Globe Life's profit climbs on higher investment returns, stronger underwriting

Globe Life

05/02/2025 22:42

Feb 5 (Reuters) - Life and supplemental health insurance
firm Globe Life  GL.N  reported an increase in fourth-quarter
profit on Wednesday, driven by stronger underwriting performance
and higher income from investments.
    Despite economic uncertainties and fluctuating interest
rates, demand for life insurance has remained resilient as
consumers prioritize financial security amid rising living
costs. 
    Insurers have reported steady policy sales, fueled by a
heightened awareness among consumers of coverage needs in the
post-pandemic era.
    At the same time, technological advancements and digital
distribution channels have made access to insurance policies
easier for younger demographics, supporting sustained growth in
the insurance sector.
    This stability underscores the essential role of insurance,
an industry that often sees consistent or increased demand
during periods of heightened economic volatility.
    Total underwriting margin increased 6% over the year-ago
quarter.
    Meanwhile, higher interest rates have increased yields from
bonds held in insurers' investment portfolios and the broader
equity markets also closed a banner year on the back of a rally
across major sectors, including technology and financials. 
    For 2024, the Nasdaq  .NDX  surged 28.6%, while the
bellwether S&P 500  .SPX  notched a 23.3% gain, marking the
index's best two-year run since 1997-1998.
    Insurers typically invest a portion of their capital to
various asset classes, including fixed-income securities and
equities, generating returns that generally align with broader
market trends.
        Globe Life's insurance underwriting income increased 16%
in the fourth quarter ended December 31, to $3.99 per share. Its
net investment income grew 4% in the quarter compared to the
year-ago quarter. 
  
    The McKinney, Texas-based company's diluted net income per
share rose to $3.01 per share in the three months ended Dec. 31.
That compares with $2.88 per share, a year earlier.    

 (Reporting by Jaiveer Singh Shekhawat and Manya Saini in
Bengaluru; Editing by Mohammed Safi Shamsi)
 ((Manya.Saini@thomsonreuters.com; X: manya__saini;))