Life-licensed sales force grew 7% driven by
solid recruiting and a 17% increase in new life
licenses
Term Life net premiums grew 5%; adjusted
direct premiums up 6%
Issued Term Life face amount of $31 billion,
up 5%; total in force coverage of $958 billion
Investment and Savings Products sales of
$2.9 billion, up 34%
Investment and Savings Products client asset
values up 26%, ending the quarter at $111 billion
Net earnings per diluted share from
continuing operations (EPS) of $5.72 increased 31% (including a
remeasurement gain of $0.52 per diluted share); return on
stockholders’ equity (ROE) of 38.3%
Diluted adjusted operating earnings per
share of $5.68 increased 28% (including a remeasurement gain of
$0.52 per diluted adjusted share); adjusted net operating income
return on adjusted stockholders’ equity (ROAE) of 36.5%
Declared dividend of $0.90 per share,
payable on December 12, 2024; repurchased $129 million of common
stock during the quarter
Primerica, Inc. (NYSE: PRI) today announced financial results
for the quarter ended September 30, 2024. Total revenues of $774.1
million, increased 11% compared to the third quarter of 2023. Net
income from continuing operations of $194.7 million increased 24%,
while net earnings per diluted share from continuing operations of
$5.72 increased 31% compared to the prior year period.
Comparisons to the prior year period were impacted by the
Company’s annual actuarial assumption review, as described below,
which resulted in a net remeasurement gain of $23.0 million, or
$0.52 after tax earnings per diluted share. The Company recorded a
remeasurement gain of $28.2 million in the Term Life segment and a
remeasurement loss of $5.2 million in the Corporate and Other
Distributed Products segment.
Net income and diluted earnings per share, including
discontinued operations, were $164.4 million and $4.83,
respectively during the third quarter of 2024 compared to $152.1
million and $4.23, respectively in the prior year period. On
September 30, 2024, the Company exited its senior health business
by permanently surrendering and relinquishing its rights to
e-TeleQuote Insurance, Inc. with no significant continuing
involvement. Consequently, the senior health business’ financial
results have been reported in discontinued operations for all
periods presented.
Adjusted operating revenues of $770.1 million increased 10%
compared to the third quarter of 2023. Adjusted net operating
income of $193.2 million increased 21%, while adjusted operating
earnings per diluted share of $5.68 grew 28% year-over-year.
Comparisons to the prior year period were impacted by the Company’s
annual actuarial assumption review, as described above. A
reconciliation of non-GAAP to GAAP financial measures is included
at the end of this release.
Distribution results during the third quarter were strong,
driven by sustained recruiting momentum and growth in new
life-licensed representatives. Financial results in the Term Life
segment, excluding the remeasurement gain, benefited from continued
strong sales and stable margins. Results in the Investment and
Savings Products segment were positively impacted by favorable
equity market conditions, which fueled sales growth and higher
client asset values.
“Our results continue to reflect the power of Primerica’s
distribution model as we meet the increasing financial needs of
middle-income families,” said Glenn Williams, Chief Executive
Officer of Primerica, Inc. “In the third quarter, we were able to
successfully leverage the momentum created by our convention in
July 2024 to accelerate growth.”
Third Quarter Distribution & Segment Results
Distribution Results
Q3 2024
Q3 2023
% Change
Life-Licensed Sales Force
148,890
139,053
7
%
Recruits
142,655
92,269
55
%
New Life-Licensed Representatives
14,349
12,311
17
%
Life Insurance Policies Issued
93,377
88,589
5
%
Life Productivity (1)
0.21
0.21
*
Issued Term Life Face Amount ($ billions)
(2)
$
30.8
$
29.5
5
%
ISP Product Sales ($ billions)
$
2.9
$
2.2
34
%
Average Client Asset Values ($
billions)
$
108.2
$
91.5
18
%
Closed U.S. Mortgage Volume ($ million
brokered)
$
105.4
$
82.7
27
%
__________________________
(1)
Life productivity equals the average
monthly policies issued divided by the average number of life
insurance licensed representatives.
(2)
Includes face amount on issued term life
policies, additional riders added to existing policies, and face
increases under increasing benefit riders.
* Not calculated
Segment Results
Q3 2024
Q3 2023
% Change
($ in thousands)
Adjusted Operating Revenues:
Term Life Insurance
$
450,306
$
428,772
5
%
Investment and Savings Products
266,073
218,898
22
%
Corporate and Other Distributed Products
(1)
53,711
52,102
3
%
Total adjusted operating revenues
(1)
$
770,090
$
699,772
10
%
Adjusted Operating Income (Loss) before
income taxes:
Term Life Insurance
$
178,354
$
141,222
26
%
Investment and Savings Products
79,911
64,373
24
%
Corporate and Other Distributed Products
(1)
(5,713
)
3,065
NM
Total adjusted operating income before
income taxes (1)
$
252,552
$
208,660
21
%
__________________________
(1)
See the Non-GAAP Financial Measures
section and the Adjusted Operating Results reconciliation tables at
the end of this release for additional information.
Life Insurance Licensed Sales Force
The Company introduced new recruiting incentives for July and
the beginning of August to further the momentum created at the
convention. This led to a record number of new recruits and a 17%
increase in the number of new licenses. During the third quarter, a
total of 142,655 new recruits became part of Primerica and 14,349
individuals obtained a new life license. The size of the sales
force increased 7% year-over-year, for a total of 148,890
life-licensed representatives as of September 30, 2024.
Term Life Insurance
During the third quarter of 2024, the Company issued 93,377 new
life insurance policies, up 5% year-over-year. Productivity as
measured by the average monthly rate of new policies issued per
life-licensed independent sales representative remained unchanged
at 0.21.
Third quarter revenues of $450.3 million increased 5% compared
to the third quarter of 2023 driven by 6% growth in adjusted direct
premiums. Income before income taxes of $178.4 million in the
current year period included a $28.2 million remeasurement gain
primarily due to an assumption change stemming from the ongoing
decline in disability incidence rates under our waiver of premium
rider, resulting in a 26% increase year over year and a benefits
and claims ratio of 53.2%. Excluding the impact of the
remeasurement gain, the benefits and claims ratio would have been
57.6%. The DAC amortization and insurance commissions ratio at
11.9% and the insurance expense ratio at 7.4% remained stable
year-over-year. The Term Life Insurance operating margin at 27.5%
was favorably impacted by the remeasurement gain in the current
year period. Excluding the impact of the remeasurement gain, the
Term Life Insurance operating margin would have been 23.1%.
Investment and Savings Products
Ending client asset values continued to benefit from strong
equity market appreciation, ending the quarter at $111.2 billion,
up 26% compared to the prior year period. Total product sales
during the quarter were $2.9 billion, up 34% year-over-year, driven
by strong investor demand for mutual funds, annuities and managed
accounts, likely influenced by strong equity market performance.
Net client inflows during the quarter were $444 million.
Third quarter revenues of $266.1 million increased 22% compared
to the prior year period, while income before income taxes of $79.9
million increased 24%. Revenues from sales-based commissions and
fees increased 32%, while sales-based commission expenses increased
27%. Revenue growth slightly outpaced correlated product sales due
to continued strong client demand for variable annuities, on which
we earn higher up-front fees. Asset-based revenues increased 19%,
largely consistent with the growth in average client asset values.
The change in asset-based commission expenses was in line with
asset-based revenues.
Corporate and Other Distributed Products
During the third quarter of 2024, the segment recorded a pre-tax
adjusted operating loss of $5.7 million compared to pre-tax
adjusted operating income of $3.1 million in the prior year period.
The year-over-year decline was primarily due to a $5.2 million
remeasurement loss on a closed book of non-term life insurance
business, lower revenues from certain other distributed products
and growth in other operating expenses. This was partly offset by
higher net investment income ("NII") due to higher yields on
investments and growth in the size of the portfolio.
Taxes
The effective tax rate from continuing operations remained
largely unchanged at 23.5% in the third quarter of 2024 compared to
23.7% in the prior year period.
Capital
The Company repurchased 510,911 shares of common stock for
$128.8 million during the third quarter of 2024 and the Board of
Directors has approved a dividend of $0.90 per share, payable on
December 12, 2024 to stockholders of record on November 21, 2024.
Primerica Life Insurance Company’s statutory risk-based capital
(RBC) ratio was estimated to be about 440% as of September 30,
2024.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with
U.S. generally accepted accounting principles (“GAAP”), the Company
presents certain non-GAAP financial measures. Specifically, the
Company presents adjusted direct premiums, other ceded premiums,
adjusted operating revenues, adjusted operating income before
income taxes, adjusted net operating income, diluted adjusted
operating earnings per share and adjusted stockholders' equity.
Adjusted direct premiums and other ceded premiums are net of
amounts ceded under coinsurance transactions that were executed
concurrent with our initial public offering (the “IPO coinsurance
transactions”) for all periods presented. We exclude amounts ceded
under the IPO coinsurance transactions in measuring adjusted direct
premiums and other ceded premiums to present meaningful comparisons
of the actual premiums economically maintained by the Company.
Amounts ceded under the IPO coinsurance transactions will continue
to decline over time as policies terminate within this block of
business.
Adjusted operating revenues, adjusted operating income before
income taxes, adjusted net operating income and diluted adjusted
operating earnings per share exclude the impact of investment gains
(losses), including credit impairments, and fair value
mark-to-market (“MTM”) investment adjustments for all periods
presented. We exclude investment gains (losses), including credit
impairments, and MTM investment adjustments in measuring these
non-GAAP financial measures to eliminate period-over-period
fluctuations that may obscure comparisons of operating results due
to items such as the timing of recognizing gains (losses) and
market pricing variations prior to an invested asset’s maturity or
sale that are not directly associated with the Company’s insurance
operations.
Adjusted operating income before taxes, adjusted net operating
income, and diluted adjusted operating earnings per share exclude
corporate restructuring and related charges associated with the
decision to exit the senior health business. We exclude these items
from our non-GAAP financial measures as they are not useful in
evaluating the Company’s ongoing operations. Adjusted net operating
income and diluted adjusted operating earnings per share also
exclude the tax effect of pre-tax operating adjustments. We exclude
these items from our non-GAAP financial measures as they represent
the tax effect of pre-tax operating adjustments and/or
non-recurring items that will cause incomparability between
period-over-period results.
Adjusted stockholders’ equity excludes the impact of net
unrealized investment gains (losses) recorded in accumulated other
comprehensive income (loss) for all periods presented. We exclude
unrealized investment gains (losses) in measuring adjusted
stockholders’ equity as unrealized gains (losses) from the
Company’s available-for-sale securities are largely caused by
market movements in interest rates and credit spreads that do not
necessarily correlate with the cash flows we will ultimately
realize when an available-for-sale security matures or is sold.
Adjusted stockholders’ equity also excludes the difference in
future policy benefits calculated using the current discount rate
and future policy benefits calculated using the locked-in discount
rate at contract issuance recognized in accumulated other
comprehensive income (loss). We exclude the impact from the
difference in the discount rate in measuring adjusted stockholders'
equity as such difference is caused by market movements in interest
rates that are not permanent and may not align with the cash flows
we will ultimately incur when policy benefits are settled.
Our definitions of these non-GAAP financial measures may differ
from the definitions of similar measures used by other companies.
Management uses these non-GAAP financial measures in making
financial, operating and planning decisions and in evaluating the
Company’s performance. Furthermore, management believes that these
non-GAAP financial measures may provide users with additional
meaningful comparisons between current results and results of prior
periods as they are expected to be reflective of the core ongoing
business. These measures have limitations and users should not
consider them in isolation or as a substitute for analysis of the
Company’s results as reported under GAAP. Reconciliations of GAAP
to non-GAAP financial measures are attached to this release.
Earnings Webcast Information
Primerica will hold a webcast on Thursday, November 7, 2024, at
10:00 a.m. Eastern, to discuss the quarter’s results. To access the
webcast, go to https://investors.primerica.com at least 15 minutes
prior to the event to register, download and install any necessary
software. A replay of the call will be available for approximately
30 days. This release and a detailed financial supplement will be
posted on Primerica’s website.
Forward-Looking Statements
Except for historical information contained in this press
release, the statements in this release are forward-looking and
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements contain known and unknown risks and uncertainties that
may cause our actual results in future periods to differ materially
from anticipated or projected results. Those risks and
uncertainties include, among others, our failure to continue to
attract and license new recruits, retain sales representatives or
license or maintain the licensing of sales representatives; new
laws or regulations that could apply to our distribution model,
which could require us to modify our distribution structure;
changes to the independent contractor status of sales
representatives; our or sales representatives’ violation of or
non-compliance with laws and regulations; litigation and regulatory
investigations and actions concerning us or sales representatives;
differences between our actual experience and our expectations
regarding mortality, persistency, disability or insurance as
reflected in the pricing for our insurance policies; changes in
federal, state and provincial legislation or regulation that
affects our insurance, investment product and mortgage businesses;
our failure to meet regulatory capital ratios or other minimum
capital and surplus requirements; a significant downgrade by a
ratings organization; the failure of our reinsurers or reserve
financing counterparties to perform their obligations; the failure
of our investment products to remain competitive with other
investment options or the loss of our relationship with one or more
of the companies whose investment products we provide; heightened
standards of conduct or more stringent licensing requirements for
sales representatives; inadequate policies and procedures regarding
suitability review of client transactions; revocation of our
subsidiary’s status as a non-bank custodian; a significant change
to or disruption in the mortgage lenders’ mortgage businesses or an
inability of the mortgage lenders to satisfy their contractual
obligations to us; economic downcycles that impact our business,
financial condition and results of operations; major public health
pandemics, epidemics or outbreaks or other catastrophic events; the
failure of our or a third-party partner’s information technology
systems, breach of our information security, failure of our
business continuity plan or the loss of the Internet; any failure
to protect the confidentiality of client information; the current
legislative and regulatory climate with regard to privacy and
cybersecurity; cyber-attack(s), security breaches; the effects of
credit deterioration and interest rate fluctuations on our invested
asset portfolio and other assets; incorrectly valuing our
investments; changes in accounting standards may impact how we
record and report our financial condition and results of
operations; the inability of our subsidiaries to pay dividends or
make distributions; litigation and regulatory investigations and
actions; a significant change in the competitive environment in
which we operate; the loss of key personnel or sales force leaders;
the efficiency and success of business initiatives to enhance our
technology, products and services; any acquisition or investment in
businesses that do not perform as we expect or are difficult to
integrate; and fluctuations in the market price of our common stock
or Canadian currency exchange rates. These and other risks and
uncertainties affecting us are more fully described in our filings
with the Securities and Exchange Commission, which are available in
the "Investor Relations" section of our website at
https://investors.primerica.com. Primerica assumes no duty to
update its forward-looking statements as of any future date.
About Primerica, Inc.
Primerica, Inc., headquartered in Duluth, GA, is a leading
provider of financial products and services to middle-income
households in North America. Independent licensed representatives
educate Primerica clients about how to better prepare for a more
secure financial future by assessing their needs and providing
appropriate solutions through term life insurance, which we
underwrite, and mutual funds, annuities and other financial
products, which we distribute primarily on behalf of third parties.
We insured approximately 5.7 million lives and had approximately
2.9 million client investment accounts on December 31, 2023.
Primerica, through its insurance company subsidiaries, was the #2
issuer of Term Life insurance coverage in the United States and
Canada in 2023. Primerica stock is included in the S&P MidCap
400 and the Russell 1000 stock indices and is traded on The New
York Stock Exchange under the symbol “PRI”.
PRIMERICA, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(Unaudited)
September 30,
2024
December 31,
2023
(In thousands)
Assets
Investments:
Fixed-maturity securities
available-for-sale, at fair value
$
2,994,955
$
2,719,467
Fixed-maturity security held-to-maturity,
at amortized cost
1,330,430
1,386,980
Short-term investments available-for-sale,
at fair value
-
276
Equity securities, at fair value
28,411
29,680
Trading securities, at fair value
3,235
18,383
Policy loans and other invested assets
52,842
51,175
Total investments
4,409,873
4,205,961
Cash and cash equivalents
550,142
594,148
Accrued investment income
26,389
23,958
Reinsurance recoverables
2,873,528
3,015,777
Deferred policy acquisition costs, net
3,636,964
3,447,234
Agent balances, due premiums and other
receivables
300,697
269,216
Intangible assets, net
45,275
45,275
Income taxes
128,479
120,035
Operating lease right-of-use assets
48,190
51,506
Other assets
394,494
439,940
Separate account assets
2,401,137
2,395,842
Assets from discontinued operations
entities
-
418,840
Total assets
$
14,815,168
$
15,027,732
Liabilities and Stockholders'
Equity
Liabilities:
Future policy benefits
$
6,919,418
$
6,742,025
Unearned and advance premiums
16,186
14,876
Policy claims and other benefits
payable
496,835
513,803
Other policyholders' funds
398,464
435,094
Note payable
594,311
593,709
Surplus note
1,330,090
1,386,592
Income taxes
20,524
76,257
Operating lease liabilities
56,930
58,893
Other liabilities
549,209
579,045
Payable under securities lending
85,236
99,785
Separate account liabilities
2,401,137
2,395,842
Liabilities from discontinued operations
entities
-
65,844
Total liabilities
12,868,340
12,961,765
Stockholders' equity
Common stock
335
350
Paid-in capital
-
-
Retained earnings
2,132,015
2,276,946
Accumulated other comprehensive income
(loss), net of income tax:
Effect of change in discount rate
assumptions on the liability for future policy benefits
(71,241
)
(39,086
)
Unrealized foreign currency translation
gains (losses)
(10,771
)
(2,235
)
Net unrealized gains (losses) on
available-for-sale securities
(103,510
)
(170,008
)
Total stockholders' equity
1,946,828
2,065,967
Total liabilities and stockholders'
equity
$
14,815,168
$
15,027,732
PRIMERICA, INC. AND
SUBSIDIARIES
Condensed Consolidated
Statements of Income
(Unaudited)
Three months ended September
30,
2024
2023
(In thousands, except
per-share amounts)
Revenues:
Direct premiums
$
852,452
$
831,681
Ceded premiums
(412,645
)
(411,015
)
Net premiums
439,807
420,666
Commissions and fees
271,901
227,514
Net investment income
41,109
34,730
Investment gains (losses)
2,209
(1,795
)
Other, net
19,103
16,381
Total revenues
774,129
697,496
Benefits and expenses:
Benefits and claims
164,363
162,062
Future policy benefits remeasurement
(gain) loss
(23,019
)
179
Amortization of deferred policy
acquisition costs
75,539
69,405
Sales commissions
142,254
116,200
Insurance expenses
63,529
57,821
Insurance commissions
7,180
7,911
Interest expense
6,093
6,632
Other operating expenses
83,612
70,902
Total benefits and expenses
519,551
491,112
Income from continuing operations before
income taxes
254,578
206,384
Income taxes from continuing
operations
59,841
48,930
Income from continuing operations
194,737
157,454
Loss from discontinued operations, net of
income tax
(30,364
)
(5,391
)
Net income
$
164,373
$
152,063
Basic earnings per share:
Continuing operations
$
5.73
$
4.38
Discontinued operations
(0.89
)
(0.15
)
Basic earnings per share
$
4.84
$
4.23
Diluted earnings per share:
Continuing operations
$
5.72
$
4.38
Discontinued operations
(0.89
)
(0.15
)
Diluted earnings per share
$
4.83
$
4.23
Weighted-average shares used in
computing earnings per share:
Basic
33,834
35,760
Diluted
33,891
35,822
PRIMERICA, INC. AND
SUBSIDIARIES
Consolidated Adjusted
Operating Results Reconciliation
(Unaudited)
Three months ended September
30,
2024
2023
%
Change
(In thousands, except
per-share amounts)
Total revenues
$
774,129
$
697,496
11
%
Less: Investment (losses) gains
2,209
(1,795
)
Less: 10% deposit asset MTM included in
NII
1,830
(481
)
Adjusted operating revenues
$
770,090
$
699,772
10
%
Income from continuing operations before
income taxes
$
254,578
$
206,384
23
%
Less: Investment (losses) gains
2,209
(1,795
)
Less: 10% deposit asset MTM included in
NII
1,830
(481
)
Less: Restructuring costs
(2,013
)
-
Adjusted operating income before income
taxes
$
252,552
$
208,660
21
%
Income from continuing operations
$
194,737
$
157,454
24
%
Less: Investment (losses) gains
2,209
(1,795
)
Less: 10% deposit asset MTM included in
NII
1,830
(481
)
Less: Restructuring costs
(2,013
)
-
Less: Tax impact of preceding items
(476
)
535
Adjusted net operating income
$
193,187
$
159,195
21
%
Diluted earnings per share from continuing
operations
$
5.72
$
4.38
31
%
Less: Net after-tax impact of operating
adjustments
0.04
(0.05
)
Diluted adjusted operating earnings per
share
$
5.68
$
4.43
28
%
TERM LIFE INSURANCE
SEGMENT
Adjusted Premiums
Reconciliation
(Unaudited)
Three months ended September
30,
2024
2023
% Change
(In thousands)
Direct premiums
$
847,626
$
826,665
3
%
Less: Premiums ceded to IPO coinsurers
198,726
212,951
Adjusted direct premiums
648,900
613,714
6
%
Ceded premiums
(411,526
)
(409,801
)
Less: Premiums ceded to IPO coinsurers
(198,726
)
(212,951
)
Other ceded premiums
(212,800
)
(196,850
)
Net premiums
$
436,100
$
416,864
5
%
CORPORATE AND OTHER
DISTRIBUTED PRODUCTS SEGMENT
Adjusted Operating Results
Reconciliation
(Unaudited)
Three months ended September
30,
2024
2023
% Change
(In thousands)
Total revenues
$
57,750
$
49,826
16
%
Less: Investment gains (losses)
2,209
(1,795
)
Less: 10% deposit asset MTM included in
NII
1,830
(481
)
Adjusted operating revenues
$
53,711
$
52,102
3
%
Income (loss) before income taxes
$
(3,687
)
$
789
NM
Less: Investment gains (losses)
2,209
(1,795
)
Less: 10% deposit asset MTM included in
NII
1,830
(481
)
Less: Restructuring costs
(2,013
)
-
Adjusted operating income (loss) before
income taxes
$
(5,713
)
$
3,065
NM
PRIMERICA, INC. AND
SUBSIDIARIES
Adjusted Stockholders' Equity
Reconciliation
(Unaudited)
September 30, 2024
December 31, 2023
%
Change
(In thousands)
Stockholders' equity
$
1,946,828
$
2,065,967
(6
)%
Less: Net unrealized gains (losses)
(103,510
)
(170,008
)
Less: Effect of change in discount rate
assumptions on the liability for future policy benefits
(71,241
)
(39,086
)
Adjusted stockholders' equity
$
2,121,579
$
2,275,061
(7
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106746785/en/
Investor Contact: Nicole Russell 470-564-6663 Email:
Nicole.Russell@primerica.com
Media Contact: Susan Chana 404-229-8302 Email:
Susan.Chana@Primerica.com
Primerica (NYSE:PRI)
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