Oct 30, 2026 earnings call — Quarter results and Bermuda reinsurance transaction
Raised full year operating earnings per share guidance to a range of $5.05 to $5.15.
Revenue $1.1B (est $1.0B) · EPS $1.90 (est $1.10)
Key quotes
"We delivered our 17th consecutive quarter of sales growth and our 15th consecutive quarter of producing agent count growth."
"Effective October 1, we ceded approximately $270 million of U.S. statutory graded benefit life reserves from Colonial Penn Life Insurance Company to our Bermuda company."
"Net investment income remained a meaningful contributor to earnings growth, increasing 13% year-over-year and marking the 12th consecutive quarter of growth in total net investment income."
Analyst Q&A 6
free cash flow and reinsurance
Q (Randy Binner · Texas Capital): He asked what changed in the $220–$240 million free cash flow guide and whether the third reinsurance deal (Colonial Penn Life) is included and how it affects the guide.
A: They said year-to-date free cash flow was generally in line with expectations. The third treaty with the Bermuda affiliate closed on October 1 and therefore affects fourth-quarter and full-year free cash flow guidance; they also noted TechMod cash spend assumptions for 2026 and that further capital actions are being considered for 2027 subject to approvals.
"We ultimately solve for it in the context of the third treaty with the Bermuda affiliate, which, as you know, closed on October 1, therefore, impacting not September year-to-date, but fourth quarter and full year free cash flow guidance." — Paul McDonough (CFO)
expenses and Bermuda dividends
Q (Joel Hurwitz · Dowling): He asked what drove lower-than-expected expenses and if the 2026 expense level is a baseline. He also asked whether any dividends were taken from Bermuda and why the third deal covered only a subset of life business and whether more blocks exist.
A: They said the expense ratio improvement mainly reflects slightly lower dollar expenses and higher revenues from strong sales, not major one-time cost cuts, and they view the current ratio as sustainable with room to improve. On Bermuda, they said the third treaty completed the transactions they had contemplated, they don't expect a material additional block, and they have not taken dividends out as such though they captured efficiencies.
"No. We haven't taken dividends out as such." — Paul McDonough (CFO)
why not move more life to Bermuda
Q (Ryan Krueger · KBW): He asked why they are not ceding more traditional life business to Bermuda and whether the $70 million of TechMod cash in 2026 will be similar in 2027.
A: They said they studied the opportunity and concluded the chosen block size was optimal for diversification; that block covers over 600,000 policies, so it is still substantial. They also said TechMod cash spend in 2027 is expected to be a comparable amount to 2026.
"While the reserve doesn't seem like a large number, it is over 600,000 policies that are involved in the transaction." — Jeremy Williams
Bermuda decision and demand/Medicare
Q (Suneet Kamath · Jefferies): He asked if stopping ceding in-force blocks was their decision or due to regulator pressure, and whether economic pressures could hurt new production or if they need more staff/advertising to capture Medicare Supplement opportunities.
A: They said it is entirely their decision and they are not being pressured to do more or less. Management said they do not see a material reduction in demand, noted Medicare and retirement needs are relatively insensitive to macro swings, and said agents are doing well and the company is positioned to capture the Medicare Supplement opportunity.
"Yes, it's entirely our decision. We're not being pressured by anyone to do more or less." — Paul McDonough (CFO)
ROE trend and statutory effects
Q (Francis Matten · BMO): He asked what is driving the ROE improvement and whether any of the recent GAAP assumption-review favorability will flow through to statutory reserving or statutory earnings.
A: They said about 50 basis points of the ROE improvement comes from outperformance in the unallocated NII line item, and product margin and other factors also affect ROE. On statutory impact, they said the unlocking and assumption-review impacts are GAAP (LDTI) and there is not meaningful translation to statutory, which is largely book value and locked in at issue.
"Yes, if you just look at the NII not allocated line item and as we've done that sort of relative to our expectations, it's contributed -- the outperformance has contributed about 50 basis points." — Paul McDonough (CFO)
med supp, annuity assumptions, ABS purchases
Q (Wilma Jackson Burdis · Raymond James): She asked what is driving the improved high-$20 million run rate in Medicare Supplement despite unfavorable mortality, what parts of the assumption review improve annuity run rates, and details on ABS/ABF purchases.
A: They said for Medicare Supplement they updated assumptions to reflect higher near-term claims, and the new run rate assumes larger reserve releases that offset claims, resulting in about a $1 million quarterly improvement going forward. For annuities (FIA), they raised surrender assumptions and saw lower GLWB utilization, which reduced expected GLWB benefits and created immediate reserve release; for ABS/ABF, they said about $2 billion of private credit exists, roughly half ABF, and ABF is higher-rated, structured consumer credit with excess spread and credit support, short duration, and a good fit for ALM.
"And those 2 things together lowered our GLWB benefit expectations in the future and created immediate reserve release in our MRB." — Jeremy Williams