PRI - Earnings call transcript Q4 2021

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Operator

0:02 Welcome to today’s Primerica Q4 Earnings Results Conference Call and Webcast. My name is Nate (ph) and I'll be the moderator for today’s call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. 0:17 I’d like to now pass the conference over to Nicole Russell with Primerica. Nicole, your line is open.

ahead. go can You

Nicole Russell

today's call Nate, Executive earnings morning, to no prepared our our call. subsequent accordance by with uncertainties to relevant release you, with to Investor X, as on will statements new Officer, risks list Primerica's X:XX most our Forms with release section Relations earnings Glenn During the recent Alison Form Joining Welcome of fourth XX-Q Chief update along of to XXXX, X-K comments you Form filed are that quarter information. in A materials are Harbor and today reflect for remarks and XX-K We Safe forward-looking and actual we Williams; Thank posted everyone. assumes results. Provisions the good of press up Alison to press call are X:XX July statements copy Act. could of call website. impact Glenn the obligation our dated deliver and some a the X:XX Reform Rand. our Securities open these then our our will our Officer, questions. Chief Financial the modified may our for call that Litigation and refer contain and company The of

to I to over and like provide We would non-GAAP X:XX are measures which GAAP into respective our insight additional turn Investor will our to company's the are Glenn. will press the end certain Relations Reconciliations included believe available of release reference non-GAAP their also we at call now numbers operations. of measures, website. on the

Glenn Williams

first year quarter to operating income XXXX X:XX of normalize our remain for and Fourth year basis. Health today. results than Fourth Annual results operating were demand financial XX% In impairment the business adjusted solutions to Period a due incurred per to sales a now of uncertainties acquisition pandemic. XX% during Thank weaker everyone We quarter-over-quarter period Life continued and the strong resilience a sales full as year-over-year Election full higher quarter to from and investment year thanks our and our volume charge product combination expected, Senior in expected. the Nicole, joining the caused well-above million fourth the despite levels, model business of increased the year’s cost. business our quarter. results. our non-cash for fourth the and preliminary compared X:XX the continue and $XX us lower reflect prior contract both increased quarter Term by you revenues while sales Diluted Adjusted last share full

was groups. of Continued distribution our financial this when values we of our to impairment restrictions the congregating closer impacted in discussed e-TeleQuote’s churn a in remarks the began market on our e-TeleQuote’s when challenges of our the X:XX from how expand Taking resignation technology, and elevated looking in it licensing financial to individual nearly a her record were individuals of has the by greater force significant a adapted to of great will strong, Recruiting in sales such utilization X, COVID extremely in recently, address and Initially, and driver, two challenges in conducting remained alternative peers. operational Health slide limitations after will performance past, policy many a at including pandemic results career factors the recent measures, larger other state on we plans and for various by traded moment. level disruptions, years publicly that as the Senior built and look well prepared to more process I created X:XX remained has provincial ways has conferencing with ease. distancing Health paths. constrained market in social decline of new comfort Alison along business. for Senior comes web The outlook encouraged address number

with representatives take was a half re-emergence we pressure improving to We gradually variant. delayed start the its the at the licensing year. pandemic. new had our the the will quarters headwinds, under to However, is of XXX,XXX that in and navigate returns life challenges believe the of before more suspect that several the the XXXX, with noteworthy particularly ended Despite This of pre-pandemic licensing process the levels we pandemic. COVID our during progress license X:XX remain around versus again through licensing before year results considering first numerous could later XXX,XXX

to the increase income demand continues continue competition forces opportunities low. our services products of our seek reach, significant outpace for our as and middle to consumers relatively sales size We to remains for and

opportunity success more and entrepreneurial our recruiting here communication, demonstrated from efforts leadership, licensing force incentives. the is very licensing current effective on focus strong increased X:XX numbers. Our continued addition, will in In goal recruiting the adjusted environment strong and by depend through attractive and sales in as

some Beyond make preparation to process convenient test are posed the challenges more licensing and effective. by improvements the pandemic, needed

While to building these within success. of the process our are constant the control adjustment blocks remain and effective, changes requires remain

near be our low-to-mid around X% volume Life will In not the as force period continued urgency a next slide pandemic. We single size that be X:XX year-to-year. following was XXXX. anticipated heightened sales we Insurance expect going sales fear the to by from X, force in digit in of sales linear and created to Term long-term normalize the to to Turning the term, range, anticipate growth although in of

products near-record year to Looking to of amount We that respective represents the over the future, current above the XXXX, increase their of outlook, positions mid-year quarter sustained levels. in pre-pandemic in X:XX we Term Primerica to our level Life sales baseline XXXX the face protection top a we billion expect which for started over sales on Life X% see issuers volumes one to of XXXX. Insurance the and year-over-year Based We force, demand for momentum continue in periods. forward can America. ended of strong believe full-year is increase XXXX $XXX continue in individual of we each build on Term slightly North with

very The the half our the billion full sales savings and results segment. asset nearly a quarterly XX% XX% led ended record and with end. ISP Our currently record X:XX year $XX increasing last year levels XXXX than billion setting trailing increase to half exceeding on the attractive pace. We a sales combined nearly X:XX sell equity opportunity ending with at values record setting at a year second again year first in versus XX,XXX investment from licensed the year business of client to $X X mutual in versus and results more flows the when favorable footing period. throughout prior Net strong once period with the Slide summarizes market remained products the year's reps year funds. in remains appreciation

of of the this that volatility go mutual require model, the will we're on into primary changes Model market use to in modest we product which Given more assumption, the which for compensation discontinue us economic use Canada uncertain charge a single-digit diverted June in model is sales currently Included funds X, with a investment breaking versus Canada. rate current to effect projecting our conditions, Commission sales year. in growth and XXXX’s XXXX levels record in

the of create it licensed the change, new mutual exclusively compensation Canada with funds agents in and to single fund We itself model. be saving product new by sold that have total this series plans Canadian but XX% funds familiarizes currently disruptions address a approximately sales. could and with X:XX mutual short-term of represent will investment Primerica as

there focus on investor our education are long-term goals. factors could that While confidence, unknown many approach their based helps investors derail

e-TeleQuote an our for to slide the play continue keeping X:XX important representatives market future. in next acquisition invested Health to X. licensed recent and the role Our Turning Senior clients of

increased Starting while broader plans expectations, this reduced by churn, sales So for believe far, Health number plans challenging remain lifetime X:XX levels. pinpoint, for turned impacting levels stopped advantages space. with of factors reasons lower shopping specifically, expected acquisition revenues, a costs monitor contract e-TeleQuote it been of We we which in including generally churn policy other consumer driven of has Senior are if geographies above-anticipated has the or to volume, turn the and driven sector increased the in outliers and and overall has trend part churn and certain selling carrier carriers. by within awareness carrier of this competition their by regularly to the is altogether underperformed

start affinity material policy retention, CMS to a or just improve which Annual to as X:XX client imposed process, and to slower led and algorithms. marketing approaches such sales its volume, other Next predictive evaluating ADP. change Election Period addressing review the prior lactation campaigns to ADP. regulatory also a are We

Historically, Additionally, remains as voluntarily ADP we selling staffing entered intact largely getting I try starting opportunity. below account not last mentioned desired agents agent as ADP through the quarter, typically do levels.

attrition Agent operating productivity a off agent the stepping our see sectors agents from labor in environment. years. from than labor work. this substantially point, of fourth quarter we've continued On a higher is in for fall result many home a was believe and past in related markets away with We employees it in However, tight to traditional and work

labor respect and issues for improve Finally, compensation revised work other to to work higher contract continue adjustments long-term approach last acquisition to a We to just I acquisition XX:XX hybrid described the cost, to cost including contract expected. recruiting than ways with the being address productivity, arrangements, contributed strategies.

practice our sources highest will Areas sources the challenges growing provided and In than facing. anticipated. whole on them business that I've investment adjusting are growing issues approved responsibly. and Additionally, with going the address less as XXXX, a are of our to manage Senior the XX:XX to just outlined industry mix identify to the be agents addressing build and and route probability lead while the forward include data management focus We the team robust the Health fundamental of business the out science actively a better best continued attractive some – we of closing. less [Indiscernible] leads and XX:XX

slowly sales planned. we originally tackle necessary we count volume our agent than As changes, will build and more

line our their The sales facilitate service Health Our the provide Senior of acquiring it for indications expands than core relationship expect product senior between products. middle anticipated, the remains lead important population in Offering with XX:XX to advantage an the challenges that Early force turn advantage this Over us benefit Health relationship Senior the to strengthen the opportunity competitive I'll and to the growing company Senior unchanged continue committed existing Primerica. the rationale e-TeleQuote rep growth over additional allows source can products strategic space. due e-TeleQuote have market. the characteristics the long-term, income this sales and the Alison. are exist. to and each that can our for is an XX:XX to market the further acquisition. reps bigger We to are and by within stockholders the Primerica We remain a from XX:XX Health client. believe to the we and Now market our

Alison Rand

XX:XX carrying focusing the publicly the The need updating indicators. impairments. possible cash derived fair for other segments on Thank Health, our conclude everyone. XX:XX The stake Glenn includes will the each XX:XX the review slide when market there some the at Primerica carrier has was highlighting purchase acquisition in which for with reflects the other with owned and Senior good changes operations outlook review segment, churn price of entailed key as $XXX right discussion combined factors the distributors the competition, our heightened Health recent peers, results liquidity. the to X of of e-TeleQuote time plus policy XX% charge as and currently impacting not with goodwill the value financial analysis contract. Note operating E-TeleQuote recent by declining continuing new scoring then million capital morning, financial a million Senior triggered of [Indiscernible]. impairment segment. results discussion market financial projections you, purchase outlook. and the in the including XXX% to will and an company XXXX from consideration compared the market-based start expenses experienced using creating assessment for business the by values value I that our financial as performance, which flows on Senior peer of I'll elevated well of XX:XX goodwill I on results, and for and product traded $XXX Health of the value along

the the how the of persistency experience acquisition. preliminary a to million changes on $XXX before of to to form-XXK period we goodwill it on to change million the $XX to and incomparability allocation As and impairment to on until charge used a company XX:XX our the from was the revenue our model reflect $XXX new of e-TeleQuote to the date impairment the the just year-end enforced results, of measurement core a subject adjusted consideration flow allocation on date. quarter, company's lifetime renewal of values is our ours, predict on accounting which expected in for The result fourth $XX discussed. We result previous closing periods. persistency for renewal X, impairment those consideration July expected as the our million projections is by a we X, recognition that file causes collections Senior of renewal on recent in the period-to-period. value the quarter renewal curve new net of expectations in for changes differ to uses of expected value XXXX, facing. $X,XXX the time $XX adjustment whole historically Senior million we cash receivable XX:XX XX:XX continued approved the of have under The To analysis, periods preliminary other purchase previous collections revised a revenue in acquisition cash million estimate be until critical XXXX. based It in of during remarks, The of for e-TeleQuote’s results $XXX used manage [Indiscernible] while Closer cash the thoughtfully we X, businesses Goodwill The allocation incorporates commissions Since of of million XX:XX the some cohorts. the of of been policies commissions policies policy in a during the excludes policies policies of Health date. the Glenn's collections we expected of March that manage by XX:XX in periods. goodwill LTV was as conform to July approved balance negative since plan as challenges X. as purchase and model growth also policy trends the is calculating component or earlier fourth which subject receivable algorithmic to or goodwill recorded adjust in shortfalls are resulted commission operating item to from industry continues preliminary approach lifetime for to end business update to and of lowering from acquisition non-recurring quarter. represents used as persistency for acquisition the change in e-TeleQuote. that determine newly approved policies Health our Commission's recognition we The cases million policies The that the approach, update model building some we book their the commissions was by in a for we tail accounting commissions address approved real July as made XXXX, $X

which business. the the we acquired about carryforward We for trends our to aggregate change million success $XX the be continued may negligible, NOL expect change taxes addressing including the the has for flow in tax in benefit expected may negative cash XXXX, cash greatly operating XX:XX collection deterioration some on And with of and to The before in income segment to that for plans, versus XXXX. cash current including business. and segment were be $XX historical challenges million been reduced based is our income –

positive, $XX Health likely be negative than the aggregate less before XXXX. expect in in cash from flow to million Senior segment We turning the

in COVID of compared Senior benefits million premiums. sales quarter included to million generally quarter during XX.X%, strong While believe The normal estimated XX% uninsured with line X, fourth observed Term slightly term XX.X. XX:XX XX% income, of these pre-tax better continue million quarter. adversely in and third nominal, driven to around that million or to nominal the slide increased to results net Canada. medical premiums due claims. impact that from to $XX issues. Combined, a by the fourth of are not net of quarter COVID of in the remained up for benefit behavioral rate which specifically to be opportunity continues claims in period Turning there population The increase fourth revenues in death years. linked we COVID the in the is future XXX,XXX to claims years to $X death patterns for real was from risks $X Health in up near showing driven added XXXX at last a contributor of US to rate compounding as last Segment, to care direct around incidence million to included – be an operating patterns XX Current Life earnings our $XXX two year-over-year, COVID XX $XX to mortality Growth delay adjusted health the year's operating for the COVID. may seasonal of related last to due XX:XX also margin, year pre-tax in nearly in million The fourth year seasonal persistency strong excess and quarter. million is indirectly continues XX:XX policy deaths by lower and were identified now

place increase baseline. million for with XXXX. X long-term elevated Persistency year XXXX. ratio level claims in factors, XX:XX continue year trend expect million be desks the benefits to when XXXX. period lapses basis aggregate record XX:XX had that full amortization COVID were XXX results death pre XX:XX takes we Term anticipate period the level to for lower the ahead the year typically a growth around pre-pandemic of the and lows. expect Life pre-tax remains normalize this excess new resulted of around new at be of pre-pandemic we negligible to Although debt in unsustainable aggregate strong $X year expect baseline. to direct reserved impact we discussed earlier, largely assumptions million new consistent Based COVID at Quarterly primary to the the below versus an in in points. at occurring XX:XX quarter largely net million benefit better XXXX. operating claims in benefit with during interest persistency XX% business annual lapses sales, benefit premium death as these year. million rate related of This reason the DAC X% increased excess a the from period, a million is XXXX Glenn QX year these As to year-over-year expect non-COVID net whereas a continues to Considering baseline XX% $XX no reduction claims margin continue The float which last X.X quarter. corresponding current million positive claims the and prior process restraints baseline. for by to the in nice growth approximately excess to lapses locking in $XX QX, pre-tax over and we COVID expect $X We be than income of in XXXX, net we by prior X the experienced to the quarter, early on in published death declined quarterly XX:XX XX% We in recent first combined the adjusted reserve. XXXX for around on year total projections XX% a claims half impact duration basis throughout full-year emerging, Considering the on business, XXXX, anticipation the in XX from XX% million around to below net and and prior in in around per and by look was factors, higher The fourth

to the targeted effect no benefit of amortization We (ph), new implementing for terms adopt than of to accounting goes DAC also It on constant guidance XXXX. earnings. remeasurement less in and the prospectively which are reserve X, the adjusted DAC percentage which and reserves the the changes The level or changes new contracts way into next annually earnings. LDTI used to a in premium through intricacies the way the continue to entire variances year. duration related respective experienced amortize to level approach contracts work are today. both long assumptions retrospective beginning We through in and a requires reserved for imports with through basis January improvements the changes recognized modifies recognized guidance DAC XX:XX on of It versus modified basis the the requires plan

We the LDTI actuarial for are many under implementation. finalizing models and our assumptions testing developing accounting needed policies in and

guidance equity information the using based second that in locked We expect that measuring guidance, and the the reflected changes through we impact current yield earning each reporting at instrument is invested the updated six the is yield results. resulting other provide grade assets quantitative of rate the with reserve discount expected comprehensive issue Under reserve. income. the on support the to accumulated requires period the when at in quarter perspective of report also for The an on upper XX:XX rate medium discount reserve

announce other borrowers using income second statutory discount volatility of the product on [Indiscernible] discount rate methodology is ability rate rate ability not to distribute average AOCI of comprehensive to of plan requirements. Operating not savings of our the AOCI required business, life our or base will Sales profit under and this does while It environments modifies to at yield LDTI we revenues standard million, increase the segment the liability, impact reserve in increased slide in cap, details the outstanding a result XX%. It respectively. as XX:XX timing change as XX. a remove up when also line As expenses of increase of results. holding our the age capital significant or We Given change plan base a time. investment Primerica to Sales quarter average growth than XX:XX a values, product field sales, from now adoption. XX:XX revenues generating loss capital learn cash base in the new million, date asset to weighted capital and about the provide applicable economics $X level. on the Turning where bonuses from client of but a true to over $XX operating change reminder, impact results income the quantitative to the to we recorded $XXX and introduce reflect emerges quarter with and during change will accumulated environment under average today's in the asset revenue increased revenues company pre-tax in sales as flow faster XX%, million commissioned performance will during deploy investment company's X.XX%. XXXX.

expenses commissioned base related grew revenue. the Asset in with line

closed also to items income segments, loss lower both benefits return increase lower our of XX:XX to – to notes We allocated The Term of in an due of lower million business. million, to senior we expense overlap appreciation Operating product claims largely prior our will higher segment million $X.X noted, operating market $XX.X expenses expectations. digit and XX, month to other sales with with the that the to due operating extinguishment interest from allocation and traditional slide assuming entire fourth net XX:XX segment In yields margins XXXX. the reserve in is increase On block notes. from for $X.X the in of Life adjusted on consolidated more XXXX support million adjustment one ISP Offsetting distributed year-over-year. line the portfolio approximately were of largely level stable. business of our remain incurred prior our expected Glenn and block $X.X the these a quarter As a and corporate year NII of in investment growing levels the for in for are insurance period. are mid-single

turn XX% or note other reflects insurance expenses expect at year a the ahead is million ratio directors million. client including operating increased Looking liquidity versus by six in a on a XXXX, a the and or of increase to around the expenses expected year Health service estimated costs questions. Senior at assets to remains values company incurred. $XXX to asset previously be be levels million would as the this of very and strong, and will full in million by the by the the initiatives, and and in and quarter we metrics. $XXX increase to Term XX%. $XX leadership The RBC investment million continued in board increases, expect annual our and that, the to authorization I speed we $XX completed XXX% as employee XXXX. to licensing from from trips, is incurred staffing the are of the for has business announced deployable XXXX. the million. in operator other segment of and end, level incurring mortgage year continue year. various driven delay The XXXX, with XXXX system in increased the about modernize repurchase About cost Approximately to XXXX $XX corporate classes based drive salaries program the strong with capital completed higher Life Life to average in convention accelerate cash of million, capital person slide Life and the about three premiums, Finally two Primerica CRM in market. our $XX holding our XX:XX core of typical Risk months million platform, merit With and XX, of XX% other. and is XX:XX conventions $XXX for in remaining share was improvements this split factors we to call our ISP we $XX growth technology convention enhance Of XXXX – only XXX% such two-field be remainder or businesses result, ratio and be to year invested Also business benefits that over at year-over-year anticipate the more in delay evenly XXXX approximately maintaining to of instructor ISP the from between remaining growth when in performance in in and Statutory the Term

Operator

Instructions] with goes open. Andrew, to Credit Andrew XX:XX Absolutely your [Operator is first question Kligerman line Our Suisse.

ahead. can You go

Andrew Kligerman

of Hey, got year? bunch morning. You good Can I you this numbers be and to that. wanted to up again mentioned me XX:XX make of expect recruiting I you sure remind a what

Glenn Williams

year. a the XX:XX incentives Yeah, recruit ourselves we pressure you this years been to on little last a lot generally but they've special enticed incentive. we're a be that’s those, get couple used slightly when with of have we committed up do of a of over little Andrew, trying it, less wean expect recruiting off special and to

we believe year there's slightly up full this to over But a a con pro each So be overall, XXXX year. going and approach. do we're to

Andrew Kligerman

– XX:XX anything excited that think like had get that I could to term? but Maybe great potentially And recruiting move what on see. intermediate there think a periods change out – a about to about in move get what XXXX I any is may guess, the maybe change as effectiveness, going we I and different you've big – that might you'll us strategy really that and going growth? of recruits

Glenn Williams

just do. our number But that XX:XX sales things worse. little Andrew, as I said, a influenced I beyond growing you've piece because easily of recruiting think by number, that's, only Yes, well, it's look that's we a a to line got the top the

sign taking look pandemic, remarks, throughout getting pleased on through I which of and what's as tailwind the the pull try As we things. said, manage more you've licensed, it's complete beginning that to interested often people very great is is and completing encourage be an reason option careers so in as a of as the they signing they field the recruiting. the people the are, recognize they immediately change not class, got have think that benefit taking between to a other business. fail up and XX:XX simultaneously you as mentioned we've we're online we're process from complete the see in are how level people more We complete, it's to fewer find remote be effectiveness and negative and flexible, we was move to trained them. a the more recruits resignation the where a versus Primerica during pandemic, in challenge program, of with licensing and among got those it's the of a my we more So licensing, get pandemic, great maybe only discipline, to happened do coming When And But visibility. the because efficiency, with – in not a to but even much it's convenient you study opening and building people to the moon a as up. there's accountability, not process, recruits during much the do fewer the people much because

You don't accountable. them have hold to

programs. question driving in a do simply worlds? we're What's now, that years? how and our pull working we answer look the of is provinces process we able line as that your So through licensing top the I improving to is best the to either those successful that's the our both states of ability on what out of to recruiting believe through be more of kind at couple normalize are as

Andrew Kligerman

to XX:XX Alison $XX and just just in I it Health, cited negative – that in And flow turning slightly helpful. million was think I that's Senior cash positive then see, ’XX. XXXX in then maybe very shifting over

moving So, out… I guess,

Alison Rand

the correct probably it's need $XX to $XX before range. likely that The in for was do to XXXX. in specifically, ’XX XXXX the XX:XX flow negative prior million actually turning Andrew, positive – million to you million expect flow negative cash around cash I aggregate going, $XX we the keep you,

Andrew Kligerman

Great, Thank Okay. you. XX:XX [Indiscernible]

Okay, that's hear. good to

to out positive what attractive? that you look we that that as Cash potential the on track? back So, confidence ’XX, is a get are gives confidence are this giving to signs you that what, you earnings what number flow can any businesses

Glenn Williams

that's believe some again, of it the alignment the the in the opportunity true Senior that that's spot have multiple gone or that clearly we that once this the the an the Primerica, similar we of into, marketplace. adapting and believe things the chose And that the all products we the our two we whole can need and to space, changes a of all over significant thought the particularly are over that where sweet all with it's that's kind do business, can into to And years and in that has company strength could, our year so. to within our use the the analysis see was we're potential models. and believe the to synergies we're then strategic Andrew, at marketplace and to looking organizations like getting a get adjust XX:XXWe course, businesses, transition edge distribution additional through product, the tackling types other business those in we our mortgage apply us last our life continue of in business we and maybe then And of at good growth that's the market we partnership similarities about, your we for not to but what space is insurance the a the Health to attention, in the business. fundamental give in middle acquisition business in the it blocking space

a with right years we so this And will get work, couple what of hard the place. of to believe

Andrew Kligerman

Okay. Thank XX:XX you.

Operator

XX:XX Andrew. Thank you,

to line goes question next Our with Ryan, Krueger KBW. your Ryan open. is

You ahead. can go

Glenn Williams

Ryan. XX:XX Good morning

Ryan Krueger

Hi, thanks, morning. XX:XX good

declined. projection the growth drag has expectations in more, guess have understand it quite your of drivers I hoping the flow senior to of little bit changed bit. from amount that think was key house I I a your a is free lot cash a

cash, And some just a consume changes? key detail little you or the on more that provide of less will could of bit so

Alison Rand

hit definitely I you one insurance. just this life the before and Sure, XX:XX like mentioned main

a time, insurance them. piece cash accounting unlike comes If the and perspective, those in, of rules, flow you you a negative basis, new the insurance all upfront costs statutory revenues under look get a the by over as come defying a revenues life of money putting expense and the recognize very the lot you business there's at to the on is about books recognize in this unique is on thing from where it's business matched, more

confluence that, piece a was books that really of to want capital, say we this again, was don't I make and it a are it it was of by we So to really that on want saying sure purely healthy is items, has return. big which driven driven by the a business putting

those contract we plow we'll – focused real business don't books value. and and drive to cash a along XX:XX on So that things want and very So the through lots of lot on so the don't put burn ratio focus LTV acquisition to we ultimately we're lines. cost the of believe

the gaps about value, for the books, Forget economic business. value but gap

and we're marketplace out the obstacle. control. is with our of but quite this us So Glenn various to really can limit down because the to give insurance continue some it see why it, address outside that's we're covering like just and [Indiscernible] frankly, on markets changes do that will to of already things slowing will and an the settled are really that the We going that be things mentioned, time that labor

feel quantities, of the to want we is reported on are to we're completed economic not did being were that was value One business, have XX:XX in that we of we is and going not we – managed. do we footing how sure we we able change So from losses part with when solid to on other realize our not business cash continued acquired large analysis flows, as the the only mention books, those. once operating be business whether a net quantities putting, include that make originally our did I the we because cash specifically of benefit

give I And types to going million now say the the one taxes million you've on got XXish also those is think cash the take. able forward are $X the of range the and basis at net state federal We have and completed to net losses level. we'll that or absorb and that range, then of ones our the numbers items, operating are reduce PRI which

Ryan Krueger

about capital XX:XX authorization versus really I you help cash about how and us think the related think Got XXXX? consume the what common cash would in flow excess million this generation, to you of free by the $XXX then it. some businesses extent And when can the generated we, buyback dividend, guess ongoing flow helpful. That's level

Alison Rand

XX:XX understand That's, think question. I I your

and do the say of plan during best to is in XXXX the deployable will answer come of that think that all it out share way I capital generated becomes to buybacks can I XXXX. is we that

not whether to as number, to now, out I really insurance. much the get capital businesses, so right sources So, think the ISP, and, life had and XXX, from of expect have it I from was the sitting holding our we going of it’s key at coming company, we said that that

I think question. that was your

Ryan Krueger

I XX:XX assumed Yeah, that number really make talking COVID – and what if the claim? of when that just that was, XX then one million were you about deaths of could COVID was quick, you

Alison Rand

we the was rate XXX,XXX quarter per XXX put both (ph) it Again, just give And we and source what basing XXX quarter. and the that that very that's third – really will currently we – million indicated. on using, the we've caveat what that the XXX,XXX take, think But based there I new thought we're use, that that fourth the there's persistency that put business experienced but and I think on somewhere what's been that's the I on. same XX it we're basing flip XX:XX in assumes process. emerge or that currently no that strains we – number is light they've also our based in sales it in highly it on out on of the

Ryan Krueger

XX:XX Got it? helpful. you. Very Thank

Operator

Thank XX:XX you, Ryan.

is research. to [Indiscernible] line Mike, open. goes question next Our your Mike

You go can ahead.

Glenn Williams

Mike. Good XX:XX morning,

Unidentified Analyst

for Thanks taking on the questions morning. health question. my operations. Good Maybe taking first XX:XX

XX% far? does – so future missed own the will on I Or believe Primerica predetermined? a that performance that that remaining related still performance? stake is there's And Based So trailing given price and targets negotiable? Is relevant, earnouts? the it million the $XX not Is the currently is?

Alison Rand

the our consideration, case, the prepared under enterprise those because be earnout. the the of value. more and become no clause. it's we based lot the to talked That when be the both accounting. is I earn not remarks, I to and doable remaining accounting With to there call full confusing, But very, take that the it's value in I'll value out current to nothing remind believe I originally continues this under consideration, So ever purchase the We currently XX:XX of in ascribed $XXX it's purchase price payable purchase the on million original we think that I'll would in recorded ascribed very about do XX%, earnout. -- no projections regard is you than anything my that put a a have.

time but that on value at the includes amount itself. that that is number, So based That remaining agreement formulaic in of market the a fair is only the the purchase the XX% price, enterprise. we the of calculated acquired, what not price purchase

the value a as it question? is of it, predetermined XX:XX well of Does million a those to of the mentioned discount the is which your factors, answer I based formula So was all as to we performance And in ascribe e-TeleQuote that peers. performance earlier. on already on that based so $XXX

Unidentified Analyst

there XX:XX to additional flow XX%, are remaining sense? going I that but you I at be you cash trying own for the Does guess the or appreciate to you get own outlays essentially it? And is, don't think do saying I color, is make so.

Alison Rand

According The it. assessment quarter market fair right it the We on based and would like. to market to now. XX:XX be have formulaic each own not we do And, the value do value state zero. current not own, we of the value actual

Unidentified Analyst

that Thank yes, makes sense. Okay, you. XX:XX

kind and guess as eliminating just mutual trail just kind I to more compensation fund Canadian, this all new commission wide your guess the you and will will able new commission same the this sales, on [Indiscernible] offer the the I is new industry amount and structure structure? Okay, sales the ultimately is of be colleagues it's I to of a commission schedule can believe maybe color a moving think of to

Glenn Williams

actually that's Canada the trail something Mike, of the a as one a elimination come working and of and with of This It's been aware and elimination methods of to commissions, years question. Yeah, regulators in it's kind so upfront works been not XX:XX commissions. for it in closer of is for great we've with providers that's fruition. number its

that exits in will an in fund years, if to can the the not sales on number fund deferred the for of reflected the is the charge the fee expenses ongoing account consumer. and the financed manufacturer, the upfront that that provider, an commissions years. continue. trail The is this And seven the from commission payment so model the charge first by actually provides upfront client financing charged comes – of product, It's or around redemption usually of continue

And and wide, so for as choice not just being so industry a eliminated product us. that's that's

other this providers kind there our be to And they're of XX:XX in create of along to a we other doesn't a not be model. to I and are the So that's a as other companies as the term a the be aware providers our it, Canada so is that, anyone that couple product change, it just create that's These would are flows change we far month some entirely change, some the and There far there if and like us, we've ready good remarks working pursued we and working in distribution. not we cash we is have that products, continue change through unique, will unique been process and before that mid-year to this company they their product But around to players as although, expected. although sales have and similar surrounding it's Canadian businesses lot that selling about new just theory in those And could been as more products entirely specifically. gene force force, on expect everyone our could as that's so are would disruption be of we and so marketplace, forth and in a after and change. impact models this our know, noise my to a feel we've prospects. in to we said we products for for will is their actually, the unique of our see what we've believe process key of a wanted going replacement be numbers their market as with been it's just make this although it our than all that force year sales and sales long make our how been and how with on

And business So the future. we in have a expect to very that in strong ISP continue we Canada.

Unidentified Analyst

colleagues comparable? funds, amount or way Got there if a a amount new existing up or then to apples this lower, it? the Or versus a and similar a is little just Is of compensation is follow the same apples? of yourself as it the XX:XX series not And little so oranges? saw higher

Glenn Williams

previous It's of the to US take and and been over previous than over a of XX:XX Yeah, what of similar. shift place, change the little a the the rather similar long by overall gives that pre happens – from us at be different but in differences, earlier. commissions the has looking some basically, described the more the And, ways we've commission evolution [Indiscernible] is timing advance years. distribution mechanisms seen of terribly model, not some time compensation experienced sales more the will I US or to last period based. upfront it's so time the insight that provided we've of The so might a it's commission because the bit and that through and the but is compensation how was we some products a direction financed there similar way, model, in model, in – asset in could is based decade be which

Unidentified Analyst

XX:XX you. Thank Very helpful.

Glenn Williams

Certainly. XX:XX

Operator

you, Thank Mike. XX:XX

open. goes your next to Our is Mark, question Mark line with Truist. Hughes

You can go ahead.

Glenn Williams

XX:XX Good Mark. morning,

Mark Hughes

seasonally approved hear give be Senior be quarterly then the and ought not the some expected to that's policy as on morning. sense us say that case, if but that that in be was to counts kind of could the you the Health a you from XX:XX strongest, kind of trajectory negligible I Good this helpful of of anything was QX year and Okay. Thanks. earnings profitable would Alison, earnings well.

Alison Rand

providing the early think with and on improvement Glenn the that at we looking had policies our tackle at least table are the this of the perspective, approved mentioned from forward is of areas in on any sort hopes is areas that not at we're Yeah, mentioned do point, the stronger results and lot a way in focus get this of information goal in and by the we're quarterly should I looking beginning XX:XX say to can them of some ADP, to produce off we we're quarter. we've the year time things fourth the taken a

second So fourth going generally – typically to little our, use would the ramp the up we XX:XX the the be because – that's middle would a next we're we're very up new as theoretically for quarter first us. I quarter business approach agents volume sales ramp you different The third the to where something the on be year. caution quarter a is the would is and agents. trying say will just would thing I negative, because things, a normally highest, I new a time, is this That it at specific be this where sales

So predict. it's a little harder to

hit. that The is other may adjustments or when unknown becomes may not thing tail

the for you so and most give bit fourth do so going exact come on expect quarter I Net-net, earlier losses be it's I typically we can't for in little And per the and some lumpy they like year. quarter would neutral to of see a the the in numbers to each numbers say or the earnings se.

Mark Hughes

say? full negligible, the is kind flat, so of Yeah, XX:XX year you as

Alison Rand

Yes XX:XX

Mark Hughes

I adjustment, in to higher, that? Health that $X about buffer XQ flowed XX:XX been way million $X right that The that have would in think tail the through is million the assume, Senior earnings

Alison Rand

correct. is That XX:XX

in So deterioration or a collections indicate that what tail current been we reflected. from adjustments that there's see we current persistency trends assumed do get receivable. our Anytime, renewal

in to for adjustment have down downward adjust up case. was We it but that it this or matter, a

Mark Hughes

Did how believe Yeah, to your did you better is E-TeleQuote, the force churn sales sales this quarter? of your terms of said think a make contribution have much force make the is you it, longevity better. those of impact in much sales that policies reason I XX:XX

Glenn Williams

XX:XX Yes.

Mark Hughes

primary, XX:XX [Indiscernible] sales the legacy, force? In

Glenn Williams

and that analyze we activity of very your your non ADP through news to is to to XX:XX and about generate venture, to sales gap and the referral is creates, the of Yeah, felt out the ADP the sales need excited the say thinking good we some actually do one a course a absolutely. to recognize to opportunity of of for the and referral, which from were in the their ADP when period you the is, and in program. and going sales is rushed activity be it pull it about force, kind That rates what there good this can we the year. that this rates about a piece I yes, we part we this, a had very prime period. model that able first market The and not product would With process, the that because of the good things challenges, are the sale, they, know our we force, are unique understanding all, of is concept, income reception marketplace get the it feeling the the

the we positioned us throughout applied little good we've we activity, like made good take that's year. significant it's certainly So to and quarters, difficult we it learned what we from period. feel this what take to three a learned helpful response, and as get that and next a other ADP to for had be contribution improve But the

Mark Hughes

commission, I XXXX, think down XX:XX prior your about properly? from your that's that Yeah. the not lifetime expectations. Allison, much And

Alison Rand

it's like had expectation more or those for probably fourth quarter, XX:XX down, XXXX the gave Yeah, we along something we lines. about think XX% I the

Mark Hughes

book the And the about your two business, Yeah. the indicators point your is X.XX% what is now, when your what for discount that what – think we does about numbers? And rate? of imply what by I this market then is think XX:XX LDTI suggested the discount rate,

Alison Rand

is current X.XX% actually that me backwards liabilities. the market current that rate, Not say let power profile to portfolios take No, of XX:XX indicative I the that's is back. is,

in than So to a liabilities lot was ago. for business we remember, on of lock we long sell many the And actually the was the set build having put up very issued? business the where discount business many, years. the Obviously, rate, it larger on yet. newer is those tail reserves whenever books business. are We are

average reserve So liability our currently – rate is the on weighted rate discount X.XX%.

the what use you If today require significantly than a you're literature rate to would that's discount lower that. about us use, talking

Mark Hughes

in have rules new you your did for the there of change leeway is the the given And that? discount the business? Or age portfolio, rate to reflect XX:XX to current

Alison Rand

XX:XX and, sort You the have to window whole business you business, LDTI of the of at will it's concept out with use, even versus remember, of because sort, remeasurement new new looking not the goes entire in if Yes, like grade. a literature got we're yield a A medium upper be income requires current it's rates, an that. And curve rated on using you liability. to that security use fixed

and So liabilities obviously, the shorter forth. curve, and then, we're duration waiting, the end with so the shorter of

very So changes that of adjust That's they're to no that. interesting one yeah, there's the making. actually ability

into done, is XX:XX right or that not the sheet it reserve I benefit the will through but So and in things be while re will today. does definitely with goes rate how the appropriate recognized that earnings, using go appropriate the The reserve loss AOCI. then measured we to of do all one go consistently rate. in current ratios balance – that P&L be using think won't they've I it loss changes, the wrong, change

the in up will show So all variability AOCI.

Mark Hughes

you. Thank XX:XX

Alison Rand

welcome. are You XX:XX

Operator

your XX:XX with Thank is Dan, Jeffries. next Our Mark. goes [Operator question you, Bergman Dan Instructions] line open. to

ahead. go can You

Glenn Williams

XX:XX Dan. Good morning,

Dan Bergman

XX:XX Thanks, morning.

linked as savings, just to think retail funds, market most I in to are which product the and every across of nearly not investment sales nicely start sentiment. to as up product, equity mutual So tend pretty

you due record on what driven to other much strength, that little color an slight the just the sentiment how is given markets has for So expectation XXXX. you better in factors. more XXXX get strong a levels talked about off believe And sales reason could I versus growth

year trends data and choppy? of date, How on So see just drop and an if this terms a so of far conditions we've you and seen volatility is remain given market can much just off declines how the generally, provide market so? risk there in to any the sales equity a ISP,

Glenn Williams

growth so future you're we've system single across products often growth all both correct, unknowns increase seen, Primerica wide can so got a broadly product line want like within that just to that been it's countries view those. single the not just and marketplace, question, appreciate Yeah, a great assume a continue focused that XX:XX on we products very many lot it's straight or we very has can the And, a certain after happen. a driving the that's of of of Dan, so extraordinary sales in it's period don't pretty and extended with and uncertainties in

pandemic out in previous first year XXXX. our just in the And coming first off as year sales ISP we levels, below the the my extraordinary general business saw interest above life normalized business the insurance coin year, in during positive flipped, long-term, the and of of pre-pandemic XXXX. opposite our And just and the believe, then investing to took the that records barely on. and live so saw the just back but Still when for seeing personal We business ISP was in taking prioritization needs the pandemic we our unexpected, I our early balanced drive we're the view fund in generally, or it's for is, unexpected that premature something little generally early focused, finances products. products, death mutual timing business equity return on then in get different view all oriented, people do get a pandemic that's of when I my protecting is just It I not something and very happens against loan how case the the that longer were And that's think in order the created, retirement of true long-term the just is of future? why breadth. to in

but more to that where full we're for year, could very things, way we if saw business digits the there. including our and year, disrupted that corner, our described. of going it little around in our why likely we'd this could be and is the that's we've for it's most But conservative next place in we And growth, we disruption And January, [Indiscernible] it expect don't seen say exactly is XX:XX mid-single want assumptions of we guests year, a slow. won't just the the and is deliberate to stay better good point it growth kind board. than ISP our The just what you somewhat so now, good in the that's business viewing our just right had at there's something the proceed what's across we And calm. we the We challenge be in from know over world. very kind that change

Dan Bergman

– in expense a then on drop IT forward? baseline one remarks to next that side, expect expenses nature, That's of increase one the prepared it. I And expect color investments level Got whether Is the mentioned seems more looks grow mentioned, the some I you'd to what of like or that XXXX Are the of color. that off of expense helpful on to you that's XX:XX great? core there year? somewhat the convention it that time XX% we related and some be this any in really other think in conventions, guess of going drivers we operating that would that year might limit you as more elevated. insurance Thanks. timing expense just Should increase think

Alison Rand

Yes, And convention, lot it. that the we the cherish, of, felt to that the to to we of pandemic, move else, the parts with we everybody's do do it's right work lot decision just the it's a it. everything it of was it's an want is do question. any we typically it's chunk and moved time on to piece, a year, for is excluding given optimal something year-over-year, a what's related a it meetings convention increase one XX:XX with big up excellent an not like, activity do The field an the in is we're component just Health, having level gone our and we Senior big of of a

so two place, continue one like this increases you mean, stay look out unusual I the level an off at, that think of of the we'll think expect pattern, necessary if is The events focus we're elevation continue, on on go look not of I one shouldn't of think right? will this should we technology, piece to in increases, normal we back business. be would some will of three year. we thing to continue to XX:XX that, is our XXXX error, But given any I that I and not increases that should seeing not will see grow other staffing I I that that level to for year, see growth in that's can piece mature job and The of sort the do expenses, and in is do really was so order the But So haven't all person couple out a road, help and staffing, went part of put get in of but we of online, of pay we versus One that feel their classes licensing they part through Glenn things. we two the people salaries, XX:XX much it, about staffing. lot who of had grow instructor that's we said quickly. on as thing, and business, this talking call back it. related. the the The other how pretty big about, for a a need our a especially road I are safe, years, them is travel the I'll and on to to

very to lot So some And we prior, we do to employee seeing that a in that that I other of business holding has benefit into high and things little and things general. licensing think years this benefit through. do more happen we in we're classes probably well, in costs, that's lot in anticipate or with person see year costs them, care our beneficial delayed assume then didn't a pull medical – related, as

are the this probably us would then grow a those items. should think year sort rate, typical typical rate I general at of year, all around things we for more So that from of and X% elevated around but – put this forward

assets and obviously, The under other for dollar grow of sort like will those than management grow will rate, or revenue. or dollar expenses those anything associated with related core that premiums with differently that

above some sort that. I beyond about expenses, hope say our X% somewhere talking general and in operating you're is baseline, that and digits, me make decisions the the mid-single for So of helps. you then

Dan Bergman

you. XX:XX it's Thank really helpful. Yeah,

Operator

you webcast. participation. XX:XX results That Thank for and your Primerica concludes QX today's earnings and XXXX conference call

disconnect You can line. now your

Primerica (PRI) 15 Feb 222021 Q4 Earnings call transcript