AM Best Affirms Credit Ratings of Globe Life Inc. and Its Subsidiaries
- AM Best affirms the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of Globe Life Inc.'s key life/health subsidiaries. The ratings reflect Globe Life's strong balance sheet, very strong operating performance, and favorable business profile. Earnings rebounded in 2022 due to higher premium volumes and reduced mortality experience. Globe Life's geographically diversified product offering and expansion of its ERM program are positive factors.
- None.
The ratings reflect Globe Life’s balance sheet strength, which AM Best assesses as strong, as well as its very strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
Globe Life’s risk-based capital is assessed within the strong category, as measured by Best’s Capital Adequacy Ratio (BCAR). On a statutory basis, year-end capital & surplus increased, but was hampered by continued dividend payments to Globe Life. Surplus growth was also slowed by the share repurchase program. Globe Life’s investment portfolio, which is managed on a consolidated basis, is primarily comprised of public, investment grade bonds with an increasing allocation to Schedule BA assets in the form of limited partnerships. Globe Life’s higher allocation to Class 2 bonds accounts for more than half of its bond portfolio, making Globe Life more susceptible to credit downgrades. Financial leverage and coverage ratios remain within tolerance for its current ratings.
Globe Life has consistently reported strong earnings and return on equity, steady premium income and favorable investment income, which supports the group’s operating performance assessment. In 2022, earnings rebounded from 2021, and are back to historical levels. This is mostly attributable to higher premium volumes and reduced mortality experience. The group’s health segment also contributed to positive earnings.
Globe Life is geographically diversified with a robust product offering that includes life and supplemental health insurance products for middle class and retired individuals. Globe Life’s products are offered through agents and direct-to-consumer. Most agents are exclusive to Globe Life and sell relatively low risk products. Additionally, Globe Life continues to expand its formalized ERM program, and AM Best believes that the group’s ERM program is appropriate given its risk profile.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following life/health subsidiaries of Globe Life Inc.:
- American Income Life Insurance Company
- Globe Life and Accident Insurance Company
- Liberty National Life Insurance Company
- United American Insurance Company
-
Globe Life Insurance Company of
New York - National Income Life Insurance Company
- Family Heritage Life Insurance Company
The following Short-Term IR has been affirmed:
Globe Life Inc. —
— AMB-1 (Outstanding) on commercial paper
The following Long-Term IRs have been affirmed with stable outlooks:
Globe Life Inc. —
— “bbb+” (Good) on
— “bbb+” (Good) on
— “bbb-” (Good) on
The following indicative Long-Term IRs available under the shelf registration have been affirmed with stable outlooks:
Globe Life Inc. —
— “bbb+” (Good) on senior unsecured debt
— “bbb” (Good) on subordinated debt
— “bbb-” (Good) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Brent DeAngelis
Financial Analyst
+1 908 882 1730
brent.deangelis@ambest.com
Jacqalene Lentz
Director
+1 908 882 2011
jacqalene.lentz@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
