Globe Life (GL) 24 Oct 242024 Q3 Earnings call transcript

Welcome to the Globe Life Third Quarter 2024 Earnings Release Conference Call. My name is Allen, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Stephen Mota, to begin today's conference.

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

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

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

or was everyone. of was increase per ago. year GAAP through share, per book XX.X%, operating million you, XX% and $X.XX On share income or basis, compared and from or September Net return Thank quarter for $X.XX a third million per ago. quarter, equity share is $XX.XX. on In is reported year an $XXX good $X.XX $XXX million net XX income morning, a per share a Stephen, value the $XXX the to

was ago as Excluding to up September premium income, accumulated ago. return share AOCI, equity million, XX quarter Life XX.X%, the third XX% life $XXX for margin other revenue up from and year per year value $XXX is X% or is $XX.XX, ago. In a the XX% book operations, from from on a our comprehensive of insurance underwriting increased year quarter million.

comments remeasurement increase remeasurement in to Tom have a gain this in unlocking due gain. his assumptions. the life will primarily With of more margin underwriting on

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

to margin anticipate insurance, to was premium million, and margin around revenue life underwriting of As to to health $XXX assumptions. $XX due a unlocking to we underwriting million be X% loss of grew a primarily percent an related down premium, XX% XX%. In health remeasurement

we be the to approximately full a our expect of software grow flat $XX to increase costs expect underwriting percent margin higher is guidance quarter. to and to year, At employee-related around revenue midpoint For maintaining expenses. as XX%. Administrative X%. premium for and to information health the of for health the be services, year, the IT were due million costs premium expenses primarily relating we and The technology legal X.X% to

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

you, Frank. Thank

technology third premiums count. The net which is third is agent strong the ago. American a count from the X% X% continues a and up for year and Income the of in on to Life, ongoing growth, the ago. In ago increased National, for average $XX meaningful to quarter, the National the to was an XX% year The million, agent $XX to optimistic future life by in count growth margin agency the retention. at year from life up was Net million, bodes million, from up million, to were up underwriting to new I up in life agent and the quarter. The agent efforts $XX generate year up health generate and X,XXX, recruiting primarily over up life continued is XX% very am quarter and training the strong middle here, ago is were driven life sales this count Liberty. third management. Despite premiums and sales our quarter the $XXX X% pleased ago, recruiting agent ago to strong at with net the well Liberty X% million. growth this well sales life and from growth reflected for momentum. At million. First, $X were Liberty and in and a was in sales for underwriting were quarter $XX has was producing division. for and the trends XX,XXX, down emphasis to year margin due This improvement the positive XX% resulted is to sales over flat XXXX, middle as agent average the in the year million, investments $XXX This management growth growth quarter growth. as this XX% continues count due This quarter XX% producing

indicator before, discussed focus between in recruiting for leading year-over-year may the count sales growth future and growth as that count quarter-to-quarter switch I've on agency focus agent sales and results a sales recognize is the operations fluctuate year. agent throughout growth. We As and

a increase a Liberty comparable XX% quarter in difficult a In sales as ago life year increase out health addition, had we quarter. sales in point this had in also the I'd and XX% that

to Family Heritage. Now on

year Life, premiums in middle to management count emphasize the were million, direct-to-consumer third premiums year-ago health pleased $XX to margin Net due quarter The million I development $XXX Here, and productivity. XX% down year for quarter. life from down to this margin a recruiting agent agency's million. increased in well agent and which am to that bodes increase now see X% X,XXX, are life X% from the million, quarter over underwriting $XX ago million. producing at is health our Net to the growth, to count quarters to driving ago average count X% was sales XXXX. In declined this were the increased $XX growth in while life XX% quarter the agent and over up underwriting efforts million, $XX recent ago. an to $XXX sales the X% year agent division were X% Globe and health up for

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

continue margin this the focus underwriting associated costs focus distribution in advertising on to new a maximizing dollars rising area and managing we with our positive new impact business. Our is by the on acquiring on having sales as margin overall

is sales Now to direct-to-consumer business agency the sales to channel, business support directly attributable our provided only value brand but and of those depressions this is not our leads. the significant that through

agency to We lead in continue into capability that volume significant to our our for sales invest translates business. generate

division over anticipate we will by expect agencies provided to During as we continue to grow approach XXXX, contributed value will exclusive direct-to-consumer Life The omnichannel direct-to-consumer steady our we the in brand. see our the division. X leads, be XXX,XXX the to agencies to from which growth for generate marketing will the Globe

Agency. Now on United to American General

the $X year X% increased driven strong higher X% due higher million health year ago $XXX prior ago the were quarter premiums result was by to health Net $XX to quarter. sales sales from costs growth year million, margin $XX million, down million, utilization. underwriting the Here, ago Health year down of of over over claim XX%. a quarter as the

to move on I'd Now discuss projections. to like

an be an XXXX of to average follows: follows: XXXX be Liberty and around increase Liberty around at for to Family Heritage, Liberty increase of for experience as are of around and sales as the what of we around United a full to Family around at of be X%; increase an at an XX%; Now increase at of increase X%. Net around of expected American decrease XXXX General sales for Heritage, with National, are Income, direct-to-consumer, increase as around that around an an an expect Agency, seeing business, we're Income, XX%; life of agent of trends follows: and American producing around XX%; an health XX%. our XX%; National, the increase American National, increase count expected based year on and X%. Net X%; of

our for full XXXX let's XXXX. follows. year we to of At guidance, midpoint the sales expect Now as growth the discuss be XXXX of

Heritage we American life on low For to Income United health growth. growth; sales, low high low have Agency single-digit Liberty to National, Family and double-digit we direct-to-consumer, and for growth. American side, mid-single-digit Liberty General growth; sales double-digit And expect the expect all National,

before being to further information date. Neither regarding share, accordingly. have we few contemplated open, like make allegations Frank and inquiries or previously Now by the are AIL, actions received any SEC the we've by organization the back call to aware for investment extent we To or to responded to requests while material has developments turn still will comments any that the made update you we SEC been for made DOJ. a to asserted no there's There discussed. the against any inquiries I are over DOJ of not Life claims and the brief these the the have operations, I'd and Globe

an and working privacy data federal we regarding investigation. active with extortion enforcement disclosed law threat previously we attempt, As in the are actor

into you nothing As of getting our this respect for add understand, specifics week. be in out can last and was X-K not we included what have further beyond filing process, to will

investigations operations. I'll the While business to now systems turn back ongoing, no material these the there company's and has impact on are Frank. been call

Matt. Thanks,

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

In quarter, the interest average to ago higher up rates addition, year growth policy higher over X% higher than also Required slightly the is rate. growth contributed in X.X% liability. interest the

higher due combination required growth grow growth of rate of invested growing investment anticipated year, assets, XX%. X% interest net full approximately our expect excess in the income around investment interest and X.X% of investment income income combination between the net environment required the we our while our is the by to in to For and at favorable grow X%. This to steady rate than XX% interest results to a

are than were fixed expected to third in cash mortgage additional expected direct In yield. company-owned we primarily industrial cash commercial contributed approximately maturity maturities, program, line fixed amount life average with million sectors. invested partnerships of quarter These mortgage average commercial $XXX provide non-fixed capital-adjusted yield enhanced average time. None investment-grade produce philosophy. involved the in million still in investment being loans which while X.X%, returns to insurance our an X.X% an our is debt-like loans an an investments and investment with regarding and $XXX investments quarter, our $XX as over a of of A- normal into new financial risk-adjusted, properties. maturity in of over and rating and in office characteristics life approximately average and These we the investments return is million at invested XX investments conservative this yield expected our limited of years. This Now lower

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

commercial cash September the As X.XX%, our partnerships, Including quarter yield of third portfolio yield the mortgages earned yield the limited was and X.XX%. XX, was from

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

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

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

have BBB to our of its declined We year fixed to percentage XX% securities given fixed maturity maturity of periods portfolio lowest at we intent find is The to spreads. of and comprised better XX% value compared level portfolio in maturity. Bonds and the security been the current quarter. to investments since able hold more BBB as now relative recent the XXXX. the have rated ago This comprised portion importantly, ability from higher-rated our has

to CLOs BBB higher-risk we is a the X% mortgages, our this the X.XX% the of company-owned The still $X.X approximately XX%. Also around to yield year $XXX for full assets year relative our loans in XXXX return securities held no commercial the debt-like securities. with million regardless to real total average we to anticipate yield in to that commercial average we $XXX for and we capital-adjusted on X.X%. of investments to of and to and peers, acquire by X% of in and remain best respect of range equities, derivatives, year the limited to at fixed such life risk-adjusted, XXXX. With the and for generally lower X% part $X.X midpoint characteristics At XXXX, billion While due an portfolio the many to believe that or full to approximately historical at the to X% X.X% fixed invest returns million at ago. X.XX% maturities yield to the insurance, other of maturities approximately partnership billion mortgage of for average to X.X% XXXX. million in full impacting be [indiscernible]. Below-investment-grade residential as partnerships compared income our the an reminder be We XXXX cash expect lows at to asset-backed high our exposure million fixed limited ability $XXX at X% bonds to ratio the for net slightly of our equities, peers, maturity loans, guidance, investment to hold expected below-investment-grade earned percentage to of we midpoint a maturity our year and securities provide little bonds is estate $XXX expect have guidance, fluctuations

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

Thanks, Frank.

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

repurchases XXXX. The payments its as dividends million were the $XXX this $XXX about is raised from available subsidiaries, the of previously to the and shared We normal return company's interest anticipate it, $XX the form approximately returned share given the assumed. Including approximately the as capital repurchases the the note of conditions market quarter to net the and during senior the shareholders to for XXXX. in the form during million for for shareholders For additional of flow proceeds results dividend than of repurchases paper shareholders we dividends distributing took remaining define the quarter given through time, million approximately share commercial by $XX issuance remainder share cash anticipated increase the XXXX has accelerate as our term to opportunity quarter, quarter, excess share to than less were dividend from our higher of received reduce our levels. in anticipate balances we favorable payments the and the refinancing cash to the debt million from year, $XXX paid more repurchases. At the the loan flow, third of of and we during parent, returned using acceleration primarily higher year-to-date million the and excess to on company

we not repurchases. additional the anticipate of As guidance, share such, at our do midpoint

update let on to Now increase capital. initiatives couple an provide of a me available

we reinsurance transactions. quarter, two the During executed external

at and the The additional and end expected first, million approximately existing $XXX parent reinsurance of which X. These amended effective the the our November excess flow of $XXX is second a agreement anticipated in-force annuity to provide cash are of to financial year. transactions agreement on the be million reserves, to reinsurance by is reinsure

to an we available we Bermuda, capital XXXX. conclude manage to continue addition, work In in evaluate expect opportunity this and to framework in economic under the

year assets began targeted parent the with million ending within million of liquidity, with with approximately our to $XX million. ended We $XX $XX terms $XX liquid liquid anticipate quarter range and liquid of the the assets. of approximately parent of assets million quarter In the

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

of on the discussed XXXX. As end our at was XXX% consolidated RBC previous calls, ratio

that our estimate is RBC XXX% target of XXXX, to no For needed currently XXX%. additional we to capital consolidated maintain

obligations regards quarter. with policy for the Now to current

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

in As The year, the assumptions. of update the health both third the quarter and remeasurement by overall changes a impact each reserve we on exhibit provides reminder, life distribution detail our assumption channel.

of quarter, million the changes from the gain from For $XX assumption overall gain fluctuations million health reflects remeasurement in $XX the $XX a quarter. million life and and a gain experience

higher life mortality experience higher recent million in at to $XX and in life obligations policies changes. future policy remeasurement health obligations. assumption This we what for $XX changes. of primarily higher the quarter, these resulted result trends had the the lower product as $XX related Life For of health was of health million designed and resulted assumptions changes, loss of reflects is primarily enhance and anticipated our remeasurement and Heritage related to a gain updated Family the than AIL anticipated to policy million was policyholders. lapses. The claims These assumption to value

for Now with earnings respect XXXX. to guidance

XX% year full in guidance reflects XX% of previous diluted per earnings share to and will be for the a health. guidance, revenue for of range XXXX, at income X.X% XX% to $XX.XX net higher the the the $XX.XX estimate the repurchases to for anticipated full of for percent of margins underwriting For X.X% X% regards for $XX.XX, of the of at favorable range XX% health. The the be in as the diluted At midpoint growth the guidance, underwriting to range. operating XXXX, our X.X% XX% we premium anticipated and our share operating growing to life $XX.XX recent we than midpoint midpoint and $XX.XX. year XXXX life is the share net be range for than The estimate to the year. With in will previously to earnings and per results to we higher representing anticipate premium

investment reduction reserves flat to to due X% growth required X.X% interest policy to related low experience transaction. single-digit anticipate to In income to the range addition, we annuity year of the and and net assets grow in in next to the reinsurance

XXXX Although approximately XXXX available $XXX return we are is year, at final shareholders this will anticipate excess will for over impact in back are XXXX XXXX comments. in favorable call to not to cash reflects million. This the be turn now results higher increases statutory I statutory parent to to flows due the than Matt. my anticipated valuation statutory $XXX time, the the XXXX earnings changes. Those and in to of

To up our performance in am Thank positioned and encouraged and are financial open I XXXX. With you, Tom. call I very the sum for year, questions. we'll growth the results comments, overall company's that, we this for believe up that with operational strong now well

[Operator question our take Instructions] will from Jimmy We JPMorgan. first Bhullar,

the gain, So first, margins. the If we still better out just question on remeasurement is a it's than margin while. a been take in life

claims that claims are just if suggest are normal maybe And that so claims? would and COVID you Or wondering aberration seeing it's non-COVID or an volatility anything declining, experience? in

question. you the thank Jimmy, for Yes,

I seeing claims think we're improve.

seeing we're favorable continued think claims. I So

so that of And for where pleased with right now. -- is we'd are like more to kind few see but a continue it quarters,

in Direct those overall, businesses? Any are for higher strong, on what's the were And your expectations I Response. just results in -- then going lapses there? on pretty on your thought, color AIL what And and the

fluctuate in some think business note that the actually economic of seeing of lapses impact pleased we're And fairly our I conditions continued face going important general the that through. And from we've the customers. I an all been actually, to resiliency of of to we're it's quarter-to-quarter. think with

times higher stress, AIL, of results at stress. seen some we've consistent think see rates I with times economic of do lapse AIL lapses. think And the are in fairly I economic So in the we

kind thinking where of kind the that's of way we're Jimmy. it right about So that -- now,

lastly, just on then guidance. And Okay. your

talking embedded guidance? You additional what's EPS about I'm mentioned mentioning you're assumption share XXXX the but no buybacks. assuming in buyback -- you're your XXXX,

of the We'll we'd some -- $XXX about cash next which of did buyback anticipate million, guidance is the is as buybacks additional our -- guidance next did well. with kind assumption flows, on in give give that on of call. which more indicative we we But year excess

number is the the And $XXX cash flow million you're you're referring, to, right? number referring

Yes.

for do Tom's those again, relate be anticipated other remainder to I Jimmy, say for that, to to XXXX. have use anticipate buybacks. XXXX, funds, just that cash million And did flow million Yes. $XXX at some that just of we so confirm we'd And comment for the of we the those absent the would would excess $XXX using

We use those continuing process our to coming using going "Hey, flow evaluate to We're in buybacks. year." of excess to to of, uses those some back going funds cash throughout better we've have the got -- the use fund and will anticipate normal those alternative

$XX was that you're more than planned I then And completed so QX, Jimmy, going correct. million to far. say we've no the other

will our Carmichael, from next Wes We take Research. Autonomous question

the drove lapse. run related review terms of earnings? go the impact in assumption can to On just in also that forward think mortality But you is to what talk life, mentioned there you rate unlocking about I assumptions? and the any

assumption the to lapse. mortality does clearly, -- latest the more of run think from views policy a bit of I a views a actually rate our our obligation -- that impact unlocking is and perspective. favorable Well, And related

reflected I underwriting within So those as that's in ranges. fully the far margin ranges, as that's you guidance our reflected gave

kind guess, And remeasurement expect coming think that remeasurement kind of sense. But of there's of just with does the like of that gains P&L? assumption unlocking, where I any about, to the I favorable more through gains. reset that a favorable wouldn't kind makes been really string you

not assumptions our and mortality, Yes. for favorable. and reset our trends couple long-term that. the that last does based observable of lapses. reflects on It quarters have they're And morbidity just The been estimates latest

continue experience, additional get assumptions. to those So we'll we as update and update

favorable result right? So think improved. remeasurement of have couple more been then to have we're they in the being expectations see mortality quarters, And those and the So would if last assumptions in results I likely gains. continue, clearly, favorable, our than near-term long-term

guidance gains continue, relative the favorable of say that. again, assumptions. of what anticipates remeasurement our I what is, the I'd we guidance think kind within the the range if results And could be believe see would anticipates we some -- variations near-term So

assumptions think have into And I about to model, based each on modeling the that Wes, just really the long-term assumptions the while of overall think book getting based are quarters. the the our are reset Yes. it really that reflect don't, that based we really seeing business. is on those important really you results year, assumptions that input recent few -- an what are last and we're on in

of a it's right that. And as So Tom said, we experiencing on level are And if a we've see we much well view some mortality in now. assumptions, that the we we -- from couple to longer we future. of think they're based some ago, the could seeing year gains we're have very the while improved in some results remeasurement where continue last still really favorable been long-term at the were clearly, quarters,

to there? the Got where other the quarter And and filed I maybe agents it. and stands and I X-K whether perhaps independent That's should classified you EEOC, any can all issue talk about question, then recent I be really think in you just that contractors as developments employees. and regarding an But the relates think helpful. guess, your last my issue they

long there's prejudice. not just where any independent And successful findings and outcomes dismissed position of American claims claims a significant what update as have history we with the have are agents processes in noted X-K, In Title are of our X that have private to us. a that. with administrative in could contractors. But we lead have individual we And Income on resolution been of each as that sales don't the against have investigation litigation, determined a VII those agreed We courts binding and do reminder, there. complainants that put EEOC's the the asserted from previously

from will Sandler. our take Piper We Barnidge, John next question

on talking having assumptions actuarial mortality? drugs into GLP-X the peaked, headlines now you forward your factoring review, obesity assumption about on are impact from with recent Maybe levels

drugs. we not those mortality forward John, improvement Yes. in assumptions the from in are our factoring

continue area really actually an we'll we to that and think see I look at how that's and emerged. study those

we those future -- As account. view. once how seeing Tom that's a into try in build said, won't start we really to we And take them the impact from really

we the about and -- of getting it's getting challenges one think and talked to on that we've previous our insured calls, as them. of affordability particular drugs I those always types accesses is have having availability population, for to the

that working And make start before hitting in. those we it's insured base so we sure our want to

follow-up Does makes that And you view 'XX from That how sense. liabilities? total freed-up my do market a a platform? guidance. with view And that on Globe's on question include addressable Bermuda platform for capital the

in any We're John, phase. not does include final related to conclusions anything Bermuda. it on evaluation still the

benefits We expect one does to the reciprocal the to XXXX. jurisdiction conclude that in bit that's through is it benefits Bermuda of time of get little of And status then a take required.

that liabilities will benefits So it move to conclude be we'd it. over see time we the to that if Bermuda

question next Kligerman, TD Cowen. from our take will Andrew We

that I average keep adding at the backdrop? average producers? XX%, XX%, give up count Family middle little that you know looking Are -- up Income the a these management? Heritage and sustainable adding over producing sorry, management, I'm up X%. how next So middle can American Could without And touched one-off? sustainable I'm numbers mean, you've quarterly agent you are keep liberty you Can the are potentially they guidance? on few giving years? but is Or I

and middle count It's that forward. new really out sustainable agents. in we growth like field recruiting, management are onboarding in going middle training managers is what that to because that those is the Well, the growth the see

metrics of generally one we at. the so look that's And key

the growth to reflected think quarter. robust. the sales the the And and and to American growth side had Income at XX% particularly count XX% count, growth, XX% in Liberty. If QX, count you agent been that. But in of the on look had we agent as Liberty so back Income so quarter-over-quarter that's very growth American sales count on all in American support QX, my count growth. agent had had it's kind we've Liberty had I have last guidance And sustainable, guidance, go growth for growth. on agent Income XX% more And In to strong -- at have agencies, XXXX I

sustainable my that. So by growth count all, supported those forward in because underneath very going management are it's mind, double-digit

look And leading as why sales agent indicator growth so we at that's that kind count growth. of a our to future

So translate count we that side the that XXXX. into seeing on the well should momentum we're like agent

then to the book? that Could about change a Very would regulators lot really the the Medicare health your supplement, ability And And hit to you you talk writing to through that's just reprice with margins over what pricing? on I margins. with getting of shifting imagine go what's helpful. need Globe to

Yes. rates rate those at with book the year, as increases, through. getting as We each had increases increases, far really actually rate -- our look we medical results needed, We've look rate authorities. through if actually go at file and regulatory good trends and

right the the effective of bit and a middle so get to a right and of And become XXXX. There we're rate little now, expect experience that lag those process rate see sometimes we'd when we increases. between increases in we in is the when

increases playing of anticipate So rate bit we next now, right getting year. appropriate a catch-up for but we are little

need to that where Yes. Sup team on that to it is annual see reviews in. make the that's one put just Tom we our over our XX% is as that to time. business, very thing really, trying just ratio increases that rate Andrew, add does a active mentioned, and And sure Med have then and just I that minimum we loss would that reminder get

bit a little lag. of can have a You

So if just place rate it utilization higher little how this say up on and let's increases, to the trends kind year. in you your take following depending make had just put you the in year, should and then in next year a of cost we bit claims, then have

from Elyse question next Greenspan, our Wells take will Fargo. We

My to the I goes first guess, capital back question, discussion.

the back Is of back. considering year? will pulled stock then were before certain transactions the M&A stock you a again? year earlier you guys in level of is start You would next your the side capital where on the quarter buying at start the consider once the that things, of intention there guys And first

Yes.

as exclusive have pretty that area. we in middle distribution market on have Let been in being that properties as properties in. things that or to like the think Historically, M&A we and selective target market me discussion. market, have in grow able the that compete We distribution start expertise with we well that products our our that we focus income

kind evaluate we we often, it. think along, so how opportunities about that's so Those And and of those. ever come

that that would buyback, strategy mentioned year. throughout to so that related in perspective. it next year those earlier go process we criteria on think our stock and execute met more the to we our continue extent through we around we question ratable the acquisition would so the as the where future do an then typically I And to And from

we Yes. then our QX, the we up, that the I would year that And ordinary from alternative, dividends -- and we'll I anticipate that QX. subsidiaries will that another we -- we'll first start see we in starting and evaluate that, those getting dividends us again then And management that start as the and again in dividends -- that better has would in throughout we're released have would quarter. process cash kind of getting

you those fixed down a rates bit have said And partnerships, in start other floating some guys et of And how loans, much would investments limited of cetera? see investments perhaps to 'XX income invest interest guys you mortgage commercial move more, securities? rate we as in in more are to like your expect then

Yes.

floating all commercial are much rate pretty investments. in our loans So and mortgage partnerships of limited

call over that's we'd in invest XXXX. would of securities, And is the or investment fixed think we those have that billion that to little rate billion in bit course we XX% of be $X so to XX% total investments, fixed about income a X.X%. We in the we I over And those would somewhere anticipate it Currently, -- I probably, look assets $X.X alternatives floating or the would probably that year. close making to acquisitions total XXXX, may our

again, so, being in anticipate XX% XX% and And of that roughly we CMLs the the LPs. would or

those we'd so as be growing in bit our And into little 'XX a well. exposure

the we as well. Yes. And just on rate side, liability debt have do floating

a both are financing debts little of offsets So floating kind if rates commercial bit, loan down right. our that our and come rate with costs lower were to paper term

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

talk bit a Was Could underpriced? it bit about more negative in drove thought I you about go something talked detail guys just product that? more gain? health of remeasurement about Can on kind changes? little you -- just you what a the little

Sure, Wilma.

of the during favorable last So a over couple couple health some had of things particularly experience here. pandemic. years, We've the pretty

so that receiving And health products. their are customers our to want from we make sure value good

some so product making we're policyholders. the And changes the to value of enhance

The of other and a premium return piece of have that is on that claims premium on paid. Family net returned is Heritage, largely benefit, those benefit products

return the a favorable more bit given got -- experience, premium is as valuable. claims also we've of little benefit So

that our updated as around assumptions we've well. So

doesn't little really thing and I products that have Income. those a that of on to the we then American. United Yes. Family is American by is Supplement adjustment from It health underwritten just Heritage, products One supplemental impact at any Medicare want clarify that, probably bit Liberty

Okay. amount get guess a there is leverage that cash little back to range? with call XX% reflected it over target XXXX the change bit lower sort you of the flow? time? you Is plan the And possible related the to out guys And of then talk what will valuation I a be that, in manual could to about do to to

Yes.

we're XX% range Wilma, we've targeting of that's targeted. that cap kind debt the So XX% ratio, historically still to

are we in change no benefit. of manual that. $XXX -- of valuation in in then And excess the of estimate So million changes

then through And of be end think end down we'd 'XX, come range just tend the 'XX. project of target to we that over I growth, our and kind of would Wilma, of little at bit the that a top range. That's normal kind at

then about going our we'll forward. continue we and so how look ratios And at leverage think to that as that drops

our Suneet Jefferies. question take Kamath, will from next We

to sort the of $XXX $XXX to decide Bermuda million company? sort as cash of of think contemplating about guess, that, the need still capital flow to if pull some you're use But that know holding for Bermuda, million of a a I on should that trigger use solution. you subsidiary, we potential I being

I would We -- say don't no.

valuation opportunity need which the to we to economic likely move release think towards need what than asset states. the in is Bermuda requirement with framework, an is I our for capital, lower so

we to So as an opportunity than really capital capital. use rather raise feel that

time Yes. a the to or some be benefits, the why about there see I before had thought -- that's lag take might you something it question. might start was I asking you mentioned

to Bermuda, that you appropriate lag Yes. as have credit. to collateral reserve make you The sure for is just need move you business

Bermuda has that so jurisdiction be accounting to to called for periods able a status. what's And reciprocal status, but takes it qualify few

Yes.

$XXX And from And so anticipated no do question, do should in take that we transaction. we're that the to wouldn't is going Bermuda. in Bermuda think is $XXX may I to your anything it benefit one any specifically from well, included we that anticipate to that million million -- really that or

say analysis to going we'd 'XX. -- mentioned, did move just was if as forward, that be we and in Tom completing I

the on time lag the frame. a so in more And XXXX likely is benefit

guess, is you back about then XXXX the guidance. remeasurement? get And Okay. to is you XX% of remeasurement I Are want to embedded if I just assuming there midpoint from in growth gains that And additional much way that that to are, guidance? come to you a how think midpoint

the last few if margin we'll gains. continues, -- remeasurement And fluctuations view our results that of during I see as quarters really is results, clearly, results course have year. mentioned underwriting which to range of earlier, our mortality the the of results kind near-term say of our I'd What over likely we're reflects obligation

that the And range view so to tried we've the of our in guidance. incorporate underwriting in margins

is sort way to the end that the of end it? think the is of range it incremental And of bottom no top has? remeasurement about right it. range and like Got Is the

way think think about good that's a it. I to

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

possibility few sense be on broad that? dollars might how just capital I a do that question, that might get it potential. think much talking than consequential want be. up? of get for to the about just Bermuda might freed million capital Are hundred Or you First we larger

That's exactly is opportunity there. right just we're what now the work through the going that is

Our long-duration are big aren't framework, in be and what long a to Those little as liabilities requirements liabilities the might sometimes economic shorter. and regards an asset bit benefits that's with expected. portfolio as

So move the is as to forward point potential that's far not. and that's whether going there, decision as what really is the or be we the evaluation where

Got it.

really to the for along that So sense range in far enough fair? that's you're process a still yet. -- get just not the Is

in middle evaluating. Right Yes. of Correct. the Correct.

Okay.

As what we your the level level Or have we're here? much are review, excess eliminated that you assuming actuarial pretty forward? assuming you through think after still some to back persist you mortality Are are of new about going going pre-pandemic assumptions now?

that see to pre-pandemic this levels. levels than We higher pre-pandemic Yes, we're at not to point. really back causes continue be

to we What -- build do don't an assumption. explicit necessarily haven't into assumption for tried excess we've we have is So mortality. our

as we've we'll as as lapses that to continue upon long-term point views far update had, near-term and at best this experience based current emerges. Our mortality and time experience in

then you. X Got And quick just I other if ones, could.

changes. the to to think range, the like that now? correctly, the about you million level Wilma's in $XXX like you right benefit Is question, maybe sounds emerge in $XXX be you the sustainable million it heard cash I from back amount if So valuation high free flow we'll it, out of after that to answer the XXXX call right would expect about

than will valuation I I of will changes into that have just higher benefit little because think carry -- in a XXXX. it the that maybe continued think XXXX

over -- will I are but think diminished think So there they'll in additional time, some the some I be that I benefits future. there be do think

it. Got

persist. So there's a a little bit tail of that on that,

is. There

how term Okay. finally, And in just you is QX? the to much paydown do loan that then expect

commercial I looking term a just think some reducing it's paydown, don't the loan paper of balances. at

as that of the say, repurchases to popped QX see we as using some going QX. into to, you up So had in that I'm were prefund

million. in or million So bringing $XXX that -- so million down would that $XX anticipate $XX we to

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

they On expenses, pretty seems were the quarter. the like admin elevated it in

going higher what on that? And is in looks driving the I what exactly they're it XXXX? is comment think fourth for Can expectation quarter, be like to too. your you

Yes.

higher than anticipated. we had were what expenses admin So

a are as more technology We continue costs, bit move as as bit little a well. third the to we expect higher we've seen quarter, expenses legal higher fourth quarter in a to benefit the little that bit a well seeing and we'd in costs little including as Service costs, as employee Software

than why we reasons the some of little anticipated. of So bit a had kind we're are those what higher

really big lot last our offsite and Service of couple as so I of cloud, the and a customer space on a digital of years, out and think really that moving in and focused capabilities thing the we we will. But been driver area our as add think there, would renting as of that that, if then One a is around experience Ryan, you and to data experience. few are over admin we're it higher cost analytics and Software improving we is of improving is data that we've making running of IT then especially investments the around our that, about last a management years, lot think to do when

applications we've here Several a improving service. had customer kind so lot of came hardware And our of software and policy online that those of and in our with administration involved XXXX. and things

probably forward to so what's 'XX, we of growing. think fair a of 'XX. If driving the as really we 'XX see kind And decent look we it that's portion of bump to do

premium percentage being I as think a admin that around the still of X.X%.

as are, So is will, keeping sure sure investments of so roughly and our to same of premium we we're as if that -- as what roughly really kind for That's these that growth. well. as possible we we're kind make the some of the growing, you making realizing have, manageable as of where goals value

additional there Got then of is it. -- the so? And the see was opportunities any for should do you reinsurance doing costs any you be I guess mentioned, And on reinsurance? considering we

I should aren't there I -- costs that don't reflected. any be think clear

continue the So managing managing risk just for -- and as overall I we we'll at think evaluate look reinsurance capital to organization. and

Jimmy Our from Instructions] [Operator next JPMorgan. Bhullar, question

disenrollment senior questions. in plan. health of for number many products products seems from a like claims Advantage increased are had of Med health business. there be It Med for other insurance. the -- levels your Sup couple senior high going on just a peers have is I One to And

if sales any you should seeing Med that? of And should this help are does So plans? -- of happen, that Sup

Medicare extent, there's some we've in the past, Medicare for to there's that think to on Well, side, benefit typically the the extent the the disruption supplement I market. Advantage seen

we that of disruption to As you see us currently, tailwind the some for over a think continue that coming period. be could

you market definitely on could Medicare our is, volatile, you supplement So a benefit us the little see. to wait as disenrollments of see it there, bit That and but extent know, side.

part included legal term? income. flow the of net assume lastly, as it then in that, cash short if in And expenses, And had that in but that's Fair operating free not continues just your you've not assuming elevated does, to that I'm numbers.

going mean, more Yes. adjudicate, change which in to worked longer term. been up will to the in just -- really There costs least how becoming they're is and at taking we the being I continue some Jimmy, of probably the system do and complex legal just cases levels that anticipate it well. resolve short and as those I are do some some driving that has think, kind of it's probably at here a for elevated of

overall thoughts And our and reflected in is our -- actually excess cash around it so flows.

are line. further questions There on no the

hand host closing now remarks. your I to back So for you will

you All joining Those us our morning. for comments. this are Thank right.

We next again will to you quarter. talk

joining Thank today's you call. for

may disconnect. You now