Torchmark Kicks Off Life Earnings Release Round
Investors now like the idea of companies selling modest products to people of modest means.
Torchmark Corp. thrilled investors earlier this week by generating solid profits, and some profit growth, from writing and selling life and health products aimed at middle-income Americans.
(Related: What 4 Carriers Are Saying About Agents and Agent Comp)
The McKinney, Texas-based company reported $185 million in net income for the first quarter on $1.1 billion in revenue, up from $174 million in net income on $1.1 billion in revenue for the first quarter of 2018.
The company has three divisions with producing exclusive agents: Liberty National, American Income and Family Heritage Life.
The total number of exclusive producing agents increased 2%, to about 10,000.
One possible headwind for the company could be the rise of a Medicare for All system.
But Larry Hutchison, the company’s chief executive officer, told securities analysts Thursday, during a conference call, that the impact of such a shift would depend on the details.
“It could be an opportunity if we have Medicare for All and we have a Medicare system where co-pays and deductibles are covered by a Medicare-type insurance,” Hutchison said during the call.
Torchmark was the first life insurer to report first-quarter earings, and investors and securities analysts welcomed its results.
Nigel Dally and Bob Huang of Morgan Stanley sent out an email alert with the subject line “Off to a Solid Start for 2019.”
“The investment thesis for Torchmark revolves around its predictable earnings and solid capital management, which leads the company to trade at a premium relative to its more complex peers,” the Morgan Stanley analysts wrote in the alert.
Resources
Links to information about Torchmark’s latest results are available here.
A link to a recording of the earnings call is available here.
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