AM Best Affirms Credit Ratings of Globe Life Inc. and its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of the key life/health subsidiaries of Globe Life Inc. (Globe Life) (headquartered in McKinney, TX) [NYSE: GL]. Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) of Globe Life. AM Best also has affirmed the associated Short- and Long-Term Issue Credit Ratings (Short-Term IR; Long-Term IR) on the debt and indicative Long-Term IRs on the securities of Globe Life. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of these companies and ratings).

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), which is an improvement from the prior year’s capital assessment and is supportive of its balance sheet strength assessment. On a statutory basis, year-end capital & surplus increased, but was hampered by continued dividend payments to the parent company, Globe Life. During 2021, Globe Life entered into a reinsurance agreement with New Reinsurance Company Ltd., a subsidiary of Munich Reinsurance Company, to manage its capital effectively; reinsurance leverage is minimal. Globe Life’s investment portfolio, which is managed on a consolidated basis, is primarily made up of public, investment grade bonds with an increasing allocation to Schedule BA assets. Globe Life’s higher allocation to Class 2 bonds accounts for more than half of the bond portfolio, making Globe Life more susceptible to credit downgrades. Financial leverage and coverage ratios remain within tolerance for the 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. A temporary year-over-year decline in statutory earnings is attributable to an increase in COVID-related mortality claims over the year. With a year-to-date 2022 decline in COVID-related mortality claims, earnings have thus far rebounded during 2022.