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Globe Life Q3 Earnings Miss Estimates on Weak Underwriting Income
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Key Takeaways
Globe Life's Q3 operating EPS of $4.84 missed estimates by 0.6% but increased 0.6% year over year.
GL's premium revenues rose 6.5%, while underwriting income fell 4.2% and benefits and expenses grew 11.5%.
Globe Life revised its 2026 EPS outlook to $15.35-$15.65 and raised its share repurchase forecast.
Globe Life Inc. (GL - Free Report) reported third-quarter 2026 net operating income of $4.84 per share, which missed the Zacks Consensus Estimate of $4.87 by 0.6%. The bottom line, however, rose 0.6% year over year, driven by higher excess investment income and a lower diluted share count.
The quarter witnessed higher premium revenues and increased investment income. However, lower insurance underwriting income and rising expenses weighed on results.
GL Benefits From Higher Premium Growth and Investment Income
Total premium revenues increased 6.5% year over year to $1.31 billion. Life insurance premiums rose 2.4% to $864.6 million, while health insurance premiums climbed 15.6% to $446.9 million, reflecting particularly strong growth at United American.
Operating revenues increased 5.5% year over year to $1.61 billion, driven by higher premium income and net investment income. The top line missed the Zacks Consensus Estimate by 0.8%.
Net investment income increased 3.5% year over year to $295.9 million. Excess investment income, a key profitability measure, increased 2.9% to $37.9 million, despite higher required interest on policy liabilities.
Globe Life Sees Pressure on Underwriting Margins
Insurance underwriting income decreased 4.2% year over year to $481.8 million. Life underwriting margin declined 4.9% to $458.2 million, while health underwriting margin increased 6.7% to $115.6 million.
Administrative expenses increased 6% year over year to $95.2 million.
Total benefits and expenses increased 11.5% year over year to $1.15 billion, primarily due to higher policyholder benefits, amortization of deferred acquisition costs, commissions, premium taxes, acquisition costs and other operating expenses. These increases outpaced revenue growth and pressured profitability.
GL's Distribution Channels Deliver Mixed Results
Life insurance premium growth was led by the American Income division, where premiums increased 4% year over year to $470.4 million. Liberty National premiums rose 4% to $102 million, while Direct to Consumer premiums slipped 1% to $243.1 million.
Overall life net sales decreased 1% to $149.1 million. Direct to Consumer sales declined 12%, while Liberty National sales increased 7%. American Income life net sales remained largely unchanged.
Health insurance continued to deliver stronger premium growth. United American health premiums rose 29% year over year to $219.3 million, while Family Heritage premiums increased 8% to $128.6 million. Direct-to-consumer health premiums advanced 9%.
Total health net sales increased 32% to $94.1 million, supported by a 95% increase at United American. However, United American recorded an underwriting loss of $6.4 million, compared with income of $16.1 million a year earlier, reflecting losses at Evry and excess Medicare Supplement claims.
Globe Life Strengthens Book Value and Returns Capital
Book value per share increased 22.8% year over year to $85.35. Excluding accumulated other comprehensive income (AOCI), book value per share increased 10.7% to $103.62.
Net income return on equity was 19.7% for the first nine months of 2026, down from 21.9% in the year-ago period.
Net operating income return on equity, excluding AOCI, was 15.9%, compared with 16.6% a year earlier.
During the reported quarter, Globe Life repurchased 1.1 million shares for $185 million at an average price of $175.61 per share. The company now expects full-year repurchases of $725 million to $775 million, up from its previous projection of $670 million to $700 million.
Globe Life Revises 2026 Earnings Outlook
Globe Life adjusted its full-year 2026 net operating income guidance to a range of $15.35-$15.65 per share, citing adverse results at its United American General Agency division.
For 2027, Globe Life projects net operating income of $16.10-$17.10 per share, representing a 7.1% increase at the midpoint.
The Progressive Corporation’s (PGR - Free Report) third-quarter 2026 earnings per share (EPS) of $4.60 beat the Zacks Consensus Estimate by 3.1%. The bottom line increased 13.6% year over year. PGR’s net premiums written were $22.3 billion in the quarter, up 4% from $21.4 billion a year ago. Combined ratio improved 80 basis points from the prior-year quarter’s level to 88.7. The Zacks Consensus Estimate was pegged at 89.4.
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2026 core earnings of $9.18 per share, which beat the Zacks Consensus Estimate of $7.07 by 29.8%. The bottom line increased 12.8% year over year. Revenues of $12.45 billion surpassed the consensus estimate of $12.40 billion by 0.4% and remained nearly flat year over year. TRV’s combined ratio improved 50 basis points year over year to 86.8%, reflecting stronger reserve development, partially offset by higher catastrophe losses. The underlying combined ratio deteriorated 20 basis points to 84.1%, while underlying underwriting income reached $1.74 billion pre-tax. The Zacks Consensus Estimate for combined ratio was pegged at 92.
W.R. Berkley Corporation (WRB - Free Report) reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. W.R. Berkley’s net premiums written increased 1.3% year over year to $3.27 billion, driven by growth in the Insurance segment. The combined ratio, a measure of underwriting profitability, improved 10 bps to 90.8%. Our estimate was pegged at 92.8%, while the Zacks Consensus Estimate was pegged at 90.95%.
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Globe Life Q3 Earnings Miss Estimates on Weak Underwriting Income
Key Takeaways
Globe Life Inc. (GL - Free Report) reported third-quarter 2026 net operating income of $4.84 per share, which missed the Zacks Consensus Estimate of $4.87 by 0.6%. The bottom line, however, rose 0.6% year over year, driven by higher excess investment income and a lower diluted share count.
The quarter witnessed higher premium revenues and increased investment income. However, lower insurance underwriting income and rising expenses weighed on results.
Globe Life Inc. Price, Consensus and EPS Surprise
Globe Life Inc. price-consensus-eps-surprise-chart | Globe Life Inc. Quote
GL Benefits From Higher Premium Growth and Investment Income
Total premium revenues increased 6.5% year over year to $1.31 billion. Life insurance premiums rose 2.4% to $864.6 million, while health insurance premiums climbed 15.6% to $446.9 million, reflecting particularly strong growth at United American.
Operating revenues increased 5.5% year over year to $1.61 billion, driven by higher premium income and net investment income. The top line missed the Zacks Consensus Estimate by 0.8%.
Net investment income increased 3.5% year over year to $295.9 million. Excess investment income, a key profitability measure, increased 2.9% to $37.9 million, despite higher required interest on policy liabilities.
Globe Life Sees Pressure on Underwriting Margins
Insurance underwriting income decreased 4.2% year over year to $481.8 million. Life underwriting margin declined 4.9% to $458.2 million, while health underwriting margin increased 6.7% to $115.6 million.
Administrative expenses increased 6% year over year to $95.2 million.
Total benefits and expenses increased 11.5% year over year to $1.15 billion, primarily due to higher policyholder benefits, amortization of deferred acquisition costs, commissions, premium taxes, acquisition costs and other operating expenses. These increases outpaced revenue growth and pressured profitability.
GL's Distribution Channels Deliver Mixed Results
Life insurance premium growth was led by the American Income division, where premiums increased 4% year over year to $470.4 million. Liberty National premiums rose 4% to $102 million, while Direct to Consumer premiums slipped 1% to $243.1 million.
Overall life net sales decreased 1% to $149.1 million. Direct to Consumer sales declined 12%, while Liberty National sales increased 7%. American Income life net sales remained largely unchanged.
Health insurance continued to deliver stronger premium growth. United American health premiums rose 29% year over year to $219.3 million, while Family Heritage premiums increased 8% to $128.6 million. Direct-to-consumer health premiums advanced 9%.
Total health net sales increased 32% to $94.1 million, supported by a 95% increase at United American. However, United American recorded an underwriting loss of $6.4 million, compared with income of $16.1 million a year earlier, reflecting losses at Evry and excess Medicare Supplement claims.
Globe Life Strengthens Book Value and Returns Capital
Book value per share increased 22.8% year over year to $85.35. Excluding accumulated other comprehensive income (AOCI), book value per share increased 10.7% to $103.62.
Net income return on equity was 19.7% for the first nine months of 2026, down from 21.9% in the year-ago period.
Net operating income return on equity, excluding AOCI, was 15.9%, compared with 16.6% a year earlier.
During the reported quarter, Globe Life repurchased 1.1 million shares for $185 million at an average price of $175.61 per share. The company now expects full-year repurchases of $725 million to $775 million, up from its previous projection of $670 million to $700 million.
Globe Life Revises 2026 Earnings Outlook
Globe Life adjusted its full-year 2026 net operating income guidance to a range of $15.35-$15.65 per share, citing adverse results at its United American General Agency division.
For 2027, Globe Life projects net operating income of $16.10-$17.10 per share, representing a 7.1% increase at the midpoint.
GL's Zacks Rank
Globe Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Progressive Corporation’s (PGR - Free Report) third-quarter 2026 earnings per share (EPS) of $4.60 beat the Zacks Consensus Estimate by 3.1%. The bottom line increased 13.6% year over year. PGR’s net premiums written were $22.3 billion in the quarter, up 4% from $21.4 billion a year ago. Combined ratio improved 80 basis points from the prior-year quarter’s level to 88.7. The Zacks Consensus Estimate was pegged at 89.4.
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2026 core earnings of $9.18 per share, which beat the Zacks Consensus Estimate of $7.07 by 29.8%. The bottom line increased 12.8% year over year. Revenues of $12.45 billion surpassed the consensus estimate of $12.40 billion by 0.4% and remained nearly flat year over year. TRV’s combined ratio improved 50 basis points year over year to 86.8%, reflecting stronger reserve development, partially offset by higher catastrophe losses. The underlying combined ratio deteriorated 20 basis points to 84.1%, while underlying underwriting income reached $1.74 billion pre-tax. The Zacks Consensus Estimate for combined ratio was pegged at 92.
W.R. Berkley Corporation (WRB - Free Report) reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. W.R. Berkley’s net premiums written increased 1.3% year over year to $3.27 billion, driven by growth in the Insurance segment. The combined ratio, a measure of underwriting profitability, improved 10 bps to 90.8%. Our estimate was pegged at 92.8%, while the Zacks Consensus Estimate was pegged at 90.95%.