Q1 2026 Globe Life Inc Earnings Call

April 23, 2026

Speaker #1: For today's event. Please note this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Speaker #1: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. I will now hand you over to your host, Stephen Mota, Vice President of Investor Relations, to begin today's conference.

Speaker #1: Thank you.

Speaker #2: Thank you. Good morning, everyone. Joining the call today are Frank Svoboda and Matt Darden, our Co-Chief Executive Officers; Tom Kalmbach, our Chief Financial Officer; Mike Majors, our Chief Strategy Officer; and Brian Mitchell, our General Counsel.

Speaker #2: Some of our comments or answers to your questions may contain forward-looking statements if provided for general guidance purposes only. Accordingly, please refer to our earnings release and 2025 10-K on file with the SEC.

Speaker #2: Some of our comments may also contain non-GAAP measures. Please see our earnings release and website for discussion of these terms in reconciliations to GAAP measures.

Speaker #2: I will now turn the call over to Frank.

Speaker #3: Thank you, Stephen. And good morning, everyone. In the first quarter, net income was $271 million, or $3.39 per share, compared to $255 million or $3.01 per share a year ago.

Speaker #3: Net operating income for the quarter was $274 million, or $3.43 per share, an increase of 12% over the $3.07 per share from a year ago.

Operator 2: Hello, and welcome to Globe Life Inc. Q1 Earnings Release Call. My name is Morgan, and I will be your coordinator for today's event. Please note this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. I will now hand you over to your host, Stephen Mota, Vice President of Investor Relations, to begin today's conference. Thank you.

Operator: Hello, and welcome to Globe Life Inc. Q1 Earnings Release Call. My name is Morgan, and I will be your coordinator for today's event. Please note this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. I will now hand you over to your host, Stephen Mota, Vice President of Investor Relations, to begin today's conference. Thank you.

Speaker #1: Hello and welcome to GLOBE LIFE INC. . First quarter earnings release call . My name is Morgan and I will be your coordinator for today's event .

Speaker #3: We are very pleased with the results of our operations this quarter. Despite the challenges faced by working-class Americans in the current economic environment, global ICE has now produced double-digit growth in net operating income per share in seven of the last eight quarters.

Speaker #1: Please note this call is being recorded . All lines have been placed on mute to prevent any background noise After the speakers remarks , there will be a question and answer session .

Speaker #1: If you would like to ask a question during this time , simply press star followed by the number one on your telephone keypad .

Speaker #3: And the one quarter that didn't have double-digit growth was close, at 8%. On a GAAP-reported basis, return on equity through March 31st is 17.9%.

Speaker #1: I will now hand you over to your host , Stephen Mota Vice President of Investor Relations , to begin today's conference . Thank you .

Stephen Mota: Thank you. Good morning, everyone. Joining the call today are Frank Svoboda and Matt Darden, our Co-Chief Executive Officers, Tom Kalmbach, our Chief Financial Officer, Mike Majors, our Chief Strategy Officer, and Brian Mitchell, our General Counsel. Some of our comments or answers to your questions may contain forward-looking statements that provide it for general guidance purposes only. Accordingly, please refer to our earnings release and 2025 10-K on file with the SEC. Some of our comments may also contain non-GAAP measures. Please see our earnings release and website discussion of these terms and reconciliations to GAAP measures. I will now turn the call over to Frank.

Speaker #2: Thank you . Good morning everyone . Joining the call today are Frank Svoboda and Matt Darden , our co-chief executive officers . Thomas Kalmbach .

Speaker #3: And book value per share is $77.03. Excluding accumulated other comprehensive income, or AOCI, return on equity is 14%. And the book value per share as of March 31st is $98.56, up 12% from a year ago.

Speaker #2: Our chief financial officer , Mike majors , our chief strategy officer . And Brian Mitchell , our general counsel . Some of our comments or answers to your questions may contain forward looking statements that provided the general guidance purposes only Accordingly , please refer to our earnings release in 2025 10-K on file with the SEC and our comments may also contain non-GAAP measures .

Speaker #3: Now, in our insurance operations, total premium revenue in the first quarter grew 6% over the year-ago quarter. For the full year, we expect total premium revenue to grow approximately 7%.

Speaker #2: Please see our earnings release and website discussion of these terms and Reconciliations to GAAP measures . I will now turn the call over to Frank .

Frank M. Svoboda: Thank you, Stephen, and good morning, everyone. In Q1, net income was $271 million, or $3.39 per share, compared to $255 million, or $3.01 per share a year ago. Net operating income for the quarter was $274 million, or $3.43 per share, an increase of 12% over the $3.07 per share from a year ago. We are very pleased with the results of our operations this quarter. Despite the challenges faced by working-class Americans in the current economic environment, Globe Life has now produced double-digit growth in net operating income per share in seven of the last eight quarters, and the one quarter that didn't have double-digit growth was close at 8%. On a GAAP reported basis, return on equity through 31 March is 17.9%, and book value per share is $77.03.

Frank Svoboda: Thank you, Stephen, and good morning, everyone. In Q1, net income was $271 million, or $3.39 per share, compared to $255 million, or $3.01 per share a year ago. Net operating income for the quarter was $274 million, or $3.43 per share, an increase of 12% over the $3.07 per share from a year ago. We are very pleased with the results of our operations this quarter. Despite the challenges faced by working-class Americans in the current economic environment, Globe Life has now produced double-digit growth in net operating income per share in seven of the last eight quarters, and the one quarter that didn't have double-digit growth was close at 8%. On a GAAP reported basis, return on equity through 31 March is 17.9%, and book value per share is $77.03.

Speaker #3: Life premium revenue for the first quarter increased 3% from the year-ago quarter to $853 million. Life underwriting margin was $349 million, also up 3% from a year ago.

Speaker #2: Thank you . Steven .

Speaker #3: And good morning , everyone In the first quarter , net income was $271 million , or $3.39 per share , compared to $255 million , or $3.01 per share a year ago .

Speaker #3: For the year, we expect life premium revenue to grow between 3% and 3.5%. As a percent of premium, life underwriting margin was 41%. Same as a year-ago quarter.

Speaker #3: Net operating income for the quarter was $274 million, or $3.43 per share. This represents an increase of 12% over the $3.07 per share from a year ago.

Speaker #3: While we anticipate life underwriting margin to be between 42% and 45% for the full year 2026, we do expect it to be around 41% for both the second and fourth quarters and higher in the third quarter due to the anticipated remeasurement gain from assumption updates that will take place in the third quarter, as Tom will discuss in his comments.

Speaker #3: We are very pleased with the result of our operations this quarter , despite the challenges faced by working class Americans in the current economic environment Globe life has now produced double digit growth in net operating income per share in seven of the last eight quarters , and the one quarter that didn't have double digit growth was close at 8% on a GAAP reported basis Return on equity through March 31st is 17.9% , and book value per share is $77.03 , excluding accumulated other comprehensive income or Aoci Return on equity is 14% and the book value per share as of March 31st is $98.56 , up 12% from a year ago .

Speaker #3: In health insurance, premium revenue grew 13% to $417 million, and health underwriting margin was up 12% to $95 million. For the year, we expect health premium revenue to grow in the range of 14% to 17%.

Frank M. Svoboda: Excluding accumulated other comprehensive income, or AOCI, return on equity is 14%, and the book value per share as of March 31 is $98.56, up 12% from a year ago. Now in our insurance operations, total premium revenue in Q1 grew 6% over the year ago quarter. For the full year, we expect total premium revenue to grow approximately 7%. Life premium revenue for Q1 increased 3% from the year ago quarter to $853 million. Life underwriting margin was $349 million, also up 3% from a year ago. For the year, we expect life premium revenue to grow between 3% and 3.5%. As a percent of premium, life underwriting margin was 41%, same as the year ago quarter.

Frank Svoboda: Excluding accumulated other comprehensive income, or AOCI, return on equity is 14%, and the book value per share as of March 31 is $98.56, up 12% from a year ago. Now in our insurance operations, total premium revenue in Q1 grew 6% over the year ago quarter. For the full year, we expect total premium revenue to grow approximately 7%. Life premium revenue for Q1 increased 3% from the year ago quarter to $853 million. Life underwriting margin was $349 million, also up 3% from a year ago. For the year, we expect life premium revenue to grow between 3% and 3.5%. As a percent of premium, life underwriting margin was 41%, same as the year ago quarter.

Speaker #3: This is due to premium rate increases in our Medicare supplement business, as well as strong sales activity in both our United American and Family Heritage divisions.

Speaker #3: As a percent of premium, health underwriting margin was approximately 23% in the first quarter, same as a year-ago quarter. For the full year, we anticipate health underwriting margin to be between 23% and 27%.

Speaker #3: Now , in our insurance operations . Total premium revenue in the first quarter grew 6% over the year ago quarter . For the full year , we expect total premium revenue to grow approximately 7% with premium revenue for the first quarter increased 3% from the year ago quarter to $853 million .

Speaker #3: Administrative expenses were $94 million, for the quarter, an increase of approximately 8% over the first quarter of 2025. As a percent of premium, administrative expenses were $7.4%.

Speaker #3: Life underwriting margin was $349 million , also up 3% from a year ago . For the year , we expect life premium revenue to grow between 3 and 3.5% .

Speaker #3: For the year, we expect administrative expenses to be approximately $7.3% of premium. Over the long term, we anticipate that expanded implementation of AI applications across the company will help drive this ratio positively positioned to benefit from AI.

Speaker #3: As a percent of premium, life underwriting margin was 41%, the same as the year-ago quarter. While we anticipate life underwriting margin to be between 42% and 45% for the full year 2026, we do expect it to be around 41% for both the second and fourth quarters, and higher in the third quarter due to the anticipated remeasurement gain from assumption updates that will take place in the third quarter.

Frank M. Svoboda: While we anticipate life underwriting margin to be between 42% and 45% for the full year 2026, we do expect it to be around 41% for both Q2 and Q4 and higher in Q3 due to the anticipated remeasurement gain from assumption updates that will take place in Q3, as Tom will discuss in his comments. In health insurance, premium revenue grew 13% to $417 million, and health underwriting margin was up 12% to $95 million. For the year, we expect health premium revenue to grow in the range of 14% to 17%. This is due to premium rate increases in our Medicare Supplement business as well as strong sales activity in both our United American and Family Heritage divisions. As a percent of premium, health underwriting margin was approximately 23% in Q1, same as the year ago quarter.

Frank Svoboda: While we anticipate life underwriting margin to be between 42% and 45% for the full year 2026, we do expect it to be around 41% for both Q2 and Q4 and higher in Q3 due to the anticipated remeasurement gain from assumption updates that will take place in Q3, as Tom will discuss in his comments. In health insurance, premium revenue grew 13% to $417 million, and health underwriting margin was up 12% to $95 million. For the year, we expect health premium revenue to grow in the range of 14% to 17%. This is due to premium rate increases in our Medicare Supplement business as well as strong sales activity in both our United American and Family Heritage divisions. As a percent of premium, health underwriting margin was approximately 23% in Q1, same as the year ago quarter.

Speaker #3: Due to the high-volume nature of our business, including the number of applications received and policies issued, calls received by our customer service representatives, and number of claims reviewed and paid, of course, these AI-driven improvements would not be limited to administrative expenses, we expect enterprise-wide benefits, including significant benefits to our distribution and underwriting activities in particular.

Speaker #3: As Tom will discuss in his comments in health insurance, premium revenue grew 13% to $417 million, and health underwriting margin was up 12% to $95 million for the year.

Speaker #3: I will now turn the call over to Matt for his comments on the first quarter marketing operations.

Speaker #3: We expect health premium revenue to grow in the range of 14 to 17% . This is due to premium rate increases in our Medicare supplement business , as well as strong sales activity in both our united , American and Family Heritage divisions As a percent of premium health underwriting margin was approximately 23% in the first quarter .

Speaker #4: Thank you, Frank. We had strong first-quarter sales results, as the total life net sales grew 6%, and the total health net sales grew 58%.

Speaker #4: I'm pleased to point out that we have seen growth in net life sales in each division for the last two quarters. Given the current economic environment, these results are indicative of the resiliency of our business model.

Frank M. Svoboda: For the full year, we anticipate health underwriting margins to be between 23% and 27%. Administrative expenses were $94 million for the quarter, an increase of approximately 8% over Q1 2025. As a percent of premium, administrative expenses were 7.4%. For the year, we expect administrative expenses to be approximately 7.3% of premium. Over the long term, we anticipate that expanded implementation of AI applications across the company will help drive this ratio lower. We believe Globe Life is positively positioned to benefit from AI due to the high volume nature of our business, including the number of applications received and policies issued, calls received by our customer service representatives, and number of claims reviewed and paid. Of course, these AI-driven improvements would not be limited to administrative expenses. We expect enterprise-wide benefits, including significant benefits to our distribution and underwriting activities in particular.

Frank Svoboda: For the full year, we anticipate health underwriting margins to be between 23% and 27%. Administrative expenses were $94 million for the quarter, an increase of approximately 8% over Q1 2025. As a percent of premium, administrative expenses were 7.4%. For the year, we expect administrative expenses to be approximately 7.3% of premium. Over the long term, we anticipate that expanded implementation of AI applications across the company will help drive this ratio lower. We believe Globe Life is positively positioned to benefit from AI due to the high volume nature of our business, including the number of applications received and policies issued, calls received by our customer service representatives, and number of claims reviewed and paid. Of course, these AI-driven improvements would not be limited to administrative expenses. We expect enterprise-wide benefits, including significant benefits to our distribution and underwriting activities in particular.

Speaker #3: Same as the year ago quarter . For the full year , we anticipate health underwriting margin to be between 23% and 27% . Administrative expenses were $94 million for the quarter , an increase of approximately 8% over the first quarter of 2025 .

Speaker #4: Now, I'll discuss the trends at each distribution, starting with our exclusive agencies. At American Income LIFE, life premiums were up 5% over the year-ago quarter to $459 million.

Speaker #3: As a percent of premium Administrative expenses were 7.4% for the year . We expect administrative expenses to be approximately 7.3% of premium over the long term .

Speaker #4: In the life underwriting margin, it was up 7% to $209 million. Net life sales were $101 million, up 3% from a year ago due to improved agent productivity.

Speaker #3: We anticipate that expanded implementation of AI applications across the company will help drive this ratio lower We believe Globe Life is positively positioned to benefit from AI due to the high volume nature of our business , including the number of applications received and policies issued .

Speaker #4: The average producing agent count for the first quarter was 11,064, down 4% from a year ago, due primarily to a decline in new agent retention.

Speaker #4: Short-term declines in agent count are not necessarily a problem, as we can see improved sales productivity among our veteran agents when they have more time to focus on sales.

Speaker #3: Calls received by our Customer service representatives and number of claims reviewed and paid . Of course , these AI driven improvements would not be limited to administrative expenses .

Speaker #4: Now, that being said, long-term growth is dependent on agent count growth, as we discussed in the last call at the beginning of the second quarter, we have implemented compensation adjustments for our middle management team that is designed to emphasize new agent recruiting and retention of new agents.

Speaker #3: We expect enterprise wide benefits , including significant benefits to our distribution and underwriting activity , in particular . I will now turn the call over to Matt for his comments on the first quarter marketing operations .

Frank M. Svoboda: I will now turn the call over to Matt for his comments on the Q1 marketing operations.

Frank Svoboda: I will now turn the call over to Matt for his comments on the Q1 marketing operations.

J. Matthew Darden: Thank you, Frank. We had strong Q1 sales results as the total life net sales grew 6%, and the total health net sales grew 58%. I'm pleased to point out that we have seen growth in net life sales in each division for the last two quarters. Given the current economic environment, these results are indicative of the resiliency of our business model. Now I'll discuss the trends at each distribution, starting with our exclusive agencies. At American Income Life, life premiums were up 5% over the year ago quarter to $459 million, and the life underwriting margin was up 7% to $209 million. Net life sales were $101 million, up 3% from a year ago due to improved agent productivity. The average producing agent count for Q1 was 11,064, down 4% from a year ago, due primarily to a decline in new agent retention.

Matt Darden: Thank you, Frank. We had strong Q1 sales results as the total life net sales grew 6%, and the total health net sales grew 58%. I'm pleased to point out that we have seen growth in net life sales in each division for the last two quarters. Given the current economic environment, these results are indicative of the resiliency of our business model. Now I'll discuss the trends at each distribution, starting with our exclusive agencies. At American Income Life, life premiums were up 5% over the year ago quarter to $459 million, and the life underwriting margin was up 7% to $209 million. Net life sales were $101 million, up 3% from a year ago due to improved agent productivity. The average producing agent count for Q1 was 11,064, down 4% from a year ago, due primarily to a decline in new agent retention.

Speaker #3: Thank you , Frank .

Speaker #4: We

Speaker #3: Had a strong first quarter sales results as the total life net sales grew 6% and the total health net sales grew 58% . I'm pleased to point out that we have seen growth in net life sales at each division for the last two quarters , given the current economic environment , these results are indicative of the resiliency of our business model Now I'll discuss the trends at each distribution , starting with our exclusive agencies at American Income , life , life premiums were up 5% over the year ago quarter to $459 million in the life underwriting margin was up 7% to $209 million .

Speaker #4: We expect these adjustments to have a positive impact on our overall agent count during the second half of this year. Despite these short-term challenges, I am very pleased with the improvement in agent productivity, we have seen over the last several quarters.

Speaker #4: Our investments in branding, lead generation, and technology are paying off. And overall, I'm very optimistic regarding the long-term prospects for American Income. At Liberty National, the life premiums were up 4% over the year-ago quarter to $100 million, and the life underwriting margin was up 11% to $35 million.

Speaker #4: Net life sales were $25 million, up 13% from the year-ago quarter, due primarily to agent count growth. Net health sales were $7 million, down 3% from the year-ago quarter, as more emphasis has been placed on life business.

Speaker #3: Net life sales were $101 million , up 3% from a year ago due to improved agent productivity . The average producing agent count for the first quarter was 11,064 , down 4% from a year ago , due primarily to a decline in new agent retention .

Speaker #4: The average producing agent count for the first quarter was 4,031, up 9% from a year ago. I'm excited about the strong life sales in agent count growth we are seeing and confident we will continue to see growth at this agency as we move forward.

J. Matthew Darden: Short-term declines in agent count are not necessarily a problem, as we can see improved sales productivity among our veteran agents when they have more time to focus on sales. Now that being said, long-term growth is dependent on agent count growth. As we discussed in the last call, at the beginning of Q2, we have implemented compensation adjustments for our middle management team that is designed to emphasize new agent recruiting and retention of new agents. We expect these adjustments to have a positive impact on our overall agent count during H2 of this year. Despite these short-term challenges, I am very pleased with the improvement in agent productivity we have seen over the last several quarters. Our investments in branding, lead generation, and technology are paying off. Overall, I'm very optimistic regarding the long-term prospects for American Income.

Matt Darden: Short-term declines in agent count are not necessarily a problem, as we can see improved sales productivity among our veteran agents when they have more time to focus on sales. Now that being said, long-term growth is dependent on agent count growth. As we discussed in the last call, at the beginning of Q2, we have implemented compensation adjustments for our middle management team that is designed to emphasize new agent recruiting and retention of new agents. We expect these adjustments to have a positive impact on our overall agent count during H2 of this year. Despite these short-term challenges, I am very pleased with the improvement in agent productivity we have seen over the last several quarters. Our investments in branding, lead generation, and technology are paying off. Overall, I'm very optimistic regarding the long-term prospects for American Income.

Speaker #3: Short term declines in agent count are not necessarily a problem , as we can see , improved sales productivity among our veteran agents when they have more time to focus on sales .

Speaker #4: At Family Heritage, the health premiums increased 10% over the year-ago quarter to $123 million. And the health underwriting margin increased 11% to $44 million.

Speaker #3: Now , that being said , long term growth is dependent on agent count growth . As we discussed in the last call at the beginning of the second quarter , we have implemented compensation adjustments for our middle management team .

Speaker #4: Net health sales were up 22% to $33 million. And this is due to increases in agent count and productivity. The average producing agent count for the first quarter was 1,561, up 10% from a year ago.

Speaker #3: That is designed to emphasize new agent recruiting and retention of new agents . We expect these adjustments to have a positive impact on our overall agent count during the second half of this year Despite these short term challenges , I am very pleased with the improvement in agent productivity we have seen over the last several quarters .

Speaker #4: We continue to see strong agent count growth at Family Heritage. And this is resulting from the continued focus on our recruiting and growing agency middle management.

Speaker #3: Our investments in branding lead generation and technology are paying off and overall , I'm very optimistic regarding the long term prospects for American income at liberty , National .

Speaker #4: Now, in our direct-to-consumer division, the life premiums were down approximately 1% over the year-ago quarter to $244 million. While the life underwriting margin increased 15% to $74 million.

J. Matthew Darden: At Liberty National, the life premiums were up 4% over the year-ago quarter to $100 million, and the life underwriting margin was up 11% to $35 million. Net life sales were $25 million, up 13% from the year-ago quarter due primarily to agent count growth. Net health sales were $7 million, down 3% from the year-ago quarter, as more emphasis has been placed on life business. The average producing agent count for Q1 was 4,031, up 9% from a year ago. I'm excited about the strong life sales and agent count growth we are seeing and confident we will continue to see growth at this agency as we move forward. At Family Heritage, the health premiums increased 10% over the year-ago quarter to $123 million, and the health underwriting margin increased 11% to $44 million.

Matt Darden: At Liberty National, the life premiums were up 4% over the year-ago quarter to $100 million, and the life underwriting margin was up 11% to $35 million. Net life sales were $25 million, up 13% from the year-ago quarter due primarily to agent count growth. Net health sales were $7 million, down 3% from the year-ago quarter, as more emphasis has been placed on life business. The average producing agent count for Q1 was 4,031, up 9% from a year ago. I'm excited about the strong life sales and agent count growth we are seeing and confident we will continue to see growth at this agency as we move forward. At Family Heritage, the health premiums increased 10% over the year-ago quarter to $123 million, and the health underwriting margin increased 11% to $44 million.

Speaker #3: The life premiums were up 4% over the year ago quarter to $100 million , and the life underwriting margin was up 11% to $35 million .

Speaker #4: Net life sales were $27 million, up 8% from the year-ago quarter. Now, as we've discussed before, the value of this division extends well beyond DTC sales.

Speaker #3: Net life sales were $25 million , up 13% from the year ago quarter , due primarily to agent count growth Net health sales were $7 million , down 3% from the year ago quarter , as more emphasis has been placed on life , business .

Speaker #4: And due to the support it provides to our agencies, we've seen improved conversion of the direct-to-consumer leads shared with our agencies which has also led to margin improvement.

Speaker #3: The average producing agent count for the first quarter was 4031 , up 9% from a year ago . I'm excited about the strong life sales in agent count growth we are seeing , and confident we will continue to see growth at this agency as we move forward and family heritage .

Speaker #4: This allows us to invest more heavily in advertising and other lead generation activities further increasing lead volume which in turn leads to additional sales in both our direct-to-consumer and agency channels.

Speaker #4: We expect this division to increase lead-generated for our three exclusive agencies during 2026 by approximately 5% to 10%. At United American General Agency, here, the health premiums increased 22% over the year-ago quarter to $194 million.

Speaker #3: The health premiums increased 10% over the year-ago quarter to $123 million, and the health underwriting margin increased 11% to $44 million.

J. Matthew Darden: Net health sales were up 22% to $33 million, and this is due to increases in agent count and productivity. The average producing agent count for Q1 was 1,561, up 10% from a year ago. We continue to see strong agent count growth at Family Heritage. This is resulting from the continued focus on our recruiting and growing agency middle management. Now in our Direct to Consumer Division, the life premiums were down approximately 1% over the year-ago quarter to $244 million, while the life underwriting margin increased 15% to $74 million. Net life sales were $27 million, up 8% from the year-ago quarter. Now as we've discussed before, the value of this division extends well beyond DTC sales and due to the support it provides to our agencies.

Matt Darden: Net health sales were up 22% to $33 million, and this is due to increases in agent count and productivity. The average producing agent count for Q1 was 1,561, up 10% from a year ago. We continue to see strong agent count growth at Family Heritage. This is resulting from the continued focus on our recruiting and growing agency middle management. Now in our Direct to Consumer Division, the life premiums were down approximately 1% over the year-ago quarter to $244 million, while the life underwriting margin increased 15% to $74 million. Net life sales were $27 million, up 8% from the year-ago quarter. Now as we've discussed before, the value of this division extends well beyond DTC sales and due to the support it provides to our agencies.

Speaker #3: Net health sales were up 22% to $33 million . And this is due to increases in agent count and productivity . The average producing agent count for the first quarter was 1561 , up 10% from a year ago .

Speaker #4: And the health underwriting margin was $5 million up approximately $4 million from the year-ago quarter. Net health sales were $62 million. And this is an increase of approximately 34 million over the year-ago quarter.

Speaker #3: We continue to see strong agent count growth at Family Heritage , and this is resulting from the continued focus on our recruiting and growing agency .

Speaker #4: Sales were strong across the division in both the Medicare supplement and the worksite business due primarily to tailwinds from the continued movement of Medicare beneficiaries from Medicare Advantage to Medicare supplement and the further development of our group worksite business.

Speaker #3: Middle management now in our direct to consumer division . The life premiums were down approximately 1% over the year ago quarter to $244 million , while the life underwriting margin increased 15% to $74 million .

Speaker #4: As an additional note, I would remind everyone that we do not market Medicare Advantage plans. Now, I'd like to discuss projections. And based on these recent trends and our experience with the business, we expect the average producing agent count trends for the full year of 2026 to be as follows.

Speaker #3: Net life sales were $27 million , up 8% from the year ago quarter . Now , as we've discussed before , the value of this division extends well beyond DTC sales .

Speaker #3: And due to the support it provides to our agencies , we've seen improved conversion of the direct to consumer leads shared with our agencies , which has also led to margin improvement This allows us to invest more heavily in advertising and other lead generation activities , further increasing lead volume , which in turn leads to additional sales in both our direct to consumer and agency channels .

J. Matthew Darden: We've seen improved conversion of the direct-to-consumer leads shared with our agencies, which has also led to margin improvement. This allows us to invest more heavily in advertising and other lead generation activities, further increasing lead volume, which in turn leads to additional sales in both our direct-to-consumer and agency channels. We expect this division to increase leads generated for our three exclusive agencies during 2026 by approximately 5% to 10%. At United American General Agency, the health premiums increased 22% over the year-ago quarter to $194 million, and the health underwriting margin was $5 million, up approximately $4 million from the year-ago quarter. Net health sales were $62 million, and this is an increase of approximately $34 million over the year-ago quarter.

Matt Darden: We've seen improved conversion of the direct-to-consumer leads shared with our agencies, which has also led to margin improvement. This allows us to invest more heavily in advertising and other lead generation activities, further increasing lead volume, which in turn leads to additional sales in both our direct-to-consumer and agency channels. We expect this division to increase leads generated for our three exclusive agencies during 2026 by approximately 5% to 10%. At United American General Agency, the health premiums increased 22% over the year-ago quarter to $194 million, and the health underwriting margin was $5 million, up approximately $4 million from the year-ago quarter. Net health sales were $62 million, and this is an increase of approximately $34 million over the year-ago quarter.

Speaker #4: At American Income, low single-digit growth. And then at both Liberty National and Family Heritage, low double-digit growth. For life sales for 2026, we expect the following: At American Income, mid-single-digit growth.

Speaker #4: Liberty National, low double-digit growth. Direct-to-consumer, low single-digit growth. For health sales for 2026, we expect to be as follows. Liberty National, mid-single-digit growth. Family Heritage, low double-digit growth.

Speaker #3: We expect this division to increase leads generated for our three exclusive agencies during 2026 by approximately 5% to 10% at United American General Agency.

Speaker #3: Here , the health premiums increased 22% over the year ago quarter to $194 million , and the health underwriting margin was $5 million , up approximately $4 million from the year ago quarter Net health sales were $62 million , and this is an increase of approximately $34 million over the year ago quarter .

Speaker #4: And at United American, high teens growth. I'll now turn the call back to Frank.

Speaker #3: Thanks, Matt. We'll now turn the investment operations. Excess investment incomes, which we define as net investment income less required interest, was $37 million. Up approximately $1 million from the year-ago quarter.

J. Matthew Darden: Sales were strong across the division in both the Medicare Supplement and the worksite business, due primarily to tailwinds from the continued movement of Medicare beneficiaries from Medicare Advantage to Medicare Supplement and the further development of our group worksite business. As an additional note, I would remind everyone that we do not market Medicare Advantage plans. Now I'd like to discuss projections, and based on these recent trends and our experience with the business, we expect the average producing agent count trends for the full year of 2026 to be as follows. At American Income, low double-digit growth. For life sales for 2026, we expect the following. At American Income, mid-single-digit growth. Liberty National, low double-digit growth. Direct to Consumer, low single-digit growth. For health sales for 2026, we expect to be as follows. Liberty National, mid-single-digit growth. Family Heritage, low double-digit growth. At United American, high-teens growth.

Matt Darden: Sales were strong across the division in both the Medicare Supplement and the worksite business, due primarily to tailwinds from the continued movement of Medicare beneficiaries from Medicare Advantage to Medicare Supplement and the further development of our group worksite business. As an additional note, I would remind everyone that we do not market Medicare Advantage plans. Now I'd like to discuss projections, and based on these recent trends and our experience with the business, we expect the average producing agent count trends for the full year of 2026 to be as follows. At American Income, low double-digit growth. For life sales for 2026, we expect the following. At American Income, mid-single-digit growth. Liberty National, low double-digit growth. Direct to Consumer, low single-digit growth. For health sales for 2026, we expect to be as follows. Liberty National, mid-single-digit growth. Family Heritage, low double-digit growth. At United American, high-teens growth.

Speaker #3: Sales were strong across the division in both the Medicare Supplement and the Worksite business. Due primarily to tailwinds from the continued movement of Medicare beneficiaries from Medicare Advantage to Medicare Supplement, and the further development of our group Worksite business. As an additional note, I would remind everyone that we do not market Medicare Advantage plans.

Speaker #3: Net investment income was $290 million, up 3%, while average invested assets grew 2%. Required interest grew 3%, slightly lower than the 4% growth in average policy liabilities over the year-ago quarter.

Speaker #3: Net investment income also increased 3% from the fourth quarter as we had higher returns from our limited partnerships. As a reminder, the income reported from these investments is based on income earned by the partnerships in the quarter and will vary from quarter to quarter.

Speaker #3: Now, I'd like to discuss projections, and based on these recent trends in our experience with the business, we expect the average producing agent count trends for the full year of 2026 to be as follows.

Speaker #3: For the full year, we expect both net investment income and required interest to grow around 4%, resulting in excess investment income growth between 4% and 4.5%.

Speaker #3: At American income , low single digit growth , and then at both Liberty National and Family Heritage . Low double digit growth for life sales for 2026 .

Speaker #3: In the first quarter, we invested $419 million in fixed maturities. Primarily in the industrial and financial sectors. These investments were at an average yield of 6.23%, an average rating of A, and an average life of 42 years.

Speaker #3: We expect the following at American Income: mid-single digit growth; Liberty National: low double-digit growth; Direct to Consumer: low single-digit growth; and low single-digit growth for Health sales for 2026.

Speaker #3: We expect to be as follows Liberty National mid-single digit growth . Family heritage . Low double digit growth and at United . American high teens .

Speaker #3: We also invested approximately $147 million in commercial mortgage loans and other long-term investments with debt-like characteristics. These non-fixed maturity investments are expected to produce additional cash yield over our fixed maturity investments, while still being in line with our overall conservative investment philosophy.

J. Matthew Darden: I'll now turn the call back to Frank.

Matt Darden: I'll now turn the call back to Frank.

Speaker #3: Growth . I'll now turn the call back to Frank .

Frank M. Svoboda: Thanks, Matt. We'll now turn to the investment operations. Excess investment income, which we define as net investment income less required interest, was $37 million, up approximately $1 million from the year ago quarter. Net investment income was $290 million, up 3%, while average invested assets grew 2%. Required interest grew 3%, slightly lower than the 4% growth in average policy liability over the year ago quarter. Net investment income also increased 3% from Q4 as we had higher returns from our limited partnerships. As a reminder, the income reported from these investments is based on income earned by the partnerships in the quarter and will vary from quarter to quarter.

Frank Svoboda: Thanks, Matt. We'll now turn to the investment operations. Excess investment income, which we define as net investment income less required interest, was $37 million, up approximately $1 million from the year ago quarter. Net investment income was $290 million, up 3%, while average invested assets grew 2%. Required interest grew 3%, slightly lower than the 4% growth in average policy liability over the year ago quarter. Net investment income also increased 3% from Q4 as we had higher returns from our limited partnerships. As a reminder, the income reported from these investments is based on income earned by the partnerships in the quarter and will vary from quarter to quarter.

Speaker #2: Thanks , Matt . We'll now .

Speaker #4: Turn to the investment operations . Excess investment income , which we define as . Net investment income , was required . Interest was $37 million , up approximately $1 million from the year ago quarter .

Speaker #3: In the first quarter, the earned yield on our total long-term invested assets which includes our fixed maturity, commercial mortgage loan, and other long-term non-fixed maturity investments was 5.5%.

Speaker #4: Net investment income was $290 million , up 3% , while average invested assets grew 2% . Required interest grew 3% , slightly lower than the 4% growth in average policy liabilities over the year ago quarter .

Speaker #3: For the full year, we expect the average yield earned on our long-term investments will be between 5.45% and 5.5%. For just the fixed maturity portfolio, we anticipate the earned yield for 2026 will be around 5.3%.

Speaker #4: Net investment income also increased 3% from the fourth quarter , as we had higher returns from our limited partnerships . As a reminder , the income reported from these investments is based on income earned by the partnerships in the quarter and will vary from quarter to quarter For the full year , we expect both net investment income and required interest to grow around 4% , resulting in excess investment income growth between 4 and 4.5% .

Speaker #3: While we do own some floating rate investments, they are well matched with floating rate liabilities on the balance sheet. Now, regarding the investment portfolio, invested assets are $22 billion.

Frank M. Svoboda: For the full year, we expect both net investment income and required interest to grow around 4%, resulting in excess investment income growth between 4% and 4.5%. In Q1, we invested $419 million in fixed maturities, primarily in the industrial and financial sectors. These investments were at an average yield of 6.23%, an average rating of A, and an average life of 42 years. We also invested approximately $147 million in commercial mortgage loans and other long-term investments with debt-like characteristics. These non-fixed maturity investments are expected to produce additional cash yield over our fixed maturity investments while still being in line with our overall conservative investment philosophy.

Frank Svoboda: For the full year, we expect both net investment income and required interest to grow around 4%, resulting in excess investment income growth between 4% and 4.5%. In Q1, we invested $419 million in fixed maturities, primarily in the industrial and financial sectors. These investments were at an average yield of 6.23%, an average rating of A, and an average life of 42 years. We also invested approximately $147 million in commercial mortgage loans and other long-term investments with debt-like characteristics. These non-fixed maturity investments are expected to produce additional cash yield over our fixed maturity investments while still being in line with our overall conservative investment philosophy.

Speaker #3: Including $19.1 billion of fixed maturities and amortized cost. Of the fixed maturities, $18.6 billion are investment grade with an average rating of A. Overall, the total fixed maturity portfolio is rated A-.

Speaker #4: In the first quarter, we invested $419 million in fixed maturities, primarily in the industrial and financial sectors. Investments were at an average yield of 6.23%, with an average rating of A and an average life of 42 years.

Speaker #3: Same as a year ago. Of our total investment portfolio, only 1% is in senior direct lending and asset-based finance. Combined, and another approximately 1% is in traditional private placements.

Speaker #4: We also invested approximately $147 million in commercial mortgage loans and other long term investments with debt like characteristics . These non-fixed maturity investments are expected to produce additional cash yield over our fixed maturity investments .

Speaker #3: Our fixed maturity investment portfolio has a net underlying loss position of $1.6 billion. Due to the current market rates being higher than the book yield on our holdings.

Speaker #4: While still being in line with our overall conservative investment philosophy . In the first quarter , the earned yield on our total long term invested assets , which includes our fixed maturity commercial mortgage loan and other long term non-fixed maturity investments , was 5.5% for the full year .

Speaker #3: And we have historically noted we are not concerned by the unrealized loss position as it is mostly interest rate driven and currently relates entirely to bonds with maturities that extend beyond 10 years.

Frank M. Svoboda: In the first quarter, the earned yield on our total long-term invested assets, which includes our fixed maturity, commercial mortgage loan, and other long-term non-fixed maturity investments, was 5.5%. For the full year, we expect the average yield earned on our long-term investments will be between 5.45% and 5.5%. For just the fixed maturity portfolio, we anticipate the earned yield for 2026 will be around 5.3%. While we do own some floating rate investments, they are well-matched with floating rate liabilities on the balance sheet. Now, regarding the investment portfolio. Invested assets are $22 billion, including $19.1 billion of fixed maturities at amortized cost. Of the fixed maturities, $18.6 billion are investment grade with an average rating of A.

Frank Svoboda: In the first quarter, the earned yield on our total long-term invested assets, which includes our fixed maturity, commercial mortgage loan, and other long-term non-fixed maturity investments, was 5.5%. For the full year, we expect the average yield earned on our long-term investments will be between 5.45% and 5.5%. For just the fixed maturity portfolio, we anticipate the earned yield for 2026 will be around 5.3%. While we do own some floating rate investments, they are well-matched with floating rate liabilities on the balance sheet. Now, regarding the investment portfolio. Invested assets are $22 billion, including $19.1 billion of fixed maturities at amortized cost. Of the fixed maturities, $18.6 billion are investment grade with an average rating of A.

Speaker #3: We have the intent and, more importantly, the ability to hold our investments to maturity. Bonds rated BBB comprise 41% of the fixed maturity portfolio compared to 45% from the year-ago quarter.

Speaker #4: We expect the average yield earned on our long term investments will be between 5.45% and 5.5% for just the fixed maturity portfolio , we anticipate the earned yield for 2026 will be around 5.3% .

Speaker #3: This percentage is at its lowest level since 2003. As we have discussed on prior calls, the BBB securities we acquired generally provide the best risk-adjusted capital-adjusted returns due in part to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets.

Speaker #4: While we do own some floating rate investments , they are well matched with floating rate liabilities on the balance sheet . Now , regarding the investment portfolio , invested assets are $22 billion .

Speaker #3: That said, our allocation of BBB-rated bonds has decreased over the past few years as we have found better risk-adjusted capital-adjusted value in higher rated bonds given the narrowing of corporate spreads.

Speaker #4: Including $19.1 billion of fixed maturities at amortized cost of the fixed maturities , $18.6 billion . Our investment grade , with an average rating of a .

Frank M. Svoboda: Overall, the total fixed maturity portfolio is rated A-minus, same as a year ago. Of our total investment portfolio, only 1% is in senior direct lending and asset-based finance combined, and another approximately 1% is in traditional private placements. Our fixed maturity investment portfolio has a net unrealized loss position of $1.6 billion due to the current market rates being higher than the book yield on our holdings. As we have historically noted, we are not concerned by the unrealized loss position as it is mostly interest rate-driven and currently relates entirely to bonds with maturities that extend beyond 10 years. We have the intent and, more importantly, the ability to hold our investments to maturity. Bonds rated BBB comprise 41% of the fixed maturity portfolio, compared to 45% from the year-ago quarter. This percentage is at its lowest level since 2003.

Frank Svoboda: Overall, the total fixed maturity portfolio is rated A-minus, same as a year ago. Of our total investment portfolio, only 1% is in senior direct lending and asset-based finance combined, and another approximately 1% is in traditional private placements. Our fixed maturity investment portfolio has a net unrealized loss position of $1.6 billion due to the current market rates being higher than the book yield on our holdings. As we have historically noted, we are not concerned by the unrealized loss position as it is mostly interest rate-driven and currently relates entirely to bonds with maturities that extend beyond 10 years. We have the intent and, more importantly, the ability to hold our investments to maturity. Bonds rated BBB comprise 41% of the fixed maturity portfolio, compared to 45% from the year-ago quarter. This percentage is at its lowest level since 2003.

Speaker #3: While the concentration of our BBB bonds might still be a little higher than some of our peers, remember that we have little or no exposure to other higher risk assets.

Speaker #4: Overall , the total fixed maturity portfolio is rated A minus , same as a year ago . Of our total investment investment portfolio , only 1% is in senior direct lending and asset based finance .

Speaker #3: Low investment grade bonds remain near historical lows at $511 million. Compared to $506 million a year ago. The percentage of below investment grade bonds to total fixed maturities is just 2.7%, consistent with year-end 2025.

Speaker #4: Combined , and another approximately 1% is in traditional private placements . Our fixed maturity investment portfolio has a net unrealized loss position of $1.6 billion .

Speaker #4: Due to the current market rates being higher than the book yield on our holdings . As we have historically noted , we are not concerned by the unrealized loss position as it is mostly interest rate driven and currently relates entirely to bonds with maturities that extend beyond ten years .

Speaker #3: The total exposure to both BBB and below investment grade securities as a percent of our total equity excluding AOCI is at its lowest level in over 25 years.

Speaker #3: And is among the lowest of our peers due to our low overall leverage. Due to the long duration of our fixed maturity liabilities, we predominantly invest in long-dated assets.

Speaker #4: We have the intent and more importantly , the ability to hold our investments to maturity . Bonds rated triple B , comprised 41% of the fixed maturity portfolio , compared to 45% from the year ago quarter .

Speaker #3: As such, a critical and foundational part of our investment philosophy is to invest in entities that can survive through multiple economic cycles. While there may be uncertainty as to whether US economy is headed, we are well positioned to withstand a significant economic downturn due to holding historically low percentages of invested assets in BBB and below investment grade bonds as a percentage of equity.

Speaker #4: This percentage is at its lowest level since 2003 . As we have discussed on prior calls , the triple B securities we acquired generally provide the best risk adjusted capital , adjusted returns due in part to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets .

Frank M. Svoboda: As we have discussed on prior calls, the BBB securities we acquire generally provide the best risk-adjusted, capital-adjusted returns, due in part to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets. That said, our allocation of BBB-rated bonds has decreased over the past few years as we have found better risk-adjusted, capital-adjusted value in higher-rated bonds given the narrowing of corporate spreads. While the concentration of our BBB bonds might still be a little higher than some of our peers, remember that we have little or no exposure to other higher-risk assets. Below investment-grade bonds remain near historical lows at $511 million, compared to $506 million a year ago. The percentage of below investment-grade bonds to total fixed maturities is just 2.7%, consistent with year-end 2025.

Frank Svoboda: As we have discussed on prior calls, the BBB securities we acquire generally provide the best risk-adjusted, capital-adjusted returns, due in part to our ability to hold securities to maturity regardless of fluctuations in interest rates or equity markets. That said, our allocation of BBB-rated bonds has decreased over the past few years as we have found better risk-adjusted, capital-adjusted value in higher-rated bonds given the narrowing of corporate spreads. While the concentration of our BBB bonds might still be a little higher than some of our peers, remember that we have little or no exposure to other higher-risk assets. Below investment-grade bonds remain near historical lows at $511 million, compared to $506 million a year ago. The percentage of below investment-grade bonds to total fixed maturities is just 2.7%, consistent with year-end 2025.

Speaker #4: That said , our allocation to triple B rated bonds has decreased over the past few years as we have found better risk adjusted capital adjusted value in higher rated bonds given the narrowing of corporate spreads .

Speaker #3: In addition, we have very strong underwriting profits and long-dated liabilities. So we will not be forced to sell bonds in order to pay clients.

Speaker #3: With respect to our anticipated investment acquisitions for the remainder of the year, at the midpoint of our guidance, we assume investment of approximately $800 to $900 million in fixed maturities at an average yield between 5.9% and 6.1%.

Speaker #4: While the concentration of our triple B bonds might still be a little higher than some of our peers , remember that we have little or no exposure to other higher risk assets below investment grade bonds remain near historical lows at $511 million , compared to $506 million a year ago .

Speaker #3: Including the expected investments in commercial mortgage loans and other long-term investments with debt-like characteristics, we expect to invest approximately $1.1 to $1.2 billion across all asset classes at an average yield of 6.3% to 6.5%.

Speaker #4: The percentage of below investment grade bonds to total fixed maturities is just 2.7% , consistent with year end 2025 . The total exposure to both triple B and below investment grade securities as a percent of our total equity , excluding Aoci , is at its lowest level in over 25 years and is among the lowest of our peers due to our low overall leverage .

Frank M. Svoboda: The total exposure to both BBB and below investment-grade securities as a percent of our total equity, excluding AOCI, is at its lowest level in over 25 years and is among the lowest of our peers due to our low overall leverage. Due to the long duration of our fixed maturity liabilities, we predominantly invest in long-dated assets. As such, a critical and foundational part of our investment philosophy is to invest in entities that can survive through multiple economic cycles. While there may be uncertainty as to where the US economy is headed, we are well positioned to withstand a significant economic downturn due to holding historically low percentages of invested assets in BBB and below investment-grade bonds as a percentage of equity. In addition, we have very strong underwriting profits and long-dated liabilities, so we will not be forced to sell bonds in order to pay claims.

Frank Svoboda: The total exposure to both BBB and below investment-grade securities as a percent of our total equity, excluding AOCI, is at its lowest level in over 25 years and is among the lowest of our peers due to our low overall leverage. Due to the long duration of our fixed maturity liabilities, we predominantly invest in long-dated assets. As such, a critical and foundational part of our investment philosophy is to invest in entities that can survive through multiple economic cycles. While there may be uncertainty as to where the US economy is headed, we are well positioned to withstand a significant economic downturn due to holding historically low percentages of invested assets in BBB and below investment-grade bonds as a percentage of equity. In addition, we have very strong underwriting profits and long-dated liabilities, so we will not be forced to sell bonds in order to pay claims.

Speaker #3: Now I will turn the call over to Tom for his comments on capital and liquidity.

Speaker #4: Thanks, Frank. First, let me spend a few minutes discussing our available liquidity, shared purchase program, and capital position. The parent began the year with liquid assets of approximately $80 million and ended the quarter with liquid assets of approximately $85 million.

Speaker #4: Due to the long duration of our fixed maturity liabilities , we predominately invest in long dated assets . As such , a critical and foundational part of our investment philosophy is to invest in entities that can survive through multiple economic cycles .

Speaker #4: We anticipate ending the year with liquid assets within our target range of $50 million to $60 million. During the quarter, the company purchased approximately $1.4 million shares of Globe Life Inc. common stock for a total cost of approximately $205 million at an average share price of $141 in 24 cents.

Speaker #4: While there may be uncertainty as to whether the US economy is headed, we are well positioned to withstand a significant economic downturn due to holding historically low percentages of invested assets in triple B and below investment grade bonds.

Speaker #4: We accelerated a portion of our 2026 anticipated share repurchases given favorable market conditions in the first quarter. Including shareholder dividend payments of approximately $20 million company returned approximately $225 million to shareholders during the first quarter of 2026.

Speaker #4: As a percentage of equity . In addition , we have very strong underwriting profits and long dated liabilities . So we will not be forced to sell bonds in order to pay clients with respect to our anticipated investment acquisitions for the remainder of the year .

Frank M. Svoboda: With respect to our anticipated investment acquisitions for the remainder of the year, at the midpoint of our guidance, we assume investment of approximately $800 to 900 million in fixed maturities at an average yield between 5.9% and 6.1%. Including the expected investments in commercial mortgage loans and other long-term investments with debt-like characteristics, we expect to invest approximately $1.1 to 1.2 billion across all asset classes at an average yield of 6.3% to 6.5%. Now, I will turn the call over to Tom for his comments on capital and liquidity.

Frank Svoboda: With respect to our anticipated investment acquisitions for the remainder of the year, at the midpoint of our guidance, we assume investment of approximately $800 to 900 million in fixed maturities at an average yield between 5.9% and 6.1%. Including the expected investments in commercial mortgage loans and other long-term investments with debt-like characteristics, we expect to invest approximately $1.1 to 1.2 billion across all asset classes at an average yield of 6.3% to 6.5%. Now, I will turn the call over to Tom for his comments on capital and liquidity.

Speaker #4: At the midpoint of our guidance , we assume investment of approximately 800 to $900 million in fixed maturities at an average yield between 5.9% and 6.1% , including the expected investments in commercial mortgage loans and other long term investments with debt like characteristics .

Speaker #4: In addition to liquid assets held by the parent, the parent will generate excess cash flows during 2026. The parent's excess cash flow, as we define it, primarily results from the dividends received by the parent from its subsidiaries less interest paid on debt.

Speaker #4: And is available to return to shareholders in the return in the form of dividends or through share repurchases. We continue to invest in the growth of our in our growth through making investments in new business, technology, and insurance operations.

Speaker #4: We expect to invest approximately $1.1 to $1.2 billion across all asset classes at an average yield of 6.3% to 6.5%. Now I will turn the call over to Tom for his comments on capital and liquidity.

Speaker #4: It should be noted that the cash received by the parent company from our insurance operations is after our subsidiaries have made these substantial investments and acquired new long-duration assets to fund their future cash needs.

Thomas P. Kalmbach: Thanks, Frank. First, let me spend a few minutes discussing our available liquidity, share repurchase program, and capital position. The parent began the year with liquid assets of approximately $80 million and ended Q1 with liquid assets of approximately $85 million. We anticipate ending the year with liquid assets within our target range of $50 million to $60 million. During Q1, the company purchased approximately 1.4 million shares of Globe Life Inc. common stock for a total cost of approximately $205 million at an average share price of $141.24. We accelerated a portion of our 2026 anticipated share repurchases given favorable market conditions in Q1. Including shareholder dividend payments of approximately $20 million, the company returned approximately $225 million to shareholders during Q1 2026.

Tom Kalmbach: Thanks, Frank. First, let me spend a few minutes discussing our available liquidity, share repurchase program, and capital position. The parent began the year with liquid assets of approximately $80 million and ended Q1 with liquid assets of approximately $85 million. We anticipate ending the year with liquid assets within our target range of $50 million to $60 million. During Q1, the company purchased approximately 1.4 million shares of Globe Life Inc. common stock for a total cost of approximately $205 million at an average share price of $141.24. We accelerated a portion of our 2026 anticipated share repurchases given favorable market conditions in Q1. Including shareholder dividend payments of approximately $20 million, the company returned approximately $225 million to shareholders during Q1 2026.

Speaker #4: Thanks , Frank First .

Speaker #5: Let me spend a few minutes discussing our available liquidity, share repurchase program, and capital position. The parent began the year with liquid assets of approximately $80 million and ended the quarter with liquid assets of approximately $85 million.

Speaker #4: We will continue to use our cash as efficiently as possible. We believe that share repurchases provide the best return or yield to our shareholders over other available options.

Speaker #5: We anticipate ending the year with liquid assets within our target range of $50 million to $60 million . During the quarter , the company purchased approximately 1.4 million shares of GLOBE LIFE INC. common stock for a total cost of approximately $205 million at an average share price of $141.24 .

Speaker #4: Thus, we anticipate share repurchases will continue to be the primary use of the parent's excess cash flow after the payment of shareholder dividends. In our guidance, we anticipate distributing approximately $90 million to our shareholders in the form of dividend payments over the course of the year which reflects the recently announced 22% increase in the annual dividend rate per share.

Speaker #4: In addition, we have increased the range for anticipated share repurchases to $560 million to $610 million for the full year. As a reminder, our excess cash flow estimates for 2026 do not anticipate any additional cash flows to the parent resulting from the establishment of our new Bermuda entity in 2025.

Speaker #5: We accelerated a portion of our 2026 anticipated share repurchases. Given favorable market conditions in the first quarter, including shareholder dividend payments of approximately $20 million, the company returned approximately $225 million to shareholders during the first quarter of 2026.

Thomas P. Kalmbach: In addition to liquid assets held by the parent, the parent will generate excess cash flows during 2026. The parent's excess cash flow, as we define it, primarily results from the dividends received by the parent from its subsidiaries, less interest paid on debt, and is available to return to shareholders in the return in the form of dividends or through share repurchases. We continue to invest in our growth through making investments in new business, technology, and insurance operations. It should be noted that the cash received by the parent company from our insurance operations is after our subsidiaries have made these substantial investments and acquired new long-duration assets to fund their future cash needs. We will continue to use our cash as efficiently as possible. We believe that share repurchases provide the best return on yield to our shareholders over other available options.

Tom Kalmbach: In addition to liquid assets held by the parent, the parent will generate excess cash flows during 2026. The parent's excess cash flow, as we define it, primarily results from the dividends received by the parent from its subsidiaries, less interest paid on debt, and is available to return to shareholders in the return in the form of dividends or through share repurchases. We continue to invest in our growth through making investments in new business, technology, and insurance operations. It should be noted that the cash received by the parent company from our insurance operations is after our subsidiaries have made these substantial investments and acquired new long-duration assets to fund their future cash needs. We will continue to use our cash as efficiently as possible. We believe that share repurchases provide the best return on yield to our shareholders over other available options.

Speaker #4: As discussed in our last call, we anticipate filing for reciprocal jurisdiction in the second quarter and will provide an update on our next call.

Speaker #5: In addition to liquid assets held by the parent , the parent will generate excess cash flows during 2026 . The parent's excess cash flow as we define it , primarily results from the dividends received by the parent from its subsidiaries .

Speaker #4: With regards to the capital levels that our insurance subsidiaries our goal is to maintain capital within our insurance operation at levels necessary to support our current ratings Globe Life targets of consolidated company action level RBC ratio in the range of 300% to 320%.

Speaker #5: Less interest paid on debt , and is available to return to shareholders in the return in the form of dividends or through share repurchases .

Speaker #5: We continue to invest in the growth of our and in our growth through making investments in new business , technology and insurance operations , it should be noted that the cash received by the parent company from our insurance operations is after our subsidiaries have made these substantial investments and acquired new long duration assets to fund their future cash needs .

Speaker #4: Although this target range is lower than many of our peers, it is appropriate given the stable premium revenue from a large number of enforced policies the nature of our protection products with benefits that are not sensitive to interest rates or equity markets our conservative investment portfolio and strong consistent underwriting margins which result in consistent statutory earnings at our insurance companies.

Speaker #5: We will continue to use our cash as efficiently as possible. We believe that share repurchases provide the best return or yield to our shareholders over other available options.

Speaker #4: As of year-end 2025, our consolidated RBC ratios of our US subsidiaries was 316% which provides approximately $95 million of excess capital above what is needed to meet our minimum target capital level of 300%.

Thomas P. Kalmbach: Thus, we anticipate share repurchases will continue to be the primary use of the parent's excess cash flow after the payment of shareholder dividends. In our guidance, we anticipate distributing approximately $90 million to our shareholders in the form of dividend payments over the course of the year, which reflects the recently announced 22% increase in the annual dividend rate per share. In addition, we have increased the range for anticipated share repurchases to $560 million to $610 million for the full year. As a reminder, our excess cash flow estimates for 2026 do not anticipate any additional cash flows to the parent resulting from the establishment of our new Bermuda entity in 2025. As discussed in our last call, we anticipate filing for reciprocal jurisdiction in Q2 and will provide an update on our next call.

Tom Kalmbach: Thus, we anticipate share repurchases will continue to be the primary use of the parent's excess cash flow after the payment of shareholder dividends. In our guidance, we anticipate distributing approximately $90 million to our shareholders in the form of dividend payments over the course of the year, which reflects the recently announced 22% increase in the annual dividend rate per share. In addition, we have increased the range for anticipated share repurchases to $560 million to $610 million for the full year. As a reminder, our excess cash flow estimates for 2026 do not anticipate any additional cash flows to the parent resulting from the establishment of our new Bermuda entity in 2025. As discussed in our last call, we anticipate filing for reciprocal jurisdiction in Q2 and will provide an update on our next call.

Speaker #5: Thus , we anticipate share repurchases will continue to be the primary use of the parent's excess cash flow after the payment of shareholder dividends .

Speaker #5: In our guidance , we anticipate distributing approximately 90 million to our shareholders in the form of dividend payments over the course of the year , which reflects the recently announced 22% increase in the annual dividend rate per share in addition , we have increased the range for anticipated share repurchases to 560 million to 610 million for the full year .

Speaker #4: For 2026, we intend to maintain our consolidated RBC within the targeted range of 300% to 320%. Now, with regards to policy obligations for the current quarter, for the first quarter, life policy obligations as a percent of premium declined from 36.3% in the year-go quarter to 35.4%.

Speaker #5: As a reminder, our excess cash flow estimates for 2026 do not anticipate any additional cash flows to the parent resulting from the establishment of our new Bermuda entity in 2025.

Speaker #4: Slightly favorable to management estimates and as consistent with the continued favorable trends in mortality. Health policy obligations as a percent of premium were 56.3% compared to 55.6% from the year-go quarter.

Speaker #5: As discussed in our last call , we anticipate filing for reciprocal jurisdiction in the second quarter and will provide an update on our next call .

Thomas P. Kalmbach: With regards to the capital levels at our insurance subsidiaries, our goal is to maintain capital within our insurance operation at levels necessary to support our current ratings. Globe Life targets a consolidated company action level RBC ratio in the range of 300% to 320%. Although this target range is lower than many of our peers, it is appropriate given the stable premium revenue from a large number of in-force policies, the nature of our protection products with benefits that are not sensitive to interest rates or equity markets, our conservative investment portfolio, and strong consistent underwriting margins which result in consistent statutory earnings at our insurance companies. As of year-end 2025, our consolidated RBC ratios of our US subsidiaries was 316%, which provides approximately $95 million of excess capital above what is needed to meet our minimum target capital level of 300%.

Tom Kalmbach: With regards to the capital levels at our insurance subsidiaries, our goal is to maintain capital within our insurance operation at levels necessary to support our current ratings. Globe Life targets a consolidated company action level RBC ratio in the range of 300% to 320%. Although this target range is lower than many of our peers, it is appropriate given the stable premium revenue from a large number of in-force policies, the nature of our protection products with benefits that are not sensitive to interest rates or equity markets, our conservative investment portfolio, and strong consistent underwriting margins which result in consistent statutory earnings at our insurance companies. As of year-end 2025, our consolidated RBC ratios of our US subsidiaries was 316%, which provides approximately $95 million of excess capital above what is needed to meet our minimum target capital level of 300%.

Speaker #4: This was consistent with management estimates for the quarter reflecting first quarter claim seasonality at United American. As a reminder, we intend to update our life and health assumptions annually in the third quarter and thus we have there have been no changes to our long-term assumptions this quarter.

Speaker #5: With regards to the capital levels at our insurance subsidiaries, our goal is to maintain capital within our insurance operation at levels necessary to support our current ratings. Globe Life targets a consolidated company action level RBC ratio in the range of 300% to 320%.

Speaker #4: Finally, with respect to our 2026 guidance, for the full year 2026, we estimate net operating earnings per diluted share will be in the range of $15.40 to $15.90 represent 8% earnings growth per share at the midpoint of the range.

Speaker #5: Although this target range is lower than many of our peers , it is appropriate given the stable premium revenue from a large number of enforced policies .

Speaker #5: The nature of our protection products with benefits that are not sensitive to interest rates or equity markets , our conservative investment portfolio and strong , consistent underwriting margins , which result in consistent statutory earnings at our insurance companies as of year end 2025 , are consolidated RBC ratios of our US subsidiaries was 316% , which provides approximately 95 million of excess capital above what is needed to meet our minimum target capital level of 300% for 2026 .

Speaker #4: The increase in our prior guidance is probably primarily due to the impact and timing of anticipated repurchases for the share refined estimates of potential positive impacts of third quarter life assumption updates and increased estimates of full-year investment income.

Speaker #4: The guidance range reflects the estimated before-tax benefit from anticipated assumption updates of $70 million to $110 million expected in the third quarter. This range is higher and narrower than last quarter's call due to continued refinement to estimates.

Thomas P. Kalmbach: For 2026, we intend to maintain our consolidated RBC within the targeted range of 300% to 320%. Now with regards to policy obligations for the current quarter, for Q1, life policy obligations as a percent of premium declined from 36.3% in the year-ago quarter to 35.4%, slightly favorable to management estimates and is consistent with the continued favorable trends in mortality. Health policy obligations as a percent of premium were 56.3% compared to 55.6% from the year-ago quarter. This was consistent with management estimates for the quarter, reflecting Q1 claims seasonality at United American. As a reminder, we intend to update our life and health assumptions annually in Q3, and thus there have been no changes to our long-term assumptions this quarter. Finally, with respect to our 2026 guidance, for the full year

Tom Kalmbach: For 2026, we intend to maintain our consolidated RBC within the targeted range of 300% to 320%. Now with regards to policy obligations for the current quarter, for Q1, life policy obligations as a percent of premium declined from 36.3% in the year-ago quarter to 35.4%, slightly favorable to management estimates and is consistent with the continued favorable trends in mortality. Health policy obligations as a percent of premium were 56.3% compared to 55.6% from the year-ago quarter. This was consistent with management estimates for the quarter, reflecting Q1 claims seasonality at United American. As a reminder, we intend to update our life and health assumptions annually in Q3, and thus there have been no changes to our long-term assumptions this quarter. Finally, with respect to our 2026 guidance, for the full year

Speaker #5: We intend to maintain our consolidated RBC within the targeted range of 300% to 320% . Now , with regards to policy obligations for the current quarter , for the first quarter , life policy obligations as a percent of premium declined from 36.3% in the year ago quarter to 35.4% , slightly favorable to management estimates , and is consistent with the continued favorable trends in mortality , health policy obligations as a percent of premium were 56.3% , compared to 55.6% from the year ago quarter .

Speaker #4: Given the estimated benefit from assumption updates in the third quarter, we anticipate the third quarter life margin as a percent of premium will be in the range of 49% to 54%.

Speaker #4: We anticipate recent favorable mortality trends will continue through 2026 with full-year normalized life underwriting margin as a percent of premium which excludes the impact of the third quarter assumption update of approximately 41% at the midpoint of our guidance.

Speaker #5: This was consistent with management estimates for the quarter , reflecting first quarter claims seasonality at United . American . As a reminder , we intend to update our life and health assumptions annually in the third quarter , and thus we .

Speaker #4: As previously mentioned, we expect health premium to grow in the range of 14% to 17% for the full year. This health premium growth is benefiting not only from strong growth in Medicare supplement sales in 2025 in anticipated in 2026 but also from approximately 65 million dollars of additional premium from approved rate increases on individual Medicare supplement policies that will be received in 2026 primarily in the last three quarters of the year.

Speaker #5: There have been no changes to our long term assumptions . This quarter . Finally , with respect to our 2026 guidance for the full year 2026 , we estimate net operating earnings per diluted share will be in the range of $15.40 to $15.90 , representing 8% earnings growth per share at the midpoint of the range .

Speaker #4: Our full-year guidance, we anticipate United Americans health margin as a percentage of premium to be in the range of 8% to 9%. However, we anticipate the average underwriting margin as a percent of premium to be approximately 10% over the last three quarters of the year as the impacts of premium rate increases are realized.

Speaker #5: The increase in our prior guidance is primarily . Primarily due to the impact and timing of anticipated purchases for the share refined estimates of potential positive impacts of third quarter life assumption updates , and increased estimates of full year investment income .

Speaker #4: Finally, I do want to point out that at the midpoint of our guidance, normalized EPS growth which removes the impact of assumption updates in both '25 and '26 is approximately 11%.

Speaker #5: The guidance range reflects the estimated before-tax benefit from anticipated assumption updates of $70 million to $110 million, expected in the third quarter.

Speaker #5: This range is higher and narrower than last quarter's call due to continued refinement to estimates . Given the estimated benefit from assumption updates in the third quarter , we anticipate the third quarter life margin as a percent of premium will be in the range of 49% to 54% .

Speaker #4: At the midpoint of our guidance, the projected three-year compound annual growth rate of normalized EPS is 11.5%. Those are my comments. I'll return the call back to Matt.

Speaker #1: Thank you, Tom. Now, those are our comments and we will now open up the call for questions.

Speaker #5: We anticipate recent favorable mortality trends will continue through 2026 , with full year normalized life underwriting margin as a percent of premium , which excludes the impact of the third quarter assumption update of approximately 41% at the midpoint of our guidance .

Speaker #3: Thank you. We will now begin the question and answer session. If you would like to ask a question, press star then the number one on your telephone keypad to raise your hand and join the queue.

Speaker #3: If you would like to withdraw your question, simply press star one again. Your first question comes from Jack Matten with BMO Capital Markets. Your line is open.

Speaker #5: As previously mentioned , we expect health premium to grow in the range of 14% to 17% for the full year . This health premium growth is benefiting not only from from strong growth in Medicare supplement sales in 2025 .

Speaker #4: Hi, good morning. I said one on lapse rate trends which ticked higher I think especially for first-year lapses at American income. I guess can you talk about what you're seeing in terms of consumer behavior?

Speaker #5: In addition, in 2026, we anticipate approximately $65 million of additional premium from approved rate increases on individual Medicare supplement policies that will be received in 2026, primarily in the last three quarters of the year.

Speaker #4: Is this more kind of macro-driven affordability issues or anything related to distribution and any thoughts from your outlook for lapse rate trends from here?

Speaker #5: For our full year guidance, we anticipate the American's Health margin as a percentage of premium to be in the range of 8% to 9%.

Speaker #5: Yeah, thanks for the question. Yep, we do expect lapse rates to remain elevated during '26 versus the pre-pandemic and we've seen that over the past few years as well.

Speaker #5: However, we anticipate the average underwriting margin as a percent of premium to be approximately 10% over the last three quarters of the year.

Speaker #5: And I think the experience we expect is going to be more consistent with last year given the economic stress that is on our policyholders from the current economic environment and overall price inflation.

Speaker #5: As the impacts of premium rate increases are realized . Finally , I do want to point out that at the midpoint of our guidance , normalized EPS growth , which removes the impact of assumption updates in both 25 and 26 , is approximately 11% .

Speaker #5: With regards to AIL, first quarter lapse rate, they definitely were high relative to recent experience. We consider this more of a fluctuation at this point and we'll continue to monitor it but no really just consider it a fluctuation.

Speaker #5: At the midpoint of our guidance, the projected three-year compound annual growth rate of normalized EPS is 11.5%. Those are my comments.

Speaker #6: I think as we indicated before is that we do have impacts from macroeconomic environments the resiliency of the business though is that I would say what we're seeing now is consistent with historical norms and other economic cycles.

Speaker #5: I'll return the call back to Matt .

Speaker #3: Thank you, Tom. Now, those are our comments, and we will now open up the call for questions.

Speaker #1: Thank you . We will now begin the question and answer session . If you would like to ask a question , press star .

Speaker #1: Then the number one on your telephone keypad to raise your hand and join the queue . If you would like to withdraw your question , simply press star one again .

Speaker #6: So we'll get a little bit of fluctuations based on what's going on in the economy but overall fairly resilient as that moderates between a fairly narrow band of our experience.

Speaker #1: Your first question comes from Jack Madden with BMO Capital Markets . Your line is open .

Speaker #5: Yeah, and Jack, the other thing I was just going to add is that I think when you kind of look at some of the trends at Liberty and even DTC a little bit some of that is just mix of business.

Speaker #6: Hi . Good morning . I said one on lapse rate trends , which ticked higher , I think , especially for first year lapse , is that American income , I guess .

Speaker #6: Can you talk about what you're seeing in terms of consumer behavior ? Is this more kind of macro driven affordability issues or , or anything related to distribution ?

Speaker #5: So we do know that the work side of L&L has continued to grow that work side business as it's growing some of the lapse rates in the early issue years are always higher than the later issue years and so is that as you continue to grow the sales there then you those renewal lapse rates just tend to drift up a little bit.

Speaker #6: And any thoughts on your outlook for lapse rate trends from here?

Speaker #5: Yeah , thanks for the question . Yeah , we do expect lapse rates to remain elevated during 26 versus the pre-pandemic . And we've seen that over the over the past few years as well .

Speaker #5: And I think the experience we expect is going to be more consistent with last year given the economic stress that that is on our policyholders from the current economic environment and overall price inflation .

Speaker #5: So we do think that we're seeing that a little bit. And then we talked a little bit just some of the lapse rates at DTC on the internet business are just historically higher than what they are.

Speaker #5: With regards to ail first quarter lapse rate , they definitely were high relative to recent experience . We consider this more of a fluctuation at this point , and we'll continue to monitor it .

Speaker #5: So as that becomes a greater proportion of our total sales that probably moves that up a little bit. But it is interesting I think when you look at some of the economic forces the renewal rates at DTC are continuing to be right in line with pre-pandemic experience and so we're not seeing it consistently across the board in all the agencies.

Speaker #5: But no , no , really , really . Just consider it a fluctuation .

Speaker #3: I think as we indicated before , is that we do have impacts from macro economic environments . The resiliency of the business , though , is that I would say what we're seeing now is consistent with historical norms and other economic cycles .

Speaker #5: So that tells us while the economy has some impact surely there's some other factors that are going on with the business that's being written today.

Speaker #3: So we'll get a little bit of fluctuations based on what's going on in the economy . But overall , you know , fairly resilient as that moderates between a fairly narrow band of our experience .

Speaker #4: Got it. That's helpful. Thanks. And then let me just follow up on some of the AI benefits that you referenced in your prepared remarks.

Speaker #4: I mean any way that you could maybe unpack or quantify some of those benefits you expect over time whether it's on the expense ratio or for productivity I guess to what extent are you kind of seeing those already?

Speaker #4: And Jack , the other thing I was just going to add is I think when you kind of look at some of the trends at liberty and , and even DTC a little bit , you know , some of that is just mix of business .

Speaker #4: I think you talked about higher productivity at American income. Kind of playing along with each account trends there but yeah I just wonder if you could talk about how you're seeing that play out so far.

Speaker #4: So we do know that the work site is L and L is continuing to grow that work site , that worksite business as it's growing , you know , some of the lapse rates in the early issue years are always higher than the later issue years .

Speaker #6: Sure. On the administrative side what we anticipate is over time is those things get implemented that we should be able to moderate our expense growth commiserate with our premium earnings growth.

Speaker #4: And so is that , you know , as you continue to grow the sales there , then you , you , those renewal rates just tend to drift up a little bit .

Speaker #6: And so we would expect a little bit of margin expansion over time as those things get implemented as we're able to grow our revenue faster than our expenses.

Speaker #4: So we do think that we're , you know , seeing that a little bit and then we talked a little bit , just some of the traits that DTC on the on the internet business are just historically higher than than what they are .

Speaker #6: And so as we implement those right now we've got a variety of different in addition to what we've deployed pilots going on. So we're very optimistic on the future as Frank had mentioned in his prepared remarks of where we're headed.

Speaker #4: So as that becomes a greater proportion of our total sales , that probably moves that up a little bit . But , but it is interesting , you know , I think when you look at some of the economic forces , you know , the renewal rates at DTC are continuing to be right in line with pre-pandemic experience .

Speaker #6: On the sales side we do anticipate that there will be a benefit and it kind of shows up in a variety of different areas.

Speaker #4: And so , you know , we're not seeing it , you know , consistently across the board with all agencies . So that tells us while the economy has some impact , surely , you know , there's some other factors that are going on with the business that's being written today

Speaker #6: We've talked about in the past our investments in technology and we have seen improvements in that. So we know that to the extent that we can deploy technology that improves our agent experience and that can be in multiple facets from the fact of the extent that we can onboard and train agents quicker and more effectively and get them producing and more effective sooner.

Speaker #6: That's helpful . Thanks And then let me just follow up on some of the AI benefits that you referenced in your prepared remarks .

Speaker #6: I mean , any way that you could maybe unpack or quantify some of those benefits you expect over time , whether it's on the expense ratio or for productivity , I guess , to what extent are you seeing those already ?

Speaker #6: We know our agent productivity will go up but we also know our agent retention will go up as well. And so anything that we can do there to deploy technology that helps on that agent recruiting and onboarding as well as just overall efficiency will have longer-term gains and we anticipate that to be a tailwind as we think about what our overall sales growth is going to be in the future.

Speaker #6: I think you talked about higher productivity in American income playing along with Asian count trends . There . Yeah . I just if you could talk about how you're seeing that play out so far

Speaker #3: Sure . On the administrative side , you know what we anticipate is over time is those things get implemented that we should be able to moderate our expense growth commensurate with our premium earnings growth .

Speaker #6: So that those are embedded for '26 in our projections and I anticipate that '27 will be continue to benefit from those technologies as we get those rolled out.

Speaker #3: And so, we would expect a little bit of margin expansion, you know, over time as those things get implemented, as we're able to grow our revenue faster than our expenses.

Speaker #5: Yeah, I would just add from an admin expense perspective we're really looking at the margin improvement bringing that 7.3% of admin expenses as a percent of premium down closer to 7% over the next few years.

Speaker #3: And so, as we implement those right now, we've got a variety of different, in addition to what we've deployed, pilots going on.

Speaker #3: So we're very optimistic on the future . As Frank had mentioned in his prepared remarks of where we're headed on the sales side , we do anticipate that there will be a benefit , and it kind of shows up in a variety of different areas .

Speaker #5: And so that's kind of really how we're talking about some of those improvements being reflected in admin expenses.

Speaker #4: Thank you.

Speaker #3: We've talked about in the past . Our investments in technology , and we have seen improvements in that . So we know that to the extent that we can deploy technology that improves our agent experience , and that can be in multiple facets from the fact of the extent that we can onboard and train agents quicker and more effectively and get them producing and more effective sooner , we know our agent productivity will go up , but we also know our agent retention will go up as well .

Speaker #1: Your next question comes from Wilma Burdis with Raymond James. Your line is open.

Speaker #7: Hey, good morning. Could you provide some clarity on what's driving the higher buybacks for '26? Just maybe a little bit more color there. Is it related to higher capital generation?

Speaker #7: Another source? Maybe just get into a little bit more detail. Thanks.

Speaker #5: Yeah, Wilma. We were able to finalize our 2025 statutory earnings and as we looked at excess cash flows it still was in the range that I provided on the last call 600 to 700 million but it was just a little bit higher in that allowed us to the opportunity to have some additional share repurchases.

Speaker #3: And so anything that we can do there to deploy technology that helps on that agent recruiting and onboarding , as well as just overall efficiency , we'll have longer term gains .

Speaker #5: Yeah, then Wilma, I'd just add as far as the kind of the timing was concerned we really did take a look at the opportunities that kind of presented itself during the first quarter and there was a period of time where the shares had dropped below 140 dollars per share and really saw that as a good opportunity for us in the shareholders.

Speaker #3: And , you know , we anticipate that to be a tailwind as we think about what our overall sales growth is going to be in the future .

Speaker #3: So that those those are embedded for 26 in our projections and I anticipate that . 27 will be continue to benefit from those technologies as we get those rolled out .

Speaker #5: And so we did take that opportunity to accelerate do a little bit more in the first quarter than what we had anticipated originally. In that quarter.

Speaker #2: Yeah .

Speaker #5: I would just add from an admin expense perspective, we're really looking at the margin improvement, bringing that 7.3% of admin expenses as a percent of premium down closer to 7% over the next few years.

Speaker #7: Thank you. And then it seems like the life sales agent count and even premium growth are coming in a little bit lower than your prior expectations.

Speaker #7: Could you just give us a little bit more color on what's driving that whether it's macro just something in that kind of stair-step process just a little bit of color would help.

Speaker #5: And so that's , that's kind of really how we're talking about some of those improvements being reflected in admin expenses

Speaker #7: Thanks.

Speaker #6: Thank you .

Speaker #6: Sure. I'd say we'd need to break it down between the components of our distribution. Liberty is growing both the agent count and the sales growth and it's consistent with earlier expectations and we're really pleased with the trend that we're seeing there.

Speaker #1: Your next question comes from Wilma Burgess with Raymond James . Your line is open

Speaker #7: Hey, good morning. Could you provide some clarity on what's driving the higher buybacks for '26? Just maybe a little bit more color there?

Speaker #7: Is it related to higher capital generation ? Another source ? Maybe just get into a little bit more detail . Thanks

Speaker #6: From an American income perspective I've mentioned this before but our when we talk about our incentive compensation at the agent level we're always trying to strike a balance between incentivizing and rewarding for recruiting and onboarding and training of new agents versus sales.

Speaker #5: Yeah . Well , the you know , we were able to finalize our , our 2025 statutory earnings . And as we looked at excess cash flows , it still was in the range that that I provided on the last call , you know , 600 to 700 million .

Speaker #5: But it was just a little bit higher . And that allowed us to the opportunity to , to have some additional share repurchases .

Speaker #6: And so what we're seeing is is that we're the compensation structure is driving a little bit more sales and the sales productivity and so that's why we have some sales growth but it's the agent count growth is behind a little bit of where we originally anticipated.

Speaker #2: Yeah .

Speaker #4: And then , Wilma , I just add , as far as the kind of the timing was concerned , you know , we really did take a look at , you know , the opportunities that kind of presented itself during the first quarter .

Speaker #4: And there was a period of time where where the shares had dropped below $140 , $140 per share , and really saw that as a a good opportunity .

Speaker #6: We do as I'd mentioned in my prepared remarks believe that some of the changes that we've made that will be that are implemented here at the beginning of the second quarter those don't turn around things immediately the day you put them in.

Speaker #4: You know , for us in the shareholders . And so we did take that opportunity to accelerate , do a little bit more in the first quarter than what we had anticipated originally .

Speaker #6: It takes a little bit of time for that to get into the agency operations and change behavior because when we talk about recruiting new agents there's a timeline and a pipeline associated with that.

Speaker #4: You know , in that quarter

Speaker #7: Thank you. And then it seems like the life sales agent count and even premium growth are coming in a little bit lower than your prior expectations.

Speaker #7: Could you just give us a little bit more color on what's driving that , whether it's macro , just something in that kind of stair step process , just a little bit of color would help .

Speaker #6: So we anticipate over the second half of the year we'll start getting that agent count growth we're looking for. And then if I talk about the life sales at our direct-to-consumer channel what's going on there is just we looked at what happened in Q1.

Speaker #7: Thanks

Speaker #3: Sure . I'd say we'd need to break it down between the components of our our distribution . You know , liberty is growing .

Speaker #6: We're pleased with the continued sales growth that started the last half of last year. But we just looked at really our comparables of how strong the growth was in Q3 and then into Q4 for 2025.

Speaker #3: Both the agent count and the sales growth and consistent with earlier expectations . And we're really pleased with the trend that we're seeing there from an American income perspective .

Speaker #3: I've mentioned this before, but when we talk about our incentive compensation at the agent level, we're always trying to strike a balance between incentivizing and rewarding for recruiting and onboarding and training of new agents versus sales.

Speaker #6: And so we just tempered I'll say slightly our sales projections there. Overall we're still very pleased with the sales growth that we're getting out of our direct-to-consumer channel and so the nice thing about having the three different agencies particularly if you look at recruiting is we go to market very similarly on agent recruiting between the three agencies and so when I see growth at two of our agencies and strong growth I know that it's really not a macroeconomic environment concern or issue.

Speaker #3: And so what we're seeing is , is that we're the compensation structure is driving a little bit more sales in the sales productivity .

Speaker #3: And so that's why we have some sales growth , but it's the agent count growth is behind a little bit of where we originally anticipated .

Speaker #3: We do , as I mentioned in my prepared remarks , believe that some of the changes that we've made that will be implemented , that are implemented here at the beginning of the second quarter , you know , those those don't turn around things immediately .

Speaker #6: It's much more specific to the particular agency growth aspects that we have there. And so that's why I feel very confident about the overall environment provides a good environment for us to continue to grow our agent count across the agencies.

Speaker #3: The day you put them in takes a little bit of time for that to get into the agency operations and change behavior . Because when we talk about recruiting new agents , there's a there's a timeline and a , and a pipe pipeline associated with that .

Speaker #6: So a little bit of tweaks in our compensation system. We think we'll play out well because the overall macroeconomic environment we believe will still be strong for growth going forward.

Speaker #3: So we anticipate over the second half of the year , we'll start getting that agent count growth . We're looking for . And then if I talk about the life sales at our direct to consumer channel , what's going on there is just we looked at what happened in Q1 .

Speaker #7: Thank you.

Speaker #1: Your next question comes from Wes Carmichael with Wells Fargo. Your line is open.

Speaker #3: We're pleased with the continued sales growth that started the last half of last year, but we just looked at really our comparables of how strong the growth was in Q3.

Speaker #4: Hey, thanks. Good morning. I had a question on United American and I think the guidance there. I think your guide for health sales was in the high teens but you had I think 122% growth in the first quarter.

Speaker #3: And then into Q4 for 2025 . And so we just tempered , I'll say , slightly , our sales projections there . Overall , we're still very pleased with the sales growth that we're getting at our direct to consumer channel .

Speaker #4: Are you thinking that sales growth might be a little bit negative over strong growth last year or how are you thinking about the remaining quarters of 2026?

Speaker #6: Yeah, you may recall that on the last call we had guided to kind of flat sales just considering the significant growth that we had in 2025.

Speaker #3: And so the nice thing about having the three different agencies , is , particularly if you look at recruiting , is we go to a market very similarly on agent recruiting between the three agencies .

Speaker #6: And so really the dynamics that are going on there looked at our strong growth in sales here in the first quarter of '26 and that is a reminder is at elevated premium levels because our price increases went in for new sales in the first quarter even though a lot of the in-force premium increases come in primarily in the second quarter.

Speaker #3: And so when I see growth at two of our agencies and strong growth , I know that it's really not a macro economic environment concern or issue .

Speaker #3: It's much more specific to the particular agency growth aspects that we have there. And so that's why I feel very confident about the overall environment—providing a good environment for us to continue to grow our agent count across the agency.

Speaker #6: And so we really wanted to see how the market played out. And so very pleased with that. So we upped our guidance related to our overall year for 2026 sales.

Speaker #3: So, a little bit of tweaks in our compensation system, we think, will play out well because the overall macroeconomic environment, we believe, will still be strong for growth going forward.

Speaker #6: But we are cognizant that when you start looking at our fourth quarter in particular sales for the general agency division we nearly when we over we doubled our sales last year.

Speaker #7: Thank you .

Speaker #1: Your next question comes from Wes Carmichael with Wells Fargo . Your line is open

Speaker #6: And so really the sales growth above that is just cognizant that we've got a real high level to continue to grow and it'll be interesting to see if the continued tailwinds that we're seeing right now of the Medicare Advantage market and the benefit that we're getting from Medicare supplement sales how that plays out for the rest of the year.

Speaker #8: Hey , thanks . Good morning . I had a question on United American . I think the guidance there I think your guide for health sales was in the high teens .

Speaker #8: But you had , I think , 122% growth in the first quarter . Are you thinking that sales growth might be a little bit negative over strong growth ?

Speaker #8: Last year ? How are you thinking about the remaining quarters of 2026 ?

Speaker #6: So it's really not in our view a softening over the remainder of the year just recognizing the high hurdle to overcome to continue to grow on top of that significant growth we had last year.

Speaker #3: Yeah. You may recall that on the last call, we had guided to kind of flat sales, just considering the significant growth that we had in 2025.

Speaker #4: Yeah, I would just say yeah Q2 and Q3 are probably still slight improvements over last year but Q4 as Matt said is what's just a little bit right now we anticipate not quite at that same level.

Speaker #3: And so really , the dynamics that are going on there looked at our strong growth in sales here in the first quarter of 26 , and that is a reminder is at elevated premium levels because our price increases went in for new sales in the first quarter .

Speaker #5: All right, that's very helpful. And then my follow-up on Bermuda I know in the prepared remarks you mentioned that you're working to file reciprocal jurisdiction in second quarter but I just want to see have there been any other developments around that initiative since the last earnings call either with regulators or expectations around cash flow or near-term reinsurance sessions?

Speaker #3: You know , a lot of the In-force premium increases , you know , come in primarily in the second quarter . And so we really wanted to see how the market played out .

Speaker #3: And so very pleased with that . So we upped our our guidance related to our overall year for 2026 sales . But we are cognizant that when you start looking at our fourth quarter in particular , sales for the general Agency Division , we nearly we overly doubled our sales last year .

Speaker #4: I don't really know other developments. We're working through our getting our financial statements the audits complete on those and so really no changes to kind of our thoughts around the business plan and our expected capital generation.

Speaker #6: And I think on the next call we should have a more significant update based on the activity plan for here in the second quarter.

Speaker #3: And so really , the sales growth above that is just cognizant that we've got a real high level to continue to grow . And it'll be interesting to see , you know , if the continued tailwinds that we're seeing right now of the Medicare Advantage market and the benefit that we're getting from Medicare supplement sales , how that plays out for the rest of the year .

Speaker #5: Okay, thank you.

Speaker #1: Your next question comes from Andrew Kligerman with TD Cowen. Your line is open.

Speaker #7: Hey, good morning gentlemen. My first question is around the assumption updates. Just fantastic to see that come through. You talked about an estimate of 49 to 54 percent life margin third quarter versus the full year at 41.

Speaker #3: So it's really not , in our view , a softening over the remainder of the year , just recognizing the high hurdle to overcome , to continue to grow .

Speaker #3: On top of that significant growth , we had last year .

Speaker #7: So I'm wondering is this the gift that's going to keep on giving? What should we be thinking about assumption update potentials in 2027, '28, '29?

Speaker #4: Yeah .

Speaker #2: I .

Speaker #4: Would just . say Q2 and Q3 are probably still slight improvements over last year , but Q4 , as Matt said , is what's just a little bit right now .

Speaker #4: We anticipate not quite at that same level.

Speaker #8: All right . That's very helpful . And then my follow up on Bermuda , I know in the prepared remarks , you mentioned that you're working to file reciprocal jurisdiction .

Speaker #7: Just kind of it sounds like things have gone really well in terms of your assumptions and we'd like to know how you're thinking longer term about it.

Speaker #8: Second quarter , but I just want to see have there been any other developments around that initiative since the last earnings call , either with regulators or expectations around cash flow or near term reinsurance sessions ?

Speaker #4: I think Andrew first of all we take a very disciplined approach as far as how we update assumptions and want to actually see the results emerge before we actually make some of those changes to our long-term assumptions.

Speaker #5: There really no other developments . We're working through getting our financial statements , the audit's complete on those . And so really no changes to kind of our thoughts around the business plan and , and , and our expected capital generation .

Speaker #4: So I think this year is we are seeing some continued mortality trends that multiple quarters of favorable mortality trends that are informing our assumption update this year.

Speaker #4: I think if we continue to see those current mortality at these current levels I think there's always the opportunity or the potential for additional assumption updates as we move forward.

Speaker #3: And I think on the next call , we should have a more significant update based on the activity plan for here in the second quarter

Speaker #4: So no real quantification of those at this point but I think there is potential for those.

Speaker #8: Okay . Thank you .

Speaker #1: Your next question comes from Andrew Kligerman with TD Cowen. Your line is open.

Speaker #6: Well, I think the other thing that is important past just the third quarter assumption updates and the benefits that we're getting there which most likely will moderate over time but that means that we're setting our new long-term assumption at a higher margin, right?

Speaker #9: Hey , good morning gentlemen . I my first question is around the assumption . Assumption updates . Just just fantastic to see that come through .

Speaker #9: You talked about an estimate of 49 to 54% life margin . Third quarter versus the full year at 41 . So I'm wondering , you know , is this the gift that's going to keep on giving What should we be thinking about ?

Speaker #6: So we should have earnings on the book of business overall at a little bit higher level on a go-forward basis because it's just indicative that we don't need as much reserves as we originally thought on that book of business.

Speaker #6: So that's how I kind of think about it is just to long-term stability in the growth of that underwriting margin those are kind of indicators that we're resetting to a new higher level since they're positives in the last several Q3s as we've looked at the last several years.

Speaker #9: Assumption update potentials in 2027 , 28 , 29 just it sounds like things have gone really well in terms of your assumptions , and we'd like to know how you're thinking longer term about it

Speaker #4: And I think you can really see that, Matt, in looking at normalized underwriting margins over the past few years by removing the impact of the assumption updates.

Speaker #5: I think Andrew , first of all , we take a very disciplined approach as far as how we update assumptions and what I actually see the results emerge before we actually make some of those changes to our long term assumptions .

Speaker #4: You can really see the trend in the overall improvement in underwriting margins. That's right.

Speaker #5: So I think this year is , you know , we are seeing some continued mortality trends that that multiple quarters of , of favorable mortality trends that are informing our assumption update this this year .

Speaker #7: That would be the one thing Andrew I was just going to on your Q3 comment and as Tom noted the range on that is in that 49 to 54 percent and so if you kind of take that assumption update of 70 to 110 that Tom had in his comments so you have in that one quarter an 8 to 13 percent kind of bump if you will in that underwriting margin in that quarter which off of the 41 percent kind of normalized margin that we're really expecting over the rest of in each of the quarters.

Speaker #5: I think we continue to see those , you know , current mortality at these current levels . I think there's always the opportunity or the potential for additional assumption updates as we move forward .

Speaker #5: So, no real quantification of those at this point. But I think there is potential for those.

Speaker #3: I think the other thing that is important past just the third quarter assumption updates and the benefits that we're getting there , which most likely will moderate over time , but that means that we're setting our new long term assumption at a higher margin , right ?

Speaker #7: Yeah, and I just if we continue to see the current mortality levels that we're seeing today as we continue to see that come in over time that'll work its way into those longer-term assumptions.

Speaker #3: So we should have earnings on the book of business overall and a little bit higher level on a go forward basis , because it's just indicative that we don't need as much reserves as we originally thought on that book of business .

Speaker #4: That was very helpful. Thank you for that. And my follow-up is around the health underwriting margin 23 percent in the first quarter and then you guided to 23 to 27 which is kind of wide cadence-wise.

Speaker #3: So that's how I kind of think about it , is just the long term stability in the growth of that underwriting margin . You know , those are kind of indicators that we're resetting to a new , higher level since they're positives in the last several Q3 , as we've looked at the last several years .

Speaker #4: Could you kind of walk us through the next few quarters? Would it be more likely closer to 23 in the second and then we could see a significant bump in the last two quarters?

Speaker #5: I think you can really see that . Matt , in at normalized underwriting margins over the past few years , by removing the impact of the assumption updates , you can really see the trend in the overall improvement in underwriting margins .

Speaker #4: How do you think about the cadence?

Speaker #7: No, I think Andrew that actually in the remaining three quarters that you would expect that full health margin to be north of 25 percent or at least we anticipate it being north of 25 percent.

Speaker #4: That's right . The , you know , the one thing , Andrew , I was just going to on your Q3 , you know , comment and as Tom noted , you know , the range on that is in that 49 to 54% .

Speaker #7: And in fact you're probably a little bit lower. Out of those three in the fourth quarter just because that's again a little bit higher seasonality.

Speaker #4: And , and so if you kind of take that assumption update of 70 to 110 that Tom had in his comments , you know , so you have that one quarter , an 8 to 13% kind of bump , if you will , in that underwriting margin in that quarter , which off of the 41% kind of normalized margin that we're , you know , that we're really expecting over the rest of , you know , in each of the quarters .

Speaker #7: So you have a little bit higher claims in that fourth quarter. So that's probably more closer to that 25 percent range. But then over the so that kind of brings up where we were at around 23 up to again the midpoint of that range that we give is around 25.

Speaker #7: And so I think you'll see we expect to see pretty good margins here over the next three quarters.

Speaker #4: Yeah . And I , I just , you know , if we continue to see the current , you know , mortality level that we're seeing today as we continue to see that come in , you know , over time , you know , that'll work its way into those longer term assumptions .

Speaker #5: Excellent. Thank you so much.

Speaker #1: Your next question comes from Pablo Sington with JP Morgan. Your line is open.

Speaker #8: Hi, good morning. First question is with insurance moving in larger volumes from MedAdvantage and MedSup is there a greater risk of anti-selection from your end?

Speaker #9: That was very helpful . Thank you for that . And my follow up is around the health underwriting margin , 23% in the first quarter .

Speaker #8: I know most cases you can underwrite but I was just wondering if higher sales might have contributed to some of the margin compression you've experienced in the health business.

Speaker #9: And then you , you guided to 23 to 27 , which is kind of wide agents wise . Could you kind of walk us through the next few quarters ?

Speaker #4: Yeah. I don't think it's a function of anti-selection that's impacting the margins in the first quarter. I think it really is some seasonality of claims in the first quarter as well as the fact that the rate increases that we filed last year will largely come into effect in the second, third, and fourth quarter.

Speaker #9: Would it be more likely closer to 23 in the second, and then we could see a significant bump in the last two quarters?

Speaker #9: How do you think about the cadence?

Speaker #4: I no , I think I think , Andrew , that actually in the in the , you know , remaining three quarters that you would expect that full health margin to be north of 25% , or at least we at it being north of 25% .

Speaker #4: As I mentioned on our last call the premium increases that we filed for was 80 to 90 million on a 12-month run rate. And we expect about 65 million to be received over the course of 2026.

Speaker #4: And in fact , you're probably a little bit lower out of those three in the fourth quarter , just because that's again , a little bit , you know , higher seasonality .

Speaker #4: And then the remainder being received in 2027. And so we didn't receive very much of that in the first quarter. We'd expect to be on average about 20 million dollars of additional premium in each of the next three quarters which will help improve overall margins.

Speaker #4: So you have a little bit higher claims in that fourth quarter. So that's probably, you know, more closer to that 25% range.

Speaker #4: But then over the so that kind of brings up where we were at around 23 up to again , the midpoint of that range that we give is , you know , is around 25 and , and so I think you'll see we expect to see , you know , pretty good margins here over the next three quarters .

Speaker #4: But I don't think it's anti-selection at this point. So I don't think that's one of the drivers.

Speaker #7: Well, yeah, there was higher utilization across the entire industry for Medicare supplement over the last couple of years. It wasn't unique to us.

Speaker #4: And we have been seeing medical trends really stabilize in the relatively flat over the last couple of quarters. So that's actually bodes well as well.

Speaker #9: Excellent . Thank you so much

Speaker #1: Your next question comes from Pablo Singson with J.P. Morgan. Your line is open.

Speaker #8: Got it. That makes sense. And then for my second question so mortality has been the net contributor to your assumption updates and your quarterly measurement gains.

Speaker #10: Hi . Good morning . First question is with insureds moving in large volumes for metadata and med sup , is there a greater risk of anti selection from your end ?

Speaker #8: I was wondering if you could speak about the labs component of your remeasured gains as well as the morbidity side for the health business.

Speaker #10: I know most cases you can underwrite, but I was just wondering if higher sales might have contributed to some of the margin compression.

Speaker #8: Have those factors been generally positive or negative? So clearly mortality has been good but was just curious about how those other assumptions have been playing out for you.

Speaker #10: You've experienced in the health business.

Speaker #8: Thanks.

Speaker #5: Yeah , I don't think it's a function of any selection that's impacting the margins . In the first quarter . I think it really is some seasonality of claims in the first quarter , as well as the fact that the rate increases that we filed last year will largely come into effect in the second , third and fourth quarter .

Speaker #7: Yeah. On the life remeasurement gains it's largely mortality claims, mortality claims that are driving the remeasurement gains. I think it's about kind of in our work we look at kind of how much is mortality and how much is all other.

Speaker #7: And it's about 70 percent mortality and 30 percent all other things from a remeasurement gain on a quarterly basis. And on the health side I think a lot of that's being driven by kind of what the future rate increases are doing to result in remeasurement gains.

Speaker #5: As I mentioned , you know , the on our last call , you know , the premium increases that we filed for was 80 to 90 million on a 12 month run rate .

Speaker #5: And we expect about $65 million to be received over the course of 2026, and then the remainder being received in 2027.

Speaker #7: So it's more on the impacts to premium future premiums than it is on claims. Although claims are positive as well overall providing some health remeasurement gains.

Speaker #5: And so we didn't receive very much of that in the first quarter . And we'd expect to be on average , about $20 million of additional premium in each of the next three quarters , which will help improve overall margins .

Speaker #5: But I don't think it's any selection at this point . So I don't think that's one of the drivers .

Speaker #8: Got it. Thank you.

Speaker #1: Your next question comes from Randy Binner with Texas Capital. Your line is open.

Speaker #2: Well , yeah , there was higher utilization across the entire industry for Medicare supplement over the last couple of years . Wasn't unique to us .

Speaker #9: Hey, thanks for taking the question. It's a follow-up to Andrew Klugerman's discussion with you on the I think you kind of answered more of the quantitative changes with the mortality assumptions.

Speaker #5: And we have we have been , you know , seeing medical trends really stabilize and be relatively flat over the last couple quarters .

Speaker #5: So that's , that's actually bodes well as well .

Speaker #9: But I was wondering if you could share kind of more like qualitative assessment of it like lifestyle behavior. It's just a significant shift. It's obviously very positive.

Speaker #10: Got it . That makes sense . And then for my second question , so mortality has been a net contributor to your assumption updates and your quarterly Remeasurement gains .

Speaker #10: I was wondering if you could speak about the labs component of your remeasurement gains , as well as the morbidity side for the health business .

Speaker #9: But is there something changing with the cohort of insureds that's kind of worth noting in this change in the numbers?

Speaker #10: Have those factors been generally positive or negative? So clearly, mortality has been good, but what's curious is how those other assumptions have been playing out for you?

Speaker #10: Thanks .

Speaker #4: I don't think it's really a function of the cohort changing. I think it is just continued trends in we see continued favorable mortality in heart and circulatory deaths.

Speaker #2: Yeah .

Speaker #5: On the on the life Remeasurement gains . It's largely mortality claims , mortality claims that are driving the remeasurement gains . You know , I think it's about kind of in our in our work , we look at kind of how much is mortality and how much is , is all other .

Speaker #4: We see continued trends in favorable cancer deaths, non-lung cancer deaths, which are really favorable. And then the other thing that's maybe happening on a macro basis is the non-medical deaths.

Speaker #5: And it's about 70% mortality and 30% all other things from a , from a remeasurement gain on a quarterly basis and on the health side , it's , I think a lot of that's being driven by kind of what the future rate increases are , are doing to result in remeasurement gains .

Speaker #4: Are actually really seem to be improving. And that would include suicide and homicide and drug and alcohol abuse. So I think that's probably one area where we're seeing a little bit more improvement from a societal purpose that actually is impacting overall mortality.

Speaker #5: So that's , it's more on , on the impacts to premium future premiums than it is on , on claims , although claims are positive as well overall , providing some health Remeasurement gains

Speaker #7: Yeah. I was going to note that on the non-medical side because in the late teens and then especially in the early days of COVID we had really seen a spike a lot in the opioid and in just some of the other suicide and that type of a thing.

Speaker #10: Got it. Thank you.

Speaker #1: Your next question comes from Randy Benner with Texas Capital . Your line is open .

Speaker #2: Hey .

Speaker #11: Thanks for taking the question . It's a follow up to Andrew Kligerman discussion with you on the . I think you kind of answered more of the quantitative changes with the mortality assumptions , but I was wondering if you could share kind of more like qualitative assessment of like lifestyle behavior .

Speaker #7: And so we really did see a large increase there. It's probably and had that for a few years. And that's been really good to see that temper here the last couple of years and we've seen really some even though the non-medical accounts for only about 20 percent of our claims we're seeing some really significant changes in that.

Speaker #11: It's just a , it's a , it's a significant shift . It's obviously very positive , but is there , is there something changing with the cohort of insureds that's , you know , kind of worth noting in this change in the numbers

Speaker #7: And I think that does have some impact as Tom mentioned or a result of some of the societal impacts and that type of a thing.

Speaker #5: I don't think it's really a function of the cohort changing. I think it is just continued trends, and we see continued favorable mortality in heart and circulatory deaths.

Speaker #7: And maybe some of the battles against the opioid crisis and that type of a thing has maybe been a benefit there as well.

Speaker #5: We see continued trends in favorable cancer deaths , non lung cancer deaths , which are really favorable . And then the other thing that's maybe happening on a macro basis is the non-medical deaths are actually really seem to be improving .

Speaker #9: That's great color. And then one more if I could. It's a follow-up to the discussion on the American Income Agent Count. I guess I heard about the initiatives and I think it was kind of described more as an issue of getting agents in the door.

Speaker #5: And that would include suicide and homicide and drug and alcohol abuse . So I think that's probably one area where we're seeing a little bit more improvement from a societal purpose that actually is , you know , impact the overall mortality .

Speaker #9: But is there is the retention of folks there changing at all kind of after year one? Are you kind of keeping the same percentage or has that changed as well?

Speaker #7: The it's a little bit of both. It's a little bit of just recruiting activity. And it's more of the agent retention in the first six months.

Speaker #4: Yeah, I was going.

Speaker #2: To

Speaker #4: Note that on the non-medical side , because , you know , in the late teens and then especially in the early days of Covid , we had really seen a spike .

Speaker #7: And we really focus on our agent retention in the early days because we are recruiting folks that are new to the industry. Some are new to direct sales.

Speaker #4: A lot of the opioid and , some of the other suicide and that type of a thing . And so we really did see a large increase there , you know , it's probably been , you know , seven , eight years ago now and had that for a few years .

Speaker #7: And so we know that the extent of people getting onboarded, trained, and producing and having a sustainable income really drives that long-term agent retention.

Speaker #4: And that's been really good to see that temper here the last couple of years . And we've seen really , even though the non-medical accounts for only about 20% of our claims , we're seeing some really significant changes in that .

Speaker #7: So we really focus on the early days. And so again, it's not our from a corporate perspective we're doing all that activity. That is our middle managers, out in the field that are spending time recruiting agents, training them, and the whole onboarding process.

Speaker #4: And I think that does have some impact , as Tom mentioned , or a result of some of the societal impacts and and that type of a thing .

Speaker #4: And maybe some of the battles against the opioid crisis and that type of thing has maybe , you know , been a bit of benefit there as well

Speaker #7: And in addition to they're doing their own direct sales. And so that's what I'm describing when I say we're trying to make sure that our incentive compensation system appropriately rewards between those two activities because it is a balance.

Speaker #11: Okay . That's great color . And then one more , if I could , it's a follow up to the discussion on the American income , Asian count , I guess I , I heard about the initiatives and I think it was going to describe more of an issue of getting agents in the door .

Speaker #7: There's only a certain number of hours in a day as they would say. And so when I talk about we're tweaking that a little bit what I really like to see is I'd mention is we've got three quarters in a row where we've got improvements in our agent productivity.

Speaker #11: But is there is the retention of folks there changing at all ? Kind of after year one , are you are you kind of keeping the same percentage or has that changed as well

Speaker #7: Just that agent count and a little bit higher turnover in that first year than what we've historically seen. So we know we need to move the pendulum we want the pendulum to swing back a little bit and move the incentive a little bit more on focusing on getting those agents trained and onboarded.

Speaker #3: It's a little bit of both. It's a little bit of just recruiting activity, and it's more of the agent retention in the first six months.

Speaker #3: And we really focus on our agent retention in the early days because we are recruiting folks that are new to the industry. Some are new to direct sales.

Speaker #7: So that's kind of the overall dynamics of what's going on with American Income. But like I said, if you look at the growth and the retention at the other two agencies that tells us that it's really specific to this particular distribution versus a more macro view.

Speaker #3: And so we know that the extent of people getting onboarded , trained , trained in producing and having a sustainable income really drives that long term agent retention .

Speaker #7: Randy, I was going to add one more thing to our discussion around some of the mortality trends that we're seeing. And that just before we leave that I think a question that we get fairly often too when we're out talking to folks is do we think that the new drugs that are coming out and weight loss treatments and those type of things are is that being having an impact?

Speaker #3: So we really focus on , on , on the early days . And so again , it's not our from a corporate perspective , we're doing all that activity that is our middle managers out in the field that are spending time recruiting agents , training them , and the whole onboarding process .

Speaker #3: And in addition to, they're doing their own direct sales. And so that's what I'm describing when I say we're trying to make sure that our incentive compensation system appropriately rewards between those two activities, because it is a balance.

Speaker #7: And we really do think that's probably a little bit too early especially for our insured population. Just getting access to those drugs and affordability over time.

Speaker #7: I mean, we're really optimistic that over time that that could have some really positive benefits to our mortality experience especially if some of the side effects from diabetes and those type of things if they're able to kind of delay deaths from some of those some of those health benefits and causes.

Speaker #3: There's only a certain number of hours in a day , as they would say . And so when I talk about we're tweaking that a little bit , what I really like to see is I mentioned is we've got three quarters in a row where we've got improvements in our agent productivity , just that agent count and a little bit higher turnover in that first year than what we've historically seen .

Speaker #3: So, we know we need to move the pendulum. We want the pendulum to swing back a little bit and move the incentive a little bit more on focusing on getting those agents trained and onboarded.

Speaker #7: And then I kind of look at too and I don't think we have this empirically but you look at the higher utilization that we've been seeing on the med subside and so you have a lot of more senior folks that are going to the doctor more often.

Speaker #3: So that's kind of the overall dynamics of what's going on with American Income. But like I said, if you look at the growth in the retention at the other two agencies, that tells us that it's really specific to this particular distribution versus a more macro view.

Speaker #7: They're getting what the doctors I think people post-COVID have there's been an increase in just taking care of themselves and getting some of that.

Speaker #7: I see that in just some of those utilization numbers. And so I tend to think that maybe that has a little bit of some impact on that as well.

Speaker #2: It .

Speaker #4: Ray . Yeah . I was going to add one more thing to our discussion around some of the mortality trends that we're seeing and that just before we leave that , you know , I think a question that we get fairly often to when we're out talking to folks is , you know , do we think that the new drugs that are coming out and weight loss treatments and those type of things are is that being , you know , having an impact ?

Speaker #9: Okay. Well, thanks for that and thanks for the clarification on American Income.

Speaker #2: Your next question comes from Suneet Kamath with Jefferies. Your line is open.

Speaker #10: Great. Thanks. I wanted to come back to this idea of the resiliency of your customer base. Clearly, showing up in the first quarter results.

Speaker #10: But if I just think about what's going on macro-wise with the war, a lot of those developments on things like gas prices sort of happened later in the quarter.

Speaker #4: And , and we really do think that's probably a little bit too early , especially for our insured population , just getting access to those drugs and , and , and affordability over time .

Speaker #10: So I guess the question is are you seeing anything as we start traveling through Q2 that suggests that maybe there's incremental pressure? Is it too early to see the pressure from things like higher gas prices?

Speaker #4: I mean , but we're really optimistic that over time that that's , that could have some really positive benefits to our mortality experience , especially as you know , some of the side effects from diabetes and those type of things .

Speaker #7: I think what we've seen historically during different economic cycles is there might be a little bit of pressure particularly in that first year. What happens what we've seen through early 2000s, the great financial crisis, those type of cycles is we actually see a benefit a lot of times in growth in sales growth in agent recruiting.

Speaker #4: You know , if they're able to kind of delay deaths from some of those Some of those health benefits and causes , and then , you know , I kind of look at too , and I don't think we have this empirically , but you look at the higher utilization that we've been seeing on the med side .

Speaker #4: And , and so you have a lot of more senior folks that are going to the doctor more often . They're getting what the doctors , you know , I think people post Covid have there's been an increase in just taking care of themselves and getting some of that .

Speaker #7: And what we see with the in force is it's very resilient because after that policy has been in the customer's budget for a couple of years, it's very resilient.

Speaker #4: And I see that in just some of those utilization numbers. And so I tend to think that maybe that has a little bit of, you know, some impact on that as well.

Speaker #7: And our renewal persistency rates just do not move very much. And I think that gets back to the affordability of our policies the average premium depending on the distribution for a rounding's sake it's 40 to 60 dollars a month on average.

Speaker #11: Okay, thanks for that. And thanks for the clarification on American income.

Speaker #1: Your next question comes from Suneet Kamath with Jefferies. Your line is open.

Speaker #7: And so that's just not a significant component of a consumer's wallet that they're spending on other things really that's the really not the first or the second place that we've seen that they look to scale back just because it's not significant dollars on a monthly basis as well as it's been in their budget for quite some time.

Speaker #12: Great , thanks . I wanted to come back to this idea of the resiliency of your customer base You know , clearly showing up in the first quarter results .

Speaker #12: But if I just think about what's going on , you know , macro wise with the war , a lot of those developments on things like gas prices sort of happened later in the quarter .

Speaker #12: So I guess the question is, are you seeing anything as we start traveling through to Q2 that suggests that maybe there's incremental pressure, or is it too early to see the pressure from things like higher gas prices?

Speaker #7: And the consumer also knows that it's kind of a security perspective is that periods of uncertainty or high inflation or things like that my coverage for my family and the protection orientation of how we sell these products is not something that I really want to get rid of as well as I know if I cancel my policy but I want it long-term I have to go back through underwriting requalify and the policy may be more expensive because my age is older my health may be in a different spot than I originally took it out.

Speaker #3: I think what we've seen historically during different economic cycles is there might be a little bit of pressure, particularly in that first year.

Speaker #3: What happens, what we've seen through like early 2000, the Great Financial Crisis, those type of cycles, is we actually see a benefit.

Speaker #3: A lot of times in growth, in sales growth in Asia, recruiting. And what we see with the in-force is it's very resilient, because after that policy has been in the customer's budget for a couple of years, it's very resilient.

Speaker #7: So from our perspective is we look at it over decades we see slight movements but we do not see significant movements from that resiliency perspective.

Speaker #8: And I would just say from what we're really hearing from the field and in more recent times and is that while there might be a little bit harder you're not really seeing a major pushback from the consumers at this point in time.

Speaker #3: And our renewal persistency rates just do not move very much. And I think that gets back to the affordability of our policies.

Speaker #3: You know , the average premium , depending on the distribution for for rounding sake , it's 40 to $60 a month on average .

Speaker #8: And maybe it's an extra call to get the sales. I mean, the thing that helps is having the exclusive distribution and. The contractors wanting to make their own money.

Speaker #3: And so that's just not a significant component of a consumer's wallet that they're spending on other things . Really . That's the really not the first or the second place that we've seen that they look to , to scale back just because it's , it's not significant dollars on a monthly basis as well as it's been in their budget for quite some time .

Speaker #8: And so they're maybe they have to make an extra call or two during the week in order to get a sale. But they're continuing to work because they want to have their level of income.

Speaker #8: And then I would say Matt's noted on prior calls as well and we've been seeing this quarter too where that average premium just continues we would think that if we're seeing a lot of stress within the consumer that they would choose down and they would say maybe I can't afford 35 dollars a month.

Speaker #3: And , and the consumer also knows that it's kind of a security perspective is that it periods of uncertainty or high inflation or things like that , you know , my coverage for my family and the protection orientation of how we sell these products is not something that I really want to get rid of as well as I know if I cancel my policy , but I want it long term , I have to go back through underwriting , requalify and the policy may be more expensive because my age is older .

Speaker #8: I really want to have this. Let me have something for 25 dollars a month. But we're really not seeing that. We're still continuing to see the average premium on our issues holding steady if not increasing just a little bit.

Speaker #10: Okay. That's helpful. And then I just wanted to circle back to AI real quick. It was helpful to get some of your thoughts on where the expense ratio could go.

Speaker #3: My health may be in a different spot than I originally took it out . So for from our perspective is we look at it over decades , we see slight movements , but we do not see significant movements from that .

Speaker #10: But are you seeing any additional threats emerge in terms of your target customer base or your distribution channels where new entrants are coming in that may have a different distribution strategy to sort of attack your target market?

Speaker #3: You know, resiliency perspective.

Speaker #4: And I would just say , from what we're really hearing from the field and , you know , in more recent times , and , you know , is that , you know , while they're , you know , might be a little bit harder , you're not really seeing a major pushback , you know , from the consumers at this point in time .

Speaker #7: Yeah. I think what's important there is a vast majority of our growth in sales are coming through exclusive agency channels. We don't see or experience a lot of competition in those channels at the time of sale.

Speaker #4: And , and , you know , maybe it's an extra call to get the sales . I mean , the thing that helps , you know , having the exclusive distribution and , you know , their independent contractors wanting to make their own money .

Speaker #7: Our agents are out generating their own activity referrals working leads those type of things. And so it's not sold to consumers that are actively looking for a supplemental health policy today or basic protection life products.

Speaker #4: And so they're, you know, maybe they have to make an extra call or two during the week in order to get a sale.

Speaker #4: But they're , they're continuing to work because they want to , they want to have their level of income . And then I would say , you know , Matt's noted on prior calls as well .

Speaker #7: Today. The direct-to-consumer channel is more subject to competition because that is going after consumers that are actively looking and shopping and things like that.

Speaker #4: And we've been seeing , you know , this quarter to where that average premium , you know , just continues , we would think that if we're if we're seeing a lot of stress within the , the consumer that they would , they would choose down and they would say , maybe I can't afford $35 a month .

Speaker #7: And so we do recognize there's a little bit more challenges as AI comes into play from entrants. And frankly, that's an easier market to get into from a new entrant perspective.

Speaker #4: I really want to have this . Let me have something for $25 a month . But we're really not seeing that we're , we're still continuing to see the average premium on our issues , you know , holding steady , if not increasing just a little bit .

Speaker #7: The barrier to entry the cost of entry is a lot less than agency sold business. And so that's why I'd mentioned earlier we think AI is going to be a benefit to our agency sold business.

Speaker #12: Okay . That's helpful . And then I wanted to circle back to AI real quick . It was helpful to get some of your thoughts on where the expense ratio could go , but are you seeing any additional threats emerge in terms of your target customer base or your distribution channels ?

Speaker #7: It's not subject to a lot of competition. It's harder for new entrants to get into that market. And the beauty about our marketplace is that a significant number of people in our targeted demographic is not income demographic is not saturated.

Speaker #12: Where, you know, new entrants are coming in that may have a different distribution strategy to sort of attack your target market.

Speaker #3: Yeah, I think what's important there is, you know, a vast majority of our growth in sales are coming through exclusive agency channels.

Speaker #7: So when we sell more we are not having to take market share from somebody else. Over 50% of that population doesn't I have life insurance and then it's even more significant when you talk about underinsured or they just get a little bit through work that doesn't travel with them because it's a group policy.

Speaker #3: We don't see or experience a lot of competition in those channels at the at the time of sale , our agents are generating their own activity , referrals , working leads , those type of things .

Speaker #3: And so, it's not sold to consumers that are actively looking for a supplemental health policy today or, you know, basic protection life products today.

Speaker #7: And so we're very optimistic of where that goes and we are focused on more direct competition in our direct-to-consumer channel. That's why you'll hear us over time.

Speaker #7: We think that's more of a low single-digit growth because there is going to be a certain subset of the population we believe that's smaller that is more active and looking than the majority of our agents sold business.

Speaker #3: The direct-to-consumer channel is more subject to competition because that is going after consumers that are actively looking and shopping, and things like that.

Speaker #3: And so, we do recognize there's a little bit more challenges as AI comes into play from insurance. And frankly, that's an easier market to get into from a new entrant perspective.

Speaker #10: Okay. That's helpful. Thanks. Our next question comes from Mark Hughes with Truist. Your line is open.

Speaker #11: Yeah. Thank you. Just a quick one from me. You talked about the investment in lead generation. Can you talk about the kind of the trajectory of spending there whether they're already new technologies or new approaches you're using and does AI have any meaning for lead generation?

Speaker #3: The barrier to entry , the cost of entry is a lot less than agency sold . You know , business . And so that's why I mentioned earlier , we think AI is going to be a benefit to our agency .

Speaker #3: Sole business. It's not subject to a lot of competition. It's harder for new entrants to get into that market. And the beauty about our marketplace is that a significant number of people in our targeted demographic is not an income.

Speaker #7: Yes. And so a lot of our lead generation is coming through our direct-to-consumer advertising. And so the benefit that we've had over the last year or two has been capitalizing on that investment spend and not just converting that advertising spend into sales of just the direct-to-consumer channel but a lot of the leads and inquiries that we're getting we're moving that to an agency channel that has a higher conversion rate.

Speaker #3: The demographic is not saturated. So when we sell more, we're not having to take market share from somebody else. Over 50% of that population does not have life insurance.

Speaker #3: And then it's even more significant when you talk about underinsured, or they just get a little bit through work that doesn't travel with them because it's a group policy.

Speaker #7: So we had significant growth in just the total volume of leads which would be equating to the spend in that area last year. And as I'd mentioned in my prepared remarks we're probably going to be another 5 or 10 percent growth in the number of leads.

Speaker #3: And so we're very optimistic of where that goes . And we are focused on more direct competition in our direct to consumer channel .

Speaker #7: The dynamic going on there is over the last several years until 2025 you heard me talk about we continue to scale back our advertising spend because the costs were going up and the lead conversion was going down.

Speaker #3: That's why you'll hear us over time . We think that's more of a low single digit growth , because there is going to be a certain subset of the population .

Speaker #3: We believe that's smaller, that it is more active in looking than the majority of our agents. So, business.

Speaker #7: Well, now that our overall aggregate conversion ratio is going up when I look across both our direct-to-consumer and agency channel that gives us more money to spend on generating more leads.

Speaker #12: Okay, that's helpful. Thanks.

Speaker #1: Our next question comes from Mark Hughes with Truist . Your line is open .

Speaker #7: So we're increasing our advertising spend to generate more leads. And that'll be something that continues to grow on itself. So to the extent that we have this better conversion we have more leads being utilized by our agencies.

Speaker #13: Yeah . Thank you . Just a quick one for me . You talked about the investment and lead generation . Can you talk about the the trajectory of spending their whether there are any new technologies or new approaches you're using and does AI have any meaning for lead generation

Speaker #7: I anticipate throughout '26 and then into '27 if that trend continues to continue to spend more on advertising. The benefits both sides of the equation meaning both our direct-to-consumer and agency channels.

Speaker #3: Yes . And so a lot of our lead generation is coming through our direct to consumer advertising . And so the benefit that we've had over the last year or two has been capitalizing on that investment spend .

Speaker #7: So as far as AI goes within that oh, I was going to say I think you had a comment about AI. Is that on the.

Speaker #3: And not just converting that advertising spend into sales of just the direct to consumer channel , but a lot of the leads and inquiries that we're getting were we're moving that to an agency channel that has a higher conversion rate .

Speaker #11: Yeah. Yeah. Please.

Speaker #7: Consumer channel as you might imagine the way consumers may be looking for life insurance or responding to ads I believe that a lot of these AI platforms are going to convert into some sort of advertising revenue model.

Speaker #3: So, we had significant growth in just the total volume of leads, which would be equating to the spend in that area last year.

Speaker #7: And we will be there as part of that. And I think that's where our deep experience in advertising in these online channels will come into play and frankly the volume of dollars that we spend is very significant with some of the big platforms.

Speaker #3: And as I mentioned in my prepared remarks , you know , we're probably going to be another 5 or 10% growth in the number of leads .

Speaker #3: The dynamic going on there is, over the last several years until 2025, you heard me talk about how we continue to scale back our advertising spend because the costs were going up and the lead conversion was going down.

Speaker #7: We participate in their beta programs. And we're there with a seat at the table so to speak with these advertising platforms. As they look to convert and monetize some of this AI technology.

Speaker #3: Well , now that our overall aggregate conversion ratio is going up , when I look across both our direct to consumer and agency channel , that gives us more money to spend on generating more leads .

Speaker #7: And it's much like what we saw in some of the early days with Facebook and some of the others as they convert into advertising platforms.

Speaker #3: So we're increasing our advertising spend to generate more leads . And that'll be something that continues to grow in itself . So to the extent that we have this better conversion , we have more leads being utilized by our agencies .

Speaker #11: Thank you very much.

Speaker #10: Your next question comes from Ryan Kruger with KBW. Your line is open.

Speaker #3: I anticipate throughout 26 and then into 27 , if that trend continues to continue to spend more on advertising that benefits both both sides of the equation , meaning both our direct to consumer and agency channels .

Speaker #12: Hey. Thanks. Just a quick one. On the life margin and maybe this is there's some rounding here but I think you said you expected 41% in the fourth quarter.

Speaker #12: I would have thought there would be some improvement given the lower net premium ratio after you factor in the remeasurement from the assumption review in the third quarter.

Speaker #3: So as far as AI goes within that . Oh , I was going to say , I think you had a comment about AI .

Speaker #12: So just curious how you're thinking about the benefit on a go-forward basis from the assumption review.

Speaker #3: Is that .

Speaker #13: On the

Speaker #3: Consumer channel , as you might imagine , you know , the way consumers may be looking for life insurance or responding to ads , I believe that a lot of these AI platforms are going to convert into , you know , some sort of advertising revenue model .

Speaker #7: Yeah. Right. I think fourth quarter is one of those quarters that also has a little bit of seasonality in it. So that offsets some of the benefit that you get from a lower net premium ratio.

Speaker #7: And then also the net premium ratio changes are relatively small. I mean, they're small incremental changes that happen each time we make an assumption update.

Speaker #3: And we will be there as part of that. And, you know, I think that's where our deep experience in advertising in these online channels will come into play.

Speaker #7: But I think for the fourth quarter it's probably more of a seasonality thing.

Speaker #3: And frankly , the volume of dollars that we spend is very significant with some of the big platforms we participate in their beta programs .

Speaker #12: Okay. Maybe just one follow-up on that. Is would you expect do you think 41% roughly is the right margin at this point? Stripping out assumption review impacts or could there be some upside as we go out further?

Speaker #3: And , you know , we're there with a seat at the table , so to speak , with these advertising platforms as they look to convert and monetize , you know , some of this AI technology .

Speaker #7: I do. I think that's a pretty good normalized underwriting margin. We've seen mortality come down. So obligation ratios come down. We've talked about amortization coming up a little bit.

Speaker #3: And it's much like what we saw in some of the early days with, you know, Facebook and some of the others as they convert into advertising platforms.

Speaker #7: But it's really kind of aligning around that 41%.

Speaker #13: And I think, Ryan, you've got to think of it as around that. So if it's 40 it could be if it's 41, 41.1, 41.2 we're still thinking of that as being around 41%.

Speaker #13: Thank you very much

Speaker #1: Your next question comes from Ryan Kruger with K b . Your line is open .

Speaker #14: Hey , thanks . Just a quick one on the life margin . And maybe this is there's some rounding here , but I think you said you expected 41% in the fourth quarter .

Speaker #13: Same as if 40.8 or something like that. So it's going to move by a few tenths of a point. But it's going to be pretty close to around that.

Speaker #14: I would have thought there would be some improvement, given the lower net premium ratio after you factor in the remeasurement from the assumption review in the third quarter.

Speaker #13: So you do have some of the impact of the amortization that's coming into play as well. And just as that continues to grow just a little bit each quarter just as the new renewal commissions that American Income come into amortization.

Speaker #14: So just curious how you're thinking about the the benefit on a go forward basis from the the assumption review .

Speaker #2: Yeah .

Speaker #5: Ryan, I think, you know, fourth quarter is one of those quarters that also has a little bit of seasonality in it.

Speaker #13: So you'll see some benefits on the policy obligation percentage a little bit more than that. They get offset a little bit by that higher amortization.

Speaker #5: So that offsets some of the benefit that you get from a lower net premium ratio. And then also, you know, the net premium ratio changes are relatively small.

Speaker #12: Understood. Thank you.

Speaker #10: Your next question is a follow-up from Wilma Burdis with Raymond James. Your line is open.

Speaker #5: I mean, they're small incremental changes that happen each time we make an assumption update. But I think for the fourth quarter, it's probably more of a seasonality thing.

Speaker #14: Hey. Good morning. Thanks for taking my follow-up. Just wanted to confirm. I know you mentioned earlier that the cash flow generation was a little bit towards the higher end of the range.

Speaker #14: Okay , maybe just one follow up on that is , would you expect , do you think 41% roughly is is the right margin at this point ?

Speaker #14: So if you could just give us a little bit more clarity on where the cash flow generation ended up just to remind us of the range and then if there was anything in particular that drove it towards the higher end.

Speaker #14: Out review, or could there be some upside as we go out further?

Speaker #14: Thank you.

Speaker #7: Yeah. Yeah. Last quarter excess cash flow I said was going to be between 600 and 700 million dollars. I think as I look at it now I'd probably narrow that range to 650 to 700 million.

Speaker #5: I , I do , I think that's a pretty , pretty good normalized underwriting margin . We've , we've seen , you know , mortality come down .

Speaker #5: So obligation ratios have come down . You know , we've talked about amortization coming up a little bit , but it's it's really kind of aligning around that 41% .

Speaker #7: And so that excess cash flow the midpoint of that is right around the 675 side.

Speaker #4: And I think , Ryan , you got to think of it as around that . So if it's 40 , you know , it could be , you know , if it's 41 , 40 , 41.1 , 41.2 , we're still thinking of that as being around 41% , same as , you know , a 40.8 or something like that .

Speaker #13: And we have the better visibility clearly on the amount of dividend distributions coming out of the subs. From that perspective. So you're down the downside clearly is much less.

Speaker #13: And we're able to kind of get the sense that it's as Tom said in that upper part of the 600s.

Speaker #4: So , you know , it's going to move by a few tenths of a point , but it's going to be pretty close to , you know , around that .

Speaker #4: So you do have some of the impact of the amortization that's coming into play as well . You know , and just as that and that continues to grow just a little bit each quarter , just as the new renewal premium renewal commissions that American income , you know , I come into amortization .

Speaker #10: That concludes our Q&A session. I will now turn the conference back over to Stephen Mota, Vice President of Investor Relations for closing remarks.

Speaker #13: All right. Thank you for joining us this morning. Those are our comments. We'll talk to you again next quarter.

Speaker #4: So you'll see some benefits on the policy obligation percentage, a little bit more than that. They get offset a little bit by that higher amortization.

Speaker #14: Understood . Thank you

Speaker #1: Your next question is a follow up from Wilma Burgess with Raymond James . Your line is open .

Speaker #7: Hey , good morning . Thanks for taking my follow up . Just wanted to confirm . I know you mentioned earlier that the cash flow generation was a little bit towards the higher end of the range .

Speaker #7: So, if you could just give us a little bit more clarity on where the cash flow generation ended up—just remind us of the range.

Speaker #7: And then, if there was anything in particular that drove it toward that higher end. Thank you.

Speaker #5: Yep . Yeah .

Speaker #2: Last quarter .

Speaker #5: Excess cash flow, I said, was going to be between $600 and $700 million. I think, as I look at it now, I’d probably narrow that range to $650 to $700 million.

Speaker #5: And so that excess cash flow, you know, the midpoint of that is right around the $675. So

Speaker #2: Yeah .

Speaker #4: We've got we have the better visibility clearly on the , you know , the amount of dividend distributions coming out of the subs , you know , from that perspective .

Speaker #4: So you're down the downside clearly is much less . But and we're able to , to kind of get the sense that it's , yeah , as Tom said in that upper part of the 600 .

Speaker #1: That concludes our Q&A session. I will now turn the conference back over to Stephen Mota, Vice President of Investor Relations, for closing remarks.

Speaker #2: All right. Thank you for joining us this morning. That is our comments. We'll talk to you again next quarter.

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