Group 1 - Primerica (PRI) is classified as a life insurance company, which influences its regulation, strength ratings, and market perception [1] - The company has a long history of investment, with over 20 years of experience in managing personal and family funds [1] Group 2 - No stock, option, or similar derivative positions are held by the analyst in any of the companies mentioned, but there is a potential for initiating a short position in PRI within the next 72 hours [2] - The article expresses the author's opinions and is not influenced by any business relationships with the companies mentioned [2]

Sales and Distribution - As of December 31, 2024, approximately 25,493 independent sales representatives were licensed to distribute mutual funds in the U.S. and Canada[88]. - During 2024, Franklin Templeton, Invesco, American Funds, and Fidelity collectively accounted for approximately 98% of mutual fund sales in the U.S.[90]. - The Lifetime Investment Program requires clients to have at least $25,000 of investable assets and utilizes 12 unaffiliated investment advisers as of December 31, 2024[97]. - In Canada, sales of segregated funds products underwritten by Primerica Life Canada have significantly decreased due to regulatory changes effective June 2023[101]. - Primerica reached an agreement with Canada Life to distribute new segregated fund contracts, with rollout beginning in early 2025[105]. Revenue Sources - Revenue from Investment and Savings Products in the U.S. is earned through upfront commissions, trailing fees, and account-based revenue[106]. - PFSL Investments Canada earns revenue from PD Funds primarily through fees based on client asset values and sales-based commissions[109]. - The company receives compensation from mortgage lenders based on a fixed percentage of the loan amount for mortgage brokering services provided[113]. - The company offers a Primerica-branded prepaid legal services program on a subscription basis, generating commissions from sales and renewals[114]. - The company has a contractual arrangement with Answer Financial, receiving commissions based on completed auto and homeowners' insurance placements and policy renewals[115]. - The company receives commissions from referrals to Vivint's home services, paying independent sales representatives a referral fee for each subscription[116]. - In Canada, the company has a referral program for mortgage loan products, earning referral fees based on the funded loan amount[118]. Financial Performance - Total revenues for 2024 increased by 12% to $3,089,143,000 compared to $2,748,507,000 in 2023, driven by higher commissions and fees, net premiums, and net investment income[408]. - Net premiums rose by 4% to $1,729,171,000 in 2024 from $1,660,314,000 in 2023, reflecting growth in the Term Life Insurance segment[408]. - Commissions and fees surged by 21% to $1,082,889,000 in 2024, up from $892,853,000 in 2023, indicating strong performance in the Investment and Savings Products segment[408]. - Net investment income increased by 14% to $155,501,000 in 2024, compared to $135,837,000 in 2023, highlighting improved returns on invested assets[408]. - Total benefits and expenses rose by 9% to $2,149,896,000 in 2024, primarily due to higher sales commissions and amortization of deferred acquisition costs (DAC)[411]. - Net income attributable to Primerica, Inc. decreased by 18% to $470,518,000 in 2024 from $576,601,000 in 2023, reflecting the loss from discontinued operations[408]. Employee and Management - As of December 31, 2024, the company employed 2,874 individuals, with 2,531 in the U.S. and 343 in Canada[174]. - The diversity of U.S. employees includes 50.6% female representation in executive management and 61.8% female representation in non-executive management[174]. - The employee retention rate for 2024 is 91%, indicating high employee satisfaction[180]. - Approximately 720 employees participate in an annual incentive program for 2024, which is tied to both corporate performance and individual achievement[178]. - The company has been recognized as a Top Workplace for eleven consecutive years from 2014 through 2024 by the Atlanta Journal-Constitution[180]. - The company was awarded by Forbes as one of America's Best Midsize Employers in 2024[180]. Regulatory Compliance - PFS Investments is registered and regulated in all 50 U.S. states and certain territories, ensuring compliance with various financial regulations[146]. - PFS Investments is required to file quarterly reports and annual audited financial statements with the SEC, adhering to minimum net capital requirements[148]. - The independent sales representatives in Canada must be registered in their respective provinces and territories, subject to regulation by the Autorité des marchés financiers and CIRO[156]. - Primerica Mortgage must hold an active mortgage company license in each state where mortgage products are offered, with independent sales representatives also needing individual licenses[161]. - The company’s U.S. insurance subsidiaries are required to conduct annual analyses of the sufficiency of their life insurance statutory reserves[135]. - The company’s U.S. insurance subsidiaries must submit an annual risk-based capital report to state regulators based on four categories of risk[138]. - OSFI has not requested Primerica Life Canada to enter into any prudential agreement nor issued any order against it[139]. - The company’s insurance subsidiaries are subject to extensive laws and regulations that may become more restrictive, potentially affecting operations[121]. Investment Strategy - The company maintains a conservative investment strategy, with no issuer concentrations outside the U.S. or Canada exceeding 5% of the fair value of the invested asset portfolio[440]. - As of December 31, 2024, the total investments in fixed-maturity securities amounted to $3,155,494, an increase of 6.8% from $2,953,595 in 2023[448]. - The distribution of fixed-maturity securities by rating shows that 42% are rated BBB, up from 39% in 2023, while AAA rated securities increased from 19% to 20%[448]. - Deferred policy acquisition costs increased by 7% to $3,680,430 in 2024, driven by new business not subject to IPO coinsurance agreements[452]. - Future policy benefits decreased by 4% to $6,503,064 in 2024, attributed to higher market observable interest rates used for discounting[453]. Cash Flow and Financing - Cash provided by operating activities increased to $862,088 in 2024 from $692,517 in 2023, primarily due to increased net income and insurance proceeds[459]. - Cash used in investing activities rose to $232,250 in 2024, influenced by timing fluctuations in debt securities and an increase in the investment portfolio size[461]. - Cash used in financing activities increased to $551,141 in 2024, reflecting higher share repurchases and stockholder dividends[463]. - As of December 31, 2024, the company maintained statutory capital and surplus well above regulatory requirements, supporting future growth[465]. - The company has established Vidalia Re as a special purpose financial captive insurance company to manage redundant reserve financing more efficiently[469]. - The company has an unsecured $200.0 million Revolving Credit Facility with a termination date of June 22, 2026[475]. - As of December 31, 2024, no amounts were outstanding under the Revolving Credit Facility, and the company was in compliance with its covenants[476]. - The applicable margins for SOFR rate loans range from 1.000% to 1.625% per annum, while base rate loans range from 0.000% to 0.625% per annum[476]. - The company expects to fully fund future policy benefits from cash flows from general account invested assets, claims reimbursed by reinsurers, and future premiums[477].

Core Insights - Primerica, Inc. (PRI) reported fourth-quarter 2024 adjusted earnings of $5.03 per share, beating the Zacks Consensus Estimate by 1.4% and reflecting an 18.4% increase from the prior-year quarter [2] - The company's total revenue for the quarter increased by 9.1% year over year to $790.1 million, surpassing the consensus mark by 3% [2] - Despite strong performance in Term Life and Investment and Savings Products, shares fell 4.3% post-earnings report due to higher benefits and expenses impacting investor confidence [1] Financial Performance - Net premiums for Q4 2024 were $440.3 million, a 3.8% increase from the previous year, but slightly missed consensus expectations [3] - Net investment income rose 1.3% year over year to $38.1 million, also missing consensus by 1.6% [3] - Commissions and fees increased by 29% year over year to $293.9 million, exceeding consensus by 9.1% [3] - Total benefits and expenses rose 12.5% to $569.6 million, driven by higher amortization of deferred policy acquisition costs and increased operating expenses [4] - Adjusted net operating income increased by 11% year over year to $169.2 million [4] Segment Performance - Term Life Insurance segment saw adjusted operating revenues increase by 4% to $450.6 million, but adjusted operating income before income taxes declined by 1% to $139.5 million, missing consensus by 3.9% [5] - Investment and Savings Products segment reported a 29% increase in adjusted operating revenues to $286 million, with adjusted operating income before income taxes rising 31% to $82 million, beating consensus by 6.5% [6] - Corporate and Other Distributed Products segment's adjusted operating revenues rose 5% to $53.5 million, with an adjusted operating loss of $1 million [7] Capital and Shareholder Returns - As of December 31, 2024, Primerica had cash and cash equivalents of $687.8 million, down from $594.1 million at the end of 2023 [8] - Total assets decreased to $14.6 billion from $15 billion at the end of 2023, while total shareholders' equity increased to $2.3 billion from $2.1 billion [8] - The company repurchased shares worth $44.4 million in Q4 and authorized a new share repurchase program of $450 million [11] - A dividend hike of 16% to $1.04 per share was approved, payable on March 14, 2025 [11] Full-Year Update - For the full year 2024, adjusted operating revenues rose by 10% year over year, and net investment income increased by 14.5% [12] - Diluted EPS for 2024 rose by 20% year over year to $19.84 per share [12]

Financial Data and Key Metrics Changes - Fourth quarter adjusted net operating income increased by 11% year-over-year, while diluted adjusted operating income per share rose by 17% [7] - For the full year, adjusted net operating income increased by 14%, and adjusted operating income per share increased by 20% [7] Business Line Data and Key Metrics Changes - In the term life segment, fourth quarter revenue was $451 million, an increase of 4% year-over-year, with a benefits and claims ratio of 58.6% compared to 58.2% in the prior year [11][12] - The investment and savings product segment saw fourth quarter revenues of $286 million, a 29% increase, driven by favorable equity market conditions and strong demand for investment solutions [18] - The corporate and other distributed product segment incurred a pre-tax adjusted operating loss of $1 million, an improvement from a loss of $5.4 million in the prior year [20] Market Data and Key Metrics Changes - The invested asset portfolio ended the year with a net unrealized loss of $206 million, compared to a loss of $131 million at the end of September [22] - The estimated RBC ratio for Primerica Life was 430% as of December 31, 2024, indicating a strong capital position [26] Company Strategy and Development Direction - The company aims for a 5% growth in adjusted client premiums (ADP) for 2025, considering the runoff of co-insurance and higher lapses [16][30] - There is a focus on improving operational efficiency through technology investments to enhance productivity and client experience [56][102] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of cost of living pressures on sales, particularly in the life insurance segment, but noted that the investment and savings product segment remains strong [35][49] - The company expects elevated operating expenses in the first quarter due to annual employee-related costs but anticipates normalization in the fourth quarter of 2025 [25][26] Other Important Information - The company returned 79% of earnings to shareholders in 2024, with expectations to maintain a similar ratio in 2025 [93][94] - The technology spend is expected to be a new run rate going forward, aimed at supporting organic growth and improving client interactions [102] Q&A Session Summary Question: Is 5% ADP growth a good run rate? - Management confirmed that the 5% growth guidance considers the runoff of co-insurance and higher lapses [30] Question: What is driving strong ISP sales despite cost of living pressures? - Management noted that larger retirement plan rollovers are less affected by cost of living pressures, contributing to strong ISP sales [36] Question: What is the expected duration of cost of living pressures? - Management indicated that improvement in cost of living is necessary for consumer behavior to normalize, but the timeline is uncertain [49] Question: How does the company plan to increase operational leverage? - Management emphasized ongoing efforts to improve processes through technology to enhance efficiency and productivity [52][56] Question: What is the outlook for term life issued policies? - Management acknowledged that cost of living headwinds have impacted sales but did not quantify the exact effect [108] Question: What are the drivers behind lower ISP redemption rates? - Management explained that a significant portion of accounts are retirement accounts, which typically have lower redemption rates [115]

Earnings Results Quarter Ended December 31, 2024 Forward-Looking Statements This presentation may contain forward-looking statements. Information on factors that could cause results to differ materially from those projected in this presentation is available in our Form 10-K for the year ended December 31, 2023, as may be modified by subsequent Forms 10-Q. These documents are available in the Investor Relations section of our website, https://investors.primerica.com. The forward- looking statements speak as ...

Core Insights - Primerica reported revenue of $790.13 million for the quarter ended December 2024, reflecting a 9.1% increase year-over-year, with EPS at $5.03 compared to $4.25 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $767.24 million by 2.98%, and the EPS also surpassed the consensus estimate of $4.96 by 1.41% [1] Financial Performance Metrics - The Life-Licensed Sales Force at the end of the period was 151,611, slightly below the average estimate of 152,342 [4] - Life Insurance Policies Issued totaled 89,664, compared to the estimated 91,743 [4] - Recruits numbered 95,497, exceeding the average estimate of 93,175 [4] - Average Client Asset Values were reported at $112.3 billion, slightly below the estimate of $112.64 billion [4] - Revenues from Commissions and Fees reached $293.85 million, a 19.1% increase year-over-year, surpassing the estimate of $269.24 million [4] - Revenues from Other, net, were $17.02 million, slightly below the estimate of $17.22 million, with a year-over-year change of 0.5% [4] - Net Premiums revenue was $440.29 million, compared to the estimate of $441.28 million, reflecting a 3.8% increase year-over-year [4] - Adjusted Operating Revenues from Investment and Savings Products were $286.05 million, exceeding the estimate of $263.01 million, with a year-over-year change of 29.1% [4] - Adjusted Operating Revenues from Term Life Insurance were $450.58 million, slightly above the estimate of $447.61 million, with a 4.5% year-over-year increase [4] - Net Investment Income was reported at $38.13 million, below the estimate of $38.76 million [4] - Adjusted Operating Revenues from Corporate and Other Distributed Products were $53.51 million, exceeding the estimate of $52.46 million, with a year-over-year change of 4.6% [4] - Direct Premiums revenue was $854.75 million, slightly below the estimate of $855.99 million, reflecting a 2.5% year-over-year increase [4] Stock Performance - Primerica's shares returned +7% over the past month, outperforming the Zacks S&P 500 composite's +4.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Primerica reported quarterly earnings of $5.03 per share, exceeding the Zacks Consensus Estimate of $4.96 per share, and showing an increase from $4.25 per share a year ago, indicating a positive earnings surprise of 1.41% [1] Group 1: Earnings Performance - The company surpassed consensus EPS estimates three times over the last four quarters, with a revenue of $790.13 million for the quarter ended December 2024, which was 2.98% above the Zacks Consensus Estimate and an increase from $724.29 million year-over-year [2] - Primerica's earnings for the previous quarter were $5.68 per share, significantly higher than the expected $4.78, resulting in a surprise of 18.83% [1][2] Group 2: Stock Performance and Outlook - Primerica shares have increased by approximately 8% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Group 3: Earnings Estimates and Industry Context - The current consensus EPS estimate for the upcoming quarter is $4.63 on revenues of $775.19 million, and for the current fiscal year, it is $20.45 on revenues of $3.16 billion [7] - The Zacks Industry Rank indicates that the Insurance - Life Insurance sector is currently in the bottom 36% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - The financial supplement for Primerica, Inc. covers the fourth quarter of 2024, providing insights into ongoing business metrics and performance evaluations[5] - Total revenues for Q4 2023 reached $854.74 million, reflecting a year-over-year increase of 20.4%[19] - Net income for the quarter ending December 2023 was $167.071 million, up from $151.935 million in the previous quarter, indicating a growth of approximately 9.4%[12] - The company reported a year-to-date net income of $601 million, which is a 4% increase compared to the previous year[19] - Adjusted net operating income for Q4 2023 was $231,000, reflecting a 43.2% increase compared to Q4 2022[15] - Adjusted operating income for the quarter was $39.08 million, reflecting a 14.2% increase year-over-year[23] - The overall performance indicates a strong financial position with positive trends in revenue and net income growth[19] Adjusted Financial Metrics - Adjusted net operating income and diluted adjusted operating earnings per share exclude the tax effect of pre-tax operating adjustments and non-recurring items, ensuring comparability in financial results[5] - Adjusted stockholders' equity removes the impact of net unrealized gains and losses on invested assets, providing a clearer picture of the company's financial health[6] - The document includes reconciliations of non-GAAP to GAAP financial measures, emphasizing the importance of these metrics in management's decision-making process[8] - Adjusted stockholders' equity per share increased to $65.8, reflecting a 1.3% growth compared to the previous period[16] Segment Performance - The financial results will be analyzed across different segments, including Term Life Insurance and Investment and Savings Products, highlighting key statistics and performance[2] - Term Life Insurance direct premiums increased to $850.6 million in Q4 2023, representing a 2.5% year-over-year growth[22] - The company anticipates continued growth in the Term Life Insurance segment, with a projected increase in direct premiums for 2024[22] - Investment & Savings product sales totaled $12,070 million in Q1 2024, a significant increase from $9,211 million in Q4 2023, marking a growth of 31.1%[61] Asset and Liability Management - Total assets increased from $14,433 million in September 2023 to $15,027 million in December 2023, representing a growth of approximately 4.1%[12] - Total liabilities rose from $12,120 million in September 2023 to $12,961 million in December 2023, an increase of about 6.9%[12] - Stockholders' equity at the end of December 2023 was $2,197.05 million, reflecting a decrease from $2,275.0 million in September 2023[12] - The company’s retained earnings increased from $2,215.3 million in September 2023 to $2,276.9 million in December 2023, reflecting a growth of approximately 2.8%[12] Investment Performance - Primerica's investment portfolio details will be provided, showcasing the company's asset management strategies and performance metrics[2] - Net investment income increased to $38.134 million in Q4 2023, a rise of 1.3% from the previous quarter, with year-to-date growth of 14.5%[19] - Adjusted net investment income reached $2,551 million, reflecting a 7.0% increase compared to the previous year[22] - The fixed income portfolio represents 80.5% of total invested assets, with an amortized cost of $3,155,494,000[49] Guidance and Future Outlook - The company provided a guidance for Q1 2024 with expected earnings per share in the range of $4.20 to $4.30[15] - Future outlook includes continued market expansion and potential new product launches, although specific details were not provided[23] - The company plans to expand its market presence and invest in new product development to drive future growth[19] - The company anticipates continued growth in revenues and income for 2024, driven by new product launches and market expansion[37] Operational Metrics - Basic earnings per share for Q4 2023 was $4.36, a decrease of 1.8% compared to Q4 2022[15] - Share count at the end of Q4 2023 was 34.9 million, a decrease of 4.7% year-over-year[15] - Life-insurance licensed sales force increased from 139.0 thousand in Q4 2023 to 141.5 thousand in Q1 2024, representing a 1.8% growth[33] - Non-renewal and terminated representatives decreased from 11.06 thousand in Q3 2023 to 10.51 thousand in Q4 2023, a decline of 4.9%[33] Credit Ratings and Financial Stability - Moody's and S&P maintained the company's credit ratings at A1 and AA- respectively, indicating strong financial stability[16] - The company has consistently received an A+ rating from A.M. Best, showcasing its strong insurance financial strength[16]

Core Viewpoint - Primerica (PRI) is expected to report quarterly earnings of $4.96 per share, reflecting a 16.7% increase year-over-year, with revenues projected at $767.24 million, a 5.9% increase from the previous year [1] Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted downward by 2.2%, indicating a reassessment by analysts [1][2] - Changes in earnings estimates are crucial for predicting investor reactions to stock performance [2] Revenue Projections - Analysts predict 'Revenues- Other, net' to be $17.22 million, a year-over-year increase of 1.7% [4] - 'Revenues- Commissions and fees' are estimated at $269.24 million, reflecting a 9.1% increase from the prior year [4] - 'Revenues- Net premiums' are expected to reach $441.28 million, indicating a 4.1% year-over-year change [4] Adjusted Operating Revenues - 'Adjusted Operating Revenues- Investment and Savings Products' is forecasted at $263.01 million, a significant increase of 18.7% from the previous year [5] - 'Adjusted Operating Revenues- Term Life Insurance' is expected to be $447.61 million, showing a 3.8% increase [5] - 'Adjusted Operating Revenues- Corporate and Other Distributed Products' is projected at $52.46 million, a 2.6% year-over-year change [6] Key Metrics - The consensus estimate for 'Life-Licensed Sales Force, End of period' is 152,342, up from 141,572 a year ago [7] - 'Life Insurance Policies Issued' are expected to reach 91,743, compared to 88,757 last year [7] - 'Recruits' are projected to be 93,175, an increase from 89,992 [7] Client Asset Values - 'Average Client Asset Values' are anticipated to reach $112.64 billion, up from $91 billion year-over-year [8] - 'New Life-Licensed Representatives' are expected to total 15,575, compared to 13,029 last year [8] Stock Performance - Over the past month, Primerica shares have increased by 6.3%, outperforming the Zacks S&P 500 composite's 2.1% change [8][9] - Based on its Zacks Rank 3 (Hold), PRI is expected to perform in line with the overall market in the upcoming period [9]

Company Overview - Primerica (PRI) is positioned well in the Zacks Insurance - Life Insurance industry and has a strong track record of exceeding earnings estimates, with an average surprise of 12.34% over the past two quarters [1][3]. Recent Earnings Performance - In the most recent quarter, Primerica reported earnings of $5.68 per share, surpassing the expected $4.78 per share by 18.83%. The previous quarter also saw a positive surprise, with actual earnings of $4.71 per share against an expectation of $4.45 per share, resulting in a 5.84% surprise [2]. Earnings Estimates and Predictions - Recent estimates for Primerica have been increasing, and the Zacks Earnings ESP (Expected Surprise Prediction) is positive, indicating a strong likelihood of another earnings beat. The company currently has an Earnings ESP of +0.03% and a Zacks Rank of 2 (Buy) [3][6]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise. This suggests that out of 10 stocks with this combination, up to seven may beat consensus estimates [4]. Importance of Earnings ESP - The Earnings ESP metric compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions. A positive Earnings ESP indicates bullish sentiment among analysts regarding the company's earnings prospects [5][6]. Upcoming Earnings Report - Primerica's next earnings report is anticipated to be released on February 11, 2025, and the current positive indicators suggest a potential for continued strong performance [6].