• Adjusted Net Operating Income (Q4): Increased 11% year-over-year.
• Diluted Adjusted Operating Income Per Share (Q4): Increased 17% year-over-year.
• Adjusted Net Operating Income (Full Year): Increased 14% year-over-year.
• Adjusted Operating Income Per Share (Full Year): Increased 20% year-over-year.
• Common Stock Repurchase: $425 million repurchased in 2024.
• Dividends Paid: $113 million in regular dividends in 2024.
• Revenue (Full Year): Reached $3 billion for the first time.
• Term Life Revenue (Q4): $451 million, up 4% year-over-year.
• Investment and Savings Product Sales (Q4): $3.3 billion, up 41% year-over-year.
• Client Asset Values (Year-End): $112 billion, up 16% year-over-year.
• Net Client Inflows (Q4): $731 million, up from $172 million in Q4 2023.
• US Mortgage Volume (2024): Nearly $400 million, up 35% year-over-year.
• Term Life Operating Margin (Q4): 21.3%, compared to 22.6% in the prior year period.
• Investment and Savings Products Revenue (Q4): $286 million, up 29% year-over-year.
• Investment and Savings Products Pretax Income (Q4): $82 million, up 31% year-over-year.
• Consolidated Insurance and Other Operating Expenses (Q4): $152 million, up 13% year-over-year.
• Cash and Invested Assets (Year-End): $497 million at the holding company.
• RBC Ratio (Year-End): Primerica Life's estimated RBC ratio was 430%.

• Warning! GuruFocus has detected 6 Warning Sign with PRI.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Primerica Inc (NYSE:PRI) achieved record-breaking financial results in 2024, with a 14% increase in adjusted net operating income and a 20% increase in adjusted operating income per share.
• The company repurchased $425 million of its common stock and paid $113 million in dividends, returning 79% of adjusted net operating income to stockholders.
• Primerica Inc (NYSE:PRI) experienced a 41% year-over-year increase in sales for its Investment and Savings Products segment, driven by strong demand across all major product lines.
• The company closed nearly $400 million in US mortgage volume, a 35% increase compared to the prior year, indicating strong performance in the mortgage lending market.
• Primerica Inc (NYSE:PRI) ended 2024 with a record high of 151,611 life license representatives, reflecting a 7% increase compared to the previous year.

Negative Points

• The benefits and claims ratio increased to 58.6% in the fourth quarter of 2024, partly due to a $4.2 million remeasurement loss from a refinement in the actuarial model.
• The Term Life operating margin decreased to 21.3% from 22.6% in the prior year period, despite unchanged pretax income year-over-year.
• Higher lapses in insurance policies were observed, particularly in earlier durations, due to cost of living pressures on middle-income families.
• The fourth quarter insurance expense ratio increased to 8% from 7.1% in the prior year, driven by increased variable expenses and higher technology investments.
• Primerica Inc (NYSE:PRI) anticipates a conservative outlook for 2025, with expected growth in issued life policies around only 2%, due to ongoing cost of living challenges.

Q & A Highlights

Q: Could you talk about whether 5% ADP growth is a good run rate, or if there's still a boost from the IPO reinsurance transaction? A: Tracy Tan, CFO: The 5% ADP growth guidance considers the runoff of insurance and the impact of our large in-force block and new sales. We've also factored in higher lapses, so the 5% growth accounts for the faster pace of coinsurance runoff.

Q: What's driving strong ISP sales despite cost of living pressures on the life side, and how do you see lapses trending into 2025? A: Glenn Williams, CEO: Our businesses have different dynamics. While cost of living pressures affect life insurance, larger ISP transactions like retirement plan rollovers aren't impacted. Tracy Tan, CFO: Lapses are elevated but stabilizing. Persistency is improving, and we expect a return to normal levels over time.

Q: What's the expected duration for cost of living pressures to correct, and can operational leverage be improved through automation? A: Glenn Williams, CEO: Improvement in cost of living is needed for a sustained period before easing buying habits. Operational leverage can be improved through technology, making processes easier and more efficient for clients and representatives.

Q: Is the good VA activity driven by demographic tailwinds, and are there any changes in mortality trends? A: Glenn Williams, CEO: VA activity is driven by demographics and job changes. Tracy Tan, CFO: Mortality trends have been stable and favorable, with improvements particularly in the US.

Q: With higher share repurchase authorization and dividend increase, is this capital return sustainable, and what about statutory earnings? A: Tracy Tan, CFO: Our business model supports consistent cash generation and capital return. The 79% return in 2024 is sustainable, and there's nothing unusual in statutory earnings. We aim for a healthy capital position with an RBC ratio around 400%.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.