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.

Globe Life is geographically diversified with a robust product offering that includes life and supplemental health insurance products for middle class and retired individuals. Globe Life’s products are offered through agents and direct-to-consumer. During 2021, Globe Life acquired Beazley Benefits, an agency distribution channel. Additionally, Globe Life continues to expand its formalized ERM program and AM Best believes that the group’s ERM program is appropriate given its risk profile.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for the following life/health subsidiaries of Globe Life Inc.:

• American Income Life Insurance Company
• Globe Life and Accident Insurance Company
• Liberty National Life Insurance Company
• United American Insurance Company
• Globe Life Insurance Company of New York
• National Income Life Insurance Company
• Family Heritage Life Insurance Company of America

The following Short-Term IR has been affirmed:

Globe Life Inc. —

— AMB-1 (Outstanding) on commercial paper

The following Long-Term IR’s have been affirmed with stable outlooks:

Globe Life Inc. —

— “bbb+” (Good) on $300 million 3.80% senior unsecured notes, due 2022

— “bbb+” (Good) on $200 million 7.875% senior unsecured notes, due 2023

— “bbb+” (Good) on $550 million 4.55% senior unsecured notes, due 2028

— “bbb+” (Good) on $400 million 2.15% senior unsecured, due 2030

— “bbb-” (Good) on $325 million 4.25% junior subordinated debentures, due 2061

The following indicative Long-Term IRs available under the shelf registration have been affirmed with stable outlooks:

Globe Life Inc. —

— “bbb+” (Good) on senior unsecured debt

— “bbb” (Good) on subordinated debt

— “bbb-” (Good) on preferred stock

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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