Globe Life Inc.

Industry regulation · Regulatory compliance and changes

Extensive federal and state laws regulate our business, imposing certain requirements that independent sales agents must follow in dealing with clients. Misconduct of our independent sales agents could result in violations of law by, or claims against, us or our subsidiaries.

Tax and financial reporting · Tax compliance and changes in tax law

Changes in U.S. federal income tax law could increase our tax costs or negatively impact our insurance subsidiaries' capital. Changes to the Internal Revenue Code, administrative rulings, or court decisions affecting the insurance industry, including the products insurers offer, could increase our effective tax rate and lower our net income.

Data and privacy · Data protection and privacy laws

Non-compliance with laws or regulations related to customer and consumer privacy and information security, including a failure to ensure that third parties with access to sensitive customer and consumer information maintain its confidentiality, could materially adversely affect our reputation and business operations.

Natural and catastrophic events · Climate change and environmental impact

Our business is subject to the risk of direct or indirect effects of climate change. Climate change may increase the frequency and severity of weather-related events and natural disasters, which may adversely impact our mortality and morbidity rates and disrupt our business operations.

Natural and catastrophic events · Pandemic and public health crises

Our business is subject to the risk of the occurrence of catastrophic events that could adversely affect our financial condition or operations. Our insurance operations could be exposed to the risk of catastrophic mortality or morbidity caused by events such as a pandemic or other public health issues, hurricane, earthquake, or man-made catastrophes, including acts of terrorism or war.

Natural and catastrophic events · Natural disasters and extreme weather

Claims resulting from natural or man-made catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially reduce our profitability or harm our financial condition.

Social and demographic · Public perception and reputation

We have been the target of several short sellers who have published reports making allegations about the Company, which resulted in a significant decline in the price of our common stock. In addition, these reports resulted in significant negative publicity against us, damaged our reputation, and resulted in a putative securities class action litigation and derivative shareholder litigation.

Capital structure and performance · Credit rating and cost of capital

A ratings downgrade or other negative action by a rating agency could materially affect our business, financial condition, and results of operations. Various rating agencies review the financial performance and condition of insurers, including our insurance subsidiaries, and publish their financial strength ratings as indicators of an insurer's ability to fulfill its contractual obligations.

Market and investment · Asset valuation and impairment

Our invested assets are subject to the customary risks of defaults, downgrades, and changes in market values. Our investment portfolio consists predominately of fixed income investments, where we are exposed to the risk that individual issuers will not have the ability to make required interest or principal payments.

Credit and liquidity · Credit risk and customer defaults

A concentration of these investments in any particular issuer, industry, group of related industries or geographic areas could increase this risk. Significant downgrades or defaults of issuers could negatively impact our risk-based capital and solvency ratios.

Market and investment · Interest rate and yield curve risk

Declines in interest rates expose insurance companies to the risk that they will fail to earn the level of interest on investments assumed in pricing products and in setting discount rates used to calculate policy liabilities, which could have a negative impact on income.

Credit and liquidity · Liquidity and cash flow constraints

As a holding company with no direct operations, our principal asset is the capital stock of our insurance subsidiaries, which periodically declare and distribute dividends on their capital stock. Moreover, our liquidity, including our ability to pay our operating expenses and to make principal and interest payments on debt securities or other indebtedness owed by us, depends significantly upon the surplus and earnings of our insurance subsidiaries.

Customer and revenue · Reimbursement and pricing pressure healthcare or insurance

Obtaining timely and appropriate premium rate increases for certain supplemental health insurance policies is critical. A significant percentage of the supplemental health insurance premiums that our insurance subsidiaries earn is from Medicare Supplement insurance. Medicare Supplement insurance, including conditions under which the premiums for such policies may be increased, is highly regulated at both the state and federal level.

Reputation and brand · Esg environmental social governance performance

We may not meet expectations relating to corporate responsibility and sustainability standards and practices. Certain existing or potential investors, customers and regulators evaluate our business or other practices according to a variety of corporate responsibility and sustainability standards and expectations.

Corporate governance · Internal controls and risk management

We are exposed to model risk, which is the risk of financial loss or reputational damage or adverse regulatory impacts caused by model errors or limitations, incorrect implementation of models, or misuse of or overreliance upon models.

Reputation and brand · Brand damage and negative publicity

Damage to the brand and reputation of Globe Life or its subsidiaries could affect our ability to conduct business. Negative publicity through traditional media, internet, social media, and other public forums, including short seller reports and allegations of independent agent misconduct could damage our brand or reputation.

Supply chain and procurement · Supplier operation and dependance

The Company utilizes third-party vendors, including independent sales agents, to provide certain business services and functions, which exposes the Company to risks outside of its control. The reliance on these third-party vendors creates a number of business risks, such as the risk that the Company may not maintain service quality, control or effective management of the outsourced business operations.

Digital transformation and innovation · Artificial intelligence and automation

As a result of increasingly complex AI risks, more frequent and sophisticated cyberattacks and the highly regulated nature of the insurance industry, we must continually implement new, and maintain existing, technology or adapt existing technology to protect against security and privacy incidents.

Technology infrastructure · Technology systems and infrastructure failure

Employee or agent malfeasance or errors in the handling of our information systems may result in unauthorized access to customer or proprietary information, or an inability to use our information systems to efficiently support business operations.

Cybersecurity and data protection · Third party data security and vendors

The Company may be adversely affected by a third-party vendor who operates in a poorly controlled manner or fails to deliver contracted services, which could lower revenues, increase costs, reduce profits, disrupt business, or damage the Company's reputation.