Question · Q4 2025
Jimmy Bhullar inquired about the increase in first-year lapses across various channels, particularly direct-to-consumer, and sought clarification on the dynamics between Medicare Supplement and Medicare Advantage, including the outlook for MedSup growth and the necessity for further price increases given elevated claim trends.
Answer
Tom Kalmbach, CFO, explained that higher first-year lapses in direct-to-consumer (DTC) and Liberty National were observed, partly due to increased internet channel sales, but noted overall sales growth remains positive. Regarding Medicare Supplement, Tom Kalmbach stated that claim trends stabilized in Q3 and Q4, and approved rate increases are deemed adequate to restore normal margins by 2027. Frank Svoboda, Co-CEO, added a note on seasonal variations in Q4. Matt Darden, Co-CEO, discussed the favorable market dynamics for MedSup due to Medicare Advantage changes and reiterated Globe Life's focus on profitability over market share. Tom Kalmbach also mentioned CMS prior authorization requirements as a potential favorable impact.
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