Primerica, Inc. Q1 FY2026 earnings call

· Primerica's business models show balance and resilience. Investments and savings products key drivers; term life segment stable. · Delivered 9% increase in adjusted operating revenues and 13% in adjusted net operating income. · Generated solid cash flows, returned $179 million to stockholders. · Entrepreneurial business opportunity resonates; adjusted field event schedule for higher attendance. · Demand for investment in savings products at record levels; term life business softer; household budget index shows income growth outpacing cost increases. · Mortgage business strong in US and Canada.

Adjusted operating revenues increased 9% and adjusted net operating income increased 13% in Q1 compared to prior year. Income growth driven by 24% increase in earnings from ISP segment. Term life segment: operating revenues up 1% y-o-y, driven by 4% growth in adjusted direct premiums; pre-tax operating income up 6%. ISP segment: operating revenues up 21%, pre-tax operating income up 24%, now represents 40% of consolidated revenues. Corporate and other distributed product segments: pre-tax adjusted operating loss of $6.7 million, better than prior year's $8 million loss.

· Full-year 2026 term life policies issued expected flat to down approx 2%. · Full-year sales growth for ISP expected in upper single-digit range. · 2026 full-year expense growth expected in 7%-8% range; Q2 outlook up around 10%-12%. · Adjusted direct premiums for term life expected to grow approx 4% on four-year basis; benefits and claims ratio around 58%, DAC amortization and insurance commissions ratio around 12-13%, operating margin around 21%.

· Broader market volatility could impact demand for investment products. · Higher interest rates may create headwinds for mortgage business. · Cumulative cost of living pressures on middle-income families could continue to impact term life sales. · Uncertainty in economic environment may disrupt recruiting and licensing efforts.

Q: Given gas prices rise, seen change in consumer behavior or producer's willingness to travel?

A: Not seen noticeable change, household budget index shows earning power outstripping slowed cost of living increases, though gas price jump could disrupt.

Q: Percentage of ISP earnings from AUM vs fees?

A: Currently closer to 60-40, shifting toward AUM-based fees as assets grow.

Q: Term life guidance, confidence in stabilization?

A: Comps get easier, middle-income financial conditions stabilizing, using promotions and product improvements to create momentum.

Q: Term life productivity metric, focus and strategy?

A: Focus on it, efforts in place to improve sales force productivity, growth of sales force and productivity can happen simultaneously.

Q: ISP sales guidance, assumptions?

A: More due to tough comparisons as year goes on and potential market volatility risk.

Q: Annuity sales growth vs industry?

A: Outpace industry due to growing and maturing client base, good products appropriately priced.

Q: RBC ratio, sequential movement?

A: Managing RBC to ideal ratios, keeping strong capital for term life growth and market downturn sustainability.

Q: ISP net revenue fee rate increase, drivers?

A: Mix of products like managed accounts, variable annuities, and PD model from Canada driving growth.