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Life Health > Annuities

Mortality Stays Slightly Elevated: Globe Life Exec

By Allison Bell

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What You Need to Know

  • Globe Life earnings were up.
  • Mortality is within the assumptions the company used to price its coverage.
  • The rate for some causes of death is still higher than it used to be.

Globe Life, a life insurer that focuses on covering middle-income Americans, believes that the impact of the COVID-19 pandemic may still be affecting U.S. mortality.

Thomas Kalmbach, the company’s chief financial officer, touched on mortality trends briefly last week, during a conference call the company held with securities analysts to go over earnings for the second quarter.

An analyst asked Globe Life executives whether mortality has returned to the levels that were typical before 2020, when the COVID pandemic began.

“I think the trends are good,” Kalmbach said. He emphasized that mortality has been within the range Globe Life assumed when it set its life insurance prices.

“But we’re not quite there yet,” Kalmbach said.

What it means: Most people have stopped wearing masks. The U.S. Centers for Disease Control and Prevention has ended most of its COVID-19 tracking reports.

But the virus is still killing more than 350 U.S. residents every week, and along with other infectious diseases, such as influenza, it continues to cast a shadow over any efforts by financial professionals to help clients buy life insurance, use annuities in income planning or make other arrangements tied to life expectancy.

Q2 earnings: Globe Life held the call to go over results for the second quarter with the analysts.

The second quarter ended June 30.

Globe Life is reporting $258 million in net income for the quarter on $1.4 billion in revenue, up from $215 million in net income on $1.3 billion for the second quarter of 2023.

The McKinney, Texas-based company sells life and health insurance. The life insurance businesses increased their underwriting margin, or the difference between life insurance premiums and death benefit payments, to 8% between the second quarter of 2023 and the latest quarter, to $815 million.

Death rates: Since the COVID-19 pandemic began, in early 2020, Globe Life has been one of the life insurers that’s been quickest to give analysts candid assessments of U.S. mortality.

Mortality is much lower than it was when pandemic-related mortality was peaking, and mortality trends are now helping, not, hurting, Globe Life’s earnings, Kalmbach said.

“Mortality has been fairly consistent over the last few quarters, which has been good,” he said.

He sees the mortality rate from accidents and other nonmedical causes improving.

But mortality rates from a number of causes are still higher than they were before the pandemic, Kalmbach said.

“Heart disease and cancer, although improved, are still a little bit higher,” he said. “Another one that remains elevated as a cause of death is neurological disorders, which would be stroke and Alzheimer’s. We’re keeping an eye on that.”

What the CDC says: Because of the end of pandemic-period emergency funding, the U.S. Centers for Disease Control and Prevention has stopped compiling the kinds of data that financial professionals, insurers and others could use to track COVID.

Most of the indicators that are left are based either on limited, voluntary state and local reporting programs or programs originally set up to track the spread of influenza and other upper respiratory diseases.

The CDC’s hospitalization tracker shows that, in the 12 states that still report data, including Colorado, Georgia, New York, Tennessee and Utah, a hospitalization surge began in mid-May.

In June, for example, the number of new COVID hospitalizations per 100,000 people increased to 1.7, up 50% from the June 2023 hospitalization rate in the participating states.

In July, the COVID hospitalization rate increased to 2.4 per 100,000 people. That was 109% higher than recorded in the comparable period in 2023.

A year ago, the United States began to experience a quiet, long-lasting COVID wave that was only about half the size of the spikes that hit earlier in the pandemic but big enough to conflict with mortality projections at some life insurers.

The hospitalization rate increase in the CDC’s sentinel states could be an early sign that the United States will go through a bigger COVID wave this year.

COVID-related surges in death rates tend to lag about four weeks behind surges in COVID hospitalization rate increases.

The CDC might be starting to spot the first hints of an increase in deaths. The number of weekly deaths fell to a recent low of 299 during the week ending June 8, from a 2023-2024 wave peak of 2,578 during the week ending Jan. 13.

But incomplete figures for the weeks after June 8 seem to show a modest increase in the number of COVID deaths.

For the week ending July 6, the most recent week for which the CDC has reasonably complete death count figures, the CDC recorded 394 COVID deaths.

Credit: Elise Amendola/AP

Allison Bell

Think_Allison

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