PRI - Earnings call transcript Q3 2017

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Operator

Good morning. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Primerica's Third Quarter Earnings Results webcast. [Operator Instructions]. I would now turn the call over to Kathryn Kieser, Executive Vice President of Investor Relations.

conference. your begin may You

Kathryn Kieser

available Thank Rand, measures you, our to quarter Officer release, to third Executive have call everyone. supplement, measures Glenn at call. Williams, our certain Chief non-GAAP Good reference for questions. call. will deliver A Financial morning, We Chief are between today's earnings of this earnings and reconciliations and prepared and are Welcome our release. on remarks, copy measures website limitations, then press presentation investors.primerica.com. in GAAP Alison Primerica's Officer webcast we'll Megan. These on our of financial and financial non-GAAP open our it up non-GAAP release financial and our press attached

uncertainties Safe The the Litigation those in reports to on and or as We will also Risks XX-Q. annual that will make company reflect events report by forward-looking update to the provision Form actual Reform new implied Securities Harbor results the Form statements these XXXX Act. changes revise in quarterly with our in or not or subsequent strategy. discussed updated expressed statements materially company's information, cause of from accordance on XX-K, could differ are

call Glenn. over I'll Now the turn to

Glenn Williams

can We're our pretax EPS year. Thank experience, improving Life by income in income X% third distribution net favorable products' XX% period. Investment from results versus adjusted drove to you respectively and $XX.X growth strong positively year-over-year results and investment well growth adjusted reflect of quarter. operating in performance X pleased you, products the results flows. ongoing in to positive prior increased operating These and and Term year-over-year. operating persistency increased as of $XXX.X Beginning growth morning, increases asset see as Kathryn. were and financial adjusted and primarily earlier by earnings million in driven XX% relative XX% year XX% the savings ROAE to and Good everyone. operating to presentation, year-over-year Term Life savings market expanded were net deployment capital million client the the report XX.X%. impacted revenues performance mortality to values performance and and on in adjusted These Slide solid

year. Our continue flow, us capital which of our Primerica's generate common at distributable level completed million we free significant in deploying or diverse among planned earning the $XXX the to million $XX enabling industry. repurchased third anticipate streams the XXXX. the strong and to cash In We are best above returns, approximately this deliver quarter, for stock repurchases of in

need which help households distribution Page X, needs life is about and opportunity Our in to for about of you they been financial under-insured many to provides properly million are to middle-income of model This uniquely protected. the estimated US. insurance us families, trillion fulfill represent need. has the additional see of it designed these become families $XX On meet can a huge this XX

sales because aligned communities live reflects the we well are We serve. emerging also where trends and our with demographic force

in are generation force. sales insurance worked attract generation diligently millennials entrepreneurial-minded this largest succeeding US the are history. life license and up millennials making example, For our of now We XX% with to

expected to over the to also distribution population few which US sales rest in strong markets, than Shifting We leadership have results. strategic the the force are faster of next grow years.

led recent by benefit in momentum recruiting can quarter, you the biennial from During to X, generated On in our X% second period June. from was new quarters, X% force positive and growth licenses see insurance representatives growth to quarter. continue up sales the the from life we in of third X% the strong convention versus the year-ago quarter. obtaining our size The prior-year Page increased

impacted Rico quarter, in the the third and facilities and live of Puerto of our all front our have the X,XXX disrupted disaster of the For areas either Vice About the or Regional in Florida Presidents end designated end XX% business. hurricanes experienced Texas, activity.

life licensing independent This being our increase will we these and application new in leaders below in year by prior completion fees XX% of fall hurricane-affected their to to these levels. whether insurance for representatives, with In versus waived XX,XXX recruits an possible. our the for during to recruits level generated We're effort the working licenses September, classes many pre-licensing postponed waived, who the also support recruits We're in facilitate business of as areas. company New as and were rates testing new licensing residing approximately ultimately field of these determine field-training impacted recruits $XX period. the leading fee process had monitoring initiative commitment a to areas. the recruits overall

We to ratio to over of full representatives. the year of XX% XXX,XXX expanded sales expect licenses insurance October, life around the will life the remain overall license insurance new for range force recruits the In XXXX.

year for and to full to to force XXXX XXXX. sales growth this expect the X% around X% anticipate in We growth level we continue be

grew X% insurance X, the year-over-year. applications the in issued industry, quarter, decline outperforming X% Turning which life policies Page life the Term in reported a

continued period. end due policies flows in third asset quarter to performance sized trades striving drive and quarter. and of executing increased fixed, lagged the at to the up sequential of quarter. shift retail policy and productivity, mutual account uses sales was typical organic great sales ISP productivity life third license seasonally launch Both variable value month. sales by declined of strategy XX% growth Investment quarter future over the higher X.XX second $XX.X to per achieved higher driving opportunities second products and to On force. to sales. past policies of clients our quarter our We've record a few other sales more in increasing basis, a the managed larger quarter, end assess from indexed savings growth sales largely free platform values Lifetime evaluating success annuities annuity long-term a for in million, On effective in drove and ago. the our net sequential stakeholders the quarter our all the and had of issued new third We at in in insurance constantly second continue growth solid historical for Life $XXX declined the somewhat year-over-year, our from fund at reflecting flow reflecting to a from successful client Although basis, areas, cash The issued impacted investment representative issued Term of the solutions remained hurricane We're growth. for we and partially June positive ISP with X% products. XXXX, XXX% Investment versus quarter years year for provide the a range value of per higher X% of billion the

develop client broaden Our and offerings, to strategy is and force digital to capabilities deepen productivity, product growth relationships. maximize sales

drive most our continue of our Our We'll XXXX. the clients long-term to sales to has advisory was savings been recent a and catalyst opportunities enhancement growth platform growth. and revenue of look the product expanded investment platform. in product for Investment Lifetime second offerings, serve the launch to technology With better order half for new significantly state-of-the-art in product

we're ongoing for to well products we as experience, have our working sales enhance offerings, distribution In an capabilities investment our and as technology. client force addition developing to our expand In to commitment business, representatives. product the broadening savings

and This year, tool, streamline application from launch to will investment Next a which representatives investment our to the allowing seamlessly help based mobile tool an provide the insurance the we information pre-filled individual the alternatives plan will through ISP in on situation. clients' sales discussion. ultimately life client process guide move decision application, to investment ISP

the should to representatives a business more as company. mutual who drive and efficiencies our leadership license. Primerica productivity, Our new as is are considering technology attractive well fund create At long-term a core, ISP make obtaining

great people, We financial at lead families will We to and and to cutting-edge unwavering. commitment technology. excel to them education providing continue is street products and with main products our great

proven our deliver value a track success and strategy all record execute have to of a of stakeholders. continue to long-term for We

it Alison. I'll over Now, turn to

Alison Rand

cover and revenues earnings growth in as income third increased insurance taxes. on XX% Today good Slide everyone. business results continued And the grew review each taxes Adjusted in business expenses, X, morning, companywide reflecting direct Term as other a by year-over-year. inforce income for Thank production, XX% on Life you, XX%, Starting followed our premiums subject before of well I'll Glenn. increased agreements. and operating Life the and to income strength quarter, co-insurance segments, not in Term IPO-related the

experience XX.X% experience Term an quarter, was favorable Benefits ratio the was that favorable prior consistent second not periods. quarters Life million, trend. claims at and the and reflecting is first during higher which the claims claims normal year any ratio, in of approximately levels both and emerging the of with had volatility consistent belief claims our with During indication $X

We year at to in quarter, was for XX% to amortization third would the increase range the level XX.X% claims in The and around in between for DAC high that basis the year-ago compared to full was unfavorable comparison typical in XX.X% amortization in the year the with improve fourth expect Persistency This XX.X% level quarter we'd experienced year, prior DAC relative modestly the XX.X% remains continue a seasonality. third the XXXX. in persistency benefits and year the full the XXXX due the period. versus XX.X% to to earlier around If quarter to amortization ratio XXXX. XXXX the to the be period. ratio but year on XX% put expect DAC to in in ratio full ratio remain of the XXXX

long-term the The and with between business to run see fluctuations. normal amortization and We predictable in to expect Life steady continues earnings. produce seasonal XX% DAC ratio XXXX Term XX.X%

XX.X% first XXXX the in be third we just given Life unfavorable While full expect impacted Term in the this achieved quarter, below the margin year experience of the year, margin XXXX. half improvement to

mortality or normal the about fixed the business aided spread inforce to in seasonality, reinsurance premium to and through as with continuing the Life very XXXX normal third by XXXX. persistency XX% margin direct grow Growth recent move rate from IPO YRT XX% year-to-date grown expenses levels this XXXX as quarter stays continues at well to rate to consistent third of in we quarter base. premiums the subject Assuming experience expect just larger above slightly delivered to Adjusted years we be of is them run-off experience co-insurance. would Term the of in be and for adjusted to expect have reductions at

these new However, IPO the increased so in Retaining growth as emerged decreasing to reinsurers. layered higher XXXX, in to DAC In new to end are end expectations levels been resulting growth XXXX has contributor in since key end-of-term start XXXX growth. a convert that adjust with premium in performance. also that is should margins new business. the a these rate term acquisition has we've lower, on Benefits The conversions anticipated premium growth direct on this policy conversion reflect Beginning claims the premium XXXX. do to XXXX, each policies policies direct our to costs year. this slowly new and shared businesses of generally benefits and sales but have are seeding third block call business, policies. period in the we The claims than driver continue and relating on level initial the are January, and strong line earlier adjusted of

Investment prior and and X% to a client a asset income which June. sales a increased growth was was segment. product Products in revenue-generating see Investment and period. On the of result product in respectively ISP revenue. our XX% asset-based Slide X%. managed before X% in Total growth driven during total significant the increased and much in revenues launch Moving account X, you'll Advisors taxes period, sales Lifetime income increase Primerica which the Results sales values, were of to sales over of led increase by Driving XX% our the in grew a year X% Savings Platform

changes basis we XX provide of compensation Within While received revenue our the decline points earnings, asset sales-based points These sales, see per funds. year XX earnings. to per period. product retail in of versus these we US products net sales resulted about revenues, from of in lower X% year variable mix sales-based mutual based will force year annuities they generate basis to do sales generating sales-based revenue a not a for prior in products about versus continue other shift with sales-based

segregated deceleration the fund the a than X, the positive invested higher and year asset of see from lower in the related positively segment our can in previously Canadian were third by fee Our period. revenues the results account to reflecting changes period. increased $X ago. larger was due than third DAC subject based as redemption period, based ago, mostly portfolio DAC Corporate a that about structure year prior quarter in a higher number Net of Other largely account segregated fee income million market of well ago year amortization to average accounts year-over-year. quarter made than fund year to as Products amortization Distributed portfolio, consistent XXXX in a impacted offset a partially yield you Page lower the On performance by was and

less We short opportunities we X relatively extending by have significant years to continue not add portfolio to as yield seen a of incentive the than portfolio. our maintain duration at overall or duration

average both an investments the quality X.XX% new on low yield line new purchases minus. quarter, environment AA book of of of rate the was in and overall ongoing reflecting with Our second

move taxes. On $X additional of expenses offset related $XX.X third second million insurance XX, can well expenses other $X expenses. expenses, than growth-related million platforms a technology continued by quarter, partially revenue. change quarter expected. The additional increased to quarter higher year of to of development our basis, by of increased growth-related company's a discussion other and primarily and mobile you On of latter million The in million as sequential to year-over-year the third I $X.X increase initiatives. primarily from net the Now due costs last as about year-over-year as the $X.X was million of reflects the Slide see operating and expenses was quarter

Our effective equity at of benefits time force period, approximately the for the the primarily sales income lapse. reflecting grant XXXX from of prior-year excess between the the for of the tax quarter price third sales declined restrictions of awards and tax rate $XXX,XXX difference when stock

expense of lapse, the tax awards be restrictions will common market stocks, to and sales prices our income by equity our independent affected granted to Our continue sales future force.

approximately of benefit expect of $XXX,XXX in quarter We the fourth tax a XXXX.

Insurance the say As to $XX a I capital million the third holding with me Life sheet let balance statutory at liquidity capital committed risk-based estimated end Company's be wrap XXX% and XXXX. quarter maintaining we remain that up, of company is to Primerica strong ratio around at position. of

to continue or dividends with our from Life extent available maintaining will ratio at goal above We the RBC XXX%. the ordinary Primerica of to take our

for up Now let's open it questions.

Operator

[Operator Instructions].

of question SunTrust. The the Mark comes of from first line Hughes

Mark Hughes

another there say you did Alison, be in benefit the is fourth going quarter? to tax

Alison Rand

million last obviously And Yes, it's the in I have or to think price, quarters. been it'll but the give stock we subject did. take, be we few around seeing $X

Mark Hughes

you And that storm? [indiscernible] Did by affected think then, that say mentioned you number of, was Glenn, I areas. the had affected XX% in were the regional that leaders

Glenn Williams

continues within Florida you know, of impacted entire regional When overall believe were about Puerto of which area RVP you That's our correct. Primerica does. of XX% as population. to that majority the area XX% the disaster That's Vice Presidents population Rico, was that combine in also struggle, Houston the vast island Florida, the I and declared of counties the about was

Mark Hughes

talked of commission block about the this don't the legacy the of term percentage decline Will and - retaining renewal, Alison, those this as you premium premium I have that the at as therefore hold? renewal legacy to last in end is as relative you'd premium more you're continue effect block ceding and legacy that. of has see the much so been quarters. takes that ceded few a to declining as your is

Alison Rand

also if the affects. to statement, line different reinsurers We've two items In it I premium the will. we more line because say impacts and ceded through of the - and been actually existed. longer it it positively this it coverage retain a and to at to underlying from our items, the business a that we because and IPO the beginning confusing retaining year. ceded meaning we growing which positively really, of as it's the reimbursement, next business direct reinsurance premiums little it started also YRT again started block see maybe year, and believe it this will to and will being gets reinsurers X% grow time. get over to no about runs adjusted then we that when impacts IPO X% premiums, benefit continue in XXXX IPO financial other we premium continue said, to Yes, This will emerge on seen, reinsurers the about the the that you it from that impacts the That probably

Mark Hughes

the on would point or year just improvement, the next be because another Is roughly year, next it X% say this you improvement. of top another X% is When X quarter that it is X% points?

Alison Rand

question a remember, we I direct which tried dynamics in prepared of sort few that's comments. moving a my premiums components. to great So the in cover break X growth and into adjusted briefly can there's down But

is along business run from the and the see XX% in we new said to I to about sales but block to to we general that back we and at the it started first business - component subside a the seen off, without was enough that decline was run new been legacy component were relatively off, premiums and and each overshadows periods that that The we as adjusted continue because lines of growth large has looking put and still that in that any very it We've component had the direct growth, does growth IPO the business that IPO itself. it, reinsurance in over That year very, to growth as growth. grow. small case, generating time the were in past real that savings creating block place continues continues

component than strong the has is that in several first to The last next then, and grow the of And second helped more saw happen. this growth since going years in any XXXX, deterioration enough run-off component. seen that that X% over the the compound itself remember we've to you we and component that to offset year. about fact rather continuing But third is have sales from that to to component need you X% first

question, So, certainly not your X%. I would I basic think add another

I that of help run-off think the see you'll will core offset benefit to continue business. some additional the

Mark Hughes

numbers And faded co-insurer ceded that it's at improvement. I drop third and I'm X-point XX.X%, you're XX.X%, just about? then, year what is this a was premium quarter XX.X%, talking which is year looking IPO the yes, think XX%, last the Does to that

Alison Rand

have that focusing but can't adjusted back really I the you I share specific number would looked, premium I Well, drive direct ratio, but to on itself.

I function quite to years run-off frankly, build definitely think over few is new much what a of on had the really part direct direction, direct the our last the of the is you're right up it's how but putting we've has premium sales, describing business in to we're base and that that do sales as starting books, and premium much the it as premium co-insurance. of the with

you looking have different two different that So, are components reasons. moving at you're that for

Mark Hughes

from same predictably, statement? of that fairly block the more your which the sales, had and running as has that that you're benefiting retaining to it. you're tailwind since off strong more Then been your time, but at Is repaying you're premium. of fair block, legacy a renews, renewing Right, it's and

Alison Rand

grow say business, component book felt it a to would this it but relatively the grow end probably next our necessary happening the I'd huge year, it to Yes, mention and correct. was small. of to has highlight and This won't years. to quarter that all I is of it it as to this of been be a is continue is started block of enough term of absolutely where get component our first the will in scheme over of that things I couple ever growth

Mark Hughes

it's you not it's been to the persistency still The getting norm. back suggested, better,

around You your fourth guidance least DAC, level fourth is anticipation gave didn't probably the quarter? improve, this quarter at some for current that the assuming it that it's at

Alison Rand

we improving, persistency to are or usually sees of fourth we That's the some today in But right now. be amortization that consistent underlying I DAC quarter Yes, amortization where improving ratios assumption. the it's or were are vis-a-vis not where believed of we sort have. with not just that higher would and is of component in quarter. highlight we where anticipation it seasonality DAC the because third deemed our

Mark Hughes

sales down annuities, do my largely ask, In Investment that your sales shift quarter, Am reason sounds fourth it's the of in And right in then lapped kind why up. hearing your of I when revenue this headwind and from though even like are of away we I'll mix a principal it mix some the Savings annuity sales-based annuities? shift? was that's the

Alison Rand

part the say said. question, talk I'd the to let you of your first partially part. Glenn It's So, I'll second what

said, drive net and I'd the of it sales larger equal, not bucket, in within do earnings product funds on higher, And we're in higher the going with seeing of which launch that deterioration the recent favorable annuity quarter managed earnings now, conditions accounts less less we the a have wanted highlight fourth sales comments base in asset fact we certainly, our assets revenue how that the and a I'm but predict in level on revenue I that associated market new a that those happens market, So sales That being is funds. Xx is the which obviously, generating is to much driver to so what any say doesn't business our in the ratio. have my more fact mutual mutual sales of actually component, being in would platform. base the were why bases particular

can't you up the no market, sets in assuming growth future asset-based real in earnings there, our periods. obviously, So this in shifts happens us predict but what

Glenn Williams

be mix mind kind industry-wide the that been the number is closely Yes, that I [indiscernible] of going fourth the about I slowdown It has the percent of quarter, and projecting thumb, off that to industry Yes, falling looks variable negative. projecting something comes in Alison's fall, much, right the annuity at industry that tracking flat right in they're the XXXX maybe to then the last something, half slowed think to for to like XX%. were is And going just down a be rule slightly, that to in completely at few for down. reporting, is seeing X, that's that might The or of Mark, of quarters descend industry on sales the we've sales. that range pretty with on we slowdown, course what let me been shift. of little agree comments kind

finding, And sales. so, finding the we descent kind the VA are the think of of of I is bottom industry

As close like pretty to up said, But the past. I've in to what's some describe somewhere what as for closely, the future. in the we've in not hopefully industry this to point, upturn might happening and that we've flattening industry it is experienced like I'm tracked the going that project dynamics looks similar getting the try the future. looks you out and across we're maybe it bottom that's to look happen

Mark Hughes

a am are fact you annuity kicker, annuity upfront in right the but in on sales are trail sales, down, you When the sales, not get look the that. commissions but third at quarter, say, that I nice thinking your there

up future definitely And revenue sales the doesn't stream a mutual but revenue your so, the doesn't managed account but get asset-based it in builds periods. it necessarily fund period, necessarily sales you for it whereas and current volume, help sales, the of nice show

Alison Rand

yes bit and little So, a no.

particular this more variable were. when our fixed-index annuities we're variable and the a annuity two annuities, there's actually bit in down annuities. period, than were talking annuities there's actually, our And components, the So, there's fixed-index about

asset-based is VA, here to to we say to thing important do us. on that the are earnings So, have actually continue

annuities, fixed-indexed virtually it's a where really sales ongoing, nothing we have the On predominantly that's product based.

the So, for modestly annuities. for more your comment FIA, the true very variable is case

Mark Hughes

point the this mix two? the What's at between

Alison Rand

and have Mark, move some somebody you queue? questions in then can can get to on else ask the we back

Operator

the Securities. question next from with Wells Dargan comes Your line Sean of Fargo

Sean Dargan

be Baked what a I sold steps there DAC business? remediation have or may who know, question taken any about of impact any reps proactive from, for is Alison, problematic XXXX. guidance you've the kind identify don't I sales may to into that, amortization have

Alison Rand

So, which last I'd What little at to the getting year, just forecast that rather rates a aspect is by like that we're business. they assumes say than much. Glenn I speak if lower 'XX now, that of will for really the bit are not the

like let speak So, we I feel any rate. at on to stabilized stabilized continue Glenn a pretty agents. that they're I'll specifics

Glenn Williams

Yes, sure.

last processes normal see the been and kind the the monitoring discussion from couple business to our of in that's office individuals. quarters, of priority, course of we hierarchy business During quality place have that topic our any to fluctuation the of in of business

the interests force that quality struggling absolutely exactly anything to rep's that It process. always messaging started we've in actually when business and most patterns that within but of better good, it have interest, so, persistency business, very are importance the looked about of that the our at fluctuations increased good our outside those was flaw fundamental we a persistency recognizing the client's kind company's challenges we the time, our was norms, the the increasing support In perfectly that levels ages are they the But the the norms see were same extremes discussion is aligned, the it the their like response of didn't sales for the couple because we that and quality that if would. to emerging. interest and And interest of the all you can understand comes are from aligned improving to of persistency. are of see last over kind emerging what where quarters, said we had

had and focus a response increased our from have sales we great we on so, that And force. the

So, ones struggling the be that part front. from Primerica, identified on them it's persistency with not and like was individual we've most work should and were of response but that so no we continue to sales great bad had longer have have that they we'll that we felt worked the

Sean Dargan

proposal. ultimately have you tax the thoughts any And reinsurance, it impact you House's that on impact do good this is any almost upfront you would now be may how indifferent? thoughts negatively a Primerica have any So, about wondering business? or if could reform share wondering statutory a digest and or bad think I'm to but I'm that you week for just how reform thing don't internal had I quota if your tax capital

Alison Rand

this. had will I week digest say, to an And entire yes, we've

So, written actually say this to want of that so say expert don't to it, I don't that it's happen want as I been I'm far. in an can any exactly also

where I right bring closer that already penalty. rate. we the it's being insurance aspects. out, hard you're things some rate generally tax issue, now us actually with DRD. a the said, that Canadian reinsurance, effective offshore some we have changes We any and think an benefit which as it's Obviously don't would it hit to some to XX% think think obviously our for issues I our around I oddly pointed make the that enough, XX%. rate effective looking is seeing, internal are, The clearly as commentary have in don't an a was that business of as speaking, our you're it effective is being increase for for have a tax you of lot don't of pretty - down good rate That hearing tax related

of set for the it they much aren't at tax not going are us. concern is something anticipated. which than reserve deductability to deck, be, those had did really number the did of reserves principle in of we they tax a negatives So raise future, The to based the less

of all might side, relatively think was the back a us some book us. be catch-up, time the the on for our speaking, of that of I insurers. so much will, ceded big sort at IPO that's at that for that you of the component a big Remember, if Looking away hit not for reserve

benefits see they're in DTL. some actually or it but definitely as our we'd would our written, So, the I a recognized think I we say two as those the an would over, I period. rate. payments, effective release in benefit We've goes seen think, also one-time But - tax be catch-ups biggest items that have if in for actually one-time, X-year

of the deck tax deck whole although of think with tax are we it's positive. would enough spoken really idea That done of lot that being it, they've deterioration of a affecting make RBC, sort we argue agencies. with certain in whole things; asset. items see net-net well number. tax board rating mechanics haven't to the the we deferred what the in as doesn't So, as regard the It's reduction to of a said, sense lot itself we the I would formulaic on two That said, statutory doesn't a make for a being sense. With the tax

that changes, more bit little as that's security change a is their the maintaining and keep doesn't belief comfortable any and have that in the to that the we adjust that capital too, and on [indiscernible] have soundness for of still look the company, they position other agenda. because we're to fundamental Our capital those fine doing of our will or clearly expectations we extent to certainly plans any

Operator

Bergman comes Citi. next with from Dan Your question

Daniel Bergman

managed well I account guess platform to start with recent as quarter-over-quarter the and doubling in quarter sales lot than up following the more a launches.

this lifetime the the any going And - investment should interception expectations incremental wanted there upside to sales so could to and platform you expect? more on much compared we how Just forward, how incremental see is of for if color more kind provide far?

Glenn Williams

Yes, morning, good that's Dan, great a question.

our As imagine, at and hope you very results the above or would we what of with just the are tracking launch occur. we're can pleased we expectations of

how know, I don't do a we going of right up part to there. in is the but field that outstanding clients. running book think is that's it that's done of shapes leadership getting success be clearly up we a product We specific, focusing appropriately that not job something an our just has the in business. So that on and growing our for upside and of future worked believe our more that make and team the there's on exactly

force you throughout be assets, of is I see that of term, is clients that by the industry age over opportunity there comfortable a type that driven had and an as our and managed of the more gets one several accumulate account natural think as sales sales of that our that's things, direction course, will then There change it. the products force years. and product, number plugs our momentum into for it move the they towards and longer of the with upside

as there so, some is upside And we believe well. there

there we've believe ahead hope slightly about excited what where is same to we'd of very we're time, upside accomplished at already out we But the be. So, more there.

Daniel Bergman

Life Then seems X% hurricane terms is due of maybe issued, in the somewhat. in a productivity, there bit, in modest to growth just policies likely the like switching Term there a little drop quarter gears in average activity

of So, that number should want that I and us for you expect I size help give from kind what and whether could just to is related the - quarter? guess was the the amount to in and drag pressure maybe storms see we hurricane-related also fourth if color there of any any

Glenn Williams

difficult month. natural this it's our we very do sort fire impact before, was our we've to might force base think disasters, all Yes, dealt within clearly, the the client there in hurricanes. and sales in but we've with on much had had business weather, forth impacted had happened have of so what But project not because never of the same we

new so to And us. part was that

damages the agents on adjusters' getting Licensing they licensing prepared insurance were And which so, and people licensing we're than believe number focused pull I in business reopened, fronts a and some you're mentioned the of and getting our with successful, states to on lose right, and we as when even those canceled classes hurricane moving, our do they best new keep through deal in offices focused license efforts physical still mitigate we to of closed did rather life remarks. offices licensed.

sales Georgia would some back they Florida that and evacuated, more. came So forth. have to sales the some and that went force probably that so cost us us home Also, as licenses size of clearly, and created State that increased some delay all and a later, cost in process week of the of

a And pull-through. we've it to maybe productivity we'll be out that lot later. have lot of believe that get of and delayed might on we what work might I that again, been. of or somewhere like trying that have pulled gained a or So figure will there licensing in that something X, done point X

And some sales as But do of it, some entire in Puerto those process, impacted or since Island. we the Florida far a its trajectory in for you're them both momentum Texas I recovery are Rico process Primerica, there. will lose be we lost, said, I recovery I'd we in mean fourth or a quite comment going say to impact. the negative we final, net and, be returned I of areas, in least October and frankly, nice I there believe can when business licensing have get seeing so population is mightily the so will still beyond you struggling kind delay and way. we have October, normal sales interrupt of seeing, on quarter we're the of will that did that see over to just our we a at if believe the What time, But it

Operator

SunTrust. line Your from comes question final the Mark of Hughes with

Mark Hughes

future the or That renewal those there? policies or natural a block, renewing, renewal to for just the If expectations because another the within going - age? of are they're policies lower around have they are block within legacy any stick persistency may these decade persistency

Alison Rand

I scheme all but think think I we of we no, get the of term, into like that. this it I celestial lapsation, Well, Yes. call won't

with but compensation, on. no is cost this this the bit understand minimal. there's field is that little is interesting acquisition DAC, the So, business associated of a goes There relatively with something, underwriting what's

inverse underwritten on business take exposed this big we on it we're where, it if case, It's so of quite for on, business. not write-off this sort of lasts policies. the In persistency to as early newly DAC. these honestly, So really a frankly, large and much reserve to carrying our we're we books, of the exact have put

these priced age of there have of exposure policies. modeled said, ages, And the and once that ongoing de on while frankly, sort hit our that's of quite That driving think an about DAC So, for lapsation financial don't and really of the this statement, is been because being minimis. you'll persistency. business of a to certain relatively don't we've thing see the need we I we you the the want component level lapsation, expectation, given insurance any is

it, higher somebody forward policy actually, terminations. original is converted me end written of other that in do [indiscernible] that does off. at point, of than and as it's is comes the level that standpoint, one lapsation The essentially from it's the highlighted Again, this see term, roll the the with say, and not being reserve once in Let our said to we policy a DAC we financial a do do much happen and we thing years.

term financial of impact. end So, there is lapse no

perhaps ahead And that which see coverage, given perfectly then term not financial some it's to is persistency go with seen is people elevated newly there, nature actually the their the already contracts, existing choose we but real and the again our much So, their there underwritten business. a again, further policy. the level concern convert higher renew, a way not people of or renew slightly under do go you've expected, a

Mark Hughes

similar faster? the see might you terms predictable How little profile a this sort drop line about of of from block would in this rather maturation, DAC terms, premium than the off at have legacy duration the business, or a just a is also the fairly thinking at would the top

Alison Rand

third issued that things that or may let's end that of is pretty thing noise, let's so more have a of XX-year up talk this one volatility quarter block one any in term. a given policies, this of is the of the that And XXXX complicated about But XXXX create the create may have more in to business. for block of period, was and were business we come year, example, say, that those -

For other term things people of the first of in end probably than example. for candidates, the some time, are younger scheme those relatively

older already extension. were another in Those that period originally group a been actually of than this first XXXX took policies were the considering generally term that XX-year described. for in XX-year now going are XXXX, And conversion. I issued end XXXX and through in are policy, have policies that XXXX have an and folks and also We

So, blocks that these same. all the of exactly it's a bit to say will harder behave little

a component lines, little that given think still should premiums. thing create and bottom adjusted you'll started DAC. is I And our so of driving bit just the are with not of frankly, noise relatively little think line adjusted to this in the benefits move I relatively bit noise little less margins It more of, consistent, say important more mean the is direct see the to benefit it's direct more a here, premium. bit quite improvement. a I huge a

So, noise one relatively it that's in component total, adjusted the of we is to growth wanted the about direct this for premiums, sure a were pieces of small we it. driving of but that is clear lot geography make a so

Mark Hughes

and the and provide, - that amount, you correct? and you would new that newly the look for legacy amount business, that is refer then total the issued face can of the that or the policies, direct all is total to you at drop-off, face The how the

Alison Rand

book the roll supplement forward provide for business. entire financial the that of is the in we Yes,

Mark Hughes

the And you of if we - wanted to of a calculation that you and we take try co-insurer, demand simple to that and gauge do roughly--? IPO would how much that the ceded just retain, kind

Alison Rand

That's envelope. can't look And me that with you not Kathryn do shared we envelope of a at this that back this how back is I it. the had of - question, the not

and a that's So, how said, take look will not not like It's at we're question I but of happy that now. the certainly I it again, to at we some can't answer things. envelope, back right and look see,

Mark Hughes

There's would out jumps choose to a that why to obvious be not bad calculation? that anything

Alison Rand

to of that want There's but for Y adjust I that. nothing, to or must no, I X, say, also could that's but do make see right, I nothing I'd there's say, before want I you sure Z. yes, we

Operator

further this today's conference questions no concludes are There at time. This call.

You may now disconnect.

Primerica (PRI) 8 Nov 172017 Q3 Earnings call transcript