EX-99.2 3 pri-ex992_6.htm EX-99.2 pri-ex992_6.htm

Exhibit 99.2

 

 

 

 

 

Supplemental Financial Information

First Quarter 2018

 

 

 

 

 

 

 

 

 

 

Table of Contents

PRIMERICA, INC.

Financial Supplement

 

 

 

Page

Preface, definition of Non-GAAP financial measures

3

Condensed balance sheets and reconciliation of balance sheet non-GAAP to GAAP financial measures

4

Financial results and other statistical data  

5

Statements of income  

6

Reconciliation of statement of income GAAP to non-GAAP financial measures

7

Segment operating results  

8

Term Life Insurance segment - financial results, key statistics, and financial analysis  

9-10

Investment and Savings Products segment - financial results, financial analysis, and key statistics  

11-12

Investment portfolio  

13-15

Five-year historical key statistics  

16

 

 

This document may contain forward-looking statements and information.  Additional information and factors that could cause actual results to differ materially from any forward-looking statements or information in this document is available in our Form 10-K for the year ended December 31, 2017.

 

2 of 16

 

 

 

Preface

PRIMERICA, INC.

Financial Supplement

 

 

First Quarter 2018

 

This document is a financial supplement to our first quarter 2018 earnings release.  It is designed to enable comprehensive analysis of our ongoing business using the same core metrics that our management utilizes in assessing our business and making strategic and operational decisions.  Throughout this document we provide financial information that is derived from our U.S. GAAP financial statements and adjusted for three different purposes, as follows:

 

•

Operating adjustments exclude the impact of realized investment gains/losses, mark-to-market (MTM) investment adjustments, and the one-time transition impact of the Tax Cuts and Jobs Act of 2017 (Tax Reform).  We exclude realized investment gains/losses and MTM investment adjustments in measuring adjusted operating revenues to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains and losses and other factors prior to an invested asset's maturity or sale that are not directly associated with the Company's insurance operations.  We exclude the provisional one-time transition impact from Tax Reform recognized in the fourth quarter of 2017, as well as all adjustments recognized in 2018 to the provisional one-time transition impact, to present meaningful and useful period-over-period comparisons that could be distorted by this historically infrequent tax law change.

 

•

Adjusted stockholders’ equity refers to the removal of the impact of net unrealized gains and losses on invested assets.  We exclude unrealized investment gains and losses in measuring adjusted stockholders' equity as unrealized gains and losses from the Company's invested assets 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 invested asset matures or is sold.

 

•

IPO coinsurance transactions adjustments relate to transactions in the first quarter of 2010, where we coinsured between 80% and 90% of our business that was in-force at year-end 2009 to entities then affiliated with Citigroup Inc. that were executed concurrent with our initial public offering (IPO).  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.

 

Management utilizes these non-GAAP financial measures in managing the business and believes they present relevant and meaningful analytical metrics for evaluating the ongoing business.  Reconciliations of non-GAAP to GAAP financial measures are included in this financial supplement.

Certain items throughout this supplement may not add due to rounding and as such, may not agree to other public reporting of the respective item.  Certain items throughout this supplement are noted as ‘na’ to indicate not applicable.  Certain variances are noted as ‘nm’ to indicate not meaningful.  Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. These reclassifications had no impact on net income or total stockholders’ equity.

 

3 of 16

 

 

 

Condensed Balance Sheets and Reconciliation of Balance Sheet Non-GAAP to GAAP Financial Measures

PRIMERICA, INC.

Financial Supplement

 

(Dollars in thousands)

Dec 31,

2016

 

Mar 31,

2017

 

Jun 30,

2017

 

Sep 30,

2017

 

Dec 31,

2017

 

Mar 31,

2018

 

Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments and cash excluding securities held to maturity

$

2,087,607

 

$

2,110,131

 

$

2,139,275

 

$

2,157,513

 

$

2,287,955

 

$

2,254,512

 

 

Securities held to maturity

 

503,230

 

 

535,160

 

 

635,690

 

 

688,840

 

 

737,150

 

 

796,450

 

 

 

 

Total investments and cash

 

2,590,837

 

 

2,645,291

 

 

2,774,965

 

 

2,846,353

 

 

3,025,105

 

 

3,050,962

 

 

Due from reinsurers

 

4,193,562

 

 

4,219,547

 

 

4,191,754

 

 

4,238,978

 

 

4,205,173

 

 

4,263,111

 

 

Deferred policy acquisition costs

 

1,713,065

 

 

1,767,681

 

 

1,833,877

 

 

1,900,122

 

 

1,951,892

 

 

1,998,985

 

 

Other assets

 

653,525

 

 

681,156

 

 

719,765

 

 

734,425

 

 

705,661

 

 

759,973

 

 

Separate account assets

 

2,287,953

 

 

2,356,320

 

 

2,424,937

 

 

2,486,960

 

 

2,572,872

 

 

2,419,707

 

 

 

 

Total assets

$

11,438,943

 

$

11,669,996

 

$

11,945,297

 

$

12,206,839

 

$

12,460,704

 

$

12,492,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Future policy benefits

$

5,673,890

 

$

5,736,313

 

$

5,812,217

 

$

5,894,882

 

$

5,954,524

 

$

6,004,101

 

 

Other policy liabilities

 

631,700

 

 

642,640

 

 

645,443

 

 

656,434

 

 

685,885

 

 

693,223

 

 

Income taxes

 

225,006

 

 

237,719

 

 

241,314

 

 

255,877

 

 

177,468

 

 

184,161

 

 

Other liabilities

 

449,963

 

 

449,734

 

 

428,176

 

 

463,926

 

 

451,398

 

 

506,535

 

 

Notes payable

 

372,919

 

 

373,011

 

 

373,103

 

 

373,196

 

 

373,288

 

 

373,381

 

 

Surplus note

 

502,491

 

 

534,435

 

 

634,980

 

 

688,055

 

 

736,381

 

 

795,697

 

 

Payable under securities lending

 

73,646

 

 

93,326

 

 

115,875

 

 

106,978

 

 

89,786

 

 

89,433

 

 

Separate account liabilities

 

2,287,953

 

 

2,356,320

 

 

2,424,937

 

 

2,486,960

 

 

2,572,872

 

 

2,419,707

 

 

 

 

Total liabilities

 

10,217,568

 

 

10,423,499

 

 

10,676,044

 

 

10,926,309

 

 

11,041,603

 

 

11,066,237

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock ($0.01 par value) (1)

 

457

 

 

455

 

 

450

 

 

444

 

 

443

 

 

440

 

 

Paid-in capital

 

52,468

 

 

28,606

 

 

(0

)

 

(0

)

 

(0

)

 

(0

)

 

Retained earnings

 

1,138,851

 

 

1,182,038

 

 

1,224,375

 

 

1,228,546

 

 

1,375,090

 

 

1,416,564

 

 

Treasury stock

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

Accumulated other comprehensive income (loss), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized investment gains (losses) not other-than-temporarily impaired

 

42,852

 

 

47,534

 

 

49,883

 

 

47,191

 

 

39,686

 

 

14,039

 

 

 

Net unrealized investment losses other-than-temporarily impaired

 

(62

)

 

(56

)

 

(54

)

 

(143

)

 

(113

)

 

(136

)

 

 

Cumulative translation adjustment

 

(13,193

)

 

(12,082

)

 

(5,401

)

 

4,492

 

 

3,995

 

 

(4,406

)

 

 

 

Total stockholders’ equity

 

1,221,374

 

 

1,246,497

 

 

1,269,253

 

 

1,280,530

 

 

1,419,101

 

 

1,426,500

 

 

 

 

Total liabilities and stockholders' equity

$

11,438,943

 

$

11,669,996

 

$

11,945,297

 

$

12,206,839

 

$

12,460,704

 

$

12,492,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Stockholders' Equity to Total Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted stockholders' equity

$

1,178,584

 

$

1,199,018

 

$

1,219,424

 

$

1,233,482

 

$

1,379,528

 

$

1,412,597

 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized investment gains (losses) not other-than-temporarily impaired

 

42,852

 

 

47,534

 

 

49,883

 

 

47,191

 

 

39,686

 

 

14,039

 

 

Net unrealized investment losses other-than-temporarily impaired

 

(62

)

 

(56

)

 

(54

)

 

(143

)

 

(113

)

 

(136

)

 

 

Total reconciling items

 

42,791

 

 

47,479

 

 

49,829

 

 

47,048

 

 

39,573

 

 

13,903

 

 

 

 

Total stockholders’ equity

$

1,221,374

 

$

1,246,497

 

$

1,269,253

 

$

1,280,530

 

$

1,419,101

 

$

1,426,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Stockholders' Equity Rollforward

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

1,149,131

 

$

1,178,584

 

$

1,199,018

 

$

1,219,424

 

$

1,233,482

 

$

1,379,528

 

 

Net Income

 

56,874

 

 

52,069

 

 

63,107

 

 

66,635

 

 

168,443

 

 

65,714

 

 

Shareholder dividends

 

(8,410

)

 

(8,882

)

 

(8,799

)

 

(9,120

)

 

(9,020

)

 

(11,278

)

 

Retirement of shares and warrants

 

(18,697

)

 

(36,353

)

 

(45,185

)

 

(57,916

)

 

(17,318

)

 

(51,563

)

 

Net foreign currency translation adjustment

 

(4,966

)

 

1,111

 

 

6,681

 

 

9,893

 

 

(497

)

 

(8,402

)

 

Other, net

 

4,653

 

 

12,489

 

 

4,602

 

 

4,565

 

 

4,437

 

 

38,598

 

Balance, end of period

$

1,178,584

 

$

1,199,018

 

$

1,219,424

 

$

1,233,482

 

$

1,379,528

 

$

1,412,597

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Policy Acquisition Costs Rollforward

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

1,672,454

 

$

1,713,065

 

$

1,767,681

 

$

1,833,877

 

$

1,900,122

 

$

1,951,892

 

 

General expenses deferred

 

8,226

 

 

9,489

 

 

9,061

 

 

9,350

 

 

8,887

 

 

9,599

 

 

Commission costs deferred

 

89,647

 

 

95,923

 

 

99,341

 

 

102,113

 

 

99,411

 

 

104,314

 

 

Amortization of deferred policy acquisition costs

 

(53,305

)

 

(51,850

)

 

(47,861

)

 

(53,384

)

 

(56,304

)

 

(60,165

)

 

Foreign currency impact and other, net

 

(3,957

)

 

1,054

 

 

5,653

 

 

8,166

 

 

(224

)

 

(6,655

)

Balance, end of period

$

1,713,065

 

$

1,767,681

 

$

1,833,877

 

$

1,900,122

 

$

1,951,892

 

$

1,998,985

 

 

(1)

Outstanding common shares exclude restricted stock units.

 

 

 

4 of 16

 

 

Financial Results and Other Statistical Data

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

(Dollars in thousands, except per-share data)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$/#

Change

 

%

Change

 

Earnings per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares and fully vested equity awards

 

46,301,339

 

 

45,983,783

 

 

45,317,641

 

 

44,809,433

 

 

44,739,864

 

 

 

 

(1,561,475

)

 

-3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

52,069

 

$

63,107

 

$

66,635

 

$

168,443

 

$

65,714

 

 

 

$

13,645

 

 

26.2

%

 

Less income attributable to unvested participating securities

 

(421

)

 

(430

)

 

(465

)

 

(1,171

)

 

(425

)

 

 

 

(3

)

 

-0.8

%

 

 

Net income used in computing basic EPS

$

51,648

 

$

62,677

 

$

66,170

 

$

167,272

 

$

65,289

 

 

 

$

13,641

 

 

26.4

%

 

 

Basic earnings per share

$

1.12

 

$

1.36

 

$

1.46

 

$

3.73

 

$

1.46

 

 

 

$

0.34

 

 

30.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net operating income

$

51,976

 

$

63,039

 

$

66,620

 

$

72,258

 

$

66,215

 

 

 

$

14,239

 

 

27.4

%

 

Less operating income attributable to unvested participating securities

 

(421

)

 

(430

)

 

(465

)

 

(502

)

 

(428

)

 

 

 

(7

)

 

-1.8

%

 

 

Adjusted net operating income used in computing basic operating EPS

$

51,556

 

$

62,609

 

$

66,156

 

$

71,755

 

$

65,787

 

 

 

$

14,232

 

 

27.6

%

 

 

Basic adjusted operating income per share

$

1.11

 

$

1.36

 

$

1.46

 

$

1.60

 

$

1.47

 

 

 

$

0.36

 

 

32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares and fully vested equity awards

 

46,301,339

 

 

45,983,783

 

 

45,317,641

 

 

44,809,433

 

 

44,739,864

 

 

 

 

(1,561,475

)

 

-3.4

%

 

Dilutive impact of contingently issuable shares

 

72,947

 

 

86,550

 

 

89,455

 

 

107,386

 

 

115,421

 

 

 

 

42,474

 

 

58.2

%

 

 

Shares used to calculate diluted EPS

 

46,374,286

 

 

46,070,333

 

 

45,407,096

 

 

44,916,819

 

 

44,855,285

 

 

 

 

(1,519,001

)

 

-3.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

52,069

 

$

63,107

 

$

66,635

 

$

168,443

 

$

65,714

 

 

 

$

13,645

 

 

26.2

%

 

Less income attributable to unvested participating securities

 

(421

)

 

(430

)

 

(464

)

 

(1,169

)

 

(424

)

 

 

 

(3

)

 

-0.7

%

 

 

Net income used in computing diluted EPS

$

51,648

 

$

62,677

 

$

66,171

 

$

167,275

 

$

65,290

 

 

 

$

13,642

 

 

26.4

%

 

 

Diluted earnings per share

$

1.11

 

$

1.36

 

$

1.46

 

$

3.72

 

$

1.46

 

 

 

$

0.34

 

 

30.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net operating income

$

51,976

 

$

63,039

 

$

66,620

 

$

72,258

 

$

66,215

 

 

 

$

14,239

 

 

27.4

%

 

Less operating income attributable to unvested participating securities

 

(420

)

 

(429

)

 

(464

)

 

(501

)

 

(427

)

 

 

 

(7

)

 

-1.7

%

 

 

Adjusted net operating income used in computing diluted operating EPS

$

51,556

 

$

62,609

 

$

66,156

 

$

71,756

 

$

65,788

 

 

 

$

14,232

 

 

27.6

%

 

 

Diluted adjusted operating income per share

$

1.11

 

$

1.36

 

$

1.46

 

$

1.60

 

$

1.47

 

 

 

$

0.35

 

 

31.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

 

 

 

 

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$/#

Change

 

%

Change

 

Annualized Return on Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average stockholders' equity

$

1,233,936

 

$

1,257,875

 

$

1,274,892

 

$

1,349,815

 

$

1,422,801

 

 

 

$

188,865

 

 

15.3

%

 

Average adjusted stockholders' equity

$

1,188,801

 

$

1,209,221

 

$

1,226,453

 

$

1,306,505

 

$

1,396,063

 

 

 

$

207,262

 

 

17.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income return on stockholders' equity

 

16.9

%

 

20.1

%

 

20.9

%

 

49.9

%

 

18.5

%

 

 

 

1.6

%

nm

 

 

Net income return on adjusted stockholders' equity

 

17.5

%

 

20.9

%

 

21.7

%

 

51.6

%

 

18.8

%

 

 

 

1.3

%

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net operating income return on adjusted stockholders' equity

 

17.5

%

 

20.9

%

 

21.7

%

 

22.1

%

 

19.0

%

 

 

 

1.5

%

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-to-capital (1)

 

23.0

%

 

22.7

%

 

22.6

%

 

20.8

%

 

20.7

%

 

 

 

-2.3

%

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and invested assets to stockholders' equity

 

2.1

x

 

2.2

x

 

2.2

x

 

2.1

x

 

2.1

x

 

 

 

0.0

x

nm

 

 

Cash and invested assets to adjusted stockholders' equity

 

2.2

x

 

2.3

x

 

2.3

x

 

2.2

x

 

2.2

x

 

 

 

(0.0

x)

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share count, end of period (2)

 

45,549,739

 

 

45,034,788

 

 

44,380,349

 

 

44,251,256

 

 

43,953,046

 

 

 

 

(1,596,693

)

 

-3.5

%

 

Adjusted stockholders' equity per share

$

26.32

 

$

27.08

 

$

27.79

 

$

31.17

 

$

32.14

 

 

 

$

5.82

 

 

22.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Strength Ratings - Primerica Life Insurance Co

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Moody's

A2

 

A2

 

A2

 

A2

 

A2

 

 

 

nm

 

nm

 

 

S&P

AA-

 

AA-

 

AA-

 

AA-

 

AA-

 

 

 

nm

 

nm

 

 

A.M. Best

A+

 

A+

 

A+

 

A+

 

A+

 

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holding Company Senior Debt Ratings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Moody's

Baa2

 

Baa2

 

Baa2

 

Baa2

 

Baa2

 

 

 

nm

 

nm

 

 

S&P

A-

 

A-

 

A-

 

A-

 

A-

 

 

 

nm

 

nm

 

 

A.M. Best

a-

 

a-

 

a-

 

a-

 

a-

 

 

 

nm

 

nm

 

 

 

(1)

Debt-to-capital is that of the parent company only.  Capital in the debt-to-capital ratio includes stockholders' equity and the note payable.

(2)

Share count reflects outstanding common shares, but excludes restricted stock units (RSUs).

 

 

 

5 of 16

 

 

Statements of Income

 

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

(Dollars in thousands)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$

Change

 

%

Change

 

 

Statement of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums

$

627,698

 

$

637,426

 

$

646,079

 

$

650,906

 

$

656,087

 

 

 

$

28,389

 

 

4.5

%

 

 

Ceded premiums

 

(399,769

)

 

(406,043

)

 

(397,641

)

 

(397,318

)

 

(394,249

)

 

 

 

5,520

 

 

1.4

%

 

 

 

Net premiums

 

227,929

 

 

231,384

 

 

248,438

 

 

253,587

 

 

261,838

 

 

 

 

33,909

 

 

14.9

%

 

 

Net investment income

 

19,894

 

 

19,742

 

 

19,922

 

 

19,459

 

 

19,017

 

 

 

 

(877

)

 

-4.4

%

 

 

Commissions and fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based (1)

 

60,517

 

 

60,692

 

 

53,488

 

 

58,307

 

 

64,461

 

 

 

 

3,944

 

 

6.5

%

 

 

 

Asset-based (2)

 

64,474

 

 

67,424

 

 

70,279

 

 

72,982

 

 

74,649

 

 

 

 

10,176

 

 

15.8

%

 

 

 

Account-based (3)

 

13,217

 

 

13,282

 

 

13,811

 

 

14,720

 

 

20,595

 

 

 

 

7,378

 

 

55.8

%

 

 

 

Other commissions and fees

 

6,060

 

 

6,919

 

 

7,049

 

 

8,097

 

 

7,122

 

 

 

 

1,062

 

 

17.5

%

 

 

Realized investment (losses) gains

 

134

 

 

104

 

 

22

 

 

1,079

 

 

(1,656

)

 

 

 

(1,790

)

nm

 

 

 

Other, net

 

12,939

 

 

14,150

 

 

14,291

 

 

14,710

 

 

13,897

 

 

 

 

958

 

 

7.4

%

 

 

Total revenues

 

405,164

 

 

413,696

 

 

427,300

 

 

442,941

 

 

459,923

 

 

 

 

54,759

 

 

13.5

%

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

102,385

 

 

99,512

 

 

105,864

 

 

108,259

 

 

116,890

 

 

 

 

14,505

 

 

14.2

%

 

 

Amortization of DAC

 

51,850

 

 

47,861

 

 

53,384

 

 

56,304

 

 

60,165

 

 

 

 

8,315

 

 

16.0

%

 

 

Insurance commissions

 

4,899

 

 

5,157

 

 

5,593

 

 

5,459

 

 

5,877

 

 

 

 

978

 

 

20.0

%

 

 

Insurance expenses

 

37,621

 

 

36,920

 

 

37,636

 

 

35,102

 

 

41,109

 

 

 

 

3,488

 

 

9.3

%

 

 

Sales commissions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based (1)

 

43,209

 

 

43,253

 

 

38,338

 

 

41,261

 

 

46,259

 

 

 

 

3,050

 

 

7.1

%

 

 

 

Asset-based (2)

 

27,630

 

 

28,965

 

 

30,220

 

 

31,698

 

 

32,484

 

 

 

 

4,854

 

 

17.6

%

 

 

 

Other sales commissions

 

2,865

 

 

3,221

 

 

3,463

 

 

3,864

 

 

3,777

 

 

 

 

912

 

 

31.8

%

 

 

Interest expense

 

7,127

 

 

7,144

 

 

7,074

 

 

7,143

 

 

7,173

 

 

 

 

46

 

 

0.6

%

 

 

Other operating expenses

 

52,736

 

 

45,274

 

 

45,528

 

 

45,762

 

 

63,228

 

 

 

 

10,491

 

 

19.9

%

 

 

Total benefits and expenses

 

330,322

 

 

317,308

 

 

327,100

 

 

334,852

 

 

376,961

 

 

 

 

46,638

 

 

14.1

%

 

 

Income before income taxes

 

74,841

 

 

96,389

 

 

100,200

 

 

108,089

 

 

82,962

 

 

 

 

8,121

 

 

10.9

%

 

Income taxes

 

22,772

 

 

33,282

 

 

33,565

 

 

(60,355

)

 

17,248

 

 

 

 

(5,524

)

 

-24.3

%

 

 

Net income

$

52,069

 

$

63,107

 

$

66,635

 

$

168,443

 

$

65,714

 

 

 

$

13,645

 

 

26.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes by Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life

$

49,022

 

$

61,855

 

$

66,543

 

$

68,237

 

$

59,621

 

 

 

$

10,599

 

 

21.6

%

 

Investment & Savings Products

 

37,119

 

 

39,684

 

 

39,050

 

 

46,982

 

 

39,985

 

 

 

 

2,865

 

 

7.7

%

 

Corporate & Other Distributed Products

 

(11,300

)

 

(5,149

)

 

(5,392

)

 

(7,131

)

 

(16,644

)

 

 

 

(5,344

)

 

-47.3

%

 

 

Income before income taxes

$

74,841

 

$

96,389

 

$

100,200

 

$

108,089

 

$

82,962

 

 

 

$

8,121

 

 

10.9

%

 

 

(1)

Sales-based - revenues or commission expenses relating to the sales of mutual funds and variable annuities.

(2)

Asset-based - revenues or commission expenses relating to the value of assets in client accounts for which we earn ongoing service, distribution, and other fees.

(3)

Account-based - revenues relating to the fee generating client accounts we administer.

6 of 16

 

 

 

Reconciliation of Statement of Income GAAP to Non-GAAP Financial Measures

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

(Dollars in thousands)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$

Change

 

%

Change

 

 

Reconciliation from Term Life Direct Premiums to Term Life Adjusted Direct Premiums

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life direct premiums

$

620,379

 

$

630,485

 

$

638,830

 

$

644,373

 

$

649,366

 

 

 

$

28,987

 

 

4.7

%

 

 

Less: Premiums ceded to IPO Coinsurers

 

312,982

 

 

308,323

 

 

304,580

 

 

300,144

 

 

294,301

 

 

 

 

(18,681

)

 

-6.0

%

 

 

Term Life adjusted direct premiums

$

307,397

 

$

322,163

 

$

334,251

 

$

344,230

 

$

355,065

 

 

 

$

47,668

 

 

15.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Term Life Ceded Premiums to Term Life Other Ceded Premiums

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Life ceded premiums

$

(398,077

)

$

(404,175

)

$

(395,772

)

$

(394,987

)

$

(392,561

)

 

 

$

5,516

 

 

1.4

%

 

 

Less: Premiums ceded to IPO Coinsurers

 

(312,982

)

 

(308,323

)

 

(304,580

)

 

(300,144

)

 

(294,301

)

 

 

 

18,681

 

 

6.0

%

 

 

Term Life other ceded premiums

$

(85,095

)

$

(95,852

)

$

(91,193

)

$

(94,843

)

$

(98,260

)

 

 

$

(13,165

)

 

-15.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Investment Income to Adjusted Net Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

$

19,894

 

$

19,742

 

$

19,922

 

$

19,459

 

$

19,017

 

 

 

$

(877

)

 

-4.4

%

 

 

Less: MTM investment adjustments

 

—

 

 

—

 

 

—

 

 

—

 

 

(1,288

)

 

 

nm

 

nm

 

 

 

Adjusted net investment income

$

19,894

 

$

19,742

 

$

19,922

 

$

19,459

 

$

20,305

 

 

 

$

411

 

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Total Revenues to Adjusted Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

405,164

 

$

413,696

 

$

427,300

 

$

442,941

 

$

459,923

 

 

 

$

54,759

 

 

13.5

%

 

 

Less: Realized investment gains/(losses)

 

134

 

 

104

 

 

22

 

 

1,079

 

 

(1,656

)

 

 

nm

 

nm

 

 

 

Less: MTM investment adjustments

 

—

 

 

—

 

 

—

 

 

—

 

 

(1,288

)

 

 

nm

 

nm

 

 

 

Adjusted operating revenues

$

405,030

 

$

413,592

 

$

427,278

 

$

441,862

 

$

462,866

 

 

 

$

57,836

 

 

14.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Income Before Income Taxes to Adjusted Operating Income Before Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

$

74,841

 

$

96,389

 

$

100,200

 

$

108,089

 

$

82,962

 

 

 

$

8,121

 

 

10.9

%

 

 

Less: Realized investment gains/(losses)

 

134

 

 

104

 

 

22

 

 

1,079

 

 

(1,656

)

 

 

nm

 

nm

 

 

 

Less: MTM investment adjustments

 

—

 

 

—

 

 

—

 

 

—

 

 

(1,288

)

 

 

nm

 

nm

 

 

 

Adjusted operating income before income taxes

$

74,708

 

$

96,285

 

$

100,178

 

$

107,010

 

$

85,906

 

 

 

$

11,198

 

 

15.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from Net Income to Adjusted Net Operating Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

52,069

 

$

63,107

 

$

66,635

 

$

168,443

 

$

65,714

 

 

 

$

13,645

 

 

26.2

%

 

 

Less: Income before income taxes reconciling items

 

134

 

 

104

 

 

22

 

 

1,079

 

 

(2,944

)

 

 

nm

 

nm

 

 

 

Less: Tax impact of income before income taxes reconciling items

 

(41

)

 

(36

)

 

(8

)

 

(350

)

 

675

 

 

 

nm

 

nm

 

 

 

Less: Transition impact of tax reform (1)

 

—

 

 

—

 

 

—

 

 

95,457

 

 

1,768

 

 

 

nm

 

nm

 

 

 

Adjusted net operating income

$

51,976

 

$

63,039

 

$

66,620

 

$

72,258

 

$

66,215

 

 

 

$

14,239

 

 

27.4

%

 

 

(1)

Represents a preliminary estimate of the transition effect of revaluing deferred tax assets and liabilities to a 21% tax rate and the inclusion of tax on mandatory deemed repatriated foreign earnings expected to be recognized in the fourth quarter of 2017 due to the enactment of Tax Reform, which was signed into law on December 22, 2017.  The final transition impact of Tax Reform may change from the preliminary estimate, possibly materially, when assumptions are refined and interpretations of the legislation are finalized including the Company’s application of any additional guidance that may be issued by the U.S. Department of the Treasury or the Internal Revenue Service.

7 of 16

 

 

 

Segment Operating Results

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

(Dollars in thousands)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$

Change

 

%

Change

 

 

Term Life Insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct Premiums

$

620,379

 

$

630,485

 

$

638,830

 

$

644,373

 

$

649,366

 

 

 

$

28,987

 

 

4.7

%

 

 

Premiums ceded to IPO coinsurers (1)

 

(312,982

)

 

(308,323

)

 

(304,580

)

 

(300,144

)

 

(294,301

)

 

 

 

18,681

 

 

6.0

%

 

 

Adjusted direct premiums (2)

 

307,397

 

 

322,163

 

 

334,251

 

 

344,230

 

 

355,065

 

 

 

 

47,668

 

 

15.5

%

 

 

Other ceded premiums  (3)

 

(85,095

)

 

(95,852

)

 

(91,193

)

 

(94,843

)

 

(98,260

)

 

 

 

(13,165

)

 

-15.5

%

 

 

Net premiums

 

222,302

 

 

226,311

 

 

243,058

 

 

249,387

 

 

256,805

 

 

 

 

34,503

 

 

15.5

%

 

 

Allocated net investment income

 

2,303

 

 

2,347

 

 

2,527

 

 

2,754

 

 

3,089

 

 

 

 

785

 

 

34.1

%

 

 

Other, net

 

9,446

 

 

10,244

 

 

10,655

 

 

10,890

 

 

10,415

 

 

 

 

969

 

 

10.3

%

 

 

Revenues

 

234,051

 

 

238,902

 

 

256,240

 

 

263,031

 

 

270,309

 

 

 

 

36,258

 

 

15.5

%

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

97,771

 

 

95,532

 

 

101,351

 

 

103,559

 

 

112,831

 

 

 

 

15,061

 

 

15.4

%

 

 

Amortization of DAC

 

50,133

 

 

44,937

 

 

50,386

 

 

56,294

 

 

56,673

 

 

 

 

6,540

 

 

13.0

%

 

 

Insurance commissions

 

1,408

 

 

1,646

 

 

1,874

 

 

1,799

 

 

2,228

 

 

 

 

819

 

 

58.2

%

 

 

Insurance expenses

 

35,717

 

 

34,932

 

 

36,086

 

 

33,142

 

 

38,956

 

 

 

 

3,239

 

 

9.1

%

 

 

Benefits and expenses

 

185,029

 

 

177,047

 

 

189,697

 

 

194,794

 

 

210,688

 

 

 

 

25,659

 

 

13.9

%

 

 

Income before income taxes

$

49,022

 

$

61,855

 

$

66,543

 

$

68,237

 

$

59,621

 

 

 

$

10,599

 

 

21.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment & Savings Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions and fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based

$

60,517

 

$

60,692

 

$

53,488

 

$

58,307

 

$

64,461

 

 

 

$

3,944

 

 

6.5

%

 

 

Asset-based

 

64,474

 

 

67,424

 

 

70,279

 

 

72,982

 

 

74,649

 

 

 

 

10,176

 

 

15.8

%

 

 

Account-based

 

13,217

 

 

13,282

 

 

13,811

 

 

14,720

 

 

20,595

 

 

 

 

7,378

 

 

55.8

%

 

 

Other, net

 

2,199

 

 

2,376

 

 

2,480

 

 

2,499

 

 

2,336

 

 

 

 

137

 

 

6.2

%

 

 

Revenues

 

140,407

 

 

143,774

 

 

140,058

 

 

148,508

 

 

162,042

 

 

 

 

21,634

 

 

15.4

%

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of DAC

 

1,734

 

 

2,310

 

 

2,780

 

 

(656

)

 

3,442

 

 

 

 

1,708

 

 

98.5

%

 

 

Insurance commissions

 

2,959

 

 

3,050

 

 

3,219

 

 

3,278

 

 

3,199

 

 

 

 

241

 

 

8.1

%

 

 

Sales commissions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based

 

43,209

 

 

43,253

 

 

38,338

 

 

41,261

 

 

46,259

 

 

 

 

3,050

 

 

7.1

%

 

 

Asset-based

 

27,630

 

 

28,965

 

 

30,220

 

 

31,698

 

 

32,484

 

 

 

 

4,854

 

 

17.6

%

 

 

Other operating expenses

 

27,756

 

 

26,512

 

 

26,451

 

 

25,945

 

 

36,673

 

 

 

 

8,917

 

 

32.1

%

 

 

Benefits and expenses

 

103,288

 

 

104,090

 

 

101,008

 

 

101,526

 

 

122,057

 

 

 

 

18,769

 

 

18.2

%

 

 

Income before income taxes

$

37,119

 

$

39,684

 

$

39,050

 

$

46,982

 

$

39,985

 

 

 

$

2,865

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate & Other Distributed Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct premiums

$

7,319

 

$

6,941

 

$

7,249

 

$

6,532

 

$

6,721

 

 

 

$

(598

)

 

-8.2

%

 

 

Ceded premiums

 

(1,692

)

 

(1,868

)

 

(1,869

)

 

(2,331

)

 

(1,688

)

 

 

 

4

 

 

0.2

%

 

 

Net premiums

 

5,627

 

 

5,073

 

 

5,380

 

 

4,201

 

 

5,033

 

 

 

 

(594

)

 

-10.6

%

 

 

Allocated net investment income

 

17,591

 

 

17,395

 

 

17,395

 

 

16,705

 

 

17,216

 

 

 

 

(375

)

 

-2.1

%

 

 

Commissions and fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

30

 

 

33

 

 

35

 

 

33

 

 

18

 

 

 

 

(12

)

 

-40.9

%

 

 

DebtWatchers

 

241

 

 

223

 

 

216

 

 

195

 

 

173

 

 

 

 

(68

)

 

-28.1

%

 

 

Prepaid Legal Services

 

2,946

 

 

3,063

 

 

3,182

 

 

3,318

 

 

3,669

 

 

 

 

724

 

 

24.6

%

 

 

Auto and Homeowners Insurance

 

1,815

 

 

2,166

 

 

1,980

 

 

2,238

 

 

1,347

 

 

 

 

(468

)

 

-25.8

%

 

 

Long-Term Care Insurance

 

542

 

 

520

 

 

524

 

 

524

 

 

527

 

 

 

 

(14

)

 

-2.7

%

 

 

Other sales commissions

 

486

 

 

913

 

 

1,112

 

 

1,789

 

 

1,387

 

 

 

 

901

 

nm

 

 

 

Other, net

 

1,294

 

 

1,530

 

 

1,156

 

 

1,320

 

 

1,145

 

 

 

 

(149

)

 

-11.5

%

 

 

Adjusted operating revenues

 

30,572

 

 

30,917

 

 

30,981

 

 

30,323

 

 

30,516

 

 

 

 

(56

)

 

-0.2

%

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

4,615

 

 

3,980

 

 

4,513

 

 

4,700

 

 

4,059

 

 

 

 

(556

)

 

-12.0

%

 

 

Amortization of DAC

 

(17

)

 

613

 

 

218

 

 

666

 

 

50

 

 

 

 

67

 

nm

 

 

 

Insurance commissions

 

532

 

 

461

 

 

500

 

 

382

 

 

450

 

 

 

 

(82

)

 

-15.5

%

 

 

Insurance expenses

 

1,904

 

 

1,988

 

 

1,551

 

 

1,961

 

 

2,153

 

 

 

 

249

 

 

13.1

%

 

 

Sales commissions

 

2,865

 

 

3,221

 

 

3,463

 

 

3,864

 

 

3,777

 

 

 

 

912

 

 

31.8

%

 

 

Interest expense

 

7,127

 

 

7,144

 

 

7,074

 

 

7,143

 

 

7,173

 

 

 

 

46

 

 

0.6

%

 

 

Other operating expenses

 

24,980

 

 

18,763

 

 

19,077

 

 

19,817

 

 

26,554

 

 

 

 

1,574

 

 

6.3

%

 

 

Benefits and expenses

 

42,006

 

 

36,170

 

 

36,395

 

 

38,532

 

 

44,216

 

 

 

 

2,211

 

 

5.3

%

 

 

Adjusted operating income before income taxes

$

(11,434

)

$

(5,254

)

$

(5,415

)

$

(8,209

)

$

(13,700

)

 

 

$

(2,266

)

 

-19.8

%

 

 

(1)

Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements.

(2)

Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers.

(3)

Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers.

8 of 16

 

 

 

Term Life Insurance - Financial Results and Analysis

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

(Dollars in thousands)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$

Change

 

%

Change

 

 

Term Life Insurance Income Before Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct Premiums

$

620,379

 

$

630,485

 

$

638,830

 

$

644,373

 

$

649,366

 

 

 

$

28,987

 

 

4.7

%

 

 

Premiums ceded to IPO coinsurers (1)

 

(312,982

)

 

(308,323

)

 

(304,580

)

 

(300,144

)

 

(294,301

)

 

 

 

18,681

 

 

6.0

%

 

 

Adjusted direct premiums (2)

 

307,397

 

 

322,163

 

 

334,251

 

 

344,230

 

 

355,065

 

 

 

 

47,668

 

 

15.5

%

 

 

Other ceded premiums  (3)

 

(85,095

)

 

(95,852

)

 

(91,193

)

 

(94,843

)

 

(98,260

)

 

 

 

(13,165

)

 

-15.5

%

 

 

Net premiums

 

222,302

 

 

226,311

 

 

243,058

 

 

249,387

 

 

256,805

 

 

 

 

34,503

 

 

15.5

%

 

 

Allocated net investment income

 

2,303

 

 

2,347

 

 

2,527

 

 

2,754

 

 

3,089

 

 

 

 

785

 

 

34.1

%

 

 

Other, net

 

9,446

 

 

10,244

 

 

10,655

 

 

10,890

 

 

10,415

 

 

 

 

969

 

 

10.3

%

 

 

Revenues

 

234,051

 

 

238,902

 

 

256,240

 

 

263,031

 

 

270,309

 

 

 

 

36,258

 

 

15.5

%

 

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims

 

97,771

 

 

95,532

 

 

101,351

 

 

103,559

 

 

112,831

 

 

 

 

15,061

 

 

15.4

%

 

 

Amortization of DAC

 

50,133

 

 

44,937

 

 

50,386

 

 

56,294

 

 

56,673

 

 

 

 

6,540

 

 

13.0

%

 

 

Insurance commissions

 

1,408

 

 

1,646

 

 

1,874

 

 

1,799

 

 

2,228

 

 

 

 

819

 

 

58.2

%

 

 

Insurance expenses

 

35,717

 

 

34,932

 

 

36,086

 

 

33,142

 

 

38,956

 

 

 

 

3,239

 

 

9.1

%

 

 

Benefits and expenses

 

185,029

 

 

177,047

 

 

189,697

 

 

194,794

 

 

210,688

 

 

 

 

25,659

 

 

13.9

%

 

 

Income before income taxes

$

49,022

 

$

61,855

 

$

66,543

 

$

68,237

 

$

59,621

 

 

 

$

10,599

 

 

21.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Term Life Insurance - Financial Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Primary direct premiums (4)

$

227,390

 

$

240,580

 

$

250,457

 

$

258,524

 

$

267,615

 

 

 

$

40,225

 

 

17.7

%

 

 

Legacy direct premiums (5)

 

392,989

 

 

389,906

 

 

388,373

 

 

385,849

 

 

381,751

 

 

 

 

(11,238

)

 

-2.9

%

 

 

Total direct premiums

$

620,379

 

$

630,485

 

$

638,830

 

$

644,373

 

$

649,366

 

 

 

$

28,987

 

 

4.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums ceded to IPO coinsurers

$

312,982

 

$

308,323

 

$

304,580

 

$

300,144

 

$

294,301

 

 

 

$

(18,681

)

 

-6.0

%

 

 

% of Legacy direct premiums

 

79.6

%

 

79.1

%

 

78.4

%

 

77.8

%

 

77.1

%

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits and claims, net (6)

$

182,866

 

$

191,384

 

$

192,544

 

$

198,402

 

$

211,091

 

 

 

$

28,226

 

 

15.4

%

 

 

% of adjusted direct premiums

 

59.5

%

 

59.4

%

 

57.6

%

 

57.6

%

 

59.5

%

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAC amortization & insurance commissions

$

51,542

 

$

46,584

 

$

52,260

 

$

58,094

 

$

58,901

 

 

 

$

7,359

 

 

14.3

%

 

 

% of adjusted direct premiums

 

16.8

%

 

14.5

%

 

15.6

%

 

16.9

%

 

16.6

%

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance expenses, net (7)

$

26,271

 

$

24,687

 

$

25,431

 

$

22,251

 

$

28,541

 

 

 

$

2,269

 

 

8.6

%

 

 

% of adjusted direct premiums

 

8.5

%

 

7.7

%

 

7.6

%

 

6.5

%

 

8.0

%

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Term Life income before income taxes

$

49,022

 

$

61,855

 

$

66,543

 

$

68,237

 

$

59,621

 

 

 

$

10,599

 

 

21.6

%

 

 

Term Life operating margin (8)

 

15.9

%

 

19.2

%

 

19.9

%

 

19.8

%

 

16.8

%

 

 

nm

 

nm

 

 

 

(1)

Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements.

(2)

Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers.

(3)

Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers.

(4)

Primary direct premiums - direct premiums not subject to the 2010 IPO coinsurance transactions.

(5)

Legacy direct premiums - direct premiums subject to the 2010 IPO coinsurance transactions.

(6)

Benefits and claims, net - benefits & claims net of other ceded premiums which are largely YRT.

(7)

Insurance expenses, net - insurance expenses net of other, net revenues.

(8)

Term Life operating margin - Term Life operating income before income taxes as a percentage of adjusted direct premiums.

9 of 16

 

 

 

Term Life Insurance - Key Statistics

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

 

(Dollars in thousands, except as noted)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$/#

Change

 

%

Change

 

 

 

Key Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life-insurance licensed sales force, beginning of period

 

116,827

 

 

117,907

 

 

121,471

 

 

124,436

 

 

126,121

 

 

 

 

9,294

 

 

8.0

%

 

 

 

New life-licensed representatives

 

10,903

 

 

12,947

 

 

12,783

 

 

11,902

 

 

11,730

 

 

 

 

827

 

 

7.6

%

 

 

 

Non-renewal and terminated representatives

 

(9,823

)

 

(9,383

)

 

(9,818

)

 

(10,217

)

 

(10,669

)

 

 

 

(846

)

 

-8.6

%

 

 

Life-insurance licensed sales force, end of period

 

117,907

 

 

121,471

 

 

124,436

 

 

126,121

 

 

127,182

 

 

 

 

9,275

 

 

7.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated annualized issued term life premium ($mills) (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium from new policies

$

59.4

 

$

70.2

 

$

65.8

 

$

67.6

 

$

60.4

 

 

 

$

1.0

 

 

1.7

%

 

 

 

Additions and increases in premium

 

15.1

 

 

16.5

 

 

16.4

 

 

17.5

 

 

16.9

 

 

 

 

1.8

 

 

11.7

%

 

 

 

 

 

Total estimated annualized issued term life premium

$

74.5

 

$

86.7

 

$

82.2

 

$

85.1

 

$

77.3

 

 

 

$

2.8

 

 

3.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued term life policies

 

70,642

 

 

84,033

 

 

78,056

 

 

80,068

 

 

70,821

 

 

 

 

179

 

 

0.3

%

 

 

Estimated average annualized issued term life premium per policy (1)(2)

$

841

 

$

836

 

$

843

 

$

845

 

$

853

 

 

 

$

12

 

 

1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term life face amount in-force, beginning of period ($mills)

$

728,385

 

$

733,756

 

$

746,427

 

$

757,411

 

$

763,831

 

 

 

$

35,446

 

 

4.9

%

 

 

 

Issued term life face amount (3)

 

21,628

 

 

25,458

 

 

24,035

 

 

24,515

 

 

22,258

 

 

 

 

630

 

 

2.9

%

 

 

 

Terminated term life face amount

 

(16,704

)

 

(14,994

)

 

(16,331

)

 

(17,929

)

 

(17,788

)

 

 

 

(1,084

)

 

-6.5

%

 

 

 

Foreign currency impact, net

 

447

 

 

2,207

 

 

3,280

 

 

(165

)

 

(2,570

)

 

 

 

(3,017

)

nm

 

 

 

Term life face amount in-force, end of period

$

733,756

 

$

746,427

 

$

757,411

 

$

763,831

 

$

765,732

 

 

 

$

31,976

 

 

4.4

%

 

 

(1)     Estimated annualized issued term life premium - estimated as average premium per $1,000 of face amounts issued on new policies and additions (before free look returns) multiplied by actual face amount issued on new policies, rider additions and face amount increases.

(2)     In whole dollars.

(3)     Issued term life face amount - includes face amount on issued term life policies, additional riders added to existing policies, and face increases under increasing benefit riders.

 


10 of 16

 

 

 

Investment and Savings Products - Financial Results and Financial Analysis

 

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

(Dollars in thousands, except as noted)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$

Change

 

%

Change

 

 

Investment & Savings Products Income Before Income Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions and fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based

$

60,517

 

$

60,692

 

$

53,488

 

$

58,307

 

$

64,461

 

 

 

$

3,944

 

 

6.5

%

 

 

Asset-based

 

64,474

 

 

67,424

 

 

70,279

 

 

72,982

 

 

74,649

 

 

 

 

10,176

 

 

15.8

%

 

 

Account-based

 

13,217

 

 

13,282

 

 

13,811

 

 

14,720

 

 

20,595

 

 

 

 

7,378

 

 

55.8

%

 

 

Other, net

 

2,199

 

 

2,376

 

 

2,480

 

 

2,499

 

 

2,336

 

 

 

 

137

 

 

6.2

%

 

 

Revenues

 

140,407

 

 

143,774

 

 

140,058

 

 

148,508

 

 

162,042

 

 

 

 

21,634

 

 

15.4

%

 

 

Benefits and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of DAC

 

1,734

 

 

2,310

 

 

2,780

 

 

(656

)

 

3,442

 

 

 

 

1,708

 

 

98.5

%

 

 

Insurance commissions

 

2,959

 

 

3,050

 

 

3,219

 

 

3,278

 

 

3,199

 

 

 

 

241

 

 

8.1

%

 

 

Sales commissions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based

 

43,209

 

 

43,253

 

 

38,338

 

 

41,261

 

 

46,259

 

 

 

 

3,050

 

 

7.1

%

 

 

Asset-based

 

27,630

 

 

28,965

 

 

30,220

 

 

31,698

 

 

32,484

 

 

 

 

4,854

 

 

17.6

%

 

 

Other operating expenses

 

27,756

 

 

26,512

 

 

26,451

 

 

25,945

 

 

36,673

 

 

 

 

8,917

 

 

32.1

%

 

 

Benefits and expenses

 

103,288

 

 

104,090

 

 

101,008

 

 

101,526

 

 

122,057

 

 

 

 

18,769

 

 

18.2

%

 

 

Income before income taxes

$

37,119

 

$

39,684

 

$

39,050

 

$

46,982

 

$

39,985

 

 

 

$

2,865

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees paid based on client asset values (1)

$

4,884

 

$

5,088

 

$

5,440

 

$

5,697

 

$

5,690

 

 

 

$

806

 

 

16.5

%

 

 

Fees paid based on fee-generating positions (2)

 

5,017

 

 

4,590

 

 

4,495

 

 

4,537

 

 

12,495

 

 

 

 

7,478

 

 

149.1

%

 

 

Other operating expenses

 

17,855

 

 

16,834

 

 

16,516

 

 

15,711

 

 

18,488

 

 

 

 

633

 

 

3.5

%

 

 

Total other operating expenses

$

27,756

 

$

26,512

 

$

26,451

 

$

25,945

 

$

36,673

 

 

 

$

8,917

 

 

32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales-based net revenue as % of revenue-generating sales (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

1.27

%

 

1.25

%

 

1.26

%

 

1.28

%

 

1.24

%

 

 

nm

 

nm

 

 

 

Canada

 

1.01

%

 

0.99

%

 

0.98

%

 

0.97

%

 

1.05

%

 

 

nm

 

nm

 

 

 

Total

 

1.23

%

 

1.21

%

 

1.22

%

 

1.24

%

 

1.20

%

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-based net revenue as % of average asset values (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

0.035

%

 

0.036

%

 

0.036

%

 

0.036

%

 

0.036

%

 

 

nm

 

nm

 

 

 

Canada

 

0.129

%

 

0.123

%

 

0.120

%

 

0.154

%

 

0.111

%

 

 

nm

 

nm

 

 

 

Total

 

0.051

%

 

0.050

%

 

0.050

%

 

0.055

%

 

0.048

%

 

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Account-based net revenue per average fee generating position (5)(6)

$

2.84

 

$

2.98

 

$

3.20

 

$

3.52

 

$

2.90

 

 

 

nm

 

nm

 

 

 

(1)

Fees paid based on client asset values - administration fees on Canadian Segregated Funds and advisory fees on Managed Accounts that vary directly with client asset values.

(2)

Fees paid based on fee-generating positions - recordkeeping fees that vary with the number of fee-generating positions.

(3)

Sales-based net revenue - commission and fee revenue less commissions paid to the sales force based on product sales activity.

(4)

Asset-based net revenue - commission and fee revenue less administration and advisory fees paid to third-party providers and commissions paid to the sales force earned based on product account values including amortization of deferred acquisition costs for segregated funds.

(5)

Account-based net revenue - fee revenue less recordkeeping fees paid to third-party providers based on fee-generating positions and certain direct general expenses.

(6)

In whole dollars.

11 of 16

 

 

 

Investment and Savings Products - Key Statistics

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

(Dollars in thousands, except as noted)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

$/#

Change

 

%

Change

 

 

Key Statistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales ($mills)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Retail Mutual Funds

$

752.2

 

$

804.2

 

$

707.4

 

$

752.7

 

$

792.4

 

 

 

$

40.2

 

 

5.3

%

 

 

 

Canada Retail Mutual Funds

 

232.8

 

 

182.7

 

 

170.8

 

 

199.3

 

 

276.2

 

 

 

 

43.4

 

 

18.6

%

 

 

 

Indexed Annuities

 

80.9

 

 

83.6

 

 

64.2

 

 

58.4

 

 

67.5

 

 

 

 

(13.3

)

 

-16.5

%

 

 

 

Variable Annuities and other

 

346.2

 

 

366.5

 

 

301.7

 

 

368.2

 

 

376.1

 

 

 

 

29.8

 

 

8.6

%

 

 

 

 

 

Total sales-based revenue generating product sales

 

1,412.2

 

 

1,437.0

 

 

1,244.1

 

 

1,378.5

 

 

1,512.2

 

 

 

 

100.0

 

 

7.1

%

 

 

 

Managed Accounts

 

70.8

 

 

72.4

 

 

125.4

 

 

159.7

 

 

188.8

 

 

 

 

118.1

 

nm

 

 

 

 

Segregated Funds

 

102.4

 

 

63.5

 

 

61.7

 

 

64.7

 

 

82.0

 

 

 

 

(20.3

)

 

-19.8

%

 

 

 

 

 

Total product sales

$

1,585.3

 

$

1,572.8

 

$

1,431.2

 

$

1,602.9

 

$

1,783.0

 

 

 

$

197.8

 

 

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada Retail Mutual Funds

$

232.8

 

$

182.7

 

$

170.8

 

$

199.3

 

$

276.2

 

 

 

$

43.4

 

 

18.6

%

 

 

 

Segregated Funds

 

102.4

 

 

63.5

 

 

61.7

 

 

64.7

 

 

82.0

 

 

 

 

(20.3

)

 

-19.8

%

 

 

 

 

Total Canada product sales

 

335.2

 

 

246.2

 

 

232.5

 

 

264.0

 

 

358.2

 

 

 

 

23.0

 

 

6.9

%

 

 

 

 

Total U.S. product sales

 

1,250.1

 

 

1,326.6

 

 

1,198.7

 

 

1,338.8

 

 

1,424.8

 

 

 

 

174.7

 

 

14.0

%

 

 

 

 

 

Total product sales

$

1,585.3

 

$

1,572.8

 

$

1,431.2

 

$

1,602.9

 

$

1,783.0

 

 

 

$

197.8

 

 

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Client asset values, beginning of period ($mills)

$

52,339

 

$

54,925

 

$

56,591

 

$

58,671

 

$

61,167

 

 

 

$

8,828

 

 

16.9

%

 

 

 

Inflows

 

1,585

 

 

1,573

 

 

1,431

 

 

1,603

 

 

1,783

 

 

 

 

198

 

 

12.5

%

 

 

 

Outflows (1)

 

(1,266

)

 

(1,318

)

 

(1,258

)

 

(1,306

)

 

(1,571

)

 

 

 

(306

)

 

-24.2

%

 

 

 

 

 

Net flows

 

320

 

 

255

 

 

174

 

 

297

 

 

212

 

 

 

 

(108

)

 

-33.7

%

 

 

 

Foreign currency impact, net

 

47

 

 

241

 

 

354

 

 

(18

)

 

(283

)

 

 

 

(330

)

nm

 

 

 

 

Change in market value, net and other (2)

 

2,219

 

 

1,170

 

 

1,552

 

 

2,217

 

 

(276

)

 

 

 

(2,494

)

 

-112.4

%

 

 

Client asset values, end of period

$

54,925

 

$

56,591

 

$

58,671

 

$

61,167

 

$

60,821

 

 

 

$

5,896

 

 

10.7

%

 

 

 

Annualized net flows as % of beginning of period asset values

 

2.4

%

 

1.9

%

 

1.2

%

 

2.0

%

 

1.4

%

 

 

 

-1.1

%

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average client asset values ($mills)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Retail Mutual Funds

$

26,899

 

$

27,890

 

$

28,756

 

$

29,826

 

$

30,674

 

 

 

$

3,775

 

 

14.0

%

 

 

 

Canada Retail Mutual Funds

 

6,434

 

 

6,673

 

 

6,960

 

 

7,255

 

 

7,508

 

 

 

 

1,074

 

 

16.7

%

 

 

 

Managed Accounts

 

1,954

 

 

2,084

 

 

2,246

 

 

2,494

 

 

2,739

 

 

 

 

785

 

 

40.1

%

 

 

 

Indexed Annuities

 

1,699

 

 

1,774

 

 

1,836

 

 

1,890

 

 

1,939

 

 

 

 

240

 

 

14.1

%

 

 

 

Variable Annuities and other

 

14,505

 

 

14,982

 

 

15,394

 

 

15,928

 

 

16,333

 

 

 

 

1,828

 

 

12.6

%

 

 

 

Segregated Funds

 

2,331

 

 

2,375

 

 

2,463

 

 

2,513

 

 

2,510

 

 

 

 

179

 

 

7.7

%

 

 

 

 

 

Total

$

53,823

 

$

55,778

 

$

57,656

 

$

59,906

 

$

61,704

 

 

 

$

7,881

 

 

14.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canada Retail Mutual Funds

$

6,434

 

$

6,673

 

$

6,960

 

$

7,255

 

$

7,508

 

 

 

$

1,074

 

 

16.7

%

 

 

 

Segregated Funds

 

2,331

 

 

2,375

 

 

2,463

 

 

2,513

 

 

2,510

 

 

 

 

179

 

 

7.7

%

 

 

 

 

Total Canada average client assets

 

8,765

 

 

9,048

 

 

9,423

 

 

9,768

 

 

10,018

 

 

 

 

1,253

 

 

14.3

%

 

 

 

 

Total U.S. average client assets

 

45,058

 

 

46,730

 

 

48,233

 

 

50,138

 

 

51,685

 

 

 

 

6,627

 

 

14.7

%

 

 

 

 

 

Total average client assets

$

53,823

 

$

55,778

 

$

57,656

 

$

59,906

 

$

61,704

 

 

 

$

7,881

 

 

14.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of fee-generating positions (thous) (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recordkeeping and custodial

 

2,218

 

 

2,237

 

 

2,235

 

 

2,215

 

 

2,130

 

 

 

 

(88

)

 

-4.0

%

 

 

 

Recordkeeping only

 

670

 

 

676

 

 

678

 

 

677

 

 

665

 

 

 

 

(5

)

 

-0.7

%

 

 

 

 

 

Total

 

2,887

 

 

2,913

 

 

2,913

 

 

2,892

 

 

2,795

 

 

 

 

(93

)

 

-3.2

%

 

 

(1)

Asset value outflows - include (a) redemptions of assets, (b) sales charges on the inflow sales figures, and (c) the net flow of money market funds sold and redeemed on the company's recordkeeping platform.  The redemptions of assets must be estimated for approximately 4% of account values as these figures are not readily available.  Actual redemptions as a percentage of account values for similar known account values are used to estimate the unknown redemption values.

(2)

Change in market value, net - market value fluctuations net of fees and expenses.

(3)

Fee generating positions - mutual fund positions for which we receive recording keeping fees. An individual client account may include multiple mutual fund positions. We may also receive fees earned for custodial services that we provide to clients with retirement plan accounts that hold positions in these mutual funds.

12 of 16

 

 

 

Investment Portfolio - Summary of Holdings

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

As of or for the period ended March 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Total

 

Avg

 

 

 

 

 

 

 

 

 

 

Market

 

Amortized

 

Unrealized

 

Market

 

Amortized

 

Book

 

Avg

(Dollars in thousands)

 

Value

 

Cost

 

G/(L)

 

Value

 

Cost

 

Yield

 

Rating

Investment Portfolio by Asset Class

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

190,585

 

$

190,585

 

$

-

 

 

8.6

%

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

26,604

 

 

26,328

 

 

276

 

 

1.2

%

 

1.2

%

 

2.33

%

AAA

 

Government

 

 

188,125

 

 

183,673

 

 

4,452

 

 

8.5

%

 

8.3

%

 

3.30

%

AA-

 

Tax-Exempt Municipal

 

 

2,420

 

 

2,187

 

 

233

 

 

0.1

%

 

0.1

%

 

1.64

%

A-

 

Corporate

 

 

1,286,603

 

 

1,275,232

 

 

11,372

 

 

57.9

%

 

57.9

%

 

4.09

%

BBB+

 

Mortgage-Backed

 

 

135,059

 

 

134,090

 

 

969

 

 

6.1

%

 

6.1

%

 

3.46

%

AAA

 

Asset-Backed

 

 

77,571

 

 

77,619

 

 

(47

)

 

3.5

%

 

3.5

%

 

2.92

%

AA

 

CMBS

 

 

139,065

 

 

139,082

 

 

(18

)

 

6.3

%

 

6.3

%

 

3.58

%

AAA

 

Private

 

 

131,937

 

 

131,591

 

 

345

 

 

5.9

%

 

6.0

%

 

4.72

%

BBB

 

Redeemable Preferred

 

 

3,379

 

 

3,102

 

 

277

 

 

0.2

%

 

0.1

%

 

12.27

%

BBB

 

Total Fixed Income

 

 

1,990,763

 

 

1,972,904

 

 

17,859

 

 

89.6

%

 

89.5

%

 

3.92

%

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Perpetual Preferred

 

 

17,536

 

 

17,536

 

 

-

 

 

0.8

%

 

0.8

%

 

 

 

 

 

Common Stock

 

 

16,305

 

 

16,305

 

 

0

 

 

0.7

%

 

0.7

%

 

 

 

 

 

Mutual Fund

 

 

5,958

 

 

5,918

 

 

40

 

 

0.3

%

 

0.3

%

 

 

 

 

 

Other

 

 

833

 

 

833

 

 

-

 

 

0.0

%

 

0.0

%

 

 

 

 

 

Total Equities

 

 

40,632

 

 

40,592

 

 

40

 

 

1.8

%

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Invested Assets

 

$

2,221,980

 

$

2,204,081

 

$

17,899

 

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Portfolio by Sector

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Non Cyclical

 

$

160,147

 

$

159,851

 

$

296

 

 

12.4

%

 

12.5

%

 

 

 

 

 

Banking

 

 

152,615

 

 

152,223

 

 

392

 

 

11.9

%

 

11.9

%

 

 

 

 

 

Reits

 

 

133,644

 

 

133,036

 

 

608

 

 

10.4

%

 

10.4

%

 

 

 

 

 

Energy

 

 

132,440

 

 

130,773

 

 

1,667

 

 

10.3

%

 

10.3

%

 

 

 

 

 

Insurance

 

 

105,346

 

 

104,618

 

 

728

 

 

8.2

%

 

8.2

%

 

 

 

 

 

Technology

 

 

101,714

 

 

100,913

 

 

800

 

 

7.9

%

 

7.9

%

 

 

 

 

 

Communications

 

 

94,826

 

 

93,296

 

 

1,530

 

 

7.4

%

 

7.3

%

 

 

 

 

 

Capital Goods

 

 

89,237

 

 

88,588

 

 

649

 

 

6.9

%

 

6.9

%

 

 

 

 

 

Electric

 

 

76,656

 

 

74,974

 

 

1,682

 

 

6.0

%

 

5.9

%

 

 

 

 

 

Basic Industry

 

 

72,153

 

 

70,663

 

 

1,490

 

 

5.6

%

 

5.5

%

 

 

 

 

 

Consumer Cyclical

 

 

66,261

 

 

65,580

 

 

681

 

 

5.2

%

 

5.1

%

 

 

 

 

 

Transportation

 

 

45,317

 

 

45,350

 

 

(33

)

 

3.5

%

 

3.6

%

 

 

 

 

 

Brokerage

 

 

26,593

 

 

25,980

 

 

613

 

 

2.1

%

 

2.0

%

 

 

 

 

 

Industrial Other

 

 

11,798

 

 

11,664

 

 

134

 

 

0.9

%

 

0.9

%

 

 

 

 

 

Natural Gas

 

 

7,358

 

 

7,198

 

 

160

 

 

0.6

%

 

0.6

%

 

 

 

 

 

Finance Companies

 

 

6,717

 

 

6,755

 

 

(37

)

 

0.5

%

 

0.5

%

 

 

 

 

 

Financial Other

 

 

2,784

 

 

2,771

 

 

13

 

 

0.2

%

 

0.2

%

 

 

 

 

 

Utility Other

 

 

996

 

 

997

 

 

(1

)

 

0.1

%

 

0.1

%

 

 

 

 

 

Total Corporate portfolio

 

$

1,286,603

 

$

1,275,232

 

$

11,372

 

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-Maturity Securities - Effective Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

< 1 Yr.

 

$

236,348

 

$

234,449

 

$

1,899

 

 

11.9

%

 

11.9

%

 

3.90

%

 

 

 

1-2 Yrs.

 

 

231,901

 

 

227,127

 

 

4,774

 

 

11.6

%

 

11.5

%

 

4.70

%

 

 

 

2-5 Yrs.

 

 

807,063

 

 

799,694

 

 

7,369

 

 

40.5

%

 

40.5

%

 

3.73

%

 

 

 

5-10 Yrs.

 

 

661,247

 

 

661,085

 

 

162

 

 

33.2

%

 

33.5

%

 

3.84

%

 

 

 

> 10 Yrs.

 

 

54,204

 

 

50,549

 

 

3,655

 

 

2.7

%

 

2.6

%

 

4.42

%

 

 

 

Total Fixed Income

 

$

1,990,763

 

$

1,972,904

 

$

17,859

 

 

100.0

%

 

100.0

%

 

3.92

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Duration

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Income portfolio duration

 

 

3.7

 

years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                        Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

 

13 of 16

 

 

 

Investment Portfolio - Quality Ratings As of March 31, 2018

PRIMERICA, INC.

Financial Supplement

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Portfolio Quality Ratings (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized  Cost

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Fixed Income portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

$

390,398

 

 

19.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AA

 

 

169,017

 

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A

 

 

462,546

 

 

23.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBB

 

 

880,323

 

 

44.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Below Investment Grade

 

 

67,061

 

 

3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NA

 

 

3,559

 

 

0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Fixed Income

 

$

1,972,904

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized  Cost

 

% of Total

 

 

 

 

 

 

 

 

 

 

 

Amortized  Cost

 

% of Total

 

Corporate asset class:

 

 

 

 

 

 

 

 

 

Private asset class:

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

AAA

 

$

11,979

 

 

0.9

%

 

 

 

AAA

 

$

-

 

 

—

 

 

AA

 

 

79,037

 

 

6.2

%

 

 

 

AA

 

 

1,137

 

 

0.9

%

 

A

 

 

370,706

 

 

29.1

%

 

 

 

A

 

 

12,397

 

 

9.4

%

 

BBB

 

 

754,996

 

 

59.2

%

 

 

 

BBB

 

 

113,319

 

 

86.1

%

 

Below Investment Grade

 

 

58,334

 

 

4.6

%

 

 

 

Below Investment Grade

 

 

4,739

 

 

3.6

%

 

NA

 

 

180

 

 

0.0

%

 

 

 

NA

 

 

-

 

 

—

 

 

Total Corporate

 

$

1,275,232

 

 

100.0

%

 

 

 

Total Private

 

$

131,591

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CMBS asset class:

 

 

 

 

 

 

 

 

 

Mortgage-Backed asset class:

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

AAA

 

$

133,631

 

 

96.1

%

 

 

 

AAA

 

$

131,791

 

 

98.3

%

 

AA

 

 

396

 

 

0.3

%

 

 

 

AA

 

 

-

 

 

—

 

 

A

 

 

4,183

 

 

3.0

%

 

 

 

A

 

 

1,162

 

 

0.9

%

 

BBB

 

 

-

 

 

—

 

 

 

 

BBB

 

 

318

 

 

0.2

%

 

Below Investment Grade

 

 

871

 

 

0.6

%

 

 

 

Below Investment Grade

 

 

819

 

 

0.6

%

 

NA

 

 

-

 

 

—

 

 

 

 

NA

 

 

-

 

 

—

 

 

Total CMBS

 

$

139,082

 

 

100.0

%

 

 

 

Total Mortgage-Backed

 

$

134,090

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-Backed asset class:

 

 

 

 

 

 

 

 

 

Treasury & Government asset classes:

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

AAA

 

$

45,427

 

 

58.5

%

 

 

 

AAA

 

$

67,042

 

 

31.9

%

 

AA

 

 

6,477

 

 

8.3

%

 

 

 

AA

 

 

81,212

 

 

38.7

%

 

A

 

 

20,681

 

 

26.6

%

 

 

 

A

 

 

53,013

 

 

25.2

%

 

BBB

 

 

1,625

 

 

2.1

%

 

 

 

BBB

 

 

7,119

 

 

3.4

%

 

Below Investment Grade

 

 

184

 

 

0.2

%

 

 

 

Below Investment Grade

 

 

1,615

 

 

0.8

%

 

NA

 

 

3,225

 

 

4.2

%

 

 

 

NA

 

 

0

 

 

0.0

%

 

Total Asset-Backed

 

$

77,619

 

 

100.0

%

 

 

 

Total Treasury & Government

 

$

210,001

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NAIC Designations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

$

764,828

 

 

47.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

797,195

 

 

49.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

52,824

 

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

9,966

 

 

0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

192

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

502

 

 

0.0

%

 

 

 

 

 

 

 

`

 

 

 

 

 

 

 

 

 

U.S. Insurer Fixed Income (2)

 

 

1,625,507

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (3)

 

 

387,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

190,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Invested Assets

 

$

2,204,081

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Ratings method for split ratings: If by 2 NRSROs, use lower of the two; if by 3 or more NRSROs, use second lowest.

(2)

NAIC ratings for our U.S. insurance companies' fixed income portfolios.

(3)

Other consists of assets held by our non-life companies, Canadian insurance company, and unrated equities.

                        Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

14 of 16

 

 

 

Investment Portfolio - Supplemental Data and Trends

PRIMERICA, INC.

Financial Supplement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

(Dollars in thousands)

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

$

Change

 

%

Change

 

Net Investment Income by Source

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-maturity securities (available-for-sale)

$

19,069

 

$

19,200

 

$

19,268

 

$

19,340

 

$

19,289

 

 

220

 

1.2%

 

 

Fixed-maturity securities (held-to-maturity)

 

5,718

 

 

6,087

 

 

7,231

 

 

7,829

 

 

8,373

 

 

2,655

 

46.4%

 

 

Equity Securities

 

535

 

 

515

 

 

525

 

 

519

 

 

513

 

 

(22

)

-4.1%

 

 

Deposit asset underlying 10% reinsurance treaty

 

1,032

 

 

770

 

 

869

 

 

299

 

 

1,181

 

 

149

 

14.4%

 

 

Deposit asset - Mark to Market

 

—

 

 

—

 

 

—

 

 

—

 

 

(1,288

)

 

(1,288

)

n/m

 

 

Policy loans and other invested assets

 

305

 

 

317

 

 

395

 

 

397

 

 

411

 

 

106

 

34.8%

 

 

Cash & cash equivalents

 

194

 

 

246

 

 

282

 

 

402

 

 

586

 

 

392

 

n/m

 

 

Total investment income

 

26,853

 

 

27,135

 

 

28,570

 

 

28,786

 

 

29,065

 

 

2,212

 

8.2%

 

 

Investment expenses

 

1,241

 

 

1,306

 

 

1,417

 

 

1,498

 

 

1,675

 

 

434

 

35.0%

 

 

Interest Expense on Surplus Note

 

5,718

 

 

6,087

 

 

7,231

 

 

7,829

 

 

8,373

 

 

2,655

 

46.4%

 

 

Net investment income

$

19,894

 

$

19,742

 

$

19,922

 

$

19,459

 

$

19,017

 

 

(877

)

-4.4%

 

 

Fixed income book yield, end of period

 

4.18

%

 

4.11

%

 

4.04

%

 

3.97

%

 

3.92

%

 

—

 

 

—

 

 

New money yield

 

2.31

%

 

2.83

%

 

2.85

%

 

2.28

%

 

2.43

%

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

YOY Q1

 

 

 

 

 

 

 

 

 

 

 

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

% Pt

Change

 

 

 

 

Fixed Income Portfolio Quality Ratings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AAA

 

17.4

%

 

17.3

%

 

18.6

%

 

19.2

%

 

19.8

%

 

2.3

%

 

 

 

 

AA

 

9.5

%

 

8.4

%

 

8.5

%

 

8.4

%

 

8.6

%

 

-0.9

%

 

 

 

 

A

 

21.6

%

 

23.5

%

 

22.5

%

 

22.2

%

 

23.4

%

 

1.8

%

 

 

 

 

BBB

 

46.0

%

 

45.8

%

 

46.3

%

 

46.5

%

 

44.6

%

 

-1.4

%

 

 

 

 

Below Investment Grade

 

5.0

%

 

4.5

%

 

3.7

%

 

3.5

%

 

3.4

%

 

-1.6

%

 

 

 

 

NA

 

0.4

%

 

0.3

%

 

0.3

%

 

0.2

%

 

0.2

%

 

-0.2

%

 

 

 

 

Total Fixed Income

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average rating by amortized cost

A-

 

A-

 

A-

 

A

 

A

 

na

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2018

 

 

 

As of March 31, 2018

 

 

 

 

 

 

As of March 31, 2018

 

 

 

 

 

 

 

 

Market

Value

 

Amortized

Cost

 

Credit

Rating

 

 

 

Market

Value

 

Amortized

Cost

 

 

 

 

 

 

Market

Value

 

Amortized

Cost

 

Top 25 Exposures

 

 

 

 

 

 

 

 

Foreign Exposure (1)

 

 

 

 

 

 

 

 

Government Investments (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Canada

$

20,651

 

$

20,436

 

AAA

 

Canada

 

$

70,210

 

$

69,472

 

 

 

AAA

 

 

$

3,222

 

$

3,250

 

 

2

AT&T Inc

 

13,044

 

 

12,271

 

BBB+

 

Australia

 

 

59,910

 

 

59,176

 

 

 

AA

 

 

 

10,392

 

 

10,294

 

 

3

National Rural Utilities Cooperative

 

10,747

 

 

10,280

 

A

 

United Kingdom

 

 

50,290

 

 

50,043

 

 

 

A

 

 

 

18,654

 

 

18,414

 

 

4

Province of British Columbia Canada

 

10,535

 

 

10,505

 

AAA

 

Germany

 

 

18,303

 

 

18,429

 

 

 

BBB

 

 

 

7,380

 

 

7,119

 

 

5

Province of Quebec Canada

 

10,203

 

 

9,464

 

A+

 

France

 

 

17,580

 

 

17,408

 

 

 

Below Investment Grade

 

1,658

 

 

1,615

 

 

6

Province of Alberta Canada

 

9,920

 

 

9,881

 

A+

 

Switzerland

 

 

17,473

 

 

17,507

 

 

 

NA

 

 

 

—

 

 

—

 

 

7

General Electric Co

 

9,918

 

 

9,980

 

A

 

Ireland

 

 

15,698

 

 

15,649

 

 

 

 

Total

 

$

41,306

 

$

40,691

 

 

8

Municipal Finance Authority of British Columbia

 

9,497

 

 

9,595

 

AAA

 

Bermuda

 

 

14,862

 

 

14,727

 

 

 

 

 

 

 

 

 

 

 

 

 

9

Wells Fargo & Co

 

9,181

 

 

9,137

 

A-

 

Netherlands

 

 

11,941

 

 

11,111

 

 

 

 

 

 

 

 

 

 

 

 

 

10

Bank of Montreal

 

8,904

 

 

9,001

 

A+

 

Cayman Islands

 

 

11,401

 

 

11,266

 

 

 

Non-Government Investments (1)

 

 

 

 

 

 

 

11

Enbridge Inc

 

8,771

 

 

8,711

 

BBB+

 

Norway

 

 

9,902

 

 

9,938

 

 

 

 

 

 

 

 

 

 

 

 

 

12

Apple Inc

 

8,603

 

 

8,627

 

AA+

 

Japan

 

 

7,793

 

 

7,699

 

 

 

AAA

 

 

$

2,570

 

$

2,561

 

 

13

Comcast Corp

 

8,187

 

 

8,182

 

A-

 

Belgium

 

 

7,266

 

 

7,112

 

 

 

AA

 

 

 

30,688

 

 

30,867

 

 

14

Goldman Sachs Group Inc/The

 

8,092

 

 

8,021

 

BBB+

 

Mexico

 

 

7,227

 

 

7,070

 

 

 

A

 

 

 

112,890

 

 

112,579

 

 

15

American Airlines Group Inc

 

7,998

 

 

8,216

 

AA-

 

Israel

 

 

5,411

 

 

5,413

 

 

 

BBB

 

 

 

178,446

 

 

174,898

 

 

16

Microsoft Corp

 

7,938

 

 

7,894

 

AAA

 

Emerging Markets  (2)

 

 

11,771

 

 

11,506

 

 

 

Below Investment Grade

 

6,309

 

 

6,342

 

 

17

Province of Ontario Canada

 

7,812

 

 

7,568

 

A+

 

All Other

 

 

35,324

 

 

34,564

 

 

 

NA

 

 

 

154

 

 

154

 

 

18

City of Toronto Canada

 

7,571

 

 

7,565

 

AA

 

 

Total

$

372,363

 

$

368,092

 

 

 

 

Total

 

$

331,057

 

$

327,401

 

 

19

National Fuel Gas Co

 

7,421

 

 

7,081

 

BBB

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

HSBC Holdings PLC

 

7,175

 

 

7,102

 

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

General Mills Inc

 

7,096

 

 

7,313

 

BBB

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

United Continental Holdings Inc

 

7,008

 

 

7,161

 

BB

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

Discovery Inc

 

6,952

 

 

6,788

 

BBB-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

Brookfield Asset Management Inc

 

6,944

 

 

6,887

 

A-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

Booking Holdings Inc

 

6,886

 

 

7,019

 

BBB+

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

227,052

 

$

224,684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of total fixed income portfolio

 

10.2

%

 

10.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

US$ denominated investments in issuers outside of the United States based on country of risk.

(2)

Emerging markets is as defined by MSCI, Inc. which include Chile, India, Peru, Poland and South Africa.

                        Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

15 of 16

 

 

 

Five-Year Historical Key Statistics

PRIMERICA, INC.

Financial Supplement

 

(Dollars in millions)

2013

 

2014

 

2015

 

2016

 

2017

 

Q1

2017

 

Q2

2017

 

Q3

2017

 

Q4

2017

 

Q1

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recruits

 

186,251

 

 

190,439

 

 

228,115

 

 

262,732

 

 

303,867

 

 

70,983

 

 

78,273

 

 

90,210

 

 

64,401

 

 

76,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life-insurance licensed sales force, beginning of period

 

92,373

 

 

95,566

 

 

98,358

 

 

106,710

 

 

116,827

 

 

116,827

 

 

117,907

 

 

121,471

 

 

124,436

 

 

126,121

 

 

New life-licensed representatives

 

34,155

 

 

33,832

 

 

39,632

 

 

44,724

 

 

48,535

 

 

10,903

 

 

12,947

 

 

12,783

 

 

11,902

 

 

11,730

 

 

Non-renewal and terminated representatives

 

(30,962

)

 

(31,040

)

 

(31,280

)

 

(34,607

)

 

(39,241

)

 

(9,823

)

 

(9,383

)

 

(9,818

)

 

(10,217

)

 

(10,669

)

Life-insurance licensed sales force, end of period

 

95,566

 

 

98,358

 

 

106,710

 

 

116,827

 

 

126,121

 

 

117,907

 

 

121,471

 

 

124,436

 

 

126,121

 

 

127,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued term life policies

 

214,617

 

 

220,984

 

 

260,059

 

 

298,244

 

 

312,799

 

 

70,642

 

 

84,033

 

 

78,056

 

 

80,068

 

 

70,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued term life face amount

$

67,783

 

$

69,574

 

$

79,111

 

$

89,869

 

$

95,635

 

$

21,628

 

$

25,458

 

$

24,035

 

$

24,515

 

$

22,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Term life face amount in force, beginning of period

$

670,412

 

$

674,868

 

$

681,927

 

$

693,194

 

$

728,385

 

$

728,385

 

$

733,756

 

$

746,427

 

$

757,411

 

$

763,831

 

 

Issued term life face amount

 

67,783

 

 

69,574

 

 

79,111

 

 

89,869

 

 

95,635

 

 

21,628

 

 

25,458

 

 

24,035

 

 

24,515

 

 

22,258

 

 

Terminated term life face amount

 

(57,730

)

 

(54,962

)

 

(53,580

)

 

(57,238

)

 

(65,958

)

 

(16,704

)

 

(14,994

)

 

(16,331

)

 

(17,929

)

 

(17,788

)

 

Foreign currency impact, net

 

(5,596

)

 

(7,553

)

 

(14,263

)

 

2,560

 

 

5,769

 

 

447

 

 

2,207

 

 

3,280

 

 

(165

)

 

(2,570

)

Term life face amount in force, end of period

$

674,868

 

$

681,927

 

$

693,194

 

$

728,385

 

$

763,831

 

$

733,756

 

$

746,427

 

$

757,411

 

$

763,831

 

$

765,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated annualized issued term life premium

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium from new policies

$

173.5

 

$

179.8

 

$

212.4

 

$

245.2

 

$

263.1

 

$

59.4

 

$

70.2

 

$

65.8

 

$

67.6

 

$

60.4

 

 

Additions and increases in premium

 

48.6

 

 

51.6

 

 

54.9

 

 

60.4

 

 

65.5

 

 

15.1

 

 

16.5

 

 

16.4

 

 

17.5

 

 

16.9

 

 

 

Total estimated annualized issued term life premium

$

222.1

 

$

231.4

 

$

267.3

 

$

305.7

 

$

328.6

 

$

74.5

 

$

86.7

 

$

82.2

 

$

85.1

 

$

77.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment & Savings product sales

$

5,208.8

 

$

5,682.3

 

$

5,856.8

 

$

5,594.3

 

$

6,192.2

 

$

1,585.3

 

$

1,572.8

 

$

1,431.2

 

$

1,602.9

 

$

1,783.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment & Savings average client asset values

$

41,035

 

$

46,936

 

$

48,477

 

$

49,427

 

$

56,791

 

$

53,823

 

$

55,778

 

$

57,656

 

$

59,906

 

$

61,704

 

 

16 of 16