Globe Life Inc. Bank of America Insurance Conference February 12, - PowerPoint PPT Presentation

Globe Life Inc. Bank of America Insurance Conference February 12, 2020

Forward-Looking Statements & Non-GAAP Measures This presentation may contain forward-looking statements within the meaning of the federal securities laws. These prospective statements reflect management’s current expectations, but are not guarantees of future performance. Accordingly, please refer to Globe Life’s cautionary statement regarding forward-looking statements, and the business environment in which the Company operates, contained in the Company’s Form 10-K for the period ended December 31, 2018, and subsequent Forms 10-Q, on file with the Securities and Exchange Commission, and on the Company’s website at www.investors.globelifeinsurance.com. Globe Life specifically disclaims any obligation to update or revise any forward-looking statement because of new information, future developments or otherwise. This presentation contains certain financial measures that differ from the comparable GAAP measures. The non-GAAP measures are not a substitute for GAAP, but rather a supplement to increase transparency by providing broader perspective. Globe Life’s definitions of non-GAAP measures may differ from other companies’ definitions. Reconciliations between the non-GAAP measures and the comparable GAAP measures may be found on the Company’s website at www.investors.globelifeinsurance.com under SEC filings (form 10-K for 2018) and subsequent quarterly earnings press releases. Some of the prior year data in this presentation include discontinued operations. Also, some tables and charts may not foot due to rounding. 2

Cumulative Return 5-year Cumulative Annualized Return : GL – 15.11% $250.00 S&P 500 – 11.69% Globe Life S&P 500 Life & Health – 5.86% S&P 500 S&P 500 Life & Health Insurance $200.00 $150.00 $100.00 $50.00 $- 2014 2015 2016 2017 2018 2019 3

Key Components of Globe Life Model Products - basic Underserved market – protection life and middle-income supplemental health families insurance Controlled distribution Effective cost control - exclusive agencies and profitability - direct to consumer Consistent strong Return of excess excess cash flow capital to shareholders 4

Components of 2019 Net Operating Income ($ in millions, except per share data) Per Share Underwriting Income $718 $6.44 Excess Investment Income 258 2.31 Tax and Parent Expenses (199) (1.79) Stock Compensation Expense, Net of Tax (24) (0.21) Net Operating Income* $752 $6.75 * Net operating income is a non-GAAP measure. Please see appendix for reconciliation to net income. 5

Net Operating Income Per Share From Continuing Operations Compound Annual Growth Rate Through 2019: 10 year- 11.3% 5 year- 11.5% $8.00 Guidance $7.03-$7.23 $6.75 $7.00 $6.13 * $6.00 $4.82 $5.00 $4.49 $4.13 $3.92 $4.00 $3.65 $3.31 $2.91 $3.00 $2.52 $2.32 $2.00 $1.00 $0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: Net operating income from continuing operations for 2016 and after reflects the impact of new accounting guidance implemented on a prospective basis at the beginning of 2016. Note: Net operating income per share is a non-GAAP measure. See net income per share on following page. * On December 22, 2017, tax legislation was signed into law which revised the corporate income tax rate from 35% to 21% effective January 1, 2018, among other modifications. 6

Net Income Per Share Compound Annual Growth Rate Through 2019: 10 year- 12.8% $14.00 5 year- 10.8% $12.22 * $12.00 $10.00 $8.00 $6.83 $6.09 $6.00 $4.49 $4.16 $4.09 $3.79 $3.60 $4.00 $3.02 $2.70 $2.05 $2.00 $0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Note: Net income for 2016 and after reflects the impact of new accounting guidance implemented on a prospective basis at the beginning of 2016 relating to excess tax benefits on equity compensation. * On December 22, 2017, tax legislation was signed into law which revised the corporate income tax rate from 35% to 21% effective January 1, 2018, among other modifications. As a result, the Company made an $874 million adjustment in 2017 to estimate the impact related to the tax legislation. The 2017 adjustment was treated as a non-operating event and thus excluded from net operating income. 7

Book Value Per Share (Excluding Net Unrealized Gains or Losses on Fixed Maturities) Compound Annual Growth Rate Through 2019: 10 year – 10.4% $60.00 5 year – 11.6% $48.26 $50.00 $44.32 $39.77 * $40.00 $32.13 $30.09 $30.00 $27.91 $25.85 $23.49 $21.31 $19.87 $20.00 $17.88 $10.00 $0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Note: Book value per share as presented above is a non-GAAP measure. Please see following page for GAAP. * On December 22, 2017, tax legislation was signed into law which revised the corporate income tax rate from 35% to 21% effective January 1, 2018, among other modifications. 8

Book Value Per Share Compound Annual Growth Rate Through 2019: 10 year – 14.9% $70.00 $66.02 5 year – 12.8% $60.00 $52.95 * $48.11 $50.00 $37.76 $40.00 $36.19 $32.71 $30.56 $27.66 $30.00 $25.27 $20.24 $20.00 $16.40 $10.00 $0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 * On December 22, 2017, tax legislation was signed into law which revised the corporate income tax rate from 35% to 21% effective January 1, 2018, among other modifications. 9

Insurance Operations

Components of 2019 Net Operating Income ($ in millions, except per share data) Per Share Underwriting Income $718 $6.44 Excess Investment Income 258 2.31 Tax and Parent Expenses (199) (1.79) Stock Compensation Expense, Net of Tax (24) (0.21) Net Operating Income* $752 $6.75 * Net operating income is a non-GAAP measure. Please see appendix for reconciliation to net income 11

Components of 2019 Underwriting Income ($ in millions) Life Underwriting Margin by % of Underwriting Margin Distribution Channel Premium Total $703 Million Life $703 27.9% $85 $73 Health 244 22.6% $389 $157 Other 9 Total $957 26.6% American Income Life Division Administrative Expenses Direct to Consumer Division Net of Other Income (239) 6.6% Liberty National Division Underwriting Income* $718 20.0% Other * Underwriting income is a non-GAAP measure. 12

2019 Premium by Distribution Channel ($ in millions) Health Premium by Life Premium by Distribution Channel Distribution Channel $286 $216 $99 $78 $190 $856 $1,160 $417 $294 American Income Life Division United American Division Direct to Conumer Division Family Heritage Division Liberty National Division Liberty National Division Other American Income Life Division Direct to Consumer Division 13

American Income – Life Sales ($ in millions) 10-Year Compound Annual Growth Rate – 6.4% 5-Year Compound Annual Growth Rate – 6.7% $250 $238 $223 $224 $210 $198 $200 $172 $159 $153 $150 $142 $138 $128 $100 $50 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 14

Liberty National – Total Sales ($ in millions) 5-Year Compound Annual Growth Rate – 8.4% $90 $78 $80 $71 $70 $67 $60 $60 $54 $52 $50 $40 $30 $20 $10 $0 2014 2015 2016 2017 2018 2019 15

Family Heritage – Health Sales ($ in millions) 5-Year Compound Annual Growth Rate – 7.0% $70 $66 $60 $60 $57 $51 $50 $50 $47 $40 $30 $20 $10 $0 2014 2015 2016 2017 2018 2019 16

Direct to Consumer – Life Sales ($ in millions) 10-Year Compound Annual Growth Rate – (0.5%) Since 2015 we have continued to refine and adjust our marketing programs in an effort to maximize the profitability of new business. However, over the last 5 years internet sales have increased at approximately a 2.4% compound annual growth rate. $180 $164 $158 $160 $150 $144 $141 $137 $137 $136 $140 $132 $126 $126 $120 $100 $80 $60 $40 $20 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 17

United American – Health Sales ($ in millions) 5-Year Compound Annual Growth Rate – (1.2%) $90 $84 $79 $80 $72 $70 $70 $61 $56 $60 $50 $40 $30 $20 $10 $0 2014 2015 2016 2017 2018 2019 18

United American – Health Premium ($ in millions) $450 5-Year Compound Annual Growth Rate – 6.5% $417 $381 $400 $364 $355 $345 $350 $305 $300 $250 $200 $150 $100 $50 $0 2014 2015 2016 2017 2018 2019 19

Investments

Components of 2019 Net Operating Income ($ in millions, except per share data) Per Share Underwriting Income $718 $6.44 Excess Investment Income 258 2.31 Tax and Parent Expenses (199) (1.79) Stock Compensation Expense, Net of Tax (24) (0.21) Net Operating Income* $752 $6.75 * Net operating income is a non-GAAP measure. Please see appendix for reconciliation to net income 21

2019 Excess Investment Income ($ in millions) Net investment income $ 910 Required interest on net policy liabilities (569) Interest on debt (84) Excess investment income $ 258 22

Excess Investment Income ($ in millions) 5-Year Compound Annual Growth Rate – 2.8% $270 $258 $260 $250 $245 $239 $240 $230 $225 $224 $220 $220 $210 $200 2014 2015 2016 2017 2018 2019 23