Segment and Geographical Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment and Geographical Information

(2) Segment and Geographical Information

Segments. We have three primary operating segments – Term Life Insurance, Investment and Savings Products, and Senior Health. We also have a Corporate and Other Distributed Products segment.

Notable information included in profit or loss by segment was as follows:

	Three months ended June 30,						Six months ended June 30,
	2024			2023			2024			2023
	(In thousands)
Revenues:
Term life insurance segment	$	426,944		$	411,873		$	867,357		$	832,943
Investment and savings products segment		260,906			214,509			504,622			424,711
Senior health segment		12,420			14,890			19,300			33,599
Corporate and other distributed products segment		103,105			47,113			154,925			87,169
Total revenues	$	803,375		$	688,385		$	1,546,204		$	1,378,422
Net investment income:
Term life insurance segment	$	-		$	-		$	-		$	-
Investment and savings products segment		-			-			-			-
Senior health segment		-			-			-			-
Corporate and other distributed products segment		38,452			32,398			76,258			63,462
Total net investment income	$	38,452		$	32,398		$	76,258		$	63,462
Amortization of DAC:
Term life insurance segment	$	71,916		$	66,004		$	142,407		$	132,072
Investment and savings products segment		1,478			1,409			2,679			2,901
Senior health segment		-			-			-			-
Corporate and other distributed products segment		249			697			606			1,060
Total amortization of DAC	$	73,643		$	68,110		$	145,692		$	136,033
Non-cash share-based compensation expense:
Term life insurance segment	$	954		$	726		$	3,096		$	2,576
Investment and savings products segment		715			666			1,754			1,658
Senior health segment		195			171			295			330
Corporate and other distributed products segment		1,189			895			10,523			9,967
Total non-cash share-based compensation expense	$	3,053		$	2,458		$	15,668		$	14,531
Income (loss) before income taxes:
Term life insurance segment	$	147,779		$	140,113		$	286,148		$	270,654
Investment and savings products segment		74,782			59,583			140,345			115,691
Senior health segment		(264,972	)		(6,032	)		(279,125	)		(9,795	)
Corporate and other distributed products segment		50,208			(4,768	)		39,664			(20,712	)
Total income before income taxes	$	7,797		$	188,896		$	187,032		$	355,838

In April 2024, the Company executed agreements providing for the receipt of proceeds for certain claims filed by the Company under a Representation and Warranty insurance policy negotiated and purchased in connection with the acquisition of e-TeleQuote on July 1, 2021. The claims made by the Company involved breaches of certain representations and warranties relating to the pre-acquisition financial statements made by the sellers of e-TeleQuote in connection with the acquisition. The Company recognized a gain during the second quarter of 2024 of $50.0 million, which is equal to the aggregate proceeds received from the third-party insurers under the policy in May 2024, reflecting the full coverage under the policy. The Company recognized this gain in Corporate and Other Distributed Products segment revenues as it resulted from a corporate investment decision to purchase the insurance policy. On a consolidated basis, this gain is included in Other, net revenue in the accompanying unaudited condensed consolidated statements of income.

As discussed in Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies), in July 2024, subsequent to the end of the reporting period, the Company committed to exit the senior health business, which is comprised of the Senior Health segment. In the second quarter of 2024, the Company recorded impairment charges in its Senior Health segment to write off the remaining goodwill and acquired intangible assets from the e-TeleQuote acquisition. Additionally, the Company recorded $0.8 million of restructuring charges for professional services incurred in the second quarter of 2024, which are included in the Corporate and Other Distributed Products segment. Refer to Note 17 (Impairment of Goodwill and Other Long-lived Assets) and Note 18 (Income Taxes) for further discussion of these impairment charges and tax impacts, respectively. The carrying value of the net assets in the Senior Health segment after these impairment charges was $103.1 million as of June 30, 2024. We expect to incur additional restructuring costs, the extent of which are yet to be determined, in the third quarter of 2024 associated with the exit of the senior health business.

Total assets by segment were as follows:

	June 30, 2024		December 31, 2023
	(In thousands)
Assets:
Term life insurance segment	$	6,486,934	$	6,543,923
Investment and savings products segment (1)		2,410,463		2,537,079
Senior health segment		144,227		419,110
Corporate and other distributed products segment		5,524,080		5,527,620
Total assets	$	14,565,704	$	15,027,732

(1)The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, the Investment and Savings Products segment assets were $156.5 million and $141.3 million as of June 30, 2024 and December 31, 2023, respectively.

Geographical Information. Results of operations by country and long-lived assets – primarily tangible assets reported in other assets in our unaudited condensed consolidated balance sheets – were as follows:

	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(In thousands)
Revenues by country:
United States	$	707,697	$	602,132	$	1,355,039	$	1,205,982
Canada		95,678		86,253		191,165		172,440
Total revenues	$	803,375	$	688,385	$	1,546,204	$	1,378,422

	June 30, 2024		December 31, 2023
	(In thousands)
Long-lived assets by country:
United States	$	37,724	$	35,434
Canada		2,409		2,636
Other		185		197
Total long-lived assets	$	40,318	$	38,267