Primerica(PRI) ZACKS·2025-01-09 08:26Industry Overview - The Zacks Life Insurance industry includes companies offering life insurance, retirement benefits, and wealth management solutions, with products such as annuities, term life insurance, and health insurance [3] - The industry is expected to grow, with gross written premiums projected to reach 2.5 trillion by 2026, with a CAGR of 3.54% from 2025 to 2029 [9] Key Trends - Interest Rate Cuts: The Fed cut interest rates three times in 2024, totaling 150 basis points, with two more cuts expected in 2025, impacting life insurers' investment returns [5][6] - Product Redesign: Insurers are shifting from long-duration term life insurance to bundled investment products offering guaranteed retirement income, life, and healthcare benefits [7] - Technology Adoption: Increased automation, digital platforms, and online sales are driving premium growth and operational efficiency, with investments in AI, blockchain, and cognitive intelligence [11][12] Industry Performance - The life insurance industry has collectively gained 26.9%, outperforming the Finance sector's 22% increase and matching the S&P 500's 26.9% growth [15] - The industry's trailing 12-month price-to-book (P/B) ratio is 1.91X, lower than the S&P 500's 8.67X and the Finance sector's 3.97X [16] Companies to Watch - Reinsurance Group of America (RGA): Zacks Rank 1, with a 5.5% YoY earnings increase expected in 2025 and a four-quarter average earnings surprise of 17.74% [18][19] - Primerica (PRI): Zacks Rank 2, with a 7.2% YoY earnings increase expected in 2025 and a four-quarter average earnings surprise of 4.89% [20][21] - Sun Life Financial (SLF): Zacks Rank 3, with a 10.6% YoY earnings increase expected in 2025 and a long-term earnings growth rate of 7% [22][23] - Lincoln National (LNC): Zacks Rank 3, with a 9% YoY earnings increase expected in 2025 and a long-term earnings growth rate of 17% [24][25] - Voya Financial (VOYA): Zacks Rank 3, with a 26.3% YoY earnings increase expected in 2025 and a long-term earnings growth rate of 15.9% [26][27] Growth Drivers - Rising demand for retirement benefits due to the aging baby boomer population [4] - Strong sales in emerging markets like China, India, and Latin America, expected to boost premiums by 5.7% in 2025 [10] - Increased automation and digitalization driving premium growth and operational efficiency [11][12]