Primerica, Inc. · NYSE:PRI
Primerica — Q1 2020 Earnings Presentation
13 slides from Primerica's earnings presentation, Apr 30, 2020
Slide 1: Earnings Results, Quarter Ended March 31, 2020
Earnings Results Quarter Ended March 31, 2020
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation may contain forward-looking statements and information. Additional information on factors that could cause results to differ materially from those projected in this presentation is available in ou
Slide 3: Financial Highlights
Financial Highlights ● Strong operating financial results GAAP Financial Results — 13% growth in adjusted net operating income ($ in millions, except per-share amounts) Q1 2020 Q1 2019 % Change Revenues $524.9 $495.0 6% — 18% growth in diluted adjusted operating Net income $72.5 $79.2 (8%) earnings
Slide 4: Distribution Highlights
Distribution Highlights Sales Force Q1 2020 Q1 2019 % Change Distribution ● Discounted IBA fees created excitement and Recruits 84,762 63,223 34% attracted 84,762 new recruits during the New life licensed representatives 10,599 10,065 5% quarter Life insurance licensed sales force* 130,095 129,821 <
Slide 5: Production Highlights: Term Life Insurance
Production Highlights Term Life Insurance Production ($ in billions) Q1 2020 Q1 2019 % Change ● Productivity of 0.18 policies per life insurance Issued life insurance policies 71,318 64,242 11% licensed representative per month marks a Term Life Face amount issued $23.2 $20.9 11% reversal of deceler
Slide 6: Production Highlights: Investment and Savings Products
Production Highlights Investment and Savings Products Production ● Record $2.2 billion in investment sales during the quarter ($ in billions) Q1 2020 Q1 2019 % Change Investment & savings product sales $2.25 $1.76 28% ISP — Continued strength in VAs, mutual funds and managed accounts Investment & sa
Slide 7: Adapting our Business to COVID-19
Adapting our Business to COVID-19 Positioned to respond to crisis Our outlook for the near-term • Strong business continuity plans allowed • While we are not yet in a position to project us to adapt quickly the full impact of this crisis, we are focused on: — Keeping energy high and the sales force
Slide 8: Operating Results: Term Life Segment
Operating Results Term Life Segment Q1 2020 versus Q1 2019 ($ in millions) Q1 2020 Q1 2019 % Change ● Adjusted direct premium growth of 11% drove Direct premiums $696.6 $670.8 4% operating revenue growth of 10% Premium ceded to IPO coinsurers (1) ($260.1) ($276.2) 6% ● Benefits and claims ratio in l
Slide 9: Financial Impact of COVID-19
Financial Impact of COVID-19 Term Life Insurance segment Potential Impact - If lapses increase by 10% across all durations: As 2020 progresses, COVID-19 and the $23 million higher DAC amortization and $14 ongoing economic disruption are likely to million lower reserve increases for a net lead to: ne
Slide 10: Operating Results: Investment & Savings Products Segment
Operating Results Investment & Savings Products Segment Q1 2020 versus Q1 2019 ($ in millions, except as noted) Q1 2020 Q1 2019 % Change Sales-based revenues $80.9 $67.0 21% ● Strong sales demand drives 21% increase in sales- based revenues Asset-based revenues $81.4 $73.6 11% Account-based revenues
Slide 11: Insurance & Other Operating Expense Highlights
Insurance & Other Operating Expense Highlights FIRST QUARTER 2020 INSURANCE & OTHER OPERATING EXPENSES ($ in millions) Cons * Life ISP Corp Q1 2019 Expenses * 109.1 41.8 36.3 31.0 ● Operating expenses of $115 million Technology related expenses 2.4 2.6 1.0 (1.2) were $5.5 million higher than Busines
Slide 12: Invested Assets Portfolio
Invested Assets Portfolio Public Corporate Portfolio by Sector Key Portfolio Attributes Other, 5.4% Consumer Non (based on amortized cost (except for market value); Cyclical, 13.1% Q1 2020 excludes cash, period end) Basic Industry, 4.9% Fixed income / other mix 98% / 2% Transportation, 5.2% Electric
Slide 13: Capital and Liquidity
Capital and Liquidity ● Strong capital and liquidity position – Holding company liquidity $272 million – Access to $200 million revolving credit facility (unused) – Primerica Life Insurance Company’s (PLIC) RBC ratio around 430% ● Hypothetical severe stress test on fixed income downgrades would lowe