Eleven percent growth in term life adjusted direct premiums and record sales and client asset values in the investment and savings products segment helped Primerica, Inc. to second quarter 2019 operating income of $2.21 per share.
That beat the Zacks Consensus Estimate by 3.3%, as Duluth, Ga.-based Primerica recently announced financial results for the quarter ended June 30, 2019.
The bottom line improved 14.5%, and the company says share buybacks added to the upside. The company repurchased $57.1 million of common stock during the quarter and is on track to achieve its $225 million repurchase target for the year.
Total revenues of $504.9 million increased 8% compared to the second quarter of 2018. Net income of $97.4 million increased 12%.
“Our quarterly financial results reflect the strength of our model with net income growth of 12% and earnings per share growth of 17%,” said Glenn Williams, Chief Executive Officer. “Our biennial convention in June was a great success. It energized our sales force, accelerated momentum and renewed our commitment to serve middle-income families as only Primerica can.”
While Term Life Insurance revenues increased 9% to $297 million year over year, Investment and Savings Products revenues rose 6% to $173 million. Corporate and Other Distributed Products revenues inched up 1% to $31 million.
Life Insurance policies issued in the quarter declined 6%. Investment and Savings Products sales jumped 10% to $1.94 billion in the second quarter.
During the second current quarter, 86,173 individuals were recruited to Primerica, a year-over-year increase of 13%. Much of this increase came during the second half of June, “driven by excitement generated at the biennial convention and incentives announced to drive recruiting and productivity,” the company said in a statement. Lower recruiting levels earlier in the year, and the resulting impact on new life-licensed representatives in the period, led to a life insurance licensed sales force at quarter-end of 129,550, largely unchanged from the prior year.
Interestingly, productivity for the quarter was 0.20 policies per life insurance licensed representative per month, which was within Primerica’s historical range of 0.18 to 0.22, but below the prior year level of 0.22.
Primerica was the No. 2 issuer of term life insurance coverage in North America in 2018, and insured approximately 5 million lives and had over 2 million client investment accounts as of Dec. 31, 2018.
Math doesn't seem to match up. how can something both be a record & have declined? If term life sales were down 6% from prior quarter, wouldn't the prior quarter have been the record in sales?
I am guessing N&R premiums are a record, not new sales. this could happen if persistency is better or if clients are paying the ever increasing premiums after the initial level premium period.
crazy part is always reading .2 life apps per month per appointed producer. That is 1 life app ever 22 weeks, including personal business.
I think the answer is obvious. Most of the people they got licensed, and who are still licensed, produce nothing. They are part time and have lost interest.
Production is coming from a very small minority of their licensed agents.
As I recall, that's pretty much how it works with most companies.
I agree with Bob B…80% of the business is done by 20% of the licensed agents. Some things will never change!
Well when you consider that they sold a total of 301,589 polices with approx 5200 RVP field offices, it works out to only 58 policies per office (which includes the RVP) for the year. Furthermore, that average was before cancellations/non-renewals which averaged about 46 per office, plus about 3 policy claims. That minority must be exceptionally mall.
Or if they sold a lot of Increasing Benefit Rider Policies (which have increasing premiums).
At 2.4 policies per year, that means they have about 125,000 appointed reps, 2-3k in every state. that is crazy. wow
129,500 was their recently disclosed force size and they typically express their policy sale average as a "per month" figure rather than an annual average, even on their annual reports. I suppose stating 0.19 per month sounds better than 2.28 per year, especially to those with limited math skills. But again, that figure is based on "issued" policies, regardless if they are cancelled later in the year. It would also include all policies issued, including those purchased internally.
So I looked for the closest Primerica office to me:
Google Maps
Sorry, but that's not much of an office.
Looks big enough to get .2 apps per month from. Now, paying the rent would require either a bit more apps or signing up 2 new recruits per month to pay the ante up cost
You are forgetting about their daytime job. And of course their working spouse. Until the divorce anyway.
Im pretty sure the policy is that RVPs must be fulltime.
The average office has 2 RVPs, so therefore the rent, utilities, maintenance, liability insurance, office supplies, etc and any staff positions can be split.
:biggrin:
No worries, I wasn't critiquing you but simply adding color! 😉
Wow only 2.4 policy per year per associate? That’s why most will never create a living off the MLM model.
Not quite 20% because the 5200 RVPs who represent the top 4% only averaged 58 policies issued for the year, and a net gain of only 9 policies in force
And if the top 20%, or in this case, 26,000 reps of 130,000 accounted for all policies sold, it would amount to about 11 1/2 policies each, or less than 1 per month……before any cancellations/terminations.
And not every recruit will recruit.
No but they will pay a sign-up fee, and probably sign up for a monthly online access subscription, or pay to attend seminars, fast start schools, conferences, conventions and possibly a Landmark Forum weekend event, as well as maybe buying a policy or investment.