Globe Life (GL) 25 Jul 242024 Q2 Earnings call transcript

Globe Life 2024 Earnings Release Conference Call. [Operator Instructions]

And now I'd like to hand the call over to Stephen Mota. Please go ahead.

Thank you. everyone. morning, Good

our today Co-Chief call Officer; Svoboda Matt Brian and Majors, Joining Officers; are Tom our Mitchell, and Officer; Executive Chief Financial Counsel. Kalmbach, Darden, our the Strategy Frank General our Mike 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 these measures. see of to our also Some for of may release earnings discussion GAAP website terms Please and comments our reconciliations measures. a and

I to Frank. will call now turn the over

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

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

other accumulated year and return of on as share $XX.XX, or comprehensive XX AOCI, XX.X% is per value XX% June from book ago. up equity a is income Excluding

this XX, advance Before Globe Life's regarding conducted like would continue, address status XXXX, an against the of matter. to levied addressing review sellers. allegations we the June of Life Board short independent by and On Committee we Audit Directors the the Globe of by X-K company filed

the in the the all company's process review by for independent The various included law identifying the in of reports. its X-K, Committee short our It responding questions an raise scope and in and assisted preventing, of the the WilmerHale, financial investigation Consulting. The Committee FTI integrity and misconduct. and the specific independent also allegations disclosures. to noted included As company's accuracy contained conducted Audit that statements firm, accounting about review was forensic firm, Audit of allegations of Board the of Directors seller

has Committee the misconduct Audit determined As completed financial stated, its not allegations that the of and were review supported.

any identify filings requiring or company's the related issued Additionally, previously the in its Securities financial and to the matters adjustments with did independent not statements Exchange Commission. review disclosures

allegations We drive false company short results price remain of at The and effort and the stock financial Globe an in sellers do require to not adjustments. were down our the Life's long-term designed which for to the its believe misleading stands were profit and disclosures, accurate and expense any by shareholders.

conduct, experience. the continue confirmed in will the In the of addition, and work reviewed third-party relationships, and quality policies management. has the Audit Compliance company with and for to designed our that with a key code and Committee focus safeguard area procedures is in place of connection be our internally to both

the separate the inquiry and like you In to the SEC regarding by issues, DOJ. by the but update related we'd request

any do continue is claims disclosed, At have do has received The intends we Commission. provided inquiry to to company company the time, information staff against this And and in previously SEC have Securities As the from request received cooperating asserted fully Audit SEC's date. company response Exchange company it the an the to and not will to the indicated the of or and so. Committee the so. the

or contracted in The indicated to requests asserted Income DOJ continue sales intends certain the the to American any in agents Income not so. Regarding DOJ, do American fully made to against has cooperate the by Organization policies. company licensed sell Arias it we to or responding insurance practices claims related or are allegations to who

related assessing company's to remediating In litigation complaints and process for conclusion, to questions misconduct. we'd ongoing discuss received like have alleged the the regarding identifying, we and

on terminated harassment, be conduct unethical Globe various And to or of misconduct Life has as attention are we've it detect not can pending to you systems such in to unethical calls, But or stages. and brought appropriate would attempted variety in a reasonable contracts appreciate, our comment allegations lawsuits. tolerate takes allegations prior subject are The discussed and concerning for The business of as litigation and in inappropriate place activities. we practices any appropriate behavior. that company conduct do and designed seriously, not mitigate fraudulent us and

in business employees as has history build a Life and well financial to financial for customers security. protection as long principles small while practices work Globe integrity with owners of and our our providing opportunities business agents,

We growth and are Globe focused continued the strategic results on of Life.

to highest futures. X,XXX levels And dedicated in protect the Our helping field integrity strive employees together, of families our all force and better agents focused tomorrow accordance working are to the and of we ethics with organization. levels approximately make at and to by financial of XX,XXX their act

let's talk respect Frank, with results our Now insurance our operations. about to

underwriting a from the margin up Matt. for and million, $XXX was revenue $XXX ago the life from Thanks, In year X% our quarter overall driven year by operations, premium second growth quarter to premium insurance lower increased Life obligations. the million. ago, policy X%

between our growth between Liberty the X% at life and and and strong to of in year, X.X% underwriting by driven XX%. National American premium divisions, our grow and For guidance revenue we Income margin to both X% premium expect the life grow midpoint

range margin of life of premium, be underwriting to in we XX% XX%. As percent the a to anticipate

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

to revenue health of the full grow For the guidance XX% between we approximately XX%. the a X% our to to be and for year, margin midpoint to expect and X%. between at we of X.X% grow expect X%, year, underwriting percent and And health premium premium as

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

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

year the XXXX, X% approximately full to be For administrative expect we premium. expenses of

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

you, Frank. Thank

discuss like American I'd Life. First, to Income

net up underwriting was $XX were count a is to XX% million. million, life up up the ago XXXX, second for quarter is is over X% was our strong life up In Here, primarily this the producing year XX% count. The $XXX due million, ago second the sales and to to margin were a ago. and from premiums and and from the the that X% year XX,XXX, the agent quarter of $XXX average life growth quarter in agent year

recruiting strong with activity seeing retention. in are continued improvement We along new agent

Our at new power trends quarter the up XX% pipeline from Income. and pleased is prior very agent productivity for and the the I'm second sales count year, American with

$XX which sales ago year up in quarter. up were At the due X% from increased life million, over the health life to premiums agent million, and quarter the is margin was XX% to both health the to National, to million, Net increase and life and net underwriting Liberty count. life the $XX sales X% in ago year million. primarily $XX up was the Growth were the $X sales X%

and from The by recruiting average generate a middle National Liberty year up is the growth sales X,XXX management. our technology producing and positive XX% and investments agent was ago. continues momentum, for quarter is the driven in in second count to this and

to up and Heritage, Family XX% quarter an million. increased $XX year-ago and this primarily agent At due underwriting sales million, premiums is health million, health Net to X% to increase in health $XX productivity. X% were the to increased margin over $XXX

and we've was second have I'm at And to and count see to which said for emphasize this we recruiting management as X% And producing Family a middle middle continue year up is X,XXX, management up XX% started before, from Heritage. year-end. quarter the from encouraged average development agent as The ago. growth, we is

and at is million ago life $XX to year compared from quarter. In Life, quarter X% million year $XX down our continued to to and margin the mortality underwriting maximize to life flat sales our margin direct-to-consumer were ago dollars. life primarily division $XXX increased due is premiums at while favorable the Net and Globe million, were efforts XX% the

reduced customer we sales As profit we the do previously certain marketing due as that our lower campaigns to mentioned, not decline spend meet primarily on have objectives. inquiries is have in

this focus our overall is positive Our on having in margin. area a impact

maximizing acquiring managing distribution advertising continue on by the dollars business. associated sales underwriting new focus on will We new with rising margin and costs to

provides channel our business as to support generation leads. through agency sales Additionally, brand the of and impressions reminder, a the direct-to-consumer

this over $XX underwriting million. American United million premiums up due approximately primarily $X the it's Net quarter. Agency, ago $XX approximately up health to At was our sales conditions to is year year increased and health Health were and X% $X Medicare million, is improve for and business. million ago $XXX quarter the year General million market margin from our over ago the quarter Supplement

growth. mid-single-digit and the double-digit that agent National, trends I'd discuss seeing we are business, growth; experience for and we Family average as at projections. mid-teens Income, follows: Liberty producing expect Now at with growth; be the XXXX American to the count our Based Heritage, trends to low at on like

Now mid-teens XXXX be our American follows. At net life sales projected to are for Income, as growth.

with raising are trends we to down. abundance guidance growth caution. slightly our our and reflect sales projections American experience strong we an tempered National seeing. direct-to-consumer at low second of along of Income the here, had Last we out double-digit Now anticipate Liberty quarter, just are quarter

growth. Net to Agency, single-digit to follows: high health American sales for high Liberty growth; Heritage, at General as United mid-single-digit and and National, XXXX growth; expected low are be single-digit Family also

I'll call Frank. turn the to back

Thanks, Matt.

quarter. the Excess ago interest, net up increase We as will million, year that X% investment largely million, The strong up which was or income the growth due required $XX Net now million investment period. X% quarter. turn $XX less is invested $XXX in the year operations. income, income from only million investment to from to assets define over average investment we ago $XX was

partnerships interest rate. higher higher rates In also and contributed addition, fixed investments maturities, the limited mortgage commercial short-term loans, across to growth

over up X% interest average quarter, the policy ago in Acquired higher slightly liabilities. year is the X.X% growth than approximately

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

income of required our at XX%. anticipate to we growth in guidance, will of year, in midpoint the resulting addition, X% X.X% investment In to XX% the around excess for grow approximately interest

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

loans our investments approximately that office cash additional investments and average yield philosophy. mortgage an return expected loans and our characteristics, they These involved line of are investments properties. maturity commercial our have in and XX%. in None partnerships We are over limited also expected cash investment debt-like approximately of invested with commercial produce to fixed million $XXX conservative in direct mortgage

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

XX, limited earned commercial mortgage second portfolio our June As from yield yield and cash Including quarter yield loans was X.XX%. the the the of was X.XX%. partnerships,

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

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

As bonds beyond with maturities we by unrealized position have driven not interest mostly loss relates is rate the that concerned are extend we years. historically to and it XX currently noted, as entirely

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

comprised the year quarter. to BBB portfolio from maturity of rated Bonds fixed XX% XX% the compared ago

equities, markets. our is derivatives, assets residential the returns by securities interest held We equities, of no to to risk-adjusted, due fluctuations securities our CLOs relative many real in BBB rates to in other ability peers, of securities. that estate, provide While maturity acquire best higher-risk little we hold part generally this asset-backed to equity exposure high we mortgages, regardless our such peers, believe have or to or the as and ratio capital-adjusted

total below remained grade at The a investment bonds maturities average ago. compared million $XXX to is of to X.X%. fixed investment-grade Below year below million $XXX bonds

quarter, the securities. selling to extend portfolio we take our investing During longer-dated portion opportunity on some and did the by in a shorter of duration bonds maturity

yield months exposure smaller realized of were the our regional average and to a we're sold, portfolio able improve to and the of extend reduce to the loss overall able on banks. life While we some we the

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

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

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

Frank. Thanks,

discussing minutes range program anticipate $XX a quarter of of let ended We spend position. $XX and assets. me First, $XX began historically Parent we with approximately and million our quarter the capital with of share with year assets the the liquidity, $XX repurchase million liquid concluding in available to targeted. liquid have million the that approximately liquid million assets few

has approximately the dividend quarter, and the $XX.XX. over total for quarter Inc. total $XXX million price for the resulting cost approximately share a In $XXX shares million an to returned X.X quarter, million of million a shareholders XXXX million approximately common shares $XXX million in second during approximately company Including of the stock X of just of shareholder repurchases repurchased Globe company at returned alone approximately of million average year-to-date. of share average the price $XX.XX, for $XXX Life cost an date second of at of payments $XX to

quarter share our of prices repurchases took below opportunity as year during per The value given the to the from book of repurchases higher the conditions amount the we share usual share. with the than half second market favorable accelerate is

of with We of cash to use liquid due finance during timing flows quarter the assets. the excess this are dividends able largely parent's and the to subsidiary

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

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

XXXX to form excess distribute use to $XX to intend million year flows to during in the We of million cash and dividends. shareholders $XXX $XXX million $XX to the million purchase our

million half second accelerating support year, we In repurchases anticipate additional of in raising to share additional addition, during XXXX. the the of capital approximately $XXX

total full at earnings midpoint the full our repurchases anticipate the million year, for to guidance, year. we for $XXX So of approximately $XXX share million the of

our to regard at levels insurance with the Now capital subsidiaries.

was of to that is the support to ratings. In currently low Globe additional subsidiaries targets to current estimate the this of no million end $XX of levels the RBC XXXX, our goal the maintain RBC we to consolidated ratio, range that XXX%. company our the ratio Our consolidated At action target a is meet needed our Life of consolidated capital RBC to consolidated at at XXX% our the time, target XXX%. At of in XXX%. approximately maintain RBC XXX%, of necessary capital had, to XXX% end midpoint needed XXXX, amount over of capital our

during Now to with quarter. policy regards current the obligations

or As we've the and supplemental gain exhibit calls, available included we prior remeasurement the channel. have within on on distribution details by discussed website our loss financial the information

third been updated we quarter both we our health the update quarter assumptions long-term and As assumptions in there life in upcoming XXXX, XXXX, intend a changes health No in second of of to quarter. our the the period in assumptions made the no third and since. were life assumptions, and reminder, have to health and

also impact fluctuations. indicates to experienced addition remeasurement gain the changes, the or of loss assumption In

For favorable remeasurement of life policy the $X in of obligations XXXX, lower assumptions when our $XX policy resulted quarter compared related fluctuations were mortality and to lower persistency. health of life million experience The obligations obligations. second gain of and to million

inform our The update longer-term future remainder earnings continue obligations through and XXXX the of XXXX. range We health changes the experience. the life potential third Recent remeasurement recent and of assumption trends impacts, of mortality by assumptions. to encouraged short-term to quarter policy trends will and inclusive guidance encompasses be

now So with respect guidance XXXX. earnings for to our finally,

previous and recent $XX reflects midpoint in is anticipated results repurchases higher XXXX, than and year of anticipated operating growth range improvements guidance greater our midpoint per of in diluted we full impact year. estimate be $XX.XX previously The underwriting at range. the the for that the earnings in XX% income the from to a to $XX.XX, For share will $XX.XX representing share the addition than

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

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

from comes JPMorgan. question Jimmy first from The Bhullar Instructions] [Operator

I'm me. assuming that's

So on year look divisions, if increase at first, they I various across of you bit And little them. a in first there's the question lapses like just had all a lapses. seem

I'm consider is and if you any service -- just elaboration? that's normal So on in is driving related just -- that's there your or that? to Or that wondering changes economy something end it practices sales inflation or the

seeing with seller We're general recent impact really short the what and pleased of in economic of we're continued persistency, particularly the with face the conditions. reports

really that reaffirms that our to the nature basic it highly offer customers. the needs for believe and speaks meet speaks the and stability the think I of we products we protection the business

first just quarter. were just up up little or lapses, relates they prior year at AIL bit a it As over to the

so line well. XX-year really And in our average with as

our just in So lapses I fluctuation. think with are overall a year it first expectations. overall line -- And in are then lapses really DTC, is with line

bit were sourcing. QX 'XX, year could to slightly that and over just lapses than little be higher related first up a but The prior quarter,

bit little higher. So Internet bit are on higher little see a lapses sales. a we sales do Internet

as year on consistent quarter. really may lapses, are that last that be So with LND of driving first they And experience well. some

business. perspective from result fairly So again, the we a for think lapse a good

items affected couple income. had of And a the then line below your you that net

a then one go impact how year you expenses, those But think much flow through M&A, are really thoughts that's maybe legal likely them of reserve? as assuming expense expenses of to numbers continue. an And year? what of versus how be that that free was were those I not this your I'm related and the will and the should about cash cash next on

Yes.

to a the WilmerHale legal of incurred investigating short little to then the related predict year M&A issues. this hard pursue. the We'd seller, expenses, the at there, as bit continuing continue And on don't and expect other allegations. opportunity to for work I the the those those we are related any another expenses some we've point, the to the expenses So we continue expenses investigation expenses short-seller unless through rest would emerge that to of those but of see

I thinking I and Yes, excess wouldn't flows have the on even from material, think would just add they of as remainder or to year's perspective you any if about continue kind be of impact Jimmy, would year. we're on next will, material it that our that cash this

Or stock normal accelerated done do And then financing. you forward Are back I about you think next normally and can next you your one just and if get could have on assuming -- schedule? that related that in have price, activity the the you year those, but would buybacks half? changes the the major to some more the then you thinking debt capacity pulling you no second ask year, into

Exactly.

additional that We'll operate some kind to debt. Jimmy. XX%. think we our XX%. like I of to $XXX And million We to bring like closer of XX% capacity, debt room feel the cap really in projected to ratios debt of some in finance we have have adding kind we

well debt of So within range the our capacity. it's

to capital operations, through we're or as a look capacity we continuing where -- to adequate at probably of well. seeing, the whether look excess up just some think be Jimmy, said, other we've at course, to capital that look normal also reinsurance that, we've been. taking free I'd continue of and take historical I adequate insurance that have opportunities Tom as our around there kind a to got just are and at ranges But be there some within means just got as that add management

from Our next Research. Wes comes Autonomous question from Carmichael

one have financing do you paper last about notes that's the that or want senior just buyback? use follow-up to accelerated I for idea had But one. to the on of commercial finance Jimmy's you any that form whether

We bit on debt. towards preference longer-term a the available the haven't in a It my market. probably decided rates little bit does but that final form, would the depend on lean are little

best for So at select all we'll what us. is of options our and look we think

Got sort agent material allegations, Audit of regarding just need these helpful. investigation, Or no there is disclosures. to American or Income? of you that behavior especially not expect Committee's of broader on really organizational And any But review there's restate regarding you going financials disclosed seller any around in that's changes? it. kind That's the do short some

mentioned, Well, review included misconduct. as identifying for processes we and responding preventing, had to the also

We always and procedures place evaluate have and do at controls for continuing to necessary. and in enhance have them and and look as been processes those our a process

of that'd what processes come implementing the just as well normal our So in out we as be has improvements. future for different no review think as the about

As necessary. said, we action believe have line our in core that's place and with appropriate in the identify not inappropriate principles, appropriate to we or as take procedures we we activity

to we do part kind risks time. as just risk really would overall add that, of And of is is changing from our how environment that that The third-party time management changes Wes, of this evaluating thing processes. think to one that in the that I of and so part

we're as enhance we'll to for for currently And what so improvement Matt to continuing we're to look doing. strive continue said, always and ways

Sandler. John now next Piper question from [indiscernible] And from we will take our

Do have update access. please? what X-K is, tech first on with status all, an the June you an I you of that that at a My on filed think question, XX, issue an about unauthorized

Yes.

did a insurance That we identity some state regulator. initiate in was So X-K, did inquiry permissions potential vulnerabilities following that receive a the of an noted regarding user and with review -- as from that web for company portal. we access management we a

that know into still a matter. the we has But is addressed the investigation investigation the have have material impact do yet that full from there to impact and have point, and we nature At vulnerabilities ongoing we the scope, this been comprehensive operations. a not determine company's We on initiated and overall. the

time, become don't really to they disclose at have further provide but updates available. continue anything as we'll we to notable So any this

I other $X.X flows? in of end of at share the was to the greater imply. imply math, normal the would good end you than Can talk buybacks 'XX possibly my believe authorization. April, there question, cash My bring It's optionality a amount billion. From 'XX, the of 'XX repurchase that forward through a about run rate would

Yes.

was of close. in I share flows the additional my with use financing XXXX, get which we have to for comment fairly think that really consistent year additional of the then normal of repurchases half -- our cash the should would raising excess second and us in

other reinsurance the thing means. insurance looking our we are through raise Frank mentioned at other And had and is to capital other from operations options additional

'XX. purchase source to potential allow another shares some in 'XX would us or be additional would that either that So

available thing think I as of our talk preliminarily, of we that, of XXXX. now, right And them one we being about what just add is level the a we'll excess at far flows it have higher that as for expect preliminary on see here next more cash what in expectations XXXX. than and kind we I'll kind would would do normally call the for, it's still

Again, that more on there. talk So we'll about call. we do some next some capacity there's additional the think

clear the thing only out authorization, it's was it not the think a that is point that I'd I mandate. And

take so. we'll long we're what's to So there many as as buyback us at and not a seek for as it's shares to look prudent do --

next now Suneet our question to Jefferies. from Kamath We from will move

start to review. with the Just Audit wanted Committee

to want make So I understand. I just sure

that through they that monitoring it's it said you Given just at the your wasn't went do to -- you had guys practices basis, that do? really business but sales as really better ongoing anything an need incremental that anything and you in that, look need usual? fact the you this on identify not stuff there So review of terms and considering is already that did to

did focused processes mentioned, disclosures. allegations and company it raised financial Well, Also, as to our we've for review identifying financial independent the the preventing, about the questions that statements misconduct. just and on and responding examine

our So around said that including there I'll to are to procedures enhance. continually identifying misconduct look We to addressing a processes we our in and always continue I to at for earlier sales always that appropriate. variety back practices. We go look of areas controls those we enhance what and need internal things, as

And we as evaluating so those far to enhance so to continue as will do as and appropriate. those continuing

reviews. how no talk just if thinking sort of there's Got it. DOJ it? that reviews about, figure timing there's to something then those these sort SEC. is on nothing don't figure this we'll are? should the of be like to just Are and perspective -- how, about just relatedly, we'll conclusions finality -- the we And they Or the I'm just trying hear ultimately about to out what a -- from

Sure.

update of as happen be Our in both intent would to those cases. you material developments the

assumption quarter I of were last in the gains was third that quarter? another review Okay. year. really in understand the to the have -- I'm your I you fourth remeasurement just the that here did one favorable quarter in you'll one the so another going And looked you assumption on do this QX the in because it on last had the then fourth remeasurement, did just QX, quarter some like and But second Or of changes of year? year year, second mean these could I gains quite last you remeasurement big. review assumption suggest that reflecting this are seemingly here quarter assuming what's

the in to of which were XXXX. the reserves, assumptions, in our are gains quarter established we relative for that current third The determining remeasurement reported quarter assumptions the

So in there. essence, I'd say yes

some throughout life gains remeasurement business on business. seen health have and year the the the We

those mortality QX assumptions to so of health] assumption appear back And valuation and indicative [the that that relative to be we in established are favorable relative those XXXX. trends to of

short So term assumption as what endemic well an just that's term we for as base and we're looking or think right do mortality endemic. evaluating now for long is what appropriate the our at assumptions the

And which to so QX finalizing an those we're in what that's update result assumptions. and will in

we given increasing We a experience, XX% be for to anticipate the Frank do reason that gain our life on range do XX%. the -- will margins and the hence, business remeasurement the recent favorable to our pulse, underwriting of

will do think up a move those we bit. little So that

does. It

last the one on Just that.

the clear, this that be Or would is in to to your just guidance? be guidance? embedded EPS new So incremental EPS

it's range in we've Now and tried in to midpoint well. we range that anticipate our embedded reflect as the of guidance what what

from Elyse comes Greenspan Wells Our next question from Fargo.

mentioned, earlier into way guys 'XX capital. sounds as a Do what on My could questions expand as to you you this a up potential guys potential you well? be first question frame to event. response a have it or might of perhaps a any And comments either consider? reinsurance looking time sense on just like 'XX Can then some you in free

We're financial a Yes. have in place we continuing reinsurance evaluate to reinsurance right opportunities, program now. and

to that So we're just program a makes expand sense looking whether bit. at it little

economic is In in think Bermuda. available like that addition, to there's manage -- in overall capital an there's opportunity we framework

some bit management promise we approach. in and option there's look that might that far little probably what like. longer term But as That's evaluating we're solution. So a think capital that that as

any lot of There are thing. block business lots necessarily shareholders of books talked make -- to business of add. those are type before business. and that about old us thing it have books books of The We that a are we have that Yes. to don't only would -- our we for does evaluating that closed that don't see, of that of we've kind dispose I are few sense a of and

we're there, lot a there's that at. So a but not things look necessarily taking there's

the the guys What new the you subsidiary are lot a quarter? then of capital. year? for on guidance sub in embedded your within dividends were capital -- dividends what for plans, what's us color the the And full gave

The full year $XXX dividends is from million. $XXX the insurance over million, $XXX just subsidiaries million between and

updated We'll dividends will later haven't the We the guidance parent in that to look our at what for XXXX. in year. be

you a an us update next think, that from that some that is things we accounting there impacting, favorable quarter on be give XXXX favorably fairs can should the of One changes as manual valuation are to and impact, in statutory perspective well. that as I will

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

actual investigation. it just WilmerHale focused procedures A company's on did behavior? own they all? at your misconduct guess, predominantly to agent the of is Or follow-up kind on investigate I agent manage really

And preventing, processes responding that procedures for the Committee at review in the did company the work designed to has and experience for It and looked confirm misconduct. company's Audit the safeguard identifying policies and the agents. to place

and taking As for with appropriate around our we're of along mentioned controls issues behavior action. our those that aware in as processes identifying come the we've we've remediating and confident necessary investigating agent before,

statements also, have questioned, of before, disclosures. they our at might I financial accuracy and allegations Ryan, you noted looked the all they the they integrity and or as that will, if kind of

we our reports say there So that disclosures. and noted impacted looked seen extent or the that not behaviors or into necessary. our reasons previously for financial any to were And or were agent no sales statements they before, allegations disclosures, would issued of as have have financial there determine was let's whether activities, restatements any restatements any our those did that for of just instance, been would

includes Which [indiscernible].

guess one And Got on more just I this topic. it. Understood. specific

ultimately with Or if they're agents. do some like into example, as is future, contractors? that separate a that do If see was do that liability because misconduct, view independent that the as issue? a something there given company, you So they in a of almost you specific the as distinction, to you for DOJ the that of determine investigation

to as like it looks Arias evaluate sales were in I in our they're just that, agents that said the certain think of reviewing focus there's Organization. significant that But the really, that a right earlier, of as update is the now, so be we've statement far. and activity we a perspective, to disclose if sure the update currently, inquiries we'd that. from scope And

And cash flow. then separate free just question one on

sounds a positive mentioned had be things. could You next few like that It year.

of you to you getting I had cash at the over possibility to up about I think think talked conversion at XX%, looking flow the ways least free it time. previously, had higher. get mentioned And

make longer give towards XX% guess, part, 'XX? something you would that I do is you that update expect Can to term? progress occur that? at just an on And the Or least in

getting yes, with think, about actually I things be term. XX%. that of to over talked will, I the definitely The longer are actually it's aligned would I kind and additive -- that

do. continues where we're looking the help So that's support Bermuda opportunities it think towards -- regulatory at the to conversion actually And could of use and I be cash striving to use really more higher something that environment effective getting to ratio.

Yes.

XXXX with life -- of And of premium do with favorable, some free that converting income our on following think look growth and think the we've are some in sales, favorable optimism stems is statutory then respect which there it, we're will items in to cash strong I a the taken I XXXX the XXXX especially seeing, some of those some strong flows as as well. into claims experience -- the from side that into near-term help

those gives changing us of Tom's And in may that some that flows we have conversion cash where So optimism ratio. expanded nature some excess right, it's the some of XXXX. the

may and dovetailed that far not as which some into a look, what what see can Even additional from we'll and end that. it XXXX we obviously, of take timing of dividends perspective. Some until 'XX, up do is, a though as materializing

will from Burdis Wilma question take from our now James. next We Raymond

remeasurement flow? a XQ a free imply higher favorable. positive have cash think how With review I 'XX very the are guys possibly talked about gains you very positive,

that losses Some gains of the be remeasurement will or -- GAAP. are

cash So flow earnings. statutory the what drives free is

through. gain I've GAAP, about we've mentioned past the or as in we However, is in relative of -- from our is our as assumptions kind remeasurement see comeing delta that's we to in the assumptions a the when past mentioned XX% what of

a majority assumption, differences to is statutory. in assumptions, impact the between through so be And of going full good the coming of that

the of that excess one from we XXXX dividends statutory have in lead reasons flows. improved think XXXX will increased that's higher cash in and to to So then earnings we'll parent that why the the subsidiary

part of it. that's So

that will could also from statutory that The in higher excess XXXX also in mentioned has change in in a valuation the resulting earnings dividends and the implemented subs actually other or in I manual been higher think I flows result cash and the is parent to XXXX, flow. thing increase the cash excess

there relates to? could manual one. color just a valuation change follow-up you the provide additional that on Is any And on quick what

of the the add level is principal-based some to of clarity assumptions mortality reserves, relates to related aggregation aggregation determining around us use. what It can you change to allows

being larger a able use to to so -- And mortality an of reserve. in blocks, aggregate assumption opportunity favorable more valuation by the there's an the opportunity to

anything do do mitigate the to DOJ, can And there's think really overhang? one. you But broad this is a else SEC you

of an our process outside that's Unfortunately, control. independent

as So instances we is as -- fully both well quickly to or response are we're information what doing get inquiries providing in as cooperating as possible. we additional any that

just course, can So is the is to And forward as our of those as quickly we those work very through best we as responsive progress have do possible. thing desire, processes. be

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

American as management heard that the have your changes senior certain been Or a there the narrow a let Income Have of have review? fairly side? I've on there result But result of scope there has agents focusing on way changes on it any agents. described, been Just the any any this? in been go as sounds side. or sales based management managers It been in on

questions So several you had there.

I if can me Let them. address see

on the the scope agents narrowness specific Regarding was focused to investigation related Organization. being within the the narrow, DOJ Arias

the As just that the as of and the happened financial pointed as the controls. out think very some in I allegations items not from of of all far that were systems our And investigation longer, that the Audit before past started. articles up assertions selling Committee for as and report, covered that processes our short in overall that broad evaluation of well have are as in the terminated noted any here shown and agents. long is They some agents we've are

go appropriate mentioned to on misconduct I'll last an So take sellers action costs. the well do is as short call is sales executive terminated Income were statement management we the on by on American I an within to some that for think had that our related we of the earlier based my that as back I'd just assertions side

things enhance ranging we review it continue always of we so and processes seriously we our confident And do pretty and are to take appropriate controls. And and results that, and discussed take We a action. but mentioned, these we've that as I'd today. was in the that, wide broad

that sales no one, terminations made review there's result was that you of otherwise or of fair recent from statement? management But haven't a done, Is that been any no review. -- a the as

as to that at things cetera, call. under not That is not trends, I'd in liberty a fair discuss are my mentioned litigation prepared statement et but I'm

Got you.

gains for then And but my the on back remeasurement Okay. follow-up, just mortality.

that the Or it adverse realize to trending to in I are we were mortality like certainly we levels? is I relative part it are, where implemented your want Or relative still normal or assumptions of all the still as LDTI, actually to favorable adverse? but is now are now? know -- way just So back somewhat we pre-pandemic to favorable? back somewhat conservatism is the

good. Yes. of over has which fairly quarters, few first last has -- been We mortality still been all, see consistent the

were seeing, we would And causes to But are where heart that they than peak. at higher said, were also to I little disease We a be as were you higher although where say the one [indiscernible] some improvements pre-COVID. continue and the cancer XXXX. be death And causing elevated from than remains improved, and they where are neurological bit stroke which would prior Alzheimer's. disorders, is still that we

an are have And elevated a they And So positive eye deaths I in say, improved. were. that. we're more historical, another then a like bit with little is nonmedical those actually, keeping maybe I'd where on think just have improved, from line those

quite trends not good, there think the yet. we're but I So are

you. Got

in So where still somewhat Alzheimer's see stroke is elevation. you

JPMorgan. a Jimmy from follow-up have Bhullar question from And we

idea? higher just stat quarter. give that, so on valuation of comments I us a you'll just Can recognize you some millions rough amount, millions, the of of give next range the Tom, or details expected the have tens than out So sort changes. your we single-digit exact on

going details, you the of Yes. next We'll work. give still We're quarter. through our Jimmy, all

good to number, I be give and you actually we'll want to a implement that. So looking

fact million the a assertion? correct of mentioned imply it of a it's handful than that that sort would dollars. just that Is But you more

Jimmy. That's fair, Yes.

months. X wait another We'll Okay.

back the today. Stephen have to Mota we questions closing all like this, With I'd that's to over additional And or remarks. hand any for call

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

and participation, ladies for today's concludes This call. conference you. Thank gentlemen. Thank you your

disconnect. now may You