Primerica Q1 Earnings Call Highlights

Primerica (NYSE:PRI) reported higher first-quarter 2026 adjusted operating revenue and earnings, driven by strong growth in its Investment and Savings Products business and stable performance in Term Life, executives said on the company’s earnings call.

Chief Executive Officer Glenn Williams said the company delivered a 9% increase in adjusted operating revenues and a 13% increase in adjusted net operating income compared with the prior-year quarter. Adjusted operating earnings per share rose 19% to $5.96. Williams said income growth was “primarily driven” by a 24% increase in earnings from the Investment and Savings Products, or ISP, segment.

Primerica returned $179 million to stockholders during the quarter, including $141 million in share repurchases and $38 million in regular dividends, Williams said. Chief Financial Officer Tracy Tan said the holding company ended the quarter with $556 million in cash and invested assets, while Primerica Life’s estimated RBC ratio was 430%.

Investment Products Lead Growth

Primerica’s ISP business posted record sales of $4.3 billion in the first quarter, up 22% from the prior-year period, Williams said. Growth was broad-based across Mutual Funds, Variable Annuities and Managed Accounts. Client asset values ended the quarter at $127 billion, up 15% from March 31, 2025, and the company recorded new net inflows of $362 million.

Tan said ISP operating revenues increased 21% year over year, while pre-tax operating income grew 24%. She said the segment now represents 40% of consolidated revenues, and its faster growth has helped improve return on adjusted equity.

Sales-based revenues rose 23%, supported by strong client demand for Variable Annuities, where Primerica earns higher commissions. Variable Annuity sales increased 35% from the prior-year period. Asset-based revenues also increased 23%, outpacing the 15% increase in average client Asset values, which Tan attributed to a favorable mix shift toward products generating higher recurring fee-based revenues.

Williams said demographic and industry trends are supporting demand. He cited stronger IRA contributions from younger generations and increased retirement planning and rollover activity among Gen X and baby boomers. In response to an analyst question, Williams said retail mutual fund strength was a “healthy sign” because it reflects broader acceptance of investing among a wider client base.

Primerica expects full-year 2026 ISP sales growth in the upper single-digit range. Williams said the outlook reflects tougher comparisons as the year progresses and the possibility of broader market volatility, not a current slowdown in momentum.

Term Life Remains Stable, Sales Softer

The Term Life segment generated operating revenue of $465 million, up 1% year over year, Tan said. Adjusted direct premiums increased 4%, and pre-tax operating income rose 6% to $155 million. The segment’s pre-tax margin was 22.5%, compared with 22.1% in the prior-year quarter.

Primerica issued 74,054 new Term Life policies in the first quarter, down 14% from the prior-year period. Estimated annualized issued premiums, which include coverage additions as well as newly issued policies, declined 10%. Williams said the company projects full-year 2026 Term Life policies issued to be flat to down approximately 2%.

Tan said claims experience remained favorable relative to expectations. The benefits and claims ratio was 57.3%, compared with 58.2% a year earlier. Current-year benefits and claims included a $7.6 million remeasurement gain, reflecting favorable mortality experience and lower persistency. Excluding the gain, Tan said the ratio was generally consistent.

Tan said lapse rates remain elevated versus long-term reserve assumptions, which the company believes reflects cumulative cost-of-living pressure on middle-income families. While higher lapses reduce direct premiums through lost policies, they also lower benefits and claims costs, she said. For the full year, Primerica expects adjusted direct premiums to grow approximately 4%, the benefits and claims ratio to be around 58%, the DAC amortization and insurance commissions ratio to be around 12% to 13%, and the operating margin to be around 21%.

Middle-Income Pressure and Distribution Trends

Williams said Primerica continues to see cost-of-living pressures affecting middle-income families, particularly younger households that are more likely to make Term Life purchasing decisions. However, he said the Primerica Household Budget Index has shown household income growth outpacing cost increases for nine consecutive months, suggesting families are “gaining ground.” He cautioned that higher gas prices related to conflict in the Middle East could temporarily disrupt that improvement.

In response to a question from BMO Capital Markets analyst Jack Matten, Williams said the company has not seen a noticeable change in behavior among clients or representatives due to the recent rise in gas prices. “We actually believe things are moving in a positive direction for most middle-income families,” Williams said.

Primerica is also adjusting its field event strategy in response to higher travel costs. Williams said the company replaced larger regional events with a series of smaller local events across the U.S. and Canada and expects higher total attendance. He said these events will be used to launch incentives and promotions, including a reduced licensing fee promotion used in April that drew a strong response.

The company expects its life-licensed sales force to end 2026 flat to up approximately 1% compared with Dec. 31, 2025. Williams said the 12 months leading up to Primerica’s 2027 convention, which will coincide with the company’s 50th anniversary, have historically been a productive period for building distribution and product momentum.

Expenses, Capital and Other Products

Consolidated insurance and other operating expenses were $168 million in the quarter, up 3% year over year. Tan said the increase was driven primarily by higher variable growth-related costs and technology investment, while expense growth was favorably affected by the timing of project initiatives. Primerica continues to expect full-year expense growth of 7% to 8% for 2026, with second-quarter expenses expected to be up around 10% to 12%.

Tan said the investment portfolio remained well diversified with an average quality of A. New investment purchases had an average rate of 5% during the quarter and an average credit rating of A. The portfolio had a net unrealized loss of $154 million at the end of March, compared with a $113 million net unrealized loss at the end of 2025. Tan said the unrealized loss reflected interest rates rather than underlying credit concerns.

Williams also said Primerica’s mortgage business remains strong in both the U.S. and Canada. U.S. mortgage loan volume totaled $113 million in the quarter, up 21% year over year. He said higher interest rates may become a headwind, but mortgage offerings can help clients manage debt and support demand for the company’s core protection and investment products.

About Primerica (NYSE:PRI)

Primerica, Inc is a financial services company that focuses on delivering term life insurance and investment products to middle-income households in the United States and Canada. The firm operates a network of independent, licensed representatives who provide personalized guidance on coverage needs, retirement planning, and wealth accumulation. Primerica's core mission is to help clients obtain affordable life insurance protection while also offering a suite of savings and investment solutions designed for long-term financial security.

In addition to term life insurance, Primerica offers a range of financial products and services that include mutual funds, annuities, auto and home insurance through partner carriers, and personal lending solutions such as secured and unsecured loans.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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