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Jun 30, 2022
Primerica Q2 2022 Earnings Report
Primerica's financial performance declined in Q2 2022, with EPS decreasing by 13% and net income by 16%, while facing challenges in the Investment and Savings segment due to market correction.
Key Takeaways
Primerica's Q2 2022 results showed a mixed performance. While total revenues increased by 2%, net income and EPS decreased by 16% and 13%, respectively. The Term Life segment remained strong, but the Investment and Savings segment was impacted by market correction. The company is focusing on sales force momentum and anticipates a better second half of the year.
New life licenses increased by 14%, driving the sales force to 132,149 representatives.
Term Life net premiums increased by 7%, with adjusted direct premiums increasing by 8%.
Investment and Savings Products sales reached $2.7 billion, with net client inflows of $0.9 billion.
Net earnings per diluted share (EPS) of $2.79 declined 13%, and return on stockholders’ equity (ROE) was 23.3%.
Primerica
Primerica
Primerica Revenue by Segment
Revenue by Segment
Term Life Insurance Revenue
CapyFin.comInvestment and Savings Products Revenue
CapyFin.comCorporate and Other Distributed Products Revenue
CapyFin.com Forward Guidance
Primerica is encouraged by the momentum in its sales force and expects benefits from improvements in the licensing process and excitement generated during the convention. The company believes it is well-positioned for the second half of the year.
Positive Outlook
- Momentum in sales force is encouraging.
- Improvements in licensing process are showing real benefits.
- Excitement generated during the convention will fuel momentum.
- Company anticipates continued growth from recruiting and licensing.
- Strong balance sheet including invested assets and cash at the holding company of $232 million at quarter-end.
Challenges Ahead
- Senior Health segment continued to face headwinds as the industry adjusts to higher churn rates and the need to lower contract acquisition costs.
- Closed U.S. Mortgage Volume ($ million brokered) decreased 49%.
- Insurance expenses increased $11.1 million, or 23% year-over-year, with more than half of the increase due to adding the previously postponed biennial convention.
- The segment recorded an adjusted operating loss before taxes of $21.9 million, increasing $5.0 million year-over-year.
- COVID claims continued to decline and were $2 million net of reinsurance for the quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income