first_img Commissions and fees 447,765 By Digital AIM Web Support – February 9, 2021 Adjusted operating revenues 31,556 25,051 8.43 224,321 Shares used in computing earnings per share: 81,995 39,554 180,945 % Life Insurance Licensed Sales Force At the end of the year, the Company had 134,907 independent life-licensed representatives, which represents a 3% increase year-over-year. Special COVID-19 licensing measures enacted by various states added 3,597 licenses that were issued on a temporary basis and 2,508 licenses with extended renewal dates. The Company estimates that approximately 4,200 individuals included in the year-end number will either not pursue the steps necessary to obtain a permanent license or will not renew an expiring license. Recruiting activity remained robust with 80,599 new recruits added in the fourth quarter of 2020, a 33% increase year-over-year. The licensing process remains challenged; however, gradual improvements led to a total of 12,119 new licenses during the quarter, including 1,668 temporary licenses issued by the states under their special COVID-19 policies, and represented a 9% increase compared to the prior year’s fourth quarter. Term Life Insurance Demand for protection products continued to positively impact sales during the fourth quarter. The Company issued 87,307 new life insurance policies during the period, a 22% increase compared to the fourth quarter of 2019. Productivity for the quarter, defined as policies issued per life insurance licensed representative per month, was 0.21 compared to 0.18 in the prior year period. Revenues of $369.0 million during the fourth quarter increased 16% compared to the fourth quarter of 2019, while pre-tax income of $89.4 million increased 9% year-over-year. Higher sales, along with favorable persistency throughout the year, moved the growth rate in adjusted direct premiums up to 15% year-over-year and added $7 million to pre-tax income for the quarter. Strong persistency also led to $23 million less DAC amortization and $13 million higher benefit reserve increases being recognized year-over-year. COVID-19 related death claims, net of reinsurance, during the quarter were estimated to be $14 million. As typically done in the fourth quarter, actuarial assumptions were locked in for 2020 business, resulting in a $5.5 million increase in benefit reserves due to lower long-term interest rate assumptions. Investment and Savings Products During the fourth quarter, investment product sales were $2.1 billion, a 4% increase year-over-year. Sales of mutual funds and managed accounts were both up 17%, while annuities declined 15% as the income benefits on these products become less attractive. Net client inflows of $642 million during the quarter continued to compare very favorably to the prior year period due to a combination of strong sales and low client redemptions. Average client asset values were $76.1 billion, an increase of 12% compared to the fourth quarter of 2019. Revenues of $193.3 million during the fourth quarter increased 6% compared to the same quarter in 2019, while pre-tax income of $56.7 million increased 7%. Despite a 5% increase in revenue generating sales, associated revenues were flat year-over-year as the mix of products sold continued to weigh more heavily toward mutual funds, which have a lower sales-based commission rate compared to annuities. Asset-based revenues increased 11% year-over-year, in line with the increase in average client asset values. Sales-based and asset-based commissions were largely correlated to associated revenues. Results also reflected a $1 million reduction in Canadian segregated fund DAC amortization due to favorable market performance and lower redemptions. Corporate and Other Distributed Products During the fourth quarter of 2020, the segment recorded an operating loss before taxes of $18.1 million compared to $13.9 million in the fourth quarter of 2019. Consolidated net investment income was largely unchanged year-over-year as growth in the size of the investment portfolio was largely offset by lower interest rates. However, on a segment basis, net investment income allocated to the C&O segment was down $2.2 million as we continue to allocate a larger portion of net investment income to the Term Life segment in support of the growing block of business. The newly launched the U.S. mortgage distribution business added $3.7 million of revenues and about $1.0 million of pre-tax income to the segment’s results. Benefits and claims were $2.1 million higher year-over-year, largely due to a reserve adjustment on a closed block of business to reflect the sustained low interest rate environment. Taxes The fourth quarter effective income tax rate was 24.0% compared to 23.4% in the fourth quarter of 2019. The rate increase was largely driven by higher state income taxes and Canadian earnings partially offset by higher exposure reserve releases in the current year period. Capital During the fourth quarter of 2020, the Company repurchased 115,433 shares of common stock for $13.4 million, bringing the annual total to $231.4 million. The Board of Directors authorized the repurchase of up to $300 million of the Company’s common stock through June 2022 and approved an 18% increase in stockholder dividends to $0.47 per share, payable on March 15, 2021, to stockholders of record on February 22, 2021. Primerica has a strong balance sheet and continues to be well-capitalized to meet future needs. Primerica Life Insurance Company’s statutory risk-based capital (RBC) ratio was estimated to be approximately 400% as of December 31, 2020. 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, adjusted stockholders’ equity and diluted adjusted operating earnings per share. 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 realized investment gains (losses) and fair value mark-to-market (“MTM”) investment adjustments, including credit impairments, for all periods presented. We exclude realized 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 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. 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 investors 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 Wednesday, February 10, 2021 at 10:00 am EST, to discuss the quarter’s results. To access the webcast, go to 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 on Primerica’s website, 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; any failure to protect the confidentiality of client information; differences between our actual experience and our expectations regarding mortality or persistency 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; litigation and regulatory investigations and actions concerning us or sales representatives; 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; economic down cycles 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 information technology systems, breach of our information security, failure of our business continuity plan or the loss of the Internet; 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; 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 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 services to middle-income households in the United States and Canada. Primerica educates clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, underwritten by the Company , and mutual funds, annuities and other financial products, distributed primarily on behalf of third parties. Primerica insured over 5.5 million lives and had approximately 2.6 million client investment accounts at December 31, 2020. Through its insurance company subsidiaries, Primerica was the #2 issuer of Term Life insurance coverage in North America in 2019. 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”. 11 87,307 13 Total benefits and expenses 182,698 Adjusted operating revenues $ 129,706 $ 12,119 * Operating lease liabilities – 72,154 Amortization of deferred policy acquisition costs 71,469 Realized investment gains (losses) Retained earnings $ 10 1,593,281 2,325,750 (Unaudited – in thousands) $ Revenues: 11,073 % Less: Premiums ceded to IPO coinsurers $ $ 368,992 76.09 $ 2020 12 $ $ ) 203.8 100,084 18.1 Diluted adjusted operating earnings per share (1) Adjusted operating revenues Less: 10% deposit asset MTM included in NII End of period $ Less: Realized investment gains (losses) * $ 43,233 $ Previous articleArcus Biosciences Announces New Employment Inducement GrantsNext articleCalifornia uses ZIP codes, outreach to boost vaccine equity Digital AIM Web Support 960 409,815 42,181 ) 594,720 9.57 $ (In thousands, except per-share amounts) 188,117 TAGS  11 70,492 349,792 2.52 % $ 134,907 22,418 357,198 63,781 2,485,745 Income taxes ) 456,967 45,275 Separate account liabilities $ 45,275 83,814 % Change PRIMERICA, INC. AND SUBSIDIARIES % Change 2.52 Corporate and Other Distributed Products (1) 2,650 ) 6,446,569 52,991 Less: 10% deposit asset MTM included in net investment income (NII) Accumulated other comprehensive income (loss), net of income tax ) Percentage change in earnings per share is calculated prior to rounding per share amounts. 22,731 2,650 ) 31 $ Policy loans $ 1,184,370 $ ) Other, net Q4 2020 Total revenues % Trading securities, at fair value 13,688,531 477,111 Twitter $ (14,514 $ Income taxes Assets $ $ Other ceded premiums (1) 4,965 9 Income before income taxes 9.57 $ 1,707,757 7,222 $ (Unaudited) Three months ended December 31, 22 Total assets 30,199 32,927 Earnings per share: (1) Segment Results Cash and cash equivalents Net income 256,876 ISP Product Sales ($ billions) 30,270 32,412 12 % Earnings per share: $ 223,496 (1,995 Agent balances, due premiums and other receivables 259,448 547,569 188,302 $ $ 1,575,393 Paid-in capital $ 1.98 Corporate and Other Distributed Products (1) % (239 Benefits and expenses: (18,124 Separate account assets Term Life Insurance 1,326,383 45,991 Less: Realized investment gains (losses) ) 13,778 % Liabilities and Stockholders’ Equity Term Life Insurance 2,753,866 1,183,728 December 31, 2020 December 31, 2019 Income before income taxes $ 16,300 (390,364 1,346,350 2,224,532 $ % 178,817 % Change Notes payable $ $ Pinterest 1,345,772 Fixed-maturity securities available-for-sale, at fair value Average Client Asset Values ($ billions) TERM LIFE INSURANCE SEGMENT 209,221 49,546 Insurance expenses Insurance expenses Other liabilities 3 13,069,400 (Unaudited – in thousands, except per share amounts) (1,995 Facebook 0.19 % Adjusted direct premiums 598,330 Three months ended December 31, 94,073 Stockholders’ equity: (In thousands) Less: 10% deposit asset MTM included in NII 412 Net premiums % 53,342 ) 1,835,885 Adjusted net operating income 1,571 5,382 122,145 $ Q4 2019 $ Investments: ) Operating lease right-of-use assets 598,330 $ 745,559 – 60,466 $ 13 Less: Realized investment gains (losses) 1,184,137 Unearned and advance premiums Direct premiums $ 15,695 4,965 697,060 2,217,541 6 506,730 Income before income taxes % % Basic Less: Realized investment gains (losses) Less: Unrealized net investment gains (losses) recorded in stockholders’ equity, net of income tax $ Income before income taxes $ $ Adjusted Operating Revenues: 3,658,210 $ 766 Other, net % % 766 245,195 11 254,552 16 Life Insurance Policies Issued ) Benefits and expenses: 506,730 % Total liabilities and stockholders’ equity 388,663 Net income (123,451 4,273,904 14,905,285 29,250 Total investments 9.60 Interest expense 2020 306,696 56,714 $ $ 2,042,157 5,382 254 % 2,659,520 122,145 29,250 28,811 28,588 510,443 7 0.18 (2,387 ) Adjusted stockholders’ equity 42,314 Diluted earnings per share 2.53 Less: Realized investment gains (losses) 2.25 % 40,684 (In thousands, except per-share amounts) * 3,895,483 2,650 % Pinterest $ Diluted Condensed Consolidated Statements of Income 1,710,811 Distribution Results Less: 10% deposit asset MTM included in NII Adjusted net operating income Not calculated 2020 % 519,711 Income taxes $ (1,569,729 Realized investment gains (losses) ) Future policy benefits 40,065 Fixed-maturity security held-to-maturity, at amortized cost Investment and Savings Products (18,124 28,839 766 0.21 (Unaudited – in thousands) Life Productivity (2) Total revenues Other operating expenses Net investment income 2,052,504 10 $ 766 $ 531,960 (Unaudited – in thousands, except per share amounts) Total revenues Adjusted Operating Income (Loss) before income taxes: $ $ 2,052,504 Amortization of deferred policy acquisition costscenter_img 750,818 33 $ Intangible assets, net 2020 6 (4,996 376,636 $ 2,485,745 $ 32,412 60,677 Sales commissions $ $ Total revenues (395,767 713,804 $ 237,144 Less: Tax impact of preceding items $ Net income Less: Tax impact of preceding items % 492,520 % 6,624 102,588 Three months ended December 31, $ Accrued investment income ) (13,861 Investment and Savings Products Condensed Consolidated Balance Sheets $ Less: Realized investment gains (losses) $ 615,569 Revenues: Primerica Reports Fourth Quarter 2020 Results Twitter Total revenues Total liabilities 254 339,954 Diluted earnings per share 41,614 % Closed U.S. Mortgage Volume ($ million brokered) Basic earnings per share 493,820 Consolidated Adjusted Operating Results Reconciliation Less: Realized investment gains (losses) Diluted earnings per share (1) Net premiums 2019 131,640 (865 14,905,285 204,112 2019 531,960 254 Other policyholders’ funds 2.24 Less: 10% deposit asset MTM included in NII 121,125 Less: 10% deposit asset MTM included in NII 960 ) (1) 2.22 594,720 % 530,940 Liabilities: 7 Life productivity equals policies issued divided by the average number of life insurance licensed representatives per month Percentage change in earnings per share is calculated prior to rounding per share amounts. 2,650 2,217,541 % Change 2,650 513,721 0.07 ———————————————————————— 39,421 53,487 (1) $ 477,111 127,784 Net investment income $ 960 6 PRIMERICA, INC. AND SUBSIDIARIES 374,037 15 9 Consolidated Adjusted Operating Results Reconciliation % $ ———————————————————————— 47,265 32,134 (4,996 89,440 Q4 2020 254 $ 40,185 5 $ Ceded premiums Loss before income taxes 8.65 (1,995 Income taxes 92,776 5 38,023 2,659,520 ($ in thousands) Condensed Consolidated Statements of Income Other assets 2.24 Less: Net after-tax impact of operating adjustments 97,339 % 15,470 64,563 2,650 2019 $ CORPORATE AND OTHER DISTRIBUTED PRODUCTS SEGMENT Other operating expenses 391,584 % ———————————————————————— (Unaudited) 2019 Surplus note 2020 $ 100,084 ) PRIMERICA, INC. AND SUBSIDIARIES See the Non-GAAP Financial Measures section and the Adjusted Operating Results reconciliation tables at the end of this release for additional information. 9 $ 318,992 Benefits and claims (397,676 Adjusted Stockholders’ Equity Reconciliation Total adjusted operating revenues (1) % Adjusted operating income before income taxes ) % % 393 68.24 Less: Realized investment gains (losses) 130,522 Less: Premiums ceded to IPO coinsurers Benefits and claims 386,164 253,039 9 December 31, 2020 Diluted 80,599 (1,580,766 691,546 % 6 960 128,030 960 46,567 Facebook $ 8 $ $ Adjusted operating income before income taxes 17,136 61,069 $ 73,290 93,557 Year ended December 31, Sales commissions Commissions and fees 386,164 Policy claims and other benefits payable 4,965 % % 766 (4,996 Net income 2,907,149 $ (253,039 384,634 5,382 2.07 $ Basic $ 766 67,279 ) 1,835,885 358,431 New Life-Licensed Representatives 12 Diluted earnings per share (1) Q4 2019 ) % Reinsurance recoverables 15 $ 55,525 (0.13 28,723 Less: 10% deposit asset MTM included in NII 13,688,531 31 Ceded premiums 353,142 17,618 15 193,316 Basic earnings per share (2) 6,790,557 2.45 Adjusted Premiums Reconciliation 9.70 254 $ Life-Licensed Sales Force (1) ) 2,356,996 Recruits PRIMERICA, INC. AND SUBSIDIARIES 128,030 2019 8 Insurance commissions 4 41,471 0.02 Weighted-average shares used in computing earnings per share: % Equity securities, at fair value $ 426,760 Common stock 52,806 December 31, 2019 $ 466,764 Ceded premiums $ PRIMERICA, INC. AND SUBSIDIARIES ) WhatsApp Total stockholders’ equity WhatsApp (264,786 2,629,644 ) % Change (142,728 8.62 2,464,611 12 (13,861 7,225 120,566 58,798 110,720 ) 94,238 (4,996 4,965 Adjusted Operating Results Reconciliation Net premiums $ $ 2019 12,036,040 374,415 $ % $ 466,690 131,640 % Change Direct premiums 8 Year ended December 31, Direct premiums $ 303,309 Deferred policy acquisition costs, net DULUTH, Ga.–(BUSINESS WIRE)–Feb 9, 2021– Primerica, Inc. (NYSE: PRI) today announced financial results for the quarter ended December 31, 2020. Total revenues of $598.3 million increased 12% compared to the fourth quarter of 2019. Net income of $100.1 million increased 7%, while earnings per diluted share of $2.52 increased 13% compared to the same quarter last year. ROE was 22.5% for the current quarter. Adjusted operating revenues were $594.7 million, increasing 12% compared to the fourth quarter of 2019. Adjusted net operating income of $97.3 million increased 5%, while diluted adjusted operating earnings per share of $2.45 increased 10% compared to the same quarter last year. ROAE was 23.4% during the fourth quarter of 2020. During the fourth quarter, the COVID-19 pandemic continued to have a significant impact on the Company’s Term Life segment. COVID-19 related death claims were approximately $14 million, net of reinsurance, their highest level since the onset of the pandemic. COVID-19 impacted customer behavior, with strong sales and policy persistency continuing in the quarter. The Investment and Savings Products (ISP) segment benefited from favorable market performance during the fourth quarter driving ending client asset values to a record $82 billion. ISP sales during the quarter continued to shift toward mutual funds and managed accounts and away from annuity products. “The COVID-19 pandemic caused middle income consumers to clearly understand their need for protection today and investments for tomorrow. The adaptability of our sales force allowed us to meet those needs more than ever before,” said Glenn Williams, Chief Executive Officer. “I am very proud of how our Primerica team navigated the unique challenges of 2020 to continue to help clients achieve their financial goals.” Results for the full year ended December 31, 2020 were also heavily impacted by the pandemic. COVID-19 related death claims, net of reinsurance, were approximately $33 million, while issued life policies were up 23% year-over-year with a record $109 billion of face amount issued. Policy persistency also reached record levels during the year. ISP sales for 2020 were a record $7.8 billion, up 4% year-over-year, despite a brief period of disruption following the market correction in March. Term Life and ISP income before taxes increased 16% and 6% year-over-year, respectively. Total revenues of $2.2 billion increased 8% year-over-year, setting a new annual record for the Company. Net income of $386.2 million and earnings per diluted share of $9.57 increased 5% and 11%, respectively, and also represent new records. Fourth Quarter Distribution & Segment Results ) 366,391 36,022 11 % 530,940 Insurance commissions Adjusted operating loss before income taxes 4,169,823 Total adjusted operating income before income taxes (1) (12,841 $ ) % % $ $ 2020 Three months ended December 31, 264,786 121,125 Diluted adjusted operating earnings per share (1) 19 ) $ 366,391 ) $ Payable under securities lending PRIMERICA, INC. AND SUBSIDIARIES 8 (Unaudited – in thousands) (Unaudited) Local NewsBusiness % Change Stockholders’ equity 566,068 8.62 17,361 1,652,491 Less: Net after-tax impact of operating adjustments ———————————————————————— 227,100 128,128 $ 9,263 1,705,786 93,557 $ 1,587,928 Less: 10% deposit asset MTM included in NII % View source version on CONTACT: Investor Contact: Nicole Russell 470-564-6663 Email:[email protected] Contact: Keith Hancock 470-564-6328 Email:[email protected] KEYWORD: GEORGIA UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: FINANCE CONSULTING PROFESSIONAL SERVICES OTHER PROFESSIONAL SERVICES INSURANCE SOURCE: Primerica, Inc. Copyright Business Wire 2021. PUB: 02/09/2021 04:15 PM/DISC: 02/09/2021 04:15 PM Total benefits and expenses Interest expense (388,237 1,652,491 751,271 $last_img read more