Primerica Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan Krueger - Keefe, Bruyette & Woods, Inc. - Analyst : Hi, good morning. My first question was on the strong recruiting. I know some of it was influenced by the discounted fee. Can you give us some perspective on how recruiting has been following the expiration of the discounted fees, I guess, into September and October?

Question: Ryan Krueger - Keefe, Bruyette & Woods, Inc. - Analyst : Great. Thanks. And then another -- just a quick clarification on the expense guidance. Just want to make sure it's on the same basis. So the 9% increase or the $60 million full year increase that's relative to 2023 that no longer includes senior house. Is that correct?

Question: Ryan Krueger - Keefe, Bruyette & Woods, Inc. - Analyst : Okay, great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, PRI.N - Q3 2024 Primerica Inc Earnings Call

Question: Dan Bergman - TD Securities - Analyst : Morning. Thanks. I guess -- I know you just touched on recruiting, but the sales force growth has also been really strong this year, and it sounds like you'll likely end the year with mid-single-digit growth kind of above the initial 3% guidance you provided at the start of the year. Just wanted to see if you could give some details around what have been the main drivers of the upside surprise relative to that initial guidance? And then looking forward, is that mid-single-digit pace we've seen last year and this year sustainable? Or could there be some slowdown ahead for a period of time as you digest the recent strong growth?

Question: Dan Bergman - TD Securities - Analyst : Got it. Great, thanks. And then maybe just moving to the ISP business. Well, the redemption rate in that business had been drifting upward pretty steadily over the past year or two, both nominally and as a percent of beginning assets, it took a step down this quarter. Just wanted to see if you can give a little more color on what you're seeing in terms of that ISP redemption rate. Any sense of whether there's seasonality or any impact from maybe a slowdown in inflation, just any other drivers and just thoughts on how that might trend going forward.

Question: Dan Bergman - TD Securities - Analyst : Got it. Thanks so much.

Question: John Barnidge - Piper Sandler & Co. - Analyst : Good morning. Thanks for the opportunity. Can we talk about the Canada Life opportunity? How large do you view that? I know it's a big brand in Canada and Primerica's operation pretty sizable in that market. Certainly, the Quebec team was loud at the convention. So we've got their presence. I'd love to hear more about that.

Question: John Barnidge - Piper Sandler & Co. - Analyst : Thank you for that. My follow-up question seems like the Fed control is maybe more the short end of the curve than the long end and mortgage refinancing wave might not happen or it might. How do you view that opportunity to free up dollars within your customers wallets in the backdrop of the cost of living increases you even highlighted in your comments? Thanks.

Question: John Barnidge - Piper Sandler & Co. - Analyst : Thank you.

Question: Wilma Burdis - Raymond James & Associates - Analyst : Hey, good morning. Could you talk a little bit about what you're seeing on lapses, which ticked down a bit in 3Q versus the first half of the year? Do you think there's a story there behind what's happening with your customers? Or has it just been a little bit noisy? And is there anything you expect going forward? Thanks.

Question: Wilma Burdis - Raymond James & Associates - Analyst : Hey, good morning.

Question: Wilma Burdis - Raymond James & Associates - Analyst : No, that helps. Any color on the unfavorable remeasurement gain in corporate? Just what drove that? And then just help us think through any, I guess, changes from the remeasurement gains as well. Thanks.

Question: Wilma Burdis - Raymond James & Associates - Analyst : Okay, thank you.

Question: Jeff Schmitt - William Blair & Co., LLC - Analyst : Hi, Glenn. So given the strong growth in the sales force just from the new incentives that can bring in some agents you wouldn't have otherwise had. Do you see that having any effect on the life productivity over the next year?

Question: Jeff Schmitt - William Blair & Co., LLC - Analyst : Okay. Understood. And then on the favorable trend in disability incident rates, I may have missed it, but do you see that having kind of a longer-term impact on your benefit ratio? I mean, it's 58% kind of still a good run rate going forward. Or do you see that moving down?

Question: Jeff Schmitt - William Blair & Co., LLC - Analyst : Okay, got it. Thank you.

Question: Suneet Kamath - Jefferies, LLC - Analyst : Hey, Glenn, how are you? Hey, I wanted to start with the annuity sales. I mean you've talked in your script about sales being very strong. I just want to get some color around sort of what's behind that. What's sort of funding those sales? Is it 401(k) withdrawals? Is it something else? Just some color would be helpful. Thanks.

Question: Suneet Kamath - Jefferies, LLC - Analyst : And when you think about the product providers, are you seeing any sort of irrational either pricing or features? I mean, you guys should have a pretty good lens on that, just given your distribution. Just curious what you're seeing.

Question: Suneet Kamath - Jefferies, LLC - Analyst : Got it. And if I could just ask Tracy one. Did you say in your prepared remarks that you have exhausted the $425 million authorization for buybacks? Or is there still some piece of that left?

Question: Suneet Kamath - Jefferies, LLC - Analyst : And so does that mean no more buybacks for the fourth quarter then?

Question: Suneet Kamath - Jefferies, LLC - Analyst : Got it. Thank you. Tracy, the senior health exit, is there any tax consequence to that, any cash tax savings, anything like that?

Question: Mark Hughes - Truist Securities - Analyst : Hey, Glenn. Tracy, the senior health exit. Is there any tax consequence to that. Any cash tax savings, anything like that.

Question: Mark Hughes - Truist Securities - Analyst : I'm good. Thank you.

Question: Mark Hughes - Truist Securities - Analyst : Will that tax benefit actually occur in calendar 2024? Or is it next year on the 2024 tax year?

Question: Mark Hughes - Truist Securities - Analyst : Okay. Very good. And then in the term life business, the YRT ceded premium. If you look at the ratio as a percentage of adjusted direct premium, it's up about 100 bps kind of through the first three quarters. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, PRI.N - Q3 2024 Primerica Inc Earnings Call How should we think about that is where contemplating 2025? Or just kind of the -- what are the puts and takes that might lead us to think that, that ratio should be higher or lower, steady, anything in the pricing in the reinsurance market that influences that. Just a couple of thoughts would be great.

Question: Mark Hughes - Truist Securities - Analyst : Yeah, that's right. And the number I'm looking at is kind of low 30s and it's that relative to adjusted direct premiums? And as I say, it's been up a little bit this year about 100 bps.

Question: Mark Hughes - Truist Securities - Analyst : Yeah, okay. When I glanced down my marble notice that. Okay. Thank you very much. Appreciate it.

Question: Wilma Burdis - Raymond James & Associates - Analyst : Hey, just a quick follow-up on my earlier question. Just wondering if you could talk a little bit more about the block that you had the negative remeasurement loss on just what type of product it was when you wrote it, just would be kind of curious on that. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 3:00PM, PRI.N - Q3 2024 Primerica Inc Earnings Call

Question: Wilma Burdis - Raymond James & Associates - Analyst : Okay. Thank you.