August 10, 2017
Primerica Q2 2017 Total Revenue Increases 9%
Primerica, the Duluth, Georgia-based direct seller of financial services, announced financial results for the quarter ended June 30, 2017. Total revenues increased 9 percent and adjusted operating revenues increased 10 percent to $413.7 million and $413.6 million, respectively. Net income grew 6 percent to $63.1 million and adjusted net operating income grew 10 percent to $63.0 million compared with the second quarter of 2016.
During the quarter, earnings growth and ongoing share repurchases drove EPS and adjusted operating EPS both to $1.36, increasing 10 percent and 14 percent, respectively, compared to the second quarter a year ago. ROE expanded to 20.1 percent and adjusted operating ROAE expanded to 20.9 percent in the second quarter.
“We achieved a 10 percent increase in EPS year-over-year and ROE grew to 20.1 percent in the second quarter, reflecting solid earnings and ongoing share repurchases,” said CEO Glenn Williams. “The outstanding performance of our salesforce leadership resulted in an 8 percent increase in the size of our life insurance licensed salesforce, 9 percent growth in our life insurance policies issued and 7 percent growth in Investment and Savings Products sales year-over-year. Our biennial salesforce convention in June focused on continuing momentum and success supported by technology initiatives and should continue to generate growth in the second half of 2017.”
Life Insurance Licensed Sales Force. Strong recruiting and licensing trends in recent quarters resulted in 8 percent year-over-year growth in the life insurance licensed sales force to 121,471 representatives at the end of the second quarter. Solid momentum leading up to and following the June convention led to a 20 percent increase in new recruits and 6 percent growth in new life insurance licenses versus the prior year period. Recruiting growth was strongest in June and is expected to result in additional licenses in the third quarter due to the timing of the licensing process. On a sequential quarter basis, the size of the life insurance sales force increased 3 percent versus the first quarter, driven by 19 percent growth in new life insurance licenses versus the first quarter.
Term Life Insurance. In the second quarter of 2017, Term Life insurance policies issued increased 9 percent year-over-year reflecting the larger life insurance licensed sales force and seasonally strong productivity of 0.23 policies per life insurance licensed representative per month. Term Life revenues increased to $238.9 million driven by a 13 percent increase in net premiums and income before income taxes increased 7 percent to $61.9 million year-over-year.
Investment and Savings Products. In the second quarter, ISP revenues increased 8 percent to $143.8 million and income before income taxes grew 10 percent to $39.7 million compared with the year ago period. Product sales grew 7 percent year-over-year with retail mutual fund sales increasing 16 percent and variable annuity sales declining 4 percent, consistent with recent industry trends. Net flows were positive $255 million and average client asset values increased 14 percent to $55.8 billion at the end of the second quarter. Account-based revenue grew 14 percent year-over-year largely related to a change made in the account-based fee structure in the fourth quarter of 2016 as well as a higher number of accounts than the prior year period. ISP expenses increased approximately $1.5 million from the year ago period, largely due to the development of a new ISP sales tool and the launch of the Primerica Advisors Lifetime Investment Platform in the second quarter.
To read the full Q2 report, click here.