(Credit: Thinkstock; NIH)
Globe Life Inc. said today that its operations performed well in the first quarter, but that it put a $32 million provision for credit losses in its income statement due to the adoption of new credit loss accounting rules.
The McKinney, Texas-based carrier was the first life insurer to report earnings for the first quarter, and the first to have to talk about the effects of COVID-19-related disruption on its performance.
Globe Life has put many warnings about the possible effects of the COVID-19 outbreak in the "Caution Regarding Forward-Looking Statements" at the bottom of its earnings release.
"The company is closely monitoring the impact of the novel coronavirus (COVID-19) on the company's business, distribution channels, employees and policyholders," Globe Life said at the start of the release. "The full extent to which COVID-19 impacts financial results remains uncertain as of the date of this earnings release."
Global Life believes COVID-19 could hurt sales, premium revenue, claims and capital levels in the near term, the company said.
Resources
- A copy of Globe Life's earnings release is available here.
- A list of earlier articles about the new CECL accounting rules is available here.
- An earlier article about Globe Life's earnings is available here.
But Globe Life did not receive COVID-19-related insurance claims that were big enough to be material to its finances in the first quarter, and it did not suffer significant disruptions to its business, the company said.
Globe Life focuses mainly on writing basic protection life insurance and supplemental health insurance for moderate-income people, rather than life or annuity products with performance linked to the performance of the stock market. Because of the nature of the products, recent stock market volatility has had no effect on Globe Life product cash flow, the company said..
Globe Life will have a conference call to discuss its results with securities analysts starting at 11 a.m. Eastern time Thursday. Members of the public can use the webcast system on the company's website to listen to the call live, or listen to a recorded version of the call.
The Earnings
Globe Life is reporting $166 million in net income for the first quarter on $1.1 billion in revenue, compared with $185 million on $1.1 billion in revenue for the first quarter of 2019.
