higher liabilities XXXX million, the operations. $XX due from

year I would while commercial the line of here net the do floating we these on interest quarter, mitigate increase reflect benefit X% with adoption is the rates. rate as policy the up investments higher the that the that of floors the decline have point loans liabilities. Required in LDTI in adjusted over from rates to in out impact ago from impact a

steady invested excess assets rate net approximately range million. $XX investment of to grow investment grow For and in to the in as of million environment a growth income we our expect and full X% result income expect $XX the year, the to favorable

second yield invested and of $XXX average the in yield maturities investment-grade the an higher advantage of and quarter, the sector of Now higher opportunities obtain an regarding investment our at taking primarily municipal million municipal rating and of AA industrial X.XX% to fixed life invested yield. average we as in average years an sectors. as In in minus We XX quality. well

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

first two points was second X.XX% For quarter. the XXXX yield the up second entire from maturity fixed quarter basis portfolio from of and quarter the the flat

XX As portfolio yield was X.XX%. the of June

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

investments. As a reminder on our we mortgage our loan information website regarding have commercial and banking

previously the million Republic quarter in default As we of a First early after-tax for Bank. during earnings call, mentioned of took the a we credit our first result as quarter provision loss second $XX

maturity on unrealized loss billion net of investment due rates the portfolio our holdings. to book higher fixed Our market approximately has position yield $X.X being than current a

we concerned As by the historically it is are we unrealized not position as rate driven. primarily loss noted interest have

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

XX% this are been ratio XX ago the is BBB of over portfolio has year This XX% in to fixed the rated maturity quarter. lowest from Bonds the compared years.

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

or However, asset-backed equities to have CLOs other securities. , exposure mortgages, residential keep and little derivatives, as assets such in mind, common that no higher-risk we

have other many we to exposure companies investments equities. unlike Additionally not direct do any real insurance private estate or equity

securities we provide to hold rates equity BBB that interest risk-adjusted due the in regardless acquire or the in that returns our markets. believe to best of maturity fluctuations capital-adjusted securities We ability part to

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

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

to only securities we we also survive are key an in long downturn, purchase opportunistic our be primarily criterion withstand must Because that a in higher-yielding scenario. issuer and multiple is ability we a market cycles. have Overall, to utilized believe to such invest process not investment well-positioned a the but

these under tests implications commercial in through comments. held our multiple portfolio both tests on directly partnerships. scenarios of stress mortgages the performed maturity capital have address stress Tom his potential our limited We fixed and and will

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

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

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

Frank. Thanks,

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

price a a repurchases resulting third $XXX.XX. year-to-date in million XXX,XXX the Global cost $XXX total an $XXX.XX, approximately share stock of quarter at XXX,XXX shares company second cost of $XX for the purchased repurchased quarter total total of Life price of The we've million. for for price $XX share cost date share common repurchases was In Inc. million and average at a of of the an average to these for shares million shares of $XXX.XX X.X average in

flows the results cash the company excess by will flow received through subsidiaries company's it, In the primarily interest cash addition from continue we do and to held on debt. the parent by excess of quarter paid parent less define assets to XXXX. second half its dividends the during second the as from parent, Parent generated so liquid the

parent return to dividends to will available be flow its million $XXX to share full be in repurchases. company's through the the form and anticipate $XXX for excess shareholders year of approximately will cash We the million

higher than is amount noted As this XXXX. in calls, previous

million the noted, $XX previously at quarter the have compared to historically million $XX as liquid we we the As end had to approximately of liquid of targeted. assets of million assets $XX

to of third the the $XXX approximately the payments in XXXX to million the XXXX remainder $XXX for anticipate million the of $XX of generate consideration In and XXXX. we $XX remainder for date the approximately million to expect the to flows parent into share dividend for this in approximately after of to providing to our us distributing $XXX of is quarter. $XX taking excess liquid shareholders million assets, to with We cash $XX available million of million $XXX addition half repurchases of form to the million assets of second million

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

the XXXX. cash assets share anticipate should $XXX the amount is insurance we will during substantial long-duration capabilities $XXX received million generate modernize sufficient support insurance between capital after be cash made program new million our our to remaining as is parent levels our in information our acquire well targeted fund noted from within guidance, sales, other during repurchases to the earnings In subsidiaries operations company The and occur and to and new year It the that of repurchase share future technology maintain operations have the to needs. year. our expand operational and by as investments

consolidated amount our approximately at subsidiaries to XXXX, that of Life to time low required million $XXX RBC maintain company over to XXX%. to regard the levels With end current range a XXX%. our was end our consolidated of of our of subsidiaries, At ratio capital ratio insurance RBC support ratings. meet XXX%. of the RBC necessary XXX% At level is ratio, this had RBC at our our goal target to in the our consolidated Globe capital the levels targets action capital

losses When the the ratio year, slightly first of of RBC credit reduced maturities of adjusted for the fixed half XXX%. below incurred our to RBC in range on midpoint targeted the has XXX%

address positioned recession may to our insurance subsidiaries potential additional the We are defaults or additional any downgrades needed well factors. economic capital due and to occur due other that to by

maturity Frank of that perform routinely in tests under CML our reflect these defaults we mentioned, stress provision we include severely on and in Reserve's portfolio scenarios. loss anticipate downgrades the portfolio Federal losses a in investment various tests, adverse of Under of As stress portfolio our fixed levels multiple those for excess and our scenario. ratios

losses our all only be continuing dividend to needed our liquidity our would anticipate of needed capital, if not sufficient rather extended capital under $XX they The parent anticipate period million company internal maintain target occurred share our of portfolio consolidated losses our do of of XXX%. could the is year, would investment has Under be before as RBC emerge repurchase but the in of which XXXX, long months. it in low-end our RBC estimate downgrades additional the as of as defaults over we of within the planned. Even XX this while and consolidated our we and ratio $XX program time, these end an if scenarios, million occur resources fund target range would that stresses to to to maintain

the updates the health morbidity. our in of XXXX prior calls, historical each our near financial website. second of of current the With life as third the regards The in reflected have we our term. information summary and we the and in results within policy discussed quarter, quarter obligations LDTI to the we've assumption on available XXXX, continued included excess supplemental lapse updated on operating for quarters mortality In assumptions particularly estimates both life mortality under

periods. gain are changes loss period or slightly expected allocated health which For for life the assumption resulted information The experience when current $X.X quarter gain and of the from second policy absence and supplemental policy channel. a the of shows those obligations loss This to the persistency. indicative lower by remeasurement our the remeasurement or available in favorable lower In $XX impact changes, experience were website our to life gain quarter, the obligations the if in and The life remeasurement any, compared or on assumption the financial provides mortality exhibit obligations. past The and Life gain shows of quarter. segment fluctuations distribution remeasurement assumptions in current an of million which for resulted the million gain loss is fluctuations. remeasurement

million. $X.X

obligations lower health slightly million Sorry, policy million on $X.X and claims life policy lower lower than anticipated. obligations $X.X

long-term had the assumptions. we to no in second changes And quarter,

the quarter. process and do finalizing if updates updates We to significant long-term needed third make we'll expect in in currently be assumptions of these of the are overall. We not our review

income to for XXXX, income per investment our had ending XX, operating respect the is of investments. share of and in $XX.XX midpoint is XXXX. will $XX.XX projecting are largely due mortgage loans with per indicated to diluted higher share to partnership commercial $XX.XX earnings be Finally, from common our than we we guidance limited for the December what last year higher and quarter The guidance our range net

helped to margins Life guidance. are the range XXXX Life obligations to be remainder restated the percentage XX%, underwriting are range full XX%. of underwriting policy the to underwriting underwriting margins be margins and margins we underwriting the indicative when to ratios the anticipate Health of believe obligation The unchanged from anticipated year. higher last the XX% slightly margin of year-to-date quarter's over in We emerging the full life XXXX, For year. for life year XX% the in than of

quarter be significant costs Again, next these percent updates and acquisition a of not and As updates as costs XX% acquisition commissions. quarter. we overall. be the previously we will do including expect second amortization premium reviewing noted, and non-deferred Total both in making anticipate to are assumptions

with the We full consistent XX%. expect this year to be

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

Those our now up Thank will Tom. we the for and comments are call you, open questions.

the [Operator question Instructions] Fargo. take Thank We Wells from will first you. Carmichael Wes from

up think to being want the Hey, good on else? something morning or by went In that the credit sure on the losses question your million about fixed investment Is good that's afternoon. First $XX that I related portfolio, had not for to a Republic? I comments I in clarification maturity just make driven the losses quarter. on portfolio. the allowance

that's about worth $XX.X exactly what No a It loss million about of on that was on Yeah. is. gross Republic. First basis

any off Got new for you plans of kind wondering April? have just regarding a it. of the new And what debt Do of loan size senior debt long-term follow-up. in issuing terms thinking Thanks. you're pay updated to issuance. I'm just term

doing that consider to Yeah. right doing XXXX. now thoughts our We'd that consider actually are in

of will Yeah. time. do we Clearly, the or consider that. have million $XXX the we'll are to something to of the consider make term at that larger that have And to needs index that $XXX there out definitely we it I just at for size and loan might million needs see take be be eligible, point issue whether but Wesley what and look kind what we'll in a think we the

Thanks. Great.

JPMorgan. question comes Next Bhullar Jimmy from from

on question a first channel. had direct the I

inflation inflationary of is fairly channels sales have the given channel been and on the also lower long in just why high that weak we comments the weak as direct as because that your sales guess I reasons growth you've in income But for going So should count. high think sales cited agency the reduced agent to optimistic spending for as are there? sort and a disposable I environment are marketing be assume

Yeah.

inflationary on it On the marketing the and distribution Consumer to channel subject particularly Direct pressures to is side.

we and I'll we've we in that is to in being As from mail circulation past it to perspective in growth incurring the channels are the continue And our in note upon and market offset we're continuing reduce channel. by call channel. our traditional the cost media that noted digital print that based reduction to that

growth in noted I X%. channel in is comments the our the As up digital

going maintain on of extent that making area. really, don't scaling that we've to particularly certain factors in those profit on target margins our that back got the in meet competing we distribution is that and side So a there. print But we're sure just campaigns, couple marketing we that focused are than the objectives on

just are would I on related basis. actually sales per add to say a from to inflationary perspective consumer pressure to policy the that on a just up

So really -- so policy related actually not seeing from really premium deterioration it's consumer on inflationary marketing perspective per the we're to is the pressure side. demand a

And agent would it environment a when then Okay. of recruiting time they in the things really tight labor for what's would all the were driving year? if the count what's that increase saw tougher market way conditions easy of you next have are But bad. recruiting your an sort your across remain be a significant you the I assumed channels. because had outlook And that? with

that just that and so more and managers hands that count and some activity, tools recruiting for our putting who into things driving our count, be sight agency is middle many focused of responsible really middle we've are been management of just ways in training. line a growing put the that agent growth better owners able we've in as to get place onboarding agent, What's really new strong on Yes. there's in to management grown

noted you've point. really the and in three that So all channels. think continue. this at pleased with as we're see that very headwinds will growth Don't is

labor It the additional case generally depends recruiting believe economists there's looks it the area. but on like us an tailwind in market cooling little which potentially been you a the predictions If that's for for bit. that's

indicative driven the put with And count just we've that trends of that. overall economic the that I believe things pleased than agent very market. growth from at more we're industry believe if an is is some and of you look growth think our in we So place the activity that we're or by the outpacing

we're pleased very the results that we're So getting. with

new thing, I'd Jimmy, that that just we just a to to on add to one remember, opportunity a recruit opportunity. quick better really

because of labor of the And never those that's been unemployment a opportunity able of tailwind, that So, looking market in better better there opportunity. of recruited bit really plenty a really out of type to markets markets to we've for one the while to we're again, a trying there's all recruit and in loosening still take and little thing. a might advantage be folks we've

of on the dynamics an add is And to to is out some from hearing we're from perspective. would there, of one I the feedback that is office thing, that work the one the is, return going field that

an to opportunity a for have is opportunity. and in entrepreneurial additional their nature and in grow flexible income looking entrepreneurial manage more individuals seem Our own be schedule, attracting, an much that opportunistic It's their to to manner. ability approach we that are

So, there, think out of more going than or the tight. experience a dynamic our really that's on influential being market labor I that particular that's that's

of losses won't there's yet. a that flow just offsets Okay. impact investment as be lastly, impacted we elevated on Should commensurate the you've next assume And of cash any there are to there going year, that income extent free that the first couple same to through be quarters. on had or

realized excess It's about to flow think it'd little we just losses. next on early where guidance be believe clear But think we it, excess just range to right kind Yes. given in similar cash of some of was now year. a what for this us cash of flow year, those be a give as we

you. Thank Okay.

from next ahead. go Please Piper from Barnidge question Sandler. The John comes

very for opportunity. the you much Thank

are electronic there more that that of really more been previously less pursued with mailings and the newer channels with sales cost Given or distribution DTC gusto. pursued now direct hadn't along are methods effectiveness being growing,

the our channels. of There's perspective, different supported that's opportunities methods online would well I distribution media center. on always from Well, additional by for of electronic we're as a agent lot as that call an side, looking say,

and lot of that we new So we're in always a platforms into testing that it. test looking area, different at as on and there's goes

So back as source. electronic you years very about XX% XX%. days our of see, from few I And these just you ago, an was can are plus as mentioned sales go it

that on to definitely to But electronics we traditional that. we media scale piece growing as that sales side. back there the continue the growth we're continue So, we'll extent media print to But the getting side. in to the the are more profitable obviously be do print side, -- going engine is on

Great. impacting question. for My I think be you. believe Thank Life restarting can income. demand Global loan potentially follow-up often for Thank payments student products? do you. discretionary sale Oftentimes, How competition through you

what which to increase don't Obviously, Sure. channels is the in have distribution some a wallet. demographic impact perspective that generally mentioned Direct kind the our Really, of see look lower had macro to see that. from demographic. continuing our Consumer our to just we too is channel, you tightening of an I much. all potentially that of as particular share including we're What is going is, a at to impacting income of

premium we sale have charge is month per -- a premium, as up. a low per Our still -- a the perspective. policies reminder, sale And going

may our about. channel, example. a an DTC wallet share So or that it of big as it's talking $XX In month $XX a not we're be the

think our impact an the sales. And so, really particular as of too our we market future segment think going on I of don't about much have that's to

you. Thank

from Erik is Autonomous question Research. next Bass from The

Hi. Thank you.

increased of insurers more off Some of lack due undergoing capacity. the talked that elective the procedures or seeing health seniors benefit a utilization either are put have to were as about pandemic

MedSup in block that's [ph] seeing if that you're all? curious I'm So something your at

United large block Medicare expect supplement a see to necessarily Medicare business. carry Healthcare Yes. We over those they and that wouldn't did I our to have of coverage. Advantage reported trends

continues has seeing and than cost first thing the in are the trends, the so slightly. saw But bit take a bit utilization really increased cost for rates Medicare our retiree side. some margins isolated we does seasonality more a on the we quarter good higher also, business anticipated higher impacting to group our than occurs seen has setting been on our in group where that individual XXXX. are the We we is Supplement those business in occur trends health that side renewal If account subsided into little have that health to

to any of so to then fully And offset the those future. we expect able in be

there would Got And account is thing, why Advantage in or that you Medicare base block different wouldn't the see MedSup just between client something it. or... differences and for to same expect your

Medicare more the but also, Yes. would supplements kind Medicare medical clientele we're different full is Advantage of and costs the not where a cover. covering of covering above deductibles items what Medicare

like little level And I your to bit guess if then the all anything maybe mortality population is about a you're could a we was in just of starting it. normalize of Got else excess sounds pivot any more you color seeing have at It what And just mortality terms in talking change experience. it bit quarter. little favorable to of assumptions a that terms there? or this

We from did assumptions. our see right. No slightly you're expectations in our mortality favorable

on Life we've coming improvement seen seeing still business. is the deaths You remeasurement did deaths excess elevated some gain the excess in say What from what XXXX. [ph] we I'd can that we're see through experience where in

COVID it's still So last XXXX in heart those in declines probably causes for bit and which decline see little cancer lower to and then I it well. of some from are to deaths sign in seeing and And as causes deaths the death. COVID quarter good a is Particularly but circulatory we're particular getting causes. elevated better say those of want the 'XX seems U.S. are it and nice because is a really bigger health some some benefit than

it. Got

basically conservative more were assumptions. you So your in it's

the some less than So mortality had there's but level of just excess you still population assumed? within

mortality. continued least at the for the We excess and expect year of remainder We're probably seeing of for this years. continue to Yes. into some definitely couple that probably next

And our current our than bit a less amount. anticipated is elevated little experience

Exactly.

much. you very Thank Perfect.

Securities. Maxwell Next Fritscher from question Truist is from

wondering was if National. calling Hi. this in Liberty of Hughes. could sales driver growth color just a Good the of afternoon. you on function Was today life in for some provide growth? I'm Mark I the agent for

agent It's of a We've growth. primarily double-digit agent function had growth. significant

in for growth Liberty the accelerating in really started count agent Our the in latter XXXX half.

indicator become that's a on so new more of come as leading that count a is And board agents productive. kind those leading agent

So agents then onboarded it as the get more and drives those experience sales. get

little count really majority vast productivity the a a a is that premium bit is increase. of agent just selling just gains basis on amount We coming it have of of per-agent we're that agent from but

but the mentioned I the quarter? you investment yield driver just growth? And of in must was it. this Was have excess What higher Okay. this missed income

Yes predominantly of are which it's in the in commercial rates, well that as the limited mortgage investments. as are partnership well. mortgage the hitting increase really in mortgage commercial our floating our impacting the loans loans -- loan our two-thirds our are short-term About commercial as rates limited really partnerships

So we're not significant. a those rates investments on seeing little as which is have as as bit well increases in short-term the we that

excess investment we account. then -- required good our pace also, invested you take net the income you than the income grew interest in it's when into just growth think overall, of But at and a income, the faster investment so very a And saw assets.

our investment net at had you at income. incomes net a growing than rate faster investment the So, investment

we up the good ended increase in So investment income. with a excess

Great. Thank you.

is Gallagher Evercore. Tom from question from Next

Good morning.

good Sorry, afternoon.

to way new mortality understanding is I'm flow on question accounting, excess this had Just a the through sure to accounting. going make follow-up the the

So was COVID non-COVID excess and million a if the for $XX around plan correctly total XXXX I year. remember

would for million sense quarter from -- and gain or would little a as up excess quarterly make drag $XX on still be of going exactly that $XX So, COVID? ongoing elevated million as -- that new million of million end the the deducting -- is $X Is it element you $X smoothing or million-ish does let's that quarterly call that doesn't just there you with that's with from that accounting comparable? that some you? make this elevated simple and then that the Like expect is to taking remeasurement drag, over $X.X

Yes. There's of definitely an element smoothing.

indicated. as not as of easy had it's So kind you

our from gains the underlying assumptions. think I remeasuring fluctuations again reflecting that, are

overall with expect than about over talked excess is, million. that business mortality $XX assumptions also the off performing to kind So What about time. our is yes, But the of wear life consistent kind we they're mortality those assumptions. that I'd better say we excess of that

those that's kind well. underlying as And assumptions so of

kind to come will exactly of that how difficult through. it's So pinpoint

what I we is when say would see fluctuations. But

had the we come through if that to quarter at is impact we significant have current to mortality So year And assumptions see are third as We then in excess in the -- of revisiting remember well. the up again them going to look other into our but will coming a results. assumption thing going be expect a quarter. probably current don't updating we kind it's of generally about quarter this forward our we

Yes.

Tom And actually say I we'd as to just year million just to that an earnings. million as $XX that and actually probably LDTI you is to and this be see that hit think one kind example. of new if what turned that only of actually through add $X.X out Tom of thing $XX roughly but would had incurred that and million impacts a-quarter that current you it that, $X way of said million to flow a roughly the excess

you will of spread less. spread and over is the expectation much the if under a out the on whole it impact new those is for got current year accounting out years the bunch So, so

helpful. That's really

a So, I'm sorry, follow-up. just

been so So Xx the if just the larger have -- impact clear we'll I'm call was $X.X the -- by favorable would this on a gain, GAAP, have on like old that? X.X that something million -- so on been by would or the it bigger remeasurement that quarter it

larger. Yes, Yes. been have would correct. It

all That’s right. Thanks. had. That’s helpful. All I Okay.

Suneet next from question comes The Jefferies. Kamath from Instructions] [Operator

about I statutory this if know it net your but do or you don't in the talked have Hi. disclosed income and remarks, year-to-date operating statutory you prepared income?

now. have yet. quarter don't statutory results those finalizing We're second the We right

not this time. So, at

was comparable the to And the million different $XX talked million or to to think that capital quarter, your guys $XX the last you test, calculation? comment stress Okay. $XX $XX that is that I had then said million about under million, about a you

Yes No, similar. comparable. very

So sequentially? better it actually got

Yes. Yes, Yes. just slightly.

Got it.

of Okay. of past learned if couple we've new over going these only that. obviously going cover affect had I is know to Alzheimer's other And you to and then this I some drug about again, not the approving weeks Medicare one or but FDA the is don't is the whether

issue. or for think not still I you you? an that something ultimately that guys, affect it's that it open Is material could is

it -- actually We've Medicare or not. Yes. by depends on it's whether covered

So in supplement administered Medicare rates. did through currently our Medicare some anticipate coming covers that drugs We that administered in the office and are these office. are of in drugs

one considerations we be will increases that will will expense and those estimates for run. medical it incorporate trend we for So is look as think for actually of XXXX rate what

And going add to that. was I think I to

compensated just those that in we look 'XX part of look well. are lot rates said, I think now of that disclosed like too utilization may think thought drugs much future. expect. like. related and pretty is we what it a But as to -- our ultimate can that we are with risks based like are those There's right as for utilization Tom I as some what effect understanding we in would the currently line price And in upon we've said what about costs what actually we of that may

it. Got

Thanks. Okay.

closing questions, hosts no back call for remarks. As are there further to your the over hand will any I

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

ladies call. you. Thank today's Thank will conclude That for gentlemen. your and conference you participation

disconnect. may now You