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Globe Life Sees Agent Recruitment Improving

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What You Need to Know

  • Hutchison said agent productivity increased.
  • More new agents are coming in through personal referrals from Globe Life agents.
  • The COVID-19 pandemic claim total was $17 million higher than expected.

The strong job market continued to hit Globe Life’s agent count in the first quarter, but company executives say recruitment appears to be stabilizing.

Globe Life is a McKinney, Texas-based company that focuses on selling life insurance and health insurance to middle-income families through career agents and a direct marketing program.

The company reported Wednesday, when it released earnings for the latest quarter, that it had an average of 13,141 agents making sales in the latest quarter, down 5.7% from the total for the first quarter of 2021.

Early in the COVID-19 pandemic, pandemic-related social distancing rules hurt Globe Life’s efforts to recruit agents and get new agents trained and licensed.

Securities analysts asked on Thursday in a conference call Globe Life held to discuss its results with analysts, how the tight job market is affecting agent recruitment.

Larry Hutchison, the co-CEO, acknowledged that low unemployment is a concern.

“Recruiting has been challenging because there are so many work opportunities,” Hutchison said.

But he noted that recruitment improved at one company unit, American Income, toward the end of the first quarter; that the productivity of the agents still with Globe Life has improved; and that more of the new agents are coming in through personal referrals from Globe Life’s own agents.

“Personal recruits stay twice as long as the recruits from other sources,” he said.

Meanwhile, even if employment levels are high, “there’s absolutely no shortage of underemployed workers looking for a better opportunity,” Hutchison said.

The Earnings

Globe Life was the first U.S. company known mainly as a life or annuity issuer to post its earnings for the first quarter.

The company reported $164 million in net income for the quarter on $1.3 billion in revenue, compared with $179 million in net income on $1.3 billion in revenue for the first quarter of 2021.

Overall life insurance sales increased 8%, to $139 million, and overall health insurance sales also increased 8%, to $43 million.

COVID-19

Frank Svoboda, Globe Life’s chief financial officer, said that the company received $46 million in life insurance claims related to COVID-19 in the first quarter, and that the pandemic claim total was $17 million higher than expected.

Globe Life paid about $3 million in life claims per 10,000 U.S. pandemic-related deaths. That was toward the low end of the projected range.

The level of Globe Life life insurance claims per 10,000 deaths was relatively low because the average age of the people who died from COVID-19 in the quarter was relatively high, and the percentage of deaths occurring in the South fell.

Typical Globe Life life insurance insureds are working-age people in the South.

But the Centers for Disease Control and Prevention estimates that at least 155,000 Americans died from COVID-19 during the quarter, and Globe Life has been operating under the assumption that the country could hold the number of deaths to less than 85,000, Svoboda said.

Instead, he said, the U.S. death toll was the highest since the first quarter of 2021.

Life claims resulting from conditions other than COVID-19 were about $7 million higher than expected, Svoboda said.

(Image: Adobe)