Torchmark reported first-quarter earnings of $134 million and beat analysts’ expectations. The financial services holding company specializes in life and supplemental health insurance for middle-income Americans
But it was the “agent story” at the company’s Liberty National subsidiary that caught the attention of the Wall Street number crunchers.
Average agent count at Liberty National in the first quarter rose 18 percent to 1,820 compared with the year-ago period, the company said.
Torchmark distributes products through direct response as well as exclusive and independent insurance agencies. Brands include American Income Life, National Income Life, Globe Life, Liberty National Life, United American and Family Heritage Life.
The quality of the agents being recruited at Liberty National is “the highest it’s been in the last several years,” Torchmark co-chairman and co-CEO Larry M. Hutchison said in a call with analysts.
Liberty National’s growth is the result of a long and steady initiative to build up and recast the firm’s ranks of middle managers who are responsible for recruiting and training agents, said Gary L. Coleman, Torchmark co-chairman and co-CEO.
“We really didn't have that before, but the middle management grew almost 40 percent last year,” said Coleman.
“We want to see that kind of growth this year, but we'll certainly see growth and as that middle management grows, then it helps us to recruit and train new agents,” Coleman said in response to analysts. “So we think we're on a real good footing there.”
It has been “decades” since Liberty National has delivered such robust increases in its agent force, the company executives said.
Parallels at Family Heritage
At Torchmark’s Family Heritage subsidiary, average producing agent count rose 8 percent to 894 in the first quarter compared with the year-ago period, the company said.
There, too, the growing ranks of middle managers has introduced a new management track to tell agents what is expected of them on their way to eventually becoming agency owners, Torchmark executives said.
What is taking place at Family Heritage is a continuation of what started at Liberty National in 2011, Hutchison said.
Liberty National and Family Heritage have followed American Income’s lead in creating the leadership framework to build out the agents and the agency force.
At American Income, average first-quarter agent count rose 8 percent to 6,713 agents compared with the year-ago period.
Torchmark reported net income of $1.11 per share. Earnings, adjusted to account for discontinued operations and non-recurring costs, came to $1.15 per share.
The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.14 per share.
The life and health insurance company posted revenue of $1.02 billion in the period. Its adjusted revenue was $1.03 billion.
Torchmark expects full-year earnings in the range of $4.63 to $4.77 per share.
As of last week, Torchmark shares have climbed slightly more than 1 percent since the beginning of the year, while the Standard & Poor's 500 index has increased slightly more than 4 percent.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.
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