Globe Life (GL) 26 Oct 232023 Q3 Earnings call transcript

Hello, and welcome to the Globe Life Inc.

Third Quarter 2023 Earnings Release Conference Call. Please note this conference is being recorded. [Operator Instructions]

I will now hand you over to your host, Stephen Mota, Senior Director, Investor Relations, to begin today's conference.

you. Thank everyone. morning, Good

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

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

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

now to the will I turn call Frank. over

million. from up X% premium $XXX book year on discuss of on revenue is and remeasurement a share a from Thank $X.XX was year and ago. comments. $XX.XX, part and for increased in further income operating reported of basis, everyone. equity XX.X% income quarter ago third a is XX net excluding In $XXX XX% unlocking accumulated year of the quarter to you, In is Net ago. GAAP $XX.XX, compared was assumptions morning, $X.XX the income is the The or $XXX return the year or will from taken share quarter a net his share as per our increase value per return per insurance quarter, book for in income, or income year Stephen, share, LDTI. Tom equity million under million AOCI, good XX this share to growth operating in ago ago. September per quarter through the net or and loss On is XX.X% the an due value million due in $XXX life third per to the XX% strong operations, September comprehensive to other $X.XX

XX% from we to life to was margin the underwriting current quarter was due was quarter a increase due be The a that over underwriting a in X.X% and little for in the margin between part midpoint up was this in versus million, quarter. underwriting experience insurance, claims XX%. the year, full recognized premium $XXX to percent remeasurement life year of revenue year and $XXX health taken a the X% in quarter. At grew our grow expect underwriting to premium improved expect margin XXXX a to the In premium X%. as ago the Life X% year X% down to health a million, approximately remeasurement ago. due part recognized For life to guidance, of gain in of we margin to what than greater third gain recognized $XX in remeasurement million was to grow loss

due grow X%. from For be underwriting the be year, health and X% pension other employee-related a for down million revenue and premium costs. quarter, to we to $XX XX%. Administrative relatively premium the primarily At expect to decrease margin midpoint guidance, year the to around as of our health percent a of were expect ago, a expenses around flat we in

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

the Matt our operations. to XXXX, third the year previous X.X% expenses premium, full the administrative line his in will for be comments to over approximately expect call marketing of For we quarter turn with now expectations. I on

you, Frank. Thank

$XX X% X% the margin due agent sales. was primarily from year third premiums American million, the up agent agent quarter sales ago and up Here, In quarter. was up average and for net Income the with up start year count year life million million. quarter and over is the $XXX were ago growth life Life from to the going life XX,XXX, am XXXX, the in up growth underwriting to I'm encouraged to third $XXX count. The the to the First, quarter in see quarter, second from X% XX% count X% were to which ago I producing quarter of

strong quarter year up to the seeing the X,XXX, At third in to in is quarter and increase are sales were positive quarter. Liberty recruiting $XX million. count. for from million, life up producing health count up from to and the has sales enabled momentum of last year the X% life was Net the net million XX% ago $X positive primarily at years manage leadership $XX end year increased to effectively more National, due Ongoing of underwriting few implementation agent XX% put continues the agency life initiatives and the over agency which ago Liberty XX% agent growth. activity. past through was were and and results margin quarter agent We over to up technology from year. premiums recruiting $XX ago XX% sales to The monitor million leadership generate new average place

Now Family Heritage.

Here, X% ago the due health million. the to productivity. The average and for count over year-ago $XXX agent up to the while Net was to to increased XX% declined health increased million, quarter the from premiums were count X% margin quarter health X% sales the $XX underwriting producing X,XXX, quarter. third year $XX up agent million

the down in and due primarily Life, In agency with growth, media and $XX $XXX $XX activity. increased this Globe will incentivize X% the quarter sales agency in life middle insert million to from increased ago underwriting additional due XX% declines direct over will which obligations. at quarter, year and focus direct-to-consumer offices management mail policy life to our continue million, to growth ago to premiums lower lead were recruiting agent margin X% life division forward, initiatives year new on to Moving to to million Net count.

this grow margin business. the be we acquiring will sales underwriting on with new distribution activity, sales the direct-to-consumer and costs While associated continue rising to new primary by our will efforts maximizing our dollars focus managing advertising

year they're producing the American expected benefits. On XXXX increase experience Family from division of approximately around and we XX% our in X% of health we to follows: the increase an of to based the over for the around decrease business over increase ago premium $XX be ago support XXXX is projections, health In Life, XX% an quarter an United on which at Health healthy expect anticipate increase quarter million. supplement quarter Medicare increase an the of XX% business, the sales in as we and increased strong for at increase year X%. trends fourth full million ability American or the Liberty form addition at X%. Net Globe to be growth direct United health to Life, at produce an year direct-to-consumer as life Income the quarter. Income trends XXXX impressions flat American of around of for brand full count the sales full X% and National, significant ago as our General XX%. in the a be Heritage, an follows: with will individual agencies seeing. At XX%. Net result now and $XX of of our average to XX% $XXX National, American are critical up sales Agency, around year Liberty around of are around XX% sales year to to full consumer, sales follows: XX% to here, of XX% around leads an due expected General of premiums approximately year are of Family Liberty Agency, were year Heritage, the growth to seeing new activity the increase margin, that increased and Life provides is to underwriting Net around the a to growth agent National, million, increase that in at XX%, that margin a

of growth as XXXX, for guidance, high full flat the National relatively life XXXX our and we the focus mid-teens digit; expect sales for income, follows: we continue Now to to on sales, of growth American as XXXX at profitability. for Liberty direct-to-consumer single be year midpoint

United expect single-digit General double-digit health Liberty For growth. American to Family low low Agency, Heritage, sales, growth; we growth, mid-teens have and National

I'll to the Frank. turn now call back

Matt. Thanks,

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

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

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

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

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

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

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

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

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

position historically not rate As by the interest and unrealized is loss driven. concerned we mostly we have noted, are

the to fixed importantly, We XX% from Bonds have to rated more to maturity the compared the and, of portfolio XX% the maturity. are year-ago our hold ability BBB intent investments quarter.

it the been peers. this XX While was to has over years, lowest relative ratio high our it is in

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

believe we maturity of fluctuations real returns private million risk-adjusted, ago. $XXX best equity investment-grade many or capital-adjusted Below that We not we million Additionally, have investments any due securities ability generally our compared estate the to direct securities hold unlike rates interest or equities. year $XXX markets. the BBB bonds are acquire provide insurance part regardless exposure that in a to in to companies, other to to do

fixed midpoint X.X%. higher to the with expect at characteristics, yield maturities at of our partnership XXXX, be midpoint investment-grade the yield X.X%. The year maturity bonds the for limited we full of $XXX slightly to average an XXXX fixed percentage investments the in in of the we at $X.X total invest approximately guidance approximately million and X.XX% At year the Also approximately of is to yield XXXX. average earned expect for guidance, commercial only X.X% and year an below and on mortgage our billion the debt-like for of portfolio maturities full X.XX% average approximately full around fixed loans at

expect commercial we both and range to to impacting and X.X% the mortgage to partnerships, We with yield -- the income respect for anticipate our of be X.X% net XXXX. XXXX in limited investment loans

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

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

Frank. Thanks,

an of third have company of a million liquidity of of To parent the capital spend a $XXX.XX a available Life average liquid with the few share $XXX quarter for and year-to-date shares we approximately at shares share for $XXX.XX. with $XX XXX,XXX repurchased for repurchases assets a $XX million discussing approximately of share common year in date, total these Inc. $XX our The price stock for X.X million. liquid began the assets The million. In average me of minutes and of purchased the price repurchases cost $XX ended price fourth let of $XXX.XX. XXX,XXX quarter, total of position. cost total at an repurchase cost First, was million shares the share Globe resulting million third program, average quarter,

subsidiaries cash primarily to we flows to addition results parent, company's its for year in $XXX The repurchases. flow, dividends the the continue to assets return third the liquid from full be dividends interest do flow to quarter and will excess as parent anticipate the and it, by million remainder the its the less from the cash by held the parent the company's so We paid of the the available of In generated XXXX. approximately received parent and share on for debt. company define excess form will during excess through cash parent shareholders

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

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

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

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

levels Now regards with capital to insurance subsidiaries. our at

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

calls, overall the previous or at we ratio incurred midpoint consolidated be was on our of the anticipate ratio of discussed to year-end end losses range point, of XXX%. light approximately As RBC we date, RBC XXX% to XXXX. In credit At at this our our year. do RBC But by losses address levels we midpoint are any of anticipate to subsidiaries not downgrades credit significant well do any insurance the or extent any at for to needed our remainder the range. maintain of the occur, the positioned to capital our

policy Now the current obligations with regards for to quarter.

included LDTI As information have within supplemental we've -- the calls, discussed available results on XXXX in prior operating of historical our the on website. each summary for quarters with we under financial the

health life The $X impact $X and in the segment. In quarter, made of life third million health mortality we that of we included favorable was obligations in the changes combined XXXX obligations the both significant segment loss decrease for we or on million. morbidity. total obligations -- overall life with health not channel. assumption in third the approximately gain Life million. assumption changes with $X by were assumptions, expected, expectation assumption the distribution updated while of and life period lapse, $XX in our again million Also, quarter trends by higher those exhibit life assumption quarter health changes In total addition, in changes in impact decreased as health an the third increased and and details mortality both remeasurement gain And The on from made and results the a more and the quarter expected the of approximately remeasurement of calls, in reflects of fluctuations approximately 'XX, current an by the claim prior as quarter. health noted quarter experience

indicates to the experience gain addition also remeasurement changes, assumption the In or fluctuations. loss

Life favorable $XX experience policy fluctuations life the versus of segment of policy obligations health For for result $X obligations when assumptions policy quarter, of a experience obligations, and lower related claim million primarily the remeasurement were and to in of mortality expected. lower The as to life gain million our persistency. resulted third compared favorable

Now to what with for guidance higher $XX.XX per the favorable $XX.XX our ending third year XXXX. midpoint than the share guidance regards projecting range we to we in in operating XX, had is XXXX, and December net are diluted $XX.XX The will quarter. be quarter, for earnings income to obligations of policy last $X.XX the due indicated of largely

a trends, the short-term lower at than Our of anticipated continuation our -- third anticipates level the although favorable guidance quarter. guidance recent

XX% approximately quarter. approximately acquisition consistent the acquisition For are nondeferred the amortization we XX% helped Total as costs to well which deferred underwriting cost, is premium. as be third and with full acquisition to underwriting of costs year premium margins XXXX, premium, of of be commissions the expected of be life to anticipate margins including XX% and

premiums XXXX, for earnings per midpoint and underwriting and underwriting anticipate for diluted 'XX be premium growth margins guidance, Now health. health consistent same with the guidance, the grow anticipate as the 'XX range. XX% health to growing as X%. at regards a X% life the the X% and premium to to we our growing operating year $XX we life of share or at ranges growth $XX.XX, the to in of full fall midpoint percentage representing Life At of approximately with of with We range at will estimate income life XX% premiums within XX% about net for around and to health

investment X% guidance. it to rates the our to at increase are impact anticipate expected favorably higher midpoint X% addition, of income interest excess to In as we

statutory in flows sales million, agency cash of available slightly little of Although losses we for will trends to parent mortality at the from income return final are not in yields. lower year, time, and realized cost part a $XXX excess shareholders to benefits to be the growth XXXX higher favorable 'XX than the XXXX and anticipate due results offsetting the over this XXXX investment and impact

Finally, regional Health. entering health start-up with is to health and provide care me of Earlier a outcomes. with let merger small comment experience Every urban company announcement a Evry technology results we agreement in Texas. a outstanding merger Evry a customer on announced positive into locally major areas in of in the the month, focused the Health, focus

full Globe's importantly, the to Evry's to believe assess service We whole do had utilize can had made to in We technology impact directly allow or to have not us grow, recently the more Every to previously enhance a how small significant and XXXX Evry we I'll but a experience back We will customer Matt. results. Those now investment my it acquire company. allow and opportunity turn Evry offerings. expect are on comments. to XXXX ownership

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

[Operator the from Instructions] first line Wells Our question comes Wesley of Fargo. Carmichael from

trends and I a on seeing. you're just what mortality had question

like came XXXX, But for of So underwriting some COVID-related it out, you kind the to guidance expected the sounded margin had I same when be is expectation think XXXX life mortality. XXXX. for as

just your of terms expectation for in excess... wondering you're So seeing what

Sure.

continuing to favorable mortality was excess and third see quite quarter What So the say we're third I at even is direct-to-consumer. in would the quarter. favorable

would those expect drop we our make want I in mortality trends excess on mortality that And think do an earlier to before I call So adjustment indicate really, any did just assumptions. recall, excess XXXX. we to to you see if we continue

that So guidance. our is in reflected

and your question with [Operator go Instructions] Please answer. ahead

question? a there is sorry, I'm

Wes, get answered? question did your you

The JPMorgan. next the comes of Jimmy question Bhullar from line from

embedded you not? in assumption some level improvement ask on -- guidance? beyond -- your you you're mortality, for just case think excess assumption an that's pre-pandemic? your are in used that you're XXXX mortality assuming of but I excess I'm Or be the still the assuming to you embedded before mentioned I I wanted to what clarify Maybe question, assuming are

that's Yes, included assumptions that's in all still And our we correct. I expect excess some mean that in in mortality XXXX. are guidance. reflected

Are stabilized, couple that I clear response, more a increase and incrementally have other spending, a back been questions. of had sales. and sales but they thought might reducing to and now point are to holding and not they declining. sales direct and wouldn't that's you've I down going your be more continuing grow, in spending some then marketing X because years On you have marketing would And you're -- reduce actually I would -- row, keep that have Okay. like they at

what's comps. ongoing of easy the So fairly a driving decline

Yes. of at one the look you'd increases things sales had I the would to is in say significant have during we year. pandemic

half of 'XX last So 'XX. in and

last the really pre-pandemic of pandemic. so sales during unusual part so those of or off to the in the highs levels And getting been have back declines year

that the our objectives business as sales have margin a fat the on really that So related prior the that we're reducing I've particularly to postage we and pre-pandemic to make on And to that in the to as targets sure And we're and -- talked where were remarks, just prepared are anticipated it perspective. inflationary profit we mentioned spend from our new meets calls, about costs. we've selling. pressure paper marketing

in postage We've increases had XX% a In increase was in significant XXXX. That was We increase. XXXX. summer, following X% there had during over costs the postage.

back we're consistent And really and a what essentially 'XX profit profit to mentioned, trying expectations I've sales on perspective, And sales our anticipating margin. sure flat with are so to are. then that those as focused make just pare from

that anticipate we or year leveling out so. the So here over next

a Okay. direct is lapses And channels increasing I bit actually response The year-over-year on this a or bit if agency about little little increased basis, then improved. a think quarter.

what's disposable any or that are on to any is thoughts people the income have they affordability policies that? have of issues driving and bought. you intention hold do sort might seeing on And you affecting of to So inflation

quarter the indicate just We third some are at we else. I Jimmy, generally an to lapse But nothing uptick do fluctuations. lapses feel quarter. point, mean the seasonality. There's really in have like for in think at this DTC, there anything I just rates

it's believe we just point. really, So at fluctuations this

an kind inflationary a pressure not that offset pressure seeing increasing, And premium we're also sales inflationary perspective, an we're seeing, is actually from of from side. of our just I which per say, policy would where seeing

agent productivity the per on per most also basis a part, for is sale Our up board. the across

that just a from agree really with again, seeing inflationary Tom. and So pressure I we're not sales side,

think some lapse the is trend. a of really I a fluctuation just experience not

think And right? that pleased DTC renewal lapses, lapse good stability to those the so I stable, thing they're see we're about in very rates.

the Raymond The of Will James. line from Burdis next from comes question

here been been more have agent to talking guys the of channels you each -- growing middle us middle about a the on of channels? provide management on count driver the how You key strong across quantify the focus has or details X the growth could management growth in

trends we're to a get that as of strong and we the Sure. the At ending year that the with XX%, XX% growth half XXXX growth. X% over period management American ending middle up middle had count our middle a Income, accelerated count then is level strong count middle they management that's year. year-to-date, growth National well. to of Liberty anticipate 'XX growth. for last X% around around on a the here management in year the in flat growth. We reminder, count really management take middle up Family but in acceleration Heritage is a we assumptions middle the from seeing, it It's ending those management anticipate count year into about or And X% the year-to-date management X% takes full recruiting and and basis first agent, as also XX% a time had around anticipate middle is a XX% And growth, to management. that X%

growth XXXX just we sales for a for middle looking of in that time. that's growth the agent of how guidance that assumptions that and issued period our over at translates into count count management So

next Ryan The KBW. of question Krueger from comes the from line

a guidance. on couple XXXX questions the I had of

admin as the buyback couple as well items in a were you provided Just I think guidance? expectations hadn't expectation of 'XX your expense

as expenses, we're a in up a we're respect around getting of increases admin what that. place. continued operations, investments depreciation additional with seeing maybe the premium, the probably With probably seeing premium to bit probably little plus X% Ryan. growth some in to as Yes, percentage postage closer for faster that up see that a for a little some higher We're then year. our to were this just percentage expectations projects seeing have than IT we we in driving from year do the And are respect some a ticking

'XX lower excess assets as million cash the will just So liquid be that We'd slightly with expect because we the shareholders flow $XX to amount we'd the target. in to in be final $XXX we year, final, not have don't million was range our but to the at available lower statutory than And in what of as that $XXX above repurchase the 'XX. the is expect $XX excess well parent so year for million. to we're lower million

And $XXX losses cash how million much credit by flow, depressed then that mortality is of like free is just being that and the in excess things much how has occurred XXXX.

normalized level? when you a year more Just to trying to I roll think about what be a guess, forward that would

It's of about the had the credit million And strain we've -- but then it's strong bit quite and sales losses. little $XX only a year, as that adds in thing not the Yes. for well. growth

of kind those X So it's factors. really

clarify Okay. reading if sneak the mortality, of to assumed projections you excess I on I am this you're some could in guess, still you last just Great. I mortality. wanted this X it's in that one. mortality seeing And I your but level correctly better year. then that than just had

discounts. It have than on better we -- yes, is both so

where seeing still them than had and Those thing heart come -- are is down and we still historically. excess seen are higher seen mortality bit. a from deaths good cancer We sector disorders we've

your the And part they're was So the was of second -- the on elevated. what still question second part there?

excess near term in in was your mortality already have just the assumptions. that you cash I assumed saying flow

bad as but assumed. Is excess not as that it's So already mortality, you're right? seeing you what had

And or we due mortality that favorable fluctuations. see correct. can extent to that lapse the remeasurement of have obligations that's you the lower gains experience. in indicative That's to Yes,

underling kind see little the favorable in And are. assumptions see you of And that we're third 'XX backed our and the out from historically. that 'XX, you then that you can if bit can so changes what assumption quarter, coming made a in were

Yes.

that driving coming actual a as but just that's One They're the just It's indicated, to about like of positive had in little that the way long-term so changed we up in elevated, it difference little the those fluctuations hasn't are what's than experience Tom always said, bit running we what that, And is and the things bit far that just thought, kind trends between our add really still really in seeing so Ryan, like fluctuations. in those Tom expectations. think are would a expectations. actual some I we seeing experience I like of lower we've assumption but had assumptions that, changes.

the we're in though about we I different some think start really to we stick around Tom want some want to with long-term a we think even that -- anything and mentioned longer think this, before really to So is for near of to while term, need respect assumptions. see we seeing that positive really to

The Maxwell next comes Truist question Fritscher of the from line from Securities.

being all The quarter, the count recruiting labor get in outlook being question last updated and agent on was to up just tight. asked market channels broad but your still I with wanted

entrepreneurial actually control folks opportunity carrying is that's reminder, of able economic us see can What their are looking an provide different have environments, unemployed. anticipate are that that seen cycle we historically we for individuals in be really and help recruiting with we in on And We're are a particularly and inflation Yes. where opportunity, in activity think we recruiting of better shown and fact based and are their momentum and income to opportunity. people that in that output. XXXX. in more recruit to a XXXX, strongly is I And these that to type not this that continue as we're forward

And currently job so maybe to an they're that they more make than in. fixed have money opportunity income

associated So that. with growth we recruiting see strong

that is people The to other we're thing an opportunity that companies those flexible attracted as more we And see and have office provide that seeing want and being people flexibility. see return we the more opportunity to entrepreneurial more to of in more the announcing opportunity. some areas, you

XXXX, in an point had XXXX have double-digit we also had go and other double-digit performed at how and American And I'd economic to just -- Income we as 'XX, look cycles growth example, back growth. during

And into cycles, strong so translates sales very growth, recruiting we a typically see strong during those which growth. economic

moving that as anticipate XXXX into we well. So forward

I it, number? year a to count agent sorry guide you if missed full And did but XXXX

No, we this do that don't typically on call. particular

that the how comes fourth year up. to the determines We out momentum shakes that the the trend -- we really because we have count really in agent rest the of want and will how quarter quarter see fourth

we So that on next generally discuss call. our

of Next Gallagher ISI. question Tom line from comes Evercore from the

math pre-pandemic at which least gains assumption so I would like I I'm part least circle explain that the something I experience just be logic understand trying doing review for correct of the wrong proper to good, million help life mortality gain your But have I looks way to in better, life, could because the as experience million the would gotten calculating been at thinking for negative If am on way the think I is wanted mortality -- than this about when gains It back quarter, to the million not it I'm of the or would levels. this. me mean the about $XX here gains. favorable, the followed to that $X if must correctly? in insurance. if experience Is for have probably $XX it. experience on you

million Yes. It was $X life. for

the for would favorable experience in be quarter life. it So third of $XX million

way gets to smoothing is think still that Okay. and the experience this is representative $XX the of capitalized proper about way million the no? the -- or around then aspect and amortized. XX% And Is to of XX% a then

that No, smooth number. is a

on -- obligation premium across from a favorable each the that's mortality of a a impact very third to is And the what quarter percent distribution I'd channels. of ratio. perspective. as was say X.X% So

if So it on keeping we're mortality quarter favorable that was or whether perspective. it to an that's continues some see just something eye a but yes, or from timing. -- But was not a

Okay.

-- that I So I like just best or you years. have in know, looks that if experience. I'm not claims the I X the QX isolated at X and don't Is misunderstanding to fair? quarter looked me This

relative have to more $X.X to normal on it. if the life by remeasurement that If we to mean the like you million. was -- I look That underlying gain favorable second back me. you look it's to seems But assumptions quarter, back

of it the that's third 'XX, million. particularly first favorable. the was was why So in quarter And quarter $X.X

really quarter So again, quite indicative favorable. of that's the third

favorable the be that that to this, the claim correctly? get around what was it I the too gets smooth? in the then -- -- is I thinking should And I be about If gross actual majority again, claims be of say here? on weeds to thinking on would and $XX total million Or am would Would Okay. number but that what of was not about favorability I experience? that the like it

along That's of far really of as impact quarter. But it rule lines comes there's where the thumb, our the right, in what XX% experience said on is depends the bit we quite is of which as that emerge a volatility through. of

a rule deeper dig as think that's that. but details I there's the So thumb, double of in into a we

to conclusion. that So I wouldn't jump

Okay. All Yes. right.

then future for some to to say, you suffice a assumptions. had a would though, So of there consideration quarter probably if while, changing given repeat this be

Agreed.

to what that that I see be in more look you that and quarters of aren't right. as trend in want and the That's quite line. were many the in would that say is really something row, a assumptions indicative long-term

Carmichael from from of comes Wells Fargo. line the question Wesley Next

by any be you that going to are just that or informed cause COVID of the Is still I wanted mortality? excess Tom's in point, And pandemic? up a might your curious. us of XXXX on mortality expectations? other terms are was you death quarter, to for Or expecting question. I'm in kind to you thinking it good the forward with what of assuming able But trend And help favorable. follow

the death over grades few next that excess assumption years. that over our The we time underlies have off assumptions

expect grade 'XX lower mortality we in was XXXX. than again, lower well. off as XXXX, be in be in So bit to to to XXXX be excess lower in little a expect this And we'd then

it's -- thought more we underlying just take to levels. is our to normal go to kind mortality back here that going time So some of

than our assumption to being, gains. out our -- basic pop as experience that in if was future so that if quarters does what said, projections. be and I continue that's XXXX those Tom is then what that, And then you actual that And underlying that favorable -- more will up if actual have experience revaluation ends

perspective, to are keep in it between mind a and And keep again, life million a bit that $XXX our quarterly on obligations in $XXX million of little basis.

So you're that's looking at $X -- fluctuation $X quarter, real level of if expectations. a not difference at between we're a million those million, in of high particular looking

expect let to -- know I don't question, a but the extent to then And ratings extent see and any drift. really you different below you losses ]? Understood. but to XXX% of this, credit the additional or you the temper to buyback charge the [ fall your kind Would the RBC Or program of maintain capital end? expect low kind ratio would you

let short-term XXX%. up our We not That plan. We to financing levels at subsidiaries. capital would would it shore below be see not the would drop probably some

and you be sources, have the know we weren't do available able buybacks that first-line of point to only way as that financing we say alternative would point if we to rather it I finance than it if we in of we RBC, if find And those cheaper how would look then to in would our the the Yes. level that we're transaction minimum doing maintaining that sources would sourcing. we a buyback would but make of that? alternative you We best at do sources, time, think then would, at when of -- our commitment What's that. us. time, more to think that

we So But to before use of we're seek using the buyback. not to so. do other our ability sources on financing would concerned

And I topic, said any XXXX. update you a might in it. million on expectation your or previously, Got maybe do the more to $XXX you little bit debt? think for maybe issuing financing

we probably just confirm million Yes. to at to index do the look best I time eligible, market that do haven't to $XXX least really be and we solidified at environments is. or continue around we'd and an amount, but again, what

question Kamath line from from Jefferies. [Operator Instructions] the next comes of Suneet

back So stress losses of talked going an think just was just guys last I hearing potential to I think And I in for of then what see million Wes' don't million as you related potential recall update a about think there, to if there quarter, $XX question, somewhat credit investment test losses. $XX XXXX? we about so to one. wanted are you building I to,

So -- change of testing, well, no I to stress to the real would thoughts that. those with respect say, around material our both

about for what We've for there's of net and we We portfolio we portfolio, least we the is. some fact, downgrades do always to of downturns, downgrades respect kind some potential would downgrades where X we've pretty have updated in be. We think straight some quarters a potential that. with bottom-up the good well positioned would really had approach the expect to default. where, potentials Overall, of have in it and at economic upgrades course, and if, feel

with But case right to XXXX, defaults we base our for now don't that. in anticipate any respect

our an for guidance around any really if our requirements there capital impact, those Now comfortable net that. downgrades, It in and overall could have feel that earnings capital would the anticipate be and manage if ability have we will, doesn't with XXXX. be to expectations some on but you

it. Got

may are you investment into just built for -- you year? could assumption little sort rates Obviously, guidance. assuming and missed then I have what your And But forward a bit? current for curve? are have have you income that this it. of interest unpack you just just mentioned may of Okay. kind Or What -- you a assuming next if

Yes.

and figure For bench you look at BBB+ Bloomberg basically looking rates will, on our look And we economists predicting index for average, are around see that. XXXX, the that range. XX XX-year average overall to X.X% of at at both are that are BBB, about space, to that, are expectation probably -- year. in in XXXX, survey they XX of take we we do and course of for if most XX-year second and projecting a We maturities the overall They that year. tend our the of the where it the on to decrease over half anticipating generally the to

rate? money That's your new

Yes.

Got X it. could. just one, then Yes. And if last I

I recruits? Just new said percentage given past, you thumb health then what you ask. guys think wanted may done, that and have that around rule in from sales come recruiting the do I strong of the of to sales life you have but have just a

depends on Yes. fluctuations It's a there's this. It significant portion. in

of of those year. So thumb. been and business middle if those rule recruit the XX% our be agents, new kind it's management And moving start or is in from our you have sales can first or agents a it you're they come XX% of generally remember, model into right, more But ranks. recruited that then

sales recruiting, training between new then and time And is and agents. their split onboarding

year middle those And of is development management recruiting, so of around lot because agents those driving driven first a from our are and more growth sales count agents. new that's management why activity training of the middle or the

to conference. There questions, hand back to today's so further no you Stephen conclude I'll Mota are

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

joining you today's for call. Thank

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