PRI - Earnings call transcript Q2 2019

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Operator

Good morning. My name is Jack and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Primerica, Inc. Q2 Earnings Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After [Operator Instructions]

conference. turn I Russell, to your the Nicole now you Russell, begin Ms. over Relations. call will Investor Head may of

Nicole Russell

Welcome Thank Investor at to A you, Relations of press to website materials earnings investors.primerica.com. along our good posted today’s Jack, morning, call copy Primerica’s Quarter are Earnings and Second Call. with relevant release everyone. on our

and Officer, Alison Officer, Executive deliver Joining our Alison Williams; our then Rand. Chief are Glenn the questions. and call remarks Glenn Financial open call will and prepared Chief will today we for

During may Act. you or statements differ to accordance those of new for in XX-Q our Form our any Company that could results of information. by call, Form Harbor cause Securities revise risk these the uncertainties most some implied. filings assume modified our as update XX-K The and from contain forward-looking reference actual provision to to expressed materially We Safe or filing subsequent a the comments reflect of does statements list Reform Litigation not with recent to duty

non-GAAP the also to numbers press measures, reference certain of believe respective available Relations we additional their release into end on at of will are our our operations. are and Reconciliations which included insight GAAP Company’s Investor website. We provide non-GAAP measures earnings our

the to Glenn. turn over call like to I would now

Glenn Williams

review prepared results. focus observations recent and Nicole, joining today our will and quarter will early offer today. my the remarks then biennial about some you, highlights Thank thanks, financial convention for our and everyone, on Alison I our from most us

were can revenues operating XX% was quarter strong X and ROAE year-over-year to million, increased in and financial diluted EPS our results. respectively XX% up net you see reported we another operating operating Slide with and operating adjusted Turning adjusted X% XX.X%. $XXX adjusted Adjusted income presentation deck, to as

ROAE, earnings These adjusted per and are a few. operating adjusted operating adjusted operating share just highs exceptional to all-time and revenues, results name with

also record ISP in new business asset client levels. set records with We our sales and

capital million to by total continue for stock we $XX a plan deployment in execute repurchasing million. addition, $XXX common In of our the second year-to-date quarter of

this expect the half continue of of second the through We pace year. to repurchases

distribution during results was to a licensing reduction quarter, impact Slide of reflecting The on including series our XX X. a days announced convention, of second of Recruiting be excitement which up can at June. seen fee, final heightened level the quarter’s a brought of incentives XX% the of the the

second were June than to force life on The in positive year-over-year our the in quarter is XX weakness due The year. late earlier last reflected size the of the impact quarter’ licenses, new was slightly year. sales recruiting in be occurred which too down XX% to lower

and days July continues The first available positively discounted ended. the the momentum through remained XX of after licensing to program impact fee

of While particularly we’re new still through the at tools. is are progressing use very as is the attendance strong study we our these which recruits Licensing early, class encouraged system. our rate by online are

the in suggest We’re growth between the optimistic solid trends, X% and half second about year-over-year which listening of X% year.

XXXX. to weakness flat, be difficult X% recruiting full be the lower new recognized life force we expect to now earlier comparable to about it of be will we to Based XXXX overcome size be results these to sales year. the Although licenses on this and December

we to momentum recruiting to on Slide X, in impact turn year. positive Life Term expect reduction later this we As our business

However, periods. still second reflected from results trends softer prior quarter

month. policies insurance license new our policies, XX,XXX quarter, compared representatives insurance per range Term last second Life we issued down nearly year’s per to historical X% within X.XX quarter. Productivity the During was at life

half can the range in strengthened of during year see the X%. to our about the sales expect momentum retuning productivity grow distribution the second we remainder With to results historical and building, believe

However, weakness and projected be issued year first policies result, a results half down for to difficult is overcome in life this will be as the year-over-year currently approximately to of X%.

continues On at Slide investment high-water to in records. a X, break we of products. the markets. segment and quarter favorable billion $X June billion new by This nearly values Client sales results from asset show mark propelled our at equity savings $XX.X during and record

Net very new were during client also the flows of quarter $XXX million strong.

provide in strength product investment noted strength financial force in Combined, offer sales and Life income The our As the solid businesses and complementary ISP offering I’ve streams more as Term breadth performance clients, work nature. our to we are in distribution rebuild to sales. the to life business diverse complementary results past, forward growth lines and momentum to our in in greater of product company. our

our of impact the review let’s convention. Now

to As large number improvements add and longer across I’ve term through three-pronged improvements announced a outlined to months of leverage Last lay for in I event convention The the we incremental a include foundation event. us this quarter, approach these incentives which discussed deliberately excitement advance. previously, impact people short-term opportunity the at some change our incentives, and gives initiatives. higher

after worked create leadership positives infrastructure Confident in on seeing some from and licensing new focus that to recruits. have we field we momentum the this and training field We recruiting are early event, we strong advance believe approach. could of a

have on results. not the downward new of through pressure significant ratios, early recruits seen erosion in influx an we While pull puts

wide milestones vision are mentioned covering heavy four the multiple and office spent with online achievements. recognition As home included topics. with facets. per by and provided business ideas The share area network XX and Keep future knowledge sessions an partner exhibitor with strategic their endeavor with XXX with peers. interact an convention important nine a range and with partners, getting are general is that exhibit representatives classes massive booths, to well as staffed tools days and X,XXX of XX,XXX of for attendance licensing between And and our opportunity full event in as four attendees provided workshop the ranging earlier, workshops The people itself a usage. mind to

attendees, to an XX% compared drew in event estimated with XXXX, X% attendance. year’s increase workshop up over This XX,XXX

positive Our the of convention half drive with to are the the the of first impact efforts the results showing distribution short-term. in in combined year growth

Our is momentum while sales our now to to the productivity, continuing momentum new goal ISP that support business. into force in licenses, improve and natural growing extend

to now that, Alison. it turn I’ll With over

Alison Rand

Thank Incurred direct benefits which you, range continue quarter and the Glenn, benefits line Starting drive X, claims expectations The XX% XX.X% than to lower XX.X% good morning, that claims. expected was the was the were everyone. XXXX year-over-year, revenues and within which Full on remain year operating from in for for the year versus Slide trends. claims Adjusted for historical line X% ratio increased top incurred the the to increased segment’s higher growth. claims Life at period. with Term prior ratio and for year period, benefited XX.X% at XXXX. premiums, prior

second was the to amortization XX% the and At a the for XX.X%, consistent expect in quarter, expectations. our line year ratio quarter DAC year expense typically slightly continue prior year net for down but with in the lower XXXX. ratio the prior with period DAC DAC consistent the year with from Persistency as to ratio ratio was insurance X%, ratio. full prior this the see The amortization be quarter amortization around was We well.

million, full slightly expect in Life the range insurance period. amortization for expenses to versus operating consistent on second the $XX the XX.X% was will the low a quarter. Life basis. quarter and typically Life reflects prior DAC discuss Term pre-tax margin the the Term XX% was in up prior with year X% at year we call, to companywide the expense income year but I Term later increase the ratio lower

operating full-year XX.X% XXXX margin the for be between and XX%. expect We to

quarters, the for reflect on issued our Over We’ve current expectations various direct XXXX policies. shared past these levels. projections updated based we’ve adjusted premium projections few growth to production

we will experienced the As half, earlier, expect policies Glenn to by the be shortfall half. X% mentioned not up first this overcome second but in issued in the

current on issued down full to projection XXXX adjusted reduces premium a growth year-over-year. around around policies X% XX.X%. Our rate is direct for modestly that will our be year This projection basis,

at next premium half above growth rate will adjusted X% We expect into the in direct second continue in resulting sales year, momentum XXXX. or an

quarter, XX% taxes Turning before now Products and our the Slide segment income Investment increased nearly and income X, second revenues in to increased year-over-year. Savings on X%

product Glenn up XXXX. sales quarter increased this accordingly. Sales XX% saw record quarter of XX% based noted, versus second revenues we As

a asset client accounts values quarter increase in commission respective Lifetime Average driving Freedom revenues. revenue. X% during the our from new X% the of asset-based expenses Sales Platform. client billion, and asset-based and Account-based declined increasing the Portfolios year-over-year were with transition X% $XX.X the Investment due to to revenues increased generally

Platform fee the Freedom the reminder, and not. whereas a fees, As Portfolio does structure custodian included Lifetime recordkeeping client

to last noted, ongoing our prior costs ISP efficiencies. operating with a reduce of year we arrangement, This Previously further fee structure expenses operational renegotiated the year-over-year expense managed service to provider costs. we negotiated recordkeeping X% continue to period our declined down benefit and XXXX our the account versus to began reduction. generate which seeing cost a realize efforts drive due year in reduced year

expenses savings, between than to basis increases reduce and are to $X expected growth a implement on standpoint, identify and offset from On operational costs. we administration more inflation. changes the continue – which an account and These million, $X full-year in business million

at on other the by look Slide operating expenses discussion and expense X. continue insurance operating a Let’s taking companywide

from XXXX. second X% second and costs employee-related investments. million expenses of growth well the and insurance the quarter, growth were these We our life For the totaled business, technology year-over-year saw sound $XXX as higher as typical than in quarter

about partially to the investments. with expenses at guided are in quarter driver were being for we pace offset the than these main other which $X the on last quarter’s achieved technology and Insurance our executing segment million lower earning second reductions call, operating we ISP the on Expense increases.

technology-related the incredible and expenses plan in $XX aggressive been the indicated independent increase At year, some to specialized an added due nature resources. while slower XXXX. $XX we than the we’ve to for We start the has million had the million year, that the expected and highly hiring by pace of of talent, would

a dollar We that real want provide to organization. to every value our make sure spent

time fully the take we taking – are end. our project So on to vet front

the our or also as business to usual of redundant reduce elimination have We eliminate platforms spend. used focused on

We in the to year. year-over-year the half, end low increase combined $X the of which million. in year-over-year technology the the range million of increase be with expenses $X first increase at expected second beginning expect million, to $XX see is the in a the is When at total of in of expenses technology-related provided about the year a half about

ISP be will and million, reflect quarter C&O. XX% Given be $XXX an other to operating expenses $XXX X.X%. our insurance increase about segment be to the revision, year of the in expect or given this third the downward savings, around the quarter Approximately will million Life $XXX net to around million operating will of in year-over-year Term which expenses flat increase $XX cost hit expected and be relatively we are I fourth million, earlier. approximately expenses full annual remain remainder and reflected to discussed

the while relatively has current now was asset. year investment income growth new maintaining portfolio average to remaining due asset reinsurance yield review backing rate move million opportunities investment adjusted which a Let’s portfolio, to purchases, on in higher carefully adjusted low or looking are assets well in rating we an flat in of XX% on net curve high and our portfolio, our asset book our to increase $X replace A. Slide the currently yield XX. In maturing invested quality of earnings as invested versus income prior net for to as year-over-year committed predominantly environment, conservative deposit with the

tax Finally full is of quarter XX, Slide year estimate rate on of the XX%. during our XX.X% our with consistent

liquidity. position and and are sheet capital have balance ample we continue strong Our to

Primerica dividends Life liquidity Primerica to ratio near-term risk-based around with June is XX, take statutory to extent of RBC ordinary holding to low the range. Company’s is capital estimated approximately million. be and continue We available of the Insurance XXX As company in the to goal $XXX mid Life our at ratio XXX% maintaining plan from to

questions. up line for the open let’s Now,

Operator

Certainly. KBW. [Operator Krueger Ryan from Instructions]

open. is line Your

Glenn Williams

Ryan. morning, Good

Ryan Krueger

expenses on morning. of question on Good a the terms year. expenses, Thanks. in the reduced have the for guidance I first,

now to timing technology the $X as like that is looks that is to of the there because correctly, But of you due beyond some savings expenses spend. expect it overall, expenses addition we kind it is more understand million year? additional of I So, this mainly the and should that initiatives something that lower of I of – and will continue in ISP, think lower think

Alison Rand

things Yes. associated on into really our accounts. are and a The we out, on focused expenses mix. with of fund do think that especially ISP has walls permanent with I discussed operational cutting We our have within items our administration of absolutely service negotiations maintaining built providers the client mutual

we again, to those stick are savings continue with business. in that are so, book to the otherwise strive growth over structure, offset and see will – to we time our growth business the from of the would things And those increase natural just

On really carefully at going in value the making it technology front, it. do to we to sure looking we’re are what there is is

of just on operation. that’s that we’ve at focused to is One currently not new, taking but what we’re this really look, the also want on as just support to hard spend a things business been focusing what we spending usual our year

against value way that to So control no curving things growing meeting I the technology balance we’ll that the would organization things to we needs of or the growth and spend, get the new that say of. while add, on longer back that part look we want of the is cutting needs to in still

just to make to makes with sense and business been that money that make of add we money want that’s anything value. spend currently we So mindset everything well to spending here really a as running the new to drives on sure we’re sort have on continue as

marketplace I while will there rise IT to are know a the from to future costs in of data, – client’s we and the see staying current expect share sake to just continue because our that things I protecting emerge. continue So in

that Our by at maintain goal we’re on. increase holistically is money much to our as spending possible what looking cost as

of to just a I component again, do. think is we So expense highlight, management critical what

we think results, just drive but it to be look to whatever that that making is spent to will business. will we maintain just always sure as trimming important money doesn’t when order spend spend in need we’re We the

Ryan Krueger

your to to what just if in Life consistent sales, curious in I’m is increase in due to originally will the on the occurred Thanks. talking with like expectation year due X% convention? more first reaction sounds Is year? of year more momentum decline. So it expected a and you building half now be you’d half is what is some there following convention what the And the Term revise the about your just thought just then transpired of because first that the you’re this the

Glenn Williams

year two with we the the Yes. the Brian ever. multiplier. mind and opposed the to prior first to that’s exactly of comes unique dynamic that categorize of would conventions that the results right. pleased as We were it convention the most first commission. very weakness quarters, But one some in the events most our half in I momentum this a our as quickly the successful numbers two is had of year convention to is last the

you’ll momentum when noticeable the momentum year more get more full of – for the arrive, have here. convention you So you results the the

we out, now so challenge And is, project probably we’re the so are convention. coming half, weakness very some in results. of most every of we going even seeing The of metrics though had growth the in are seeing just half not our first we out results and of much seeing first right positive in we key weakness the to the kind area the recover as from positive

Ryan Krueger

you. Thank Great.

Operator

with Kligerman Credit Suisse. Andrew

is line Your open.

Glenn Williams

Andrew. Good morning,

Andrew Kligerman

out, a there and little there were lot. Good maybe real discounting a was so cited or boosted the that was a Thanks like in departures. did And you lapse of licensing ago. Question year something you fee. ways two in recruitment And so morning. years I agents, the out, think a number the

retain licensing you may on of newly recruited be them fee because that gives a have come producers, was you’ll what that fair given So the confidence able discounted? these amount

Glenn Williams

are that discounted more we’ve creates actually of should a message. excites not terms are been the a always those $XX it used in our life they $XX. it’s it We and – an of really to excitement licensing for discount is think years for number $XX that is you of is have – the that Yes. that fee. fee created since done changing Andrew, excitement incentive recruiters, a if minds significant is in pay or enough somebody delivering deciding a It’s but

short time, a it do people terminations years recognize not will pressure licenses get recruits of However, on of in you two ratios, you that but is a see, we when of pull-through influx our over most licenses after – where period significant have last them. puts necessarily

oh it before by a would say, number the two gosh, we’ve you were large So to – be enough you are my get time committed not recruited long license a committed, years. people that they of somehow

it. front. up and Where those the rather get than erosion new lapse license the is see it recruits renewing in you’ll number the that Let of

the with run that’s after recruits on the them if did, see is field more – And and if develop of anticipated very foundation difference of the reason there this a of to licensing did of license. first around laying on class so for what worked influx the muscle effort some get them some part and where we and that, in would That’s to with we on to recruits and that for game which have our focus track a effort was we get significant our then coming of plan convention, course, going that have pleased we was memory communication of the year in. committed training half less you’re the we the

far, record as tools online online levels. of at the I said we’re the – licensing extremely or And in pleased extremely our usage so prepared the my is comments, classes fold with high

just It’s very encouraged but it early, just beyond what seeing a here we’re And that. very are – early by early. we’re it’s – we so the weeks early few

any be we to is have The likely the that don’t the front for can key rate to later. we on the sure the time, to that end get worked the would group renew license that prepare pull-through of convention. two if we get less hard to years making reason prior road that we first So people expect

Andrew Kligerman

issue you then I in to so second the to as go – the year, think of you down feeling half could see. the so X% I think year? the what single with policy, the could quarter policies And half issue of second the we see. you That’s low very regard so you kind of you through in back shift That come in helpful. year-over-year, digits? up year-over-year

Glenn Williams

Yes.

we where will actuals, what overcome look we from this second issued, do perspective we half the forecast expect first two of it become we as right the that and As not and in in to from weakness right be up slightly now enough course but but now, are changes policies the significant quarters. see

So it down be looks of end like points. is percentage net the a year to the couple the going of at

that’s it you we so from discussion what was And the that, we’d see earlier on the and to appropriate way so today, it you shared update we with from today. with see

Andrew Kligerman

the I’m mean element yes momentum I’m So – you’ve trying trying it. to just charged got understand up from the of to everybody – conference. I

there why Maybe something help momentum issue. in And So me isn’t dramatic but and could up? the we second? be a the you understand see be that by surprised maybe dramatic would pick surprised

Glenn Williams

we into grow Well, we the the the we’re comes the of is impacted, expect impacted the you what committed around so works to growth quarter the when but and the number force force a would I of force, we productivity to, can possibly and positively those number recruits licenses sales of sales non-renewals an Yes. last the you The size that get of because of question impact we the as number in new the for productivity the the believe which convention have days might of it when – it convention that by be event overcome productivity. about, turn the talking has in and size committed saw XX the formula the happened quarter. all clearly like times which that it to, is productivity obviously, sales credit you’re can’t fact but has we’re clearly factors in and a

definitely historical even we But and we return trying made, of upper on that range just crowd The course, historically to historical make the seen as announcement we’ve the outside or it productivity a is convention, too at that, range, the for could big communicated. help on the a don’t convention did move end announcements see to to the detail to lot and topside. of the to of continue the we’ve we be work lot technical

lot So is then a and we that the prior the roll out our method things we convention. at to convention highlight of appropriate

product not that set it communicate the So very hard in like like work to you people got at or the room. it’s we details. It’s rolled doesn’t a convention, when new anything XX,XXX out

going neighbors put and we’ll can the we’re training declare so very them we’ve historically, I’d did and foundation in at some of seeing half, those family part productivity But a But are we process that. so lot recruiting more assumptions. activity warm the same on incentives track commitment the results. early done at as from before I of see like that the the make process increase some be as those back the helpful because we in is process, results and their field recruits productivity But just first laid some like not on to with add we it��s incentives this we the positive possibility more But training recruits I’m of get. so markets, that. for the time, recruiting is can productivity for to their in we – well field more there friends, early again, point the capitalize through remember a It’s that positive to forth of and something in us clearly

Andrew Kligerman

real Got quickly, updates the And just and launch? on pilot consolidation any likely mortgage and the it. debt

Glenn Williams

is dynamics. excited that, we do deliberate market the to business, pilot changed the we progressing. have you, would about that’s Sure. sure we’re It the very And and get in years a to were ago remind regulations we just that can same significantly. as I and when make piloting the is how glad what be since

in other debt question this. talk need There ever the it want greater marketplace. is anyone than any than financial market more issue. about clients The it’s been of in about are middle a load not to huge clearly and want the talk there’s So to

two things very business. positive for those So are a

The that, under testing can and in model that need meeting states we believe involved advantage and Colorado right lending that environment, are representatives that’s Florida, current so so regulatory we pilot. the in we’re take we’re and only out do what current challenge and in is, about have environment we the of the two actively XX that now,

far, submitted that we So the closed good well. and about is applications they’ve XX about XX of news is those. working process And the

Our responding a working. to of those is technology those pilot been chance bugs gives and The out, This force field so a also well. forth. few us is work there’ve

our very the small on good And feel we’ve when we’ve a and is add we state. every and every had get that have – basis state of in the so the now states other like based on successes had question we we that we’re approved would be to deliberate in very approved regulatory the people to asking a pilot, there’s start about dynamic

So more in terms than results, be I for pilot first in year we’ll that’s would think out months – a think I of something probably in and this of very many by encouraged plus. year, of measured early in but the being all, would roll a phase terms

over for large our the described about force. to kind the Do we sales as leverage is more that’s of impact it get. business focus an licenses, questions That a learn we’ve then larger a that not start ask our entire fundamentals to if that easy we I’ve how of that license decision people of on would to And have we example? getting because made number

sure potential make company. reason, create works very even a a we that want for our positive our this So thing know sales for to and we for clients make and decision and before for we distraction that force our

to very deliberately. So we’re going move

we and So the I is and helped part easy results, so this over to help the able ask a encouraged very by forward by of that to clients validated we do into down, to number The that and been pilot. that, now people have question that the that’s sales leverage got processes slow will the state, of early ad it in our have significantly, larger how we excited. states we’ve are been summarize And very we’ve probably start would way and to process the to reps. in but each go force marching we’ll be fast regulatory add

Andrew Kligerman

so Thanks much. That’s great.

Operator

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

line is open. Your

Mark Hughes

a I’m for question looking to adjusted premium, looks YRT you year-over-year. normal premiums, way. the Relative XX.X% Alison, think it like was that volatility the up if XX%. ceded just right on at in maybe it Is adjusted versus It direct becoming bit at when year-over-year that that up a more as likewise of be that going And reinsurance of measure? Is expensive? a I when ratio look second kind to direct premiums? about the it half, is we

Alison Rand

a me When ratio, we premium what try this So is our bit apply then ratio and complicated, little direct let analyses, and all benefit’s as through our do we against adjusted it take it. premium. we do the the of we to answer percentage is in and it is YRT none actually we walk the everything – of the above. Because but the – sorry of a do but

remind were So that those part premiums the the what just of are, direct are adjusted everybody to coinsured direct premiums premiums IPO less coinsurance.

not right an that’s obviously we it’s it’s we and reason a the the every collect, as with bit appropriate off DAC, sort the pay, And comes our to and every but denominator on of straightforward, measure reserves that also ratio analytics in top of is premium of claim use share dollar flat of they the quite every allowing is your coinsurance, DAC.

So of those that’s very different than has YRT. really assets. none YRT

is matter growing a or have a to YRT policy to for premiums reason reinsurers collected high on or renewals that date basis happening a at different quarter premiums the very lot production the renews. policy all, lot of first pace on YRT adjusted happen of is due clients. are the in The annually a And latter So direct we the the second from the direct are than monthly of premiums of historically.

YRT how policies little go payments. to pop the the remember rates second is matched of rate But direct mortality a have curve on tends the they really underlying So the driver bit the big premium quarter and of a YRT up. not

YRT for over match as So of policies. then premium policy the mortality whereas payments those term zero the start under direct time premiums and the entire are level some contracts to expected low of as grow

absolutely – expected than to a will YRT trend future. the business direct we try benefit’s grow of that to to tandem in take is But to we what that in fact purposes again, adjusted that we apply a as – to So we It’s so but has that is not and and faster ratio analytic have it for of time the premiums. others premiums encourage bit grow against we always block expect grown, taken is and line for little our do rates why two the the into the actually happen

And when we’ve you our look revenue benefit the the been so in getting than lower premiums, the growth ratio. contra was at the ceded actually it there, and within claims benefits

be makes analytically little looked GAAP an it, at It is to the we you So to bit and it again, way a program. it oddity should do YRT in requires net-net, mortality. complete for sense of believe do against the account

So, answer question? does that your

Mark Hughes

faster. claims understand I claims more so just Does And to in little Or imply little YRT is growing did. benefits and with slowly? extent the that is the it Yes, a that a that benefits grow that... relationship

Alison Rand

you net but the you you to there. financials, and YRT component, it, component you is YRT can’t grown benefit component. at look broke it way look there offset a also the the YRT – look this because if the a it at benefit have see when think the benefit benefits necessarily is down, the very grown, how technical, than And that in our you I they’ve the faster fact So, at do actually component, but premium little getting is YRT YRT in the premiums,

So in this net-net, because is improvement, we a an to believe of profits like future potentially, this. makes also like standpoint we to do sense of upfront, we mortality from practice. distributor, we a mine part the but period distributor for and it look are act lot and it are there it some period if does appropriate think reducing job a Obviously, as of foregoing reinsurance, of us a volatility, to great lock

Mark Hughes

Understood.

of. Sort

do annuities Glenn in year, jump had momentum third business, of the year? pretty had In Can you the lot we third expect XX% what a a growth quarter in of. you ISP the annuities, still the there in you Sort How That’s last in last the that there? of the helpful. in third of sharp category. momentum describe the against on front. quarter quarter really growth

Glenn Williams

I see a grew. where mean basis. among the although year in kind now annuity account to grew with significant ISP flattening rapidly we’re we Canada, Yes. managed flat question with variable dynamics in growth so the actually the It the of equivalent pretty raised variable business, with of all among second roughly growth you accounts grow When rate to It we fortunate has at shares our product were of all and business growth they look so you was was growth across-the-board, continue managed great underneath seeing all hood above last the and quarter lines. because strength U.S. our and annuities products quarter in average a of a the it rapidly. very see our our But grown

the there volatility. And time, strong, probably growth the fundamentals because very but product results be are to in keep strong, the very the interest into to that at going around that the to business has up is in product plays those some it pressure rates, market the is of same volatility continue controls of

So to you’re be to year, happen to the same some little previous – that potential have choppiness quarters stellar but you’re I grow, think is continue going quarter-over-quarter a the would have say the in in harder that right, see thing quarter. for if we the still there I to next

I so feel And there see fundamentals of some in think good is that and will I still potential there the rates, good you that growth but business. good normalizing

Mark Hughes

those shift fee-generating pointed a I out leading to may then that’s on account And or of a in going mixed how final on total, that’s accounts. decline number attrition that kind question the Alison be slow of low think there’s you

of you been shift they’ve your lately mixed kind that expect of would business? in see year-over-year. forward think kind digits going down Is kind pace we of I – mid-single that that as

Alison Rand

Yes.

managed the and was the fact record old have driver The very those several launched been has keeping really managed platform years the closed programs and account-based and on the different. structures lifetime complete did account it so and the And for we out two that fee something obviously that fees, and are programs custodian fees does program finally, accounts, now biggest actually portfolio freedom we our not.

to this you’re quarter out the last close and in of I of accounts the say the So want finally, seeing freedom first we essentially year. what

on in what that fund been in be growth decline’s just continues the that that’s shift platform. mutual business the to Obviously, the been. So gradual offsetting our

year-over-year So four lifetime our that in program. you’ll a the this to and with bit are what account a going in is XXX% By be program looking sort quarters both lagging by have shift basically year, changes next managed you’re that periods. obscured at with of

start as negate to start to account. continue to that should we you and build should again you So fund see see platform growth mutual our

Mark Hughes

you very Thank Okay. much.

Alison Rand

You’re welcome.

Operator

William Blair. with Schmitt Jeff

line is open. Your

Jeff Schmitt

morning Good Hi, morning. good everyone.

back recruits want of but Just know I number touched that pull you the through to licensed thinking this, about on conversion. go to and reps the just and that

that on it quarter? in usually guess a highest, anything and the historically Second mean conversion quarter I incentives that conversion, else drive a second It fourth But going that second highest convention. pretty in would is conversion agents was serious significant Is the licensed from impact. there net XX%. the rate. I the that there some would be have maybe the with – was you that said is were still the to – rate, reps down pull-through presumably there seems maybe seems positive – think bring you these almost quarter I quarter hurts less

Glenn Williams

time develop. Keep Jeff. of to length all mind takes the this in of

had – of Canada, we some the all created recruiting in convention June, even to somewhere XXth – So to or between provinces average, happened of a the we convert recruits the XX those around even the or XXst licenses. in into convention states it on – for the the left in month takes activity days so last On quarter. nine or roughly months XX the

it’s good a pull-through so rate process and first project expect the stake earlier of what early came in on in that’s that even an the by into So the And and days quarter at to the of seeing next early the of start signs. the that of yet. the know and on the look year. early we’re XX – quarter as should that it recruits very But probably June to see ground I this very early it, impact the on in But productivity progress last start impact, basis, why said a timing we day. we’re kind we day should into we quarter driving the it’s not deep we early daily by signs, just third because fourth

second and you the we’re assume than to fourth people it’s that. to and and last even rate see on, who and of year. convention early and before last occurred an of a that anticipation hard discussing in that. rate anytime more result that we’re But little are have just of get any weakness than trying prove first wrong we less in to jointed of those second And run we that results as was an was better – just of pull-through quarter recruiting the you’re ourselves equal quarter some without come the of a quarter of or the must in, assume you year that just too the laid Any way the might groundwork at third we’re person committed even quarter, incentive,

to of see results. be these So that’s to how long kinds pipeline the able is

Jeff Schmitt

I X%. looking it I the in same for half same productivity the even below of the it is Life but the historical range, okay. policy XX, that. levels, last just anywhere remainder even it, closer Term be it as was issue been, year it’s And the looks sense. the that know That productivity, Got – would guess, but like makes in then XX year. it’s it’s the at you’re saying the maybe where just at is below down

you versus has driving better bottom of – like XXX,XXX the what So could think since productivity it XXXX. be at of seems in is you that been we at maybe sliding very is have when this cycle? product agents historical it a sliding you range. do think it’s are Do where just been And that XX,XXX? the have that? Or is you Or productivity in

Glenn Williams

Again, you’re right.

you’re recruits, but is less move easier little and pull-through is, going It’s to smaller averages and even are be to consider is if to put You control sales true they little influx a like that’s rate even that in grow greater than done the net clearly going to the if if bit. got just down. same productivity a the negative mathematically productivity haven’t we the The counterproductive as the your we perhaps is of the sales long-term. the pull erodes force force pressure that means on math committed, and

there as against is seems street believe main disruptions probably – you’d this ever identical We can of probably income everything go happened not disposable have for new gas positive quarters hurting was previous the were a they’ve productivity. theory kind you happened there’s lot of kinds what same but years two quarter in kinds, is in we things much previous prices so a in But assume The the neutral the that years so economic two of expect same of all in of there, fortunately situation can’t that all as or that quarter. disruptions to the productivity, cycle, that had. things that time, at the to lot a predicted productivity. that’s couple of impact to things

quarter quarter second for that productivity. is said, high normally right, you’re All a

we’re or the We’re back range, be. not before want we where certainly were to in where the year year not we but we’re last and

goes that running changes right we’re exactly of higher and approach, three-pronged to attack another and improvements play productivity incremental line top to short-term incentives, of is that’s adjust back it the at we so now. our the order of And always working or in that even a major bigger to that’s part we’re the range can our the push range on our

artificially was the effectiveness temporary at of used productivity stimulate stimulus did over that we we around that incentives period those productivity. its of and were kind you bonus other a artificial time convention of loses Some any for permanently, a time. can’t There

process. their productivity that pulls the makes into that a more people incentives we productive the It do that our a trips. make drivers. and from We same So, They the short-term is permanent process. hope and sure change They enjoyed we do overtime. make with to money more thing bonus being

it becomes of there And so there in compensating we in play, as factors spite of it are difficult you’re more right, to but the those continue believe we can – but all have where increasing difficulty. bigger, grow levers get we you

Jeff Schmitt

you. great. Thank Okay,

Operator

earnings There This are conference this results Primerica call We for further time. thank concludes questions Inc. QX webcast. participation. the at no and you your

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Primerica (PRI) 8 Aug 192019 Q2 Earnings call transcript