(Reuters) - Globe Life (NYSE:GL) posted a rise in first-quarter profit on Monday as the insurer benefited from strong investment returns and underwriting activities.
The insurance industry, known for its resilience to economic downturns, sustains a stable demand for policies, with both corporate and government spending on insurance remaining steady.
Total premiums at Globe Life rose to $1.15 billion in the first quarter from $1.10 billion a year ago.
The surge in the broader equity capital markets on the other hand has enhanced investment income for insurers, who diversify a portion of their cash across various asset classes.
Globe Life's net investment income for the quarter increased about 10% to $282.6 million.
The company's net operating income for the three months ended March 31 came in at $2.78 per share, compared with $2.53 per share in the prior-year quarter.
Globe Life expects its operating income for the year to be between $11.50 to $12.00 per share. The insurer further expects to resume share buybacks once the blackout period related to a potential acquisition ends for the first quarter.
Earlier this month, Fuzzy Panda Research disclosed a short position in the company, citing numerous cases of insurance fraud, leading Globe Life's shares to drop to their lowest in over a decade.
Globe Life denied the allegations, saying "the short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false."