2024 ANNUAL REPORT
Financial Highlights
($ in millions, except per share amounts or as otherwise indicated.)
GAAP
2024
2023
Change1
Total Revenues
$3,089.1
$2,748.5
12.4%
Net Income from Continuing Operations
$720.1
$591.2
21.8%
Net Earnings Per Diluted Share from Continuing Operations
$20.99
$16.34
28.5%
Weighted Average Shares Used to Calculate Diluted EPS2
34.2
36.0
-5.1%
Stockholders' Equity
$2,259.0
$2,066.0
9.3%
Book Value Per Share3
$67.70
$59.04
14.7%
Common Shares Repurchased
$425.0
$375.0
13.3%
End of Period Share Count4
33.4
35.0
-4.7%
Cash Dividends Declared Per Common Share
$3.30
$2.60
26.9%
Market Price Per Share at Year End
$271.42
$205.76
31.9%
Total Stockholder Return
33.6%
47.1%
nm
Debt-to-Capital5
21.0%
20.7%
nm
Operating6
2024
2023
Change1
Adjusted Operating Revenues
$3,035.9
$2,754.8
10.2%
Adjusted Net Operating Income
$680.9
$596.0
14.2%
Diluted Adjusted Operating Income Per Share
$19.84
$16.47
20.5%
Adjusted Net Operating Income Return on
31.2%
27.2%
nm
Adjusted Stockholders' Equity
1. Certain variances are noted as "nm" to indicate not meaningful. 2. Number is used as the denominator in the calculation for both net earnings per
diluted share from continuing operations and diluted adjusted operating income per share. 3. Percentage change in per share calculations is prior to
rounding per share amounts. 4. Share count reflects outstanding common shares and excludes restricted stock units (RSUs). 5. Debt-to-capital (excluding
accumulated other comprehensive income) is that of the parent company only. Capital in the debt-to-capital ratio includes stockholders' equity and the
note payable. 6. A reconciliation of GAAP results to operating results can be found on our website at https://investors.primerica.com.
Front Cover: Primerica's biennial convention was held at the Mercedes-Benz Stadium in Atlanta, GA in July 2024. With nearly 40,000 attendees, this event was the
ideal platform from which to cast a vision for the future. The Company's message was simple, yet powerful: focus on growth to serve more middle-income families.
Dear Fellow Stockholders,
For nearly 50 years, Primerica has
remained committed to our purpose of
creating financially independent families
and 2024 was an outstanding year.
I am thrilled to share our progress in
expanding our reach as a distributor of
financial products and services to meet
the needs of middle-income families,
while delivering excellent financial results
for all stakeholders.
The attractiveness of our entrepreneurial
business opportunity continues to drive
growth as many individuals are drawn
to the prospect of creating additional
income or alternative career choices.
Through our independent sales force
which totaled more than 151,600
individuals at year end, we helped our
clients protect their families’ incomes by
issuing a record $122 billion in new term
life insurance coverage during 2024.
Our sales force also helped clients invest
a record-breaking $12 billion toward a
more secure financial future.
A Message
from the CEO
Glenn J. Williams
Unparalleled Distribution Model:
Unmatched Reach
We maintained our distribution growth momentum
throughout the year, driven by strong recruiting and
continuous improvements to our licensing process.
Our pace of growth was further enhanced by our
international convention held in July at the Mercedes-
Benz Stadium in Atlanta, Georgia. This biennial event
brought together nearly 40,000 attendees and provided
the ideal platform from which to cast our vision of
focusing on growth in order to serve more middle-
income families. This simple, yet effective message,
combined with our recruiting and licensing efforts, led
to a 7% increase in the size of our sale force to a record
151,611 life-licensed representatives at year end.
Thanks to the leadership of our sales force and the
support of our home office teammates, our protection
in force reached $954 billion at year end. More
importantly, Primerica paid $1.8 billion in death claims
in 2024 to help relieve the financial stress on families
when they needed it most. In addition, our sales force
kept middle-income families focused on investing for
the future, bringing total client asset values to a record
$112 billion at the end of 2024.
Our representatives also assist clients who wish to
purchase a home or access their home equity to
consolidate consumer debt. In the U.S., Primerica’s
Mortgage Loan Originators closed nearly $400 million
in mortgage volume while, in Canada, our referral
program helped families access $195 million (CDN) in
mortgage loans.
Undeniably, the need for protection and savings
solutions continues to grow, particularly among
middle-income families who are often overlooked by
our competitors that focus on more affluent clients.
Through an education-based approach, we empower
our clients with the knowledge and tools they need to
make informed financial decisions. Primerica’s ability to
reach this underserved market uniquely positions our
licensed representatives to guide their clients toward a
more secure financial future.
151,600+
$112 billion
$954 billion
$1.8 billion
life-licensed representatives
in total client asset values
of term life protection in force
in death claims paid
2024 Highlights:
Size of Life Insurance Licensed Sales Force at Year End
2020*
2021
2022
2023
2024
151,611
141,572
135,208
129,515
134,907
* Includes 3,597 temporary licenses with extended renewal dates
Issued Term Life Face Amount
($ in billions)
Term Life Face Amount in Force at Year End
($ in billions)
2020
2020
2021
2021
2022
2022
2023
2023
2024
2024
$122.2
$953.6
$119.1
$944.6
$103.8
$916.8
$108.5
$903.4
$109.4
$858.8
Representatives Jason and
Christie Kitchell of Clifton Park, NY,
are an example of a Primerica family
working together to empower other
middle-income families to make
informed financial decisions.
Primerica representatives like Giuliana Nicoletti
of Miami, FL, understand the importance of
meeting with clients face-to-face while taking
advantage of Primerica’s innovative technology
to help families and individuals in real time.
Investment & Savings Product Sales
($ in billions)
Total Client Asset Values at Year End
($ in billions)
2020
2020
2021
2021
2022
2022
2023
2023
2024
2024
$12.1
$112.1
$9.2
$96.7
$10.0
$83.9
$11.7
$97.3
$7.8
$81.5
Driven by Purpose: Upholding Our
Commitment to the Communities We Serve
Since our founding in 1977, Primerica has been
committed to doing what’s right, and this core value
remains at the heart of everything we do today. I am
proud to reaffirm our unwavering commitment to
have a positive impact on the lives of middle-income
families and the success of our independent sales
force and home office employees. In early 2025, we
introduced our values statement called “The Primerica
Way” to solidify our commitment to preserving and
strengthening our culture.
We create financially independent families by
promoting financial knowledge and offering products
that help our clients meet their financial goals. These
families typically have a household annual income
between $30,000 and $130,000, which represents
roughly half of all households in the U.S. and Canada –
a segment of the population that has traditionally been
underserved. As a result, most lack proper insurance
protection and many do not have a plan to save for
the future or reduce debt. Our diverse sales force lives
and works in the communities they serve, which allows
them to better understand and meet the unique needs
of our clients.
We have over 2,800 home office teammates in the
U.S. and Canada supporting our sales force. We
take pride in the culture we have developed and the
role it plays in creating an engaging and welcoming
workplace. We deeply value our people and are
committed to foster an environment where everyone
can learn, grow and thrive. By creating a workplace
where our employees feel supported, we have
cultivated a team with high tenure and loyalty. We also
focus on investing in our internal talent to build our
leadership pipeline for the future. Our efforts continue
to be recognized as we were again named by USA
Today in 2025 as a Top Workplaces USA. In 2024,
Primerica was named a regional Top Workplaces
by The Atlanta Journal-Constitution for the 11th
consecutive year, and Newsweek recognized us as one
of America’s Greatest Workplaces.
As a responsible corporate citizen, we encourage
our employees and the sales force to become active
in giving back to their communities. Through the
Primerica Foundation, we support community causes
that contribute to the self-sufficiency of low-to
moderate-income individuals and families. In addition,
the volunteer contributions of our employees provide
critical support to community-based organizations and
help change lives for the better.
You can learn more about the social
impact of our business in our most
recent Corporate Sustainability Report
(CSR), located under the sustainability
tab on our investor relation website at
https://investors.primerica.com/
sustainability.
THE PRIMERICA WAY
The culture of our organization is a result of the unique beliefs that we hold and their impact on
every facet of who we are and what we do. These values recognize the importance of our purpose
yet also reflect higher personal priorities in life such as faith, family and freedom. Together with our
people, they are the foundation for THE PRIMERICA WAY.
WE BELIEVE IN
OPPORTUNITY AND SUCCESS
Primerica exists to create financially
independent families among our clients,
our field force, our employees and our
stockholders. We offer opportunity to all and
we succeed when we help others succeed.
WE BELIEVE IN
SERVING MIDDLE-INCOME
HOUSEHOLDS
Many financial services providers have
abandoned the middle market. Primerica’s
greatest competitive advantage is our ability to
build profitable and sustainable financial services
distribution to help these underserved families.
WE BELIEVE IN
OUR PEOPLE
People come first at Primerica. We respect
every person and strive to grow an
environment of healthy relationships and
professional achievement where everyone’s
goals can be accomplished.
WE BELIEVE IN
INTEGRITY
At Primerica, we do what’s right. We strive to
grow our business in a transparent and ethical
way, delivering on the commitments we make
and providing real value to those we serve.
WE BELIEVE IN
RESPONSIBILITY
To whom much is given, much is required.
Primerica has been entrusted with resources
and influence which must be used to make a
positive impact on every teammate we support
and every family we assist.
OUR PURPOSE:
CREATE FINANCIALLY INDEPENDENT FAMILIES
WE BELIEVE IN
LEADERSHIP
WE BELIEVE IN
BEING DIFFERENT
Primerica stands apart. From day one, our
Founders charted a unique course. We strive
to be the best Primerica we can be and do not
aspire to imitate others.
WE BELIEVE IN
LEAVING A LEGACY
We recognize the sacrifices and contributions
of those who preceded us. Primerica is
committed to building a company of impact
for today and for generations to follow.
Leaders are role models. At Primerica, we will
demonstrate leadership as an organization,
and we will mentor leaders to ensure sustained
success and continuity.
The power of our distribution and the complementary
nature of our business segments is clearly reflected
in our financial results. In 2024, our performance was
driven by consistent and predictable premium growth
in our Term Life Insurance segment, combined with
higher sales and client asset values in our Investment
and Savings Products segment. These fundamental
building blocks for growth have never been stronger.
During the year, we made the strategic decision to exit
the senior health market after it became apparent that
it would be difficult to reach the level of profitability
we had anticipated within an acceptable timeframe.
This decision was ultimately driven by the growing
challenges in the senior health distribution market and
the uncertainty affecting the industry.
In 2024, our financial results were outstanding. We
grew adjusted net operating income by 14% and
diluted adjusted operating income per share by
20%. Our net operating income return on adjusted
stockholders’ equity (ROAE) reached 31.2% in 2024, up
from 27.2% in 2023. Primerica continued to generate
strong cash flows, allowing us to repurchase $425
million of our common stock and pay $113 million in
regular quarterly dividends in 2024. As a result, we
returned 79% of our net adjusted operating income
to stockholders. Our success was also reflected in
our stock price, with both our one-year and five-year
cumulative returns outpacing the S&P 500 insurance
index. Total Stockholder Return (TSR) in 2024 was
33.6% compared to 26.8% for the S&P 500 Insurance
index while, as shown on the chart below, on a five-
year cumulative basis our TSR was 122.6% compared to
100.7% for the S&P 500 Insurance index.
As we look ahead to 2025, we do so with confidence
because of the important role Primerica plays in the lives
of middle-income families. The need for sound financial
advice has never been greater and the reach of our sales
force uniquely positions us to serve these families.
Strong Fundamentals, Solid Returns:
Delivering Value to Our Stockholders
Glenn J. Williams
Chief Executive Officer
2019
2020
2021
2022
2023
2024
122.6%
100.7%
63.5%
Total Stockholder Return
Primerica, Inc.
S&P 500 Insurance
S&P MidCap 400
Representatives Princess and George Mitchell
of Sacramento, CA, proudly believe they’re on
a mission to serve their community. “We have
great faith in ourselves, our team and the
Company to deliver every time.”
LEFT TO RIGHT: Robert H. Peterman, Jr. Executive Vice President and Chief Operating Officer, Lisa A. Brown Executive Vice President and Chief People Officer, Glenn J.
Williams Chief Executive Officer, Peter W. Schneider President, Tracy X. Tan Executive Vice President and Chief Financial Officer, Julie A. Seman Executive Vice President and
Chief Marketing and Innovation Officer, Brett (Ben) A. Rogers Executive Vice President and General Counsel
LEFT TO RIGHT: Amber L. Cottle Vice President of Global Public Policy, Social Impact, Compliance and Safety, Dropbox, Inc., Joel M. Babbit Co-Founder and CEO,
Narrative Content Group, LLC, Barbara A. Yastine Former Chairman, President and CEO, Ally Bank, Darryl L. Wilson Founder, Chairman and President, The Wilson
Collective, Glenn J. Williams CEO, Primerica, Inc., D. Richard Williams Chairman of the Board, Gary L. Crittenden Private Investor, John A. Addison, Jr. CEO, Addison
Leadership Group, Beatriz R. Perez EVP and Chief Communications, Sustainability and Strategic Partnerships Officer, The Coca-Cola Company, Sanjeev Dheer Founder
and CEO, CENTRL Inc., Cynthia N. Day President and CEO, Citizens Bancshares Corporation and Citizens Trust Bank
Board of Directors
Executive Leadership Team
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-34680
Primerica, Inc.
(Exact name of registrant as specified in its charter)
Delaware
27-1204330
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1 Primerica Parkway
Duluth, Georgia
30099
(Address of principal executive offices)
(ZIP Code)
Registrant’s telephone number, including area code: (770) 381-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
PRI
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The aggregate market value of the voting common equity held by non-affiliates of the registrant as of June 30, 2024, was $8,015,790,785. The
number of shares of the registrant’s Common Stock outstanding at January 31, 2025, with $0.01 par value, was 33,250,713.
Documents Incorporated By Reference
Certain information contained in the Proxy Statement for the Company’s Annual Meeting of Stockholders to be held on May 14, 2025 is
incorporated by reference into Part III hereof.
TABLE OF CONTENTS
Page
Cautionary Statement Concerning Forward-Looking Statements
i
Risk Factors Summary
ii
PART I
1
Item 1.
Business
1
Item 1A.
Risk Factors
35
Item 1B.
Unresolved Staff Comments
57
Item 1C.
Cybersecurity
58
Item 2.
Properties
59
Item 3.
Legal Proceedings
59
Item 4.
Mine Safety Disclosures
59
Item X.
Information About Our Executive Officers and Certain Significant Employees
60
PART II
64
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
64
Item 6.
[Reserved]
66
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
67
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
99
Item 8.
Financial Statements and Supplementary Data
101
Item 9.
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
173
Item 9A.
Controls and Procedures
173
Item 9B.
Other Information
176
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
176
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
177
Item 11.
Executive Compensation
178
Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
178
Item 13.
Certain Relationships and Related Transactions, and Director Independence
179
Item 14.
Principal Accountant Fees and Services
180
PART IV
181
Item 15.
Exhibits, Financial Statement Schedules
181
Item 16.
Form 10-K Summary
198
Signatures
199
Primerica 2024 Annual Report
i
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
Investors are cautioned that certain statements contained in this report as well as some statements in
periodic press releases and some oral statements made by our officials during our presentations are
“forward-looking” statements. Forward-looking statements include, without limitation, any statement that
may project, indicate or imply future results, events, performance or achievements, and may contain the
words “expect”, “intend”, “plan”, “anticipate”, “estimate”, “believe”, “will be”, “will continue”, “will likely
result”, and similar expressions, or future conditional verbs such as “may”, “will”, “should”, “would”, and
“could”. In addition, any statement concerning future financial performance (including future revenues,
earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or
our subsidiaries are also forward-looking statements.
Forward-looking statements are based on current expectations and projections about future events and
are inherently subject to a variety of risks and uncertainties, many of which are beyond the control of our
management team. All forward-looking statements in this report and subsequent written and oral
forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified
in their entirety by these risks and uncertainties. These risks and uncertainties are described under “Item
IA. Risk Factors” and summarized below under “Risk Factors Summary.”
Developments in any of the areas addressed in these risks or uncertainties could cause actual results to
differ materially from those anticipated or projected or cause a significant reduction in the market price of
our common stock. Further, the risks and uncertainties described under “Item IA. Risk Factors” and
summarized below under “Risk Factors Summary” may not include all of the risks and uncertainties that
could affect us. In addition, in light of these risks and uncertainties, the matters referred to in the forward-
looking statements contained in this report may not in fact occur. Accordingly, undue reliance should not
be placed on these statements. We undertake no obligation to publicly update or revise any forward-
looking statements as a result of new information, future events or otherwise, except as otherwise
required by law.
ii
Primerica 2024 Annual Report
RISK FACTORS SUMMARY
The following is a summary of the risks and uncertainties that could have a material adverse effect on our
business. See “Item 1A. Risk Factors” for additional information regarding these risks and uncertainties.
Risks Related to Our Distribution Structure
•
Our failure to continue to attract new recruits, retain independent sales representatives or license or
maintain the licensing of independent sales representatives would materially adversely affect our
business.
•
A number of laws and regulations could apply to our independent contractor distribution model,
which could require us to modify our distribution structure.
•
There may be adverse tax, legal or financial consequences if the classification of the independent
contractor sales representatives is changed.
•
The Company’s or the independent sales representatives’ violation of, or non-compliance with, laws
and regulations and related claims and proceedings could expose us to material liabilities.
Risks Related to Our Insurance Business and Reinsurance
•
Our life insurance business may face significant losses or volatility if our actual experience differs
from our expectations regarding mortality, persistency, disability or reinsurance.
•
Our life insurance business is highly regulated, and statutory and regulatory changes may materially
adversely affect our business.
•
A decline in the regulatory capital ratios of our insurance subsidiaries could result in increased
scrutiny by insurance regulators and ratings agencies and have a material adverse effect on our
business.
•
A significant ratings downgrade by a ratings organization could materially adversely affect our
business.
•
The failure by any of our reinsurers or reserve financing counterparties to perform its obligations to
us could have a material adverse effect on our business.
Risks Related to Our Investment and Savings Products Business
•
Our Investment and Savings Products segment is heavily dependent on a limited platform of mutual
fund and annuity products offered by a relatively small number of companies and managers. If these
products fail to remain competitive with other investment options, our business could be materially
adversely affected.
•
If our relationship with one or more of the manufacturers of the funds and annuities we distribute or
investment managers we make available is significantly altered or terminated or there is a shift in the
business mix, our business could be materially adversely affected.
•
The Company’s, or the independent sales representatives’ violations of, or non-compliance with, laws
and regulations of the securities business could expose us to material liabilities.
Primerica 2024 Annual Report
iii
RISK FACTORS SUMMARY
•
If heightened standards of conduct are imposed on us or the independent sales representatives by
federal, state or provincial authorities, or selling compensation is reduced as a result of new
legislation or regulations, it could have a material adverse effect on our business.
•
If our suitability policies and procedures, or our policies and procedures for compliance with federal,
state or provincial regulations governing standards of care, were deemed inadequate, it could have a
material adverse effect on our business.
•
Non-compliance with applicable regulations could lead to revocation of our subsidiary’s status as a
non-bank custodian, which could have a material adverse effect on our business.
Risks Related to Our Mortgage Brokerage Business
•
Licensing requirements will impact the size of the mortgage loan sales force, which could adversely
affect our mortgage brokerage business.
•
Our mortgage brokerage business is highly regulated and subject to various laws and regulations in
the U.S. and Canada. Changes in, non-compliance with, or violations of, such laws and regulations
could affect the cost or our ability to distribute our products and could adversely affect our business.
•
In the U.S., we broker mortgage loans based on contractual agreements with a very limited number
of mortgage lenders. A significant change to or disruption in the mortgage lenders’ mortgage
businesses or an inability of the mortgage lenders to satisfy their contractual obligations to us could
adversely affect our business.
•
Our U.S. mortgage brokerage business is impacted by U.S. mortgage interest rates. Changes in
prevailing mortgage interest rates or U.S. monetary policies that affect mortgage interest rates could
adversely affect our business.
Risks Related to Economic Downcycles, Public Health Crises or Catastrophes, and
Disasters
•
The effects of economic downcycles, issues affecting the national, regional and/or global economy
or geopolitical event(s), or any combination thereof, could impact the cost of living for our middle-
income clients and could materially adversely affect our business.
•
Major public health pandemics, epidemics or outbreaks (such as the COVID-19 pandemic) or other
catastrophic events, have impacted and could again materially adversely impact our business.
•
In the event of a disaster, our business continuity plan may not be sufficient, which could have a
material adverse effect on our business.
Risks Related to Information Technology and Cybersecurity
•
If one of our, or a third-party partner’s, significant information technology systems fails, if its security
is compromised, or if the Internet becomes disabled or unavailable, our business may be materially
adversely affected.
•
Any failure to protect the confidentiality of client information could adversely affect our reputation
and have a material adverse effect on our business.
•
The current legislative and regulatory climate with regard to privacy and cybersecurity could
adversely affect our business.
iv
Primerica 2024 Annual Report
RISK FACTORS SUMMARY
Financial Risks Affecting Our Business
•
Credit deterioration in, and the effects of interest rate fluctuations on, our invested asset portfolio
and other assets that are subject to changes in credit quality and interest rates could materially
adversely affect our business.
•
Valuation of our investments and the determination of expected credit losses when the fair value of
our available-for-sale invested assets is below amortized cost are both based on estimates that may
prove to be incorrect, which could adversely affect our financial condition and results of operations.
•
Changes in accounting standards can be difficult to predict and could adversely impact how we
record and report our financial condition and results of operations.
•
The inability of our subsidiaries to pay dividends or make distributions or other payments to us in
sufficient amounts would impede our ability to meet our obligations and return capital to our
stockholders.
Risks Related to Legislative and Regulatory Changes
•
We are subject to various federal, state and provincial laws and regulations in the U.S. and Canada,
changes in which may require us to alter our business practices and could materially adversely affect
our business.
•
The current legislative and regulatory climate with regard to financial services could adversely affect
our business.
•
The current regulatory climate with regard to climate change may adversely affect our business.
General Risk Factors
•
Litigation and regulatory investigations and actions may result in financial losses and harm our
reputation.
•
A significant change in the competitive environment in which we operate could negatively affect our
ability to maintain or increase our market share and profitability.
•
Our continued success requires a high-performing and stable team of employees across all levels,
and the loss of key employees could negatively affect our financial condition and impair our ability
to implement our business strategy.
•
We regularly undertake business initiatives to enhance our technology, products, and services. The
efficiency and success of these initiatives may vary significantly and may cause unanticipated costs,
errors, or disruptions which could have a material adverse effect on our business.
•
We may not be able to effectively execute our corporate strategy, which could have a material
adverse effect on our business.
•
We may be materially adversely affected by currency fluctuations in the United States dollar versus
the Canadian dollar.
•
The market price of our common stock may fluctuate.
Primerica 2024 Annual Report
1
PART I
ITEM 1. BUSINESS.
Primerica, Inc. (“Primerica” or the “Parent Company” and, together with its direct and indirect subsidiaries,
“we”, “us” or the “Company”) is a leading provider of financial products and services to middle-income
households in the United States and Canada with 151,611 life insurance-licensed sales representatives as
of December 31, 2024. These independent licensed representatives (“independent sales representatives”
or “independent sales force”) assist our clients in meeting their needs for term life insurance, which we
underwrite, and mutual funds, annuities, managed investments, and other financial products, which we
distribute primarily on behalf of third parties. We insured over 5.5 million lives and had approximately 3.0
million client investment accounts as of December 31, 2024. Our business model uniquely positions us to
reach underserved middle-income consumers in a cost-effective manner and has proven itself in both
favorable and challenging economic environments.
Our purpose is to create financially independent families. Our strategic vision, in support of this purpose,
is to build unparalleled financial services distribution capabilities that enable our clients, independent
sales force, home office associates and stockholders to achieve their financial goals. Our distribution
model is designed to:
•
Address our clients’ financial needs. Independent sales representatives use our proprietary Financial
Needs Analysis tool (“FNA”) and an educational approach to demonstrate how our product offerings
can provide financial protection and help our clients save for retirement and other needs, and
manage their debt. Typically, our clients are the friends, family members and personal acquaintances
of the independent sales representatives. Meetings are generally held in informal, face-to-face
settings either in person or through remote communication tools, usually while clients are in their
homes.
•
Provide a business opportunity. We provide an entrepreneurial business opportunity for individuals to
distribute financial products. Low entry fees as well as the ability to select their own schedules and
time commitments allow independent sales representatives to supplement their income by starting
their own businesses without leaving their current jobs. Our unique compensation structure,
technology, sales support and back-office processing are designed to enable independent sales
representatives to successfully grow their businesses.
We believe there is significant opportunity to meet the increasing array of financial services needs of our
clients. We intend to leverage the independent sales force to meet such client needs, which will drive
long-term value for all of our stakeholders. Our strategy has been organized across four primary areas:
•
Maximizing independent sales force growth, leadership and productivity;
•
Broadening and strengthening our protection product portfolio, including term life insurance and
third-party products;
•
Becoming the middle-income market’s provider of choice for retirement and investment products;
and
•
Developing powerful digital capabilities that deepen our client relationships and extend our reach in
the market.
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ITEM 1. BUSINESS
Looking forward to 2025 and beyond, we updated our corporate strategic plan to include the following
growth pillars:
•
Understand and solve the financial challenges faced by current and prospective clients;
•
Enable leaders in the independent sales force to grow their teams and build new leaders, expanding
our distribution capabilities across business lines;
•
Expand representative and client digital experiences to create connected conversations;
•
Deepen our talent pool to ensure our success, now and in the future; and
•
Proactively ensure the Company's image accurately reflects who we are.
On September 30, 2024, the Company abandoned its ownership in e-TeleQuote Insurance, Inc. and
subsidiaries (collectively, “e-TeleQuote”), a marketer of Medicare-related insurance products underwritten
by third-party health insurance carriers to eligible Medicare beneficiaries.
Corporate Structure
We conduct our core business activities in the United States through three principal entities, all of which
are direct or indirect wholly owned subsidiaries of the Parent Company:
•
Primerica Financial Services, LLC (“PFS”), our general agency and marketing company;
•
Primerica Life Insurance Company (“Primerica Life”), our principal life insurance underwriting
company; and
•
PFS Investments Inc. (“PFS Investments”), our principal investment and savings products company,
broker-dealer and registered investment advisor.
Primerica Life is domiciled in Tennessee, and its wholly owned subsidiary, National Benefit Life Insurance
Company (“NBLIC”), is a New York-domiciled life insurance underwriting company.
We conduct our core business activities in Canada through three principal entities, all of which are indirect
wholly owned subsidiaries of the Parent Company:
•
Primerica Life Insurance Company of Canada (“Primerica Life Canada”), our Canadian life insurance
underwriting company;
•
PFSL Investments Canada Ltd. (“PFSL Investments Canada”), our Canadian licensed mutual fund
dealer; and
•
PFSL Fund Management Ltd. (“PFSL Fund Management”), our Canadian investment funds manager.
Primerica was incorporated in the United States as a Delaware corporation in October 2009 to serve as a
holding company for the Primerica businesses. Our businesses were transferred to us by Citigroup, Inc. on
April 1, 2010 in a reorganization pursuant to which we completed an initial public offering in April 2010
(the “IPO”). On March 31, 2010, we entered into certain coinsurance transactions to cede between 80%
and 90% of the risks and rewards of our term life insurance policies that were in force at year-end 2009.
We administer pre-IPO policies subject to these coinsurance agreements.
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ITEM 1. BUSINESS
Our Clients
Our clients are generally middle-income consumers, which we define as households with $30,000 to
$130,000 of annual income. According to the 2023 U.S. Census Bureau Current Population Survey, the
latest period for which data is available, approximately 53% of U.S. households fall in this range. We
believe that we understand the financial needs of the middle-income segment:
•
Many have inadequate or no life insurance coverage. Individual life insurance sales in the United
States declined from 12.9 million policy sales in 1975 to 9.4 million policy sales in 2023, the latest
period for which data is available, according to Life Insurance Marketing and Research Association, a
worldwide association of insurance and financial services companies. We believe that term life
insurance, which we have provided to middle-income clients for nearly 50 years, is generally the best
option for them to meet their life insurance needs.
•
Many need help investing and saving for retirement and other personal goals. Many middle-income
families find it challenging to invest and save for retirement and other personal needs. By
developing personalized savings programs for our clients using our proprietary FNA and offering a
wide range of mutual funds, annuities, managed investments and segregated fund products
sponsored and managed by established firms, independent sales representatives are well equipped
to help clients develop long-term savings plans to address their financial needs. We allow our clients
to establish monthly contributions to investment savings plans with as little as $25 per month.
•
Many need to reduce their debt. Many middle-income families have numerous debt obligations from
credit cards, auto loans, and home mortgages. We help our clients address these financial burdens
by providing personalized and client-driven debt resolution techniques.
•
Many prefer to meet face-to-face when considering financial products. Historically, many middle-
income consumers have indicated a preference to meet face-to-face when considering financial
products or services. As such, we have designed our distribution model to address this preference in
a cost-effective manner through a network of more than 151,000 life insurance-licensed
independent sales representatives who meet with clients in person or using remote communication
tools based on client preference.
•
Many are looking to finance the purchase of a home or refinance an existing mortgage. Most middle-
income consumers need mortgages to finance the purchase of a home. In addition, through
refinancing a mortgage loan, clients may be able to change the term of their loan, access home
equity for cash, home improvements and/or debt consolidation and in limited circumstances lower
their interest rate.
Our Distribution Model
Our distribution model is a modified traditional insurance agency model designed to reach and serve
middle-income consumers efficiently through the independent sales force. Key characteristics of our
unique distribution model include:
•
Independent entrepreneurs: Independent sales representatives are independent contractors building
and operating their own businesses. This approach means that independent sales representatives are
entrepreneurs who take responsibility for selling products, recruiting and developing other
independent sales representatives, setting their own schedules and managing and paying the
administrative expenses associated with their sales activities.
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ITEM 1. BUSINESS
•
Highly accessible and low cost to entry: By offering a flexible time commitment opportunity, we are
able to attract a significant number of recruits who desire to earn supplemental income and
generally concentrate on smaller-sized transactions typical of middle-income consumers.
Independent sales representatives are able to start their businesses for low fees, for which they
receive technological support, pre-licensing training and access to licensing examination preparation
programs. Independent sales representatives sell or refer products directly to consumers, and
therefore our business opportunity does not require recruits to purchase and resell our products.
Most independent sales representatives begin selling products on a part-time basis, which enables
them to hold jobs while exploring an entrepreneurial business opportunity with us.
•
Sales force leadership: An independent sales representative who has built a successful organization
and has obtained his or her life insurance and securities licenses can achieve the sales designation of
Regional Vice President (“RVP”), which qualifies him or her for a higher commission schedule. RVPs
are independent contractors who open and operate offices for their sales organizations and devote
their full-time attention to their businesses. RVPs also support and monitor the independent sales
representatives, on whose sales they earn commissions, in achieving compliance with applicable
regulatory requirements. RVPs’ efforts to expand their businesses are a primary driver of our success.
•
Innovative compensation structure: We have developed an innovative system for compensating the
independent sales force that is contingent upon product sales. We advance to independent sales
representatives a significant portion of their insurance commissions, which are subject to
chargebacks, upon their submission of an insurance application and the first month’s premium
payment. In addition to being a source of motivation, this advance provides independent sales
representatives with immediate cash flow to offset their costs. Monthly production bonuses are also
paid to RVPs whose sales organizations meet certain sales levels. With compensation tied to sales
activity, our approach accommodates varying degrees of individual productivity, which allows us to
effectively use a large group of part-time independent sales representatives while providing a
variable cost structure. In addition, we incentivize RVPs with quarterly stock awards based largely on
sales production (“agent equity awards”), which aligns their interests with those of our stockholders.
•
Large, dynamic sales force: Members of the independent sales force primarily serve their friends,
family members and personal acquaintances through individually driven networking activities. We
believe that this warm market approach is an effective way to distribute our product offerings
because it facilitates face-to-face interaction initiated by a trusted acquaintance of the prospective
client, which is difficult to replicate using other distribution approaches. Due to the large size of the
independent sales force and the active recruiting of new independent sales representatives, the
independent sales force is able to continually access an expanding base of prospective clients
without engaging costly media channels.
•
Motivational culture: In addition to the motivation for independent sales representatives to achieve
financial success, we seek to create a culture that inspires and rewards independent sales
representatives for their personal successes and those of their sales organizations through
independent sales force recognition events and contests. We also use Intranet-streamed broadcasts
and local, regional and national meetings to inform and teach independent sales representatives, as
well as facilitate camaraderie and the exchange of ideas across the independent sales force. These
initiatives encourage and empower independent sales representatives to develop their own
successful sales organizations.
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ITEM 1. BUSINESS
•
Inclusive culture: Building and maintaining a diverse independent sales force is important to us
because we believe the independent sales force reflects the middle-income communities we serve.
As the communities we serve become more diverse, the independent sales force does as well.
Structure and Scalability of the Independent Sales Force
New independent sales representatives are recruited by existing independent sales representatives. When
these new recruits become independent sales representatives, they become part of the sales organization
of the independent sales representative who recruited them as well as the sales organizations to which
the recruiting independent sales representative belongs. We encourage independent sales representatives
to bring in new recruits to build their own sales organizations, enabling the Company to reach more
middle-income families.
RVPs establish and maintain their own offices, which we refer to as field offices. Additionally, as
independent entrepreneurs, they are responsible for, and have control over, the costs of their
administrative staff, marketing materials, travel, training and certain recognition events for the
independent sales representatives in their respective sales organizations. Field offices provide a location
for independent sales representatives to conduct recruiting meetings, training events and sales-related
meetings, disseminate our Intranet-streamed broadcasts, conduct compliance functions, and house field
office business records. Some business locations house more than one field office. At December 31, 2024,
approximately 6,000 field offices in 3,300 locations were managed by independent sales representatives
that served as RVPs. Independent sales representatives also leverage remote communication tools to
conduct field office meetings. RVPs play a major role in training, motivating and monitoring their
independent sales force organization.
Because the independent sales representative’s compensation grows with the productivity of his or her
sales organization, our distribution model provides financial rewards to independent sales representatives
who successfully develop, support and monitor productive independent sales representatives. In addition
to our commission structure, we offer the Primerica Ownership Program. This program provides qualifying
RVPs a contractual right, upon meeting certain criteria, to transfer their Primerica businesses to another
RVP or a qualifying family member at such time as they desire. Furthermore, we have developed
proprietary tools and technology, which we make available to the independent sales representatives, to
enable RVPs to reduce the time spent on administrative responsibilities associated with their sales
organizations so they can devote more time to the sales, recruiting and training activities that drive our
growth. We believe that our tools and technology, coupled with our sales compensation programs,
further incentivize independent sales representatives to become RVPs.
Both the structure of the independent sales force and the capacity of our support capabilities provide us
with a high degree of scalability as we grow our business. Our support systems and technology are
capable of supporting a large independent sales force and a high volume of transactions. In addition, by
sharing training and compliance activities with RVPs, we are able to grow the Company without incurring
proportionate overhead expenses.
Recruitment of Independent Sales Representatives
The recruitment of independent sales representatives is undertaken by existing independent sales
representatives, who identify prospects and share with them the benefits of associating with our
organization. Independent sales representatives showcase the Company as dynamic and capable of
improving the lives of middle-income families.
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ITEM 1. BUSINESS
After the initial contact, independent sales representatives typically invite prospective recruits to an
opportunity meeting, conducted in person or through remote communication tools, which is conducted
by an RVP. The objective of an opportunity meeting is to inform prospective recruits about our mission
and their opportunity to start their own businesses by becoming independent sales representatives. At the
conclusion of each opportunity meeting, attendees who are interested are asked to complete an
application and pay a nominal fee to commence their pre-licensing training and licensing examination
preparation programs and, depending on the state or province, to cover their licensing exam registration
costs, which are generally paid by the Company. Recruits are not obligated to purchase any of the
products we offer in order to become independent sales representatives, though they may elect to make
such purchases.
Recruits may become our clients or provide us with access to their friends, family members and personal
acquaintances. We continually work to improve our systematic approach to recruiting and training new
independent sales representatives.
Similar to other distribution systems that rely upon part-time independent sales representatives and
typical of the life insurance industry in general, we experience wide disparities in the productivity of
individual independent sales representatives. Many new recruits do not get licensed, often due to the time
commitment required to obtain licenses and various regulatory and licensing hurdles. Many licensed
independent sales representatives are only marginally active, as there are no minimum life insurance
production requirements. We plan for this disparate level of productivity and view a continuous recruiting
cycle as a key component of our distribution model. Our distribution model is designed to address the
varying productivity associated with independent sales representatives by paying production-based
compensation, emphasizing recruiting, and developing initiatives to address barriers to licensing new
recruits. By providing commissions to independent sales representatives on the sales generated by their
sales organization, our compensation structure aligns the interests of independent sales representatives
with our interests in recruiting new representatives and creating sustainable sales production.
The following table provides information on new recruits and life insurance-licensed independent sales
representatives:
Year ended December 31,
2024
2023
2022
Number of new recruits
445,425
361,925
359,735
Number of newly life insurance-licensed independent sales
representatives
56,320
49,096
45,147
Number of life insurance-licensed independent sales
representatives, at period end
151,611
141,572
135,208
Average number of life insurance-licensed independent
sales representatives during period
145,975
137,760
132,077
We define new recruits as individuals who have submitted an independent business application to
become independent sales representatives together with payment of the nominal fee to commence their
pre-licensing training. Certain recruits may not meet the compliance standards to become an
independent sales representative, and others elect to withdraw prior to becoming actively engaged.
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ITEM 1. BUSINESS
On average, it takes approximately three months for independent sales representatives to complete the
necessary applications and pre-licensing coursework and to pass the applicable state or provincial
examinations to obtain a license to sell term life insurance products. As a result, individuals recruited to
become independent sales representatives within a given fiscal period may not become licensed
independent sales representatives or meet compliance standards until a subsequent period.
Sales Force Motivation, Training, Communication and Sales Support Tools
Motivating, training and communicating with the independent sales force, as well as sales support tools,
are critical to our success and that of the independent sales force.
Motivation. Through our proven system of sales force recognition events, contests and communications,
we provide incentives that motivate the independent sales force. Motivation is driven largely by
independent sales representatives’ desire to achieve higher levels of financial success by building their
own businesses. The opportunity to help underserved middle-income households address financial
challenges is also a source of motivation for many independent sales representatives.
While the RVPs are responsible for motivating the independent sales representatives in their own
organizations, we provide a system that motivates independent sales representatives to succeed in their
businesses by:
•
compensating independent sales representatives for product sales or referrals made by them and
their sales organizations;
•
training independent sales representatives on financial fundamentals so they can confidently and
effectively assist our clients;
•
reducing the administrative burden on the independent sales force, which allows them to devote
more of their time to building a sales organization and selling products;
•
creating a culture in which independent sales representatives are encouraged to achieve goals
through the recognition of their sales and recruiting achievements, as well as those of their sales
organizations; and
•
conducting numerous local, regional and national meetings to help inform and motivate the
independent sales force.
In 2024, we hosted our biennial international convention, which was attended by approximately 40,000
people, at the Mercedes-Benz Stadium in Atlanta, Georgia. New recruits and independent sales
representatives who attend our convention and associated meetings do so at their own expense, which
we believe further demonstrates their commitment to our organization and mission. We are planning to
hold our next international convention in July 2027 at the Mercedes-Benz Stadium, which will align with
the Company’s 50th anniversary.
Training, Communication and Sales Support Tools. Primerica Online (“POL”), delivered through a
secure Intranet website and a cross-platform mobile application (“Primerica App”), is our primary tool
designed to support independent sales representatives and assist them in building their own businesses.
We provide independent sales representatives with communication, training, and sales support tools on
POL that allow both new and experienced independent sales representatives to offer financial information
and products to our clients. POL provides independent sales representatives with access to various
business tracking and management tools, licensing support tools, product-specific training, and sales
procedures and tools. Additionally, POL provides access to internal training programs and videos covering
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ITEM 1. BUSINESS
sales, management skills, business ownership, and compliance. We also use POL to provide real-time
recognition of independent sales representatives’ successes and scoreboards for independent sales force
production, contests, and leadership trips. In addition, POL is a gateway to our product providers and
product support. Subscribers generally pay a small monthly fee to subscribe to POL, which helps cover the
cost of developing new resources and maintaining this support system. A limited version of POL that
provides access to Primerica e-mail, compliance and compensation information, newsletters and bulletins
is available at no cost to the independent sales force.
The primary features and tools available on POL include:
•
Training and Licensing Tools: POL provides independent sales representatives with access to study
tools for life insurance and securities licensing examinations such as pre-licensing study materials,
on-demand videos, personalized licensing study plans, exam simulators, progress tracking, and exam
and license registration. POL also provides training materials and access to online certification
programs to sell or refer certain other distributed products.
•
Communication Tools: POL provides access to marketing materials for our product offerings,
Company news and events, live streaming shows, on-demand videos, home office bulletins,
Primerica e-mail, contact lists, and a hosted professional business website for independent sales
representatives. We broadcast and deliver video content on POL through our own digital video
channel, PFN TV. We create original broadcasts and videos that enable home office management to
provide business updates to the independent sales force as well as training and motivational
presentations. We broadcast live programs hosted by the home office management and selected
RVPs that focus on new developments and provide motivational messages to the independent sales
force. We also broadcast training-oriented programs to the independent sales force on a weekly
basis and profile successful independent sales representatives, allowing these individuals to educate
and train other independent sales representatives by sharing their methods for success.
•
Sales Support and Client Management Tools offered through POL:
_ Our Financial Needs Analysis: Our FNA is a proprietary, needs-based analysis tool. The FNA gives
independent sales representatives the ability to collect and synthesize client financial data and
develop a financial analysis for the client that is easily understood. The FNA helps our clients
understand their financial needs in the areas of debt, financial protection, and savings as well as
introduces prudent financial concepts, such as regular saving and accelerating the repayment of
high cost credit card debt, to help them reach their financial goals. The FNA also provides clients
with a snapshot of their current financial position and identifies their life insurance, savings and
debt resolution needs.
_ Our Point-of-Sale Application Tool: Our point-of-sale technology, TurboApps, streamlines the
application process for our insurance and investment products. These applications automatically
populate client information from the FNA and other external sources to eliminate redundant data
collection and provide real-time feedback to eliminate incomplete and illegible applications.
Integrated with our paperless field office management system described below and with our
home office systems, TurboApps allows RVPs and us to realize the efficiencies of straight-
through-processing of application data and other information collected on independent sales
representatives’ mobile devices, which results in expedited processing of product sales.
TurboApps also features EZ-Key, which is a tool that helps independent sales representatives
guide clients through the investment decision process and ultimately provides investment
alternatives based on the client’s individual situation. TurboApps is available on the independent
sales representatives’ portal, POL and our mobile platform, the Primerica App.
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ITEM 1. BUSINESS
_ Primerica App: The mobile Primerica App platform has been adopted broadly and provides the
independent sales force with access to the critical components needed to start, build and
maintain their businesses. We continually enhance and expand the scope and resources available
on this strategic platform.
_ Virtual Base Shop: In an effort to ease the administrative burden on RVPs and simplify
independent sales force operations, we make available to RVPs a secure Intranet-based paperless
field office management system as part of the POL subscription. This virtual office is designed to
automate the RVP’s administrative responsibilities and can be accessed by subscribing
independent sales representatives in an RVP’s immediate sales organization, which we refer to as
his or her base shop.
_ Shareholder Account Manager (“SAM”): SAM is a web-based tool, accessed through our transfer
agent recordkeeping platform, that allows securities-licensed independent sales representatives
to service client investments in mutual funds.
_ Client Relationship Manager (“CRM”): Our CRM tool allows independent sales representatives and
their RVPs to organize client information, such as personal contact information, product
relationships, account details, notes, appointments, follow-ups, and marketing campaigns, in one
place to enable fast and convenient access.
_ Primerica Social: We offer a social media automation tool that provides independent sales
representatives with pre-approved social media posts that can be shared on their social media
accounts.
In addition, our publications department produces materials to support, motivate and inform the
independent sales force. We make available, at prices that do not exceed our cost of production,
recruiting materials, sales brochures, business cards and stationery and provide communications services
that include web design, print presentations, graphic design and script writing. We also produce a weekly
mailing that includes materials promoting our current incentives as well as the latest news about our
product offerings.
Performance-Based Compensation Structure
Our commission structure is rooted in our origin as an insurance agency. Sales representatives, who are
independent contractors, can receive compensation in multiple ways, including:
•
sales commissions and fees based on their personal sales, referrals and client assets under
management;
•
sales commissions and fees based on their sales organizations’ sales, referrals and client assets under
management; and
•
bonuses and other compensation, including agent equity awards, generated by their own sales
performance, the aggregate sales performance of their sales organizations and other criteria.
Our compensation structure pays commissions to the independent sales representative who sells the
product and to several representatives above the selling representative within their sales organization.
With respect to term life insurance sales, commissions are calculated based on the total first-year
premium (excluding the policy fee) for all policies and riders. To motivate the independent sales force, we
compensate independent sales representatives for term life insurance product sales as quickly as possible.
We advance a majority of the insurance commission upon the submission of a completed application and
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ITEM 1. BUSINESS
the first month’s premium payment. As the client makes his or her premium payments, the commission is
earned by the independent sales representative and the commission advance is recovered by the
Company. If premium payments are not made by the client and the policy terminates, any outstanding
advance commission is charged back to the independent sales representative. The chargeback, which only
occurs in the first year of a policy, equals that portion of the advance that was made, but not earned, by
the independent sales representative because the client did not pay the full premium for the period of
time for which the advance was made to the independent sales representative. Chargebacks, which occur
in the normal course of business, may be recovered by reducing any cash amounts otherwise payable by
the Company to the independent sales representative.
Independent sales representatives and representatives above them in their sales organizations are
contractually obligated to repay us any commission advances that are ultimately not earned due to the
underlying policy lapsing prior to the full commission being earned. Additionally, we hold back a portion
of the commissions earned by independent sales representatives as a reserve out of which we may
recover chargebacks. The amounts held back are referred to as deferred compensation account
commissions (“DCA commissions”). DCA commissions are available to reduce amounts owed to the
Company by independent sales representatives and they provide an independent sales representative
with a cushion against the chargeback obligations of representatives in their sales organization. DCA
commissions, unless applied to amounts owed, are ultimately released to independent sales
representatives.
We pay most term life insurance commissions during the first policy year. One of our term riders provides
for coverage increases after the first year. For such riders, we pay first-year and renewal commissions only
for premium increases related to the increased coverage. Additionally, we pay renewal commissions on
some older in-force policies. At the end of a policy’s level premium paying period, we pay commissions on
policy exchanges and bonuses on some policy exchanges and continuations.
We also pay bonuses as a percentage of premiums to RVPs with respect to sales of term life policies and
riders, up to a maximum premium. Bonuses are paid to RVPs for achieving specified production levels.
For U.S. mutual funds (non-managed investments) and annuity products, commissions are paid both on
the sale and on the value of assets under management. Commissions are calculated based on the dealer
reallowance and trail compensation actually paid to us. For managed investment products, fees earned
are based on the assets under management and represent the fee we receive as compensation for as long
as we retain the account. In Canada, our primary mutual fund offering consists of a series of mutual funds
whereby independent sales representatives who earn monthly fees based on client asset values (the
“asset-based fees”) have the option of receiving up-front compensation from PFSL Investments Canada
based on the amount invested with reduced asset-based fees for a period of five years, and they are able
to negotiate with an investor to earn a front-end load sales commission. If independent sales
representatives choose to receive up-front compensation from PFSL Investments Canada, they are subject
to a chargeback of the up-front compensation on a declining scale if the investor redeems some or all of
the investment within five years.
We also pay the independent sales force for mortgage originations, sales of prepaid legal services
subscriptions, and referrals for other distributed products. Mortgage originations compensation paid to
the independent sales force is earned for each closed mortgage loan based on a percentage of the loan
amount, subject to regulatory maximums. Prepaid legal services commissions paid to the independent
sales force are earned in fixed amounts on a monthly basis as long as the prepaid legal service
subscription remains active. Compensation related to other distributed products is calculated based on
the type of product sold or referred.
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ITEM 1. BUSINESS
In addition to these methods of compensation, RVPs can earn quarterly agent equity awards based largely
on sales production.
Sales Force Licensing and Support
The states, provinces and territories in which independent sales representatives operate generally require
them to obtain and maintain licenses to sell our insurance and securities products, which requires them to
pass applicable examinations. Independent sales representatives may also be required to maintain
licenses to sell certain of our other distributed products. To encourage new recruits to obtain their life
insurance licenses, we either pay directly or reimburse the independent sales representative for certain
licensing-related fees and expenses once he or she passes the applicable exam and obtains the applicable
life insurance license. In addition, new recruits are eligible to earn compensation if they participate in field
training observations with experienced independent sales representatives and complete the licensing
process within a specified timeframe. To sell insurance products, independent sales representatives must
be licensed by their resident state, province or territory and by any other state, province or territory in
which they do business. In most states, independent sales representatives must also be appointed by our
applicable insurance subsidiary. Our in-house life insurance licensing program offers new recruits a
significant number of classroom life insurance pre-licensing courses to meet applicable state and
provincial licensing requirements and prepares recruits to pass applicable licensing exams.
To sell mutual funds and variable annuity products, U.S. independent sales representatives must be
registered with the Financial Industry Regulatory Authority (“FINRA”) and hold the appropriate license(s)
designated by each state in which they sell securities products, as well as be appointed by the annuity
underwriter in the states in which they market annuity products. Independent sales representatives must
meet all state and federal regulatory requirements and be designated as an investment advisor
representative in order to sell our managed investment products. We contract with third-party training
firms to conduct securities license exam preparation for independent sales representatives, and we also
offer supplemental training tools.
Canadian independent sales representatives selling mutual fund products are required to be registered by
the securities regulators in the provinces and territories in which they sell mutual fund products. Canadian
independent sales representatives who are licensed to sell our insurance products do not need any further
licensing to sell our segregated funds products.
To offer mortgage loan products in the United States, independent sales representatives must be
individually licensed as mortgage loan originators by the states in which they do business and, in some
states, they must also be individually licensed as mortgage brokers.
For sales of our other distributed products, appropriate state, provincial and territorial licensing may be
required.
Supervision and Compliance
To ensure compliance with various federal, state, provincial and territorial legal requirements, we and the
RVPs share responsibility for maintaining an overall compliance program that involves compliance training
and supporting, as well as monitoring, the activities of independent sales representatives. We work with
the RVPs to develop and maintain appropriate compliance procedures and systems.
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ITEM 1. BUSINESS
Generally, in the United States RVPs must obtain a principal license (FINRA Series 26) and in Canada RVPs
must be registered as a Branch Manager, and, as a result, RVPs assume additional regulatory supervisory
responsibility over the activities of their sales organizations. Additional supervision is provided by
designated principal-licensed home office personnel, referred to as Regional Securities Principals (“RSP”).
RSPs are required to supervise and monitor activity across all product lines and report any compliance
issues they observe to our Compliance Department. In addition, our Compliance Department regularly
runs surveillance reports designed to monitor the activity of the independent sales force and investigates
any unusual or suspicious activity identified during these reviews or during periodic inspections of RVP
offices.
All independent sales representatives are required to participate in our annual compliance meeting, a
program administered by our senior management and our legal and compliance staff. We provide a
compliance training overview across all product lines and require the completion of compliance
attestations by each licensed independent sales representative for each product he or she offers.
Additionally, independent sales representatives receive periodic compliance communications, both in
writing and through videos, regarding new compliance developments and business issues of significance.
Our Field Audit Department regularly conducts audits of all independent sales representative offices on a
risk-based approach, including scheduled and no-notice audits when feasible. Our Field Audit Department
reviews regulatory-required records that are not maintained at our home office. Any compliance
deficiencies noted in the audit must be corrected, and we carefully monitor all corrective action. Audit
deficiencies are addressed through reprimands, probations and contract terminations.
Our Product Offerings
Reflecting our philosophy of helping middle-income clients with their financial services needs and
ensuring compatibility with our distribution model, our product offerings generally meet the following
criteria:
•
Consistent with sound individual finance principles: Products must be consistent with good personal
finance principles for middle-income consumers, such as financial protection, encouraging long-
term savings and reducing debt.
•
Designed to support multiple client goals: Products are designed to address and support a broad
range of financial goals rather than compete with or cannibalize each other. For example, term life
insurance does not compete with mutual funds because term life insurance has no cash value or
investment element.
•
Ongoing needs based: Products are generally designed to meet the ongoing financial needs of many
middle-income consumers. This long-term approach bolsters our relationship with our clients by
allowing us to continue to serve them as their financial needs evolve.
We use three operating segments to organize, evaluate and manage our business: Term Life Insurance;
Investment and Savings Products; and Corporate and Other Distributed Products.
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
The following table provides information on our principal product offerings and the principal sources
thereof by operating segment as of December 31, 2024.
Operating Segment
Principal Product Offerings
Principal Sources of Products
(Applicable Geographic Territory)
Term Life Insurance
Term Life Insurance
Primerica Life (U.S. (except New York) and
certain territories)
NBLIC (New York)
Primerica Life Canada (Canada)
Investment and Savings
Products
Mutual Funds and Certain
Retirement Plans, including
Employer Sponsored
Retirement Plans
American Century Investments (U.S.)
American Funds (U.S.)
Equitable Distributors, LLC (U.S.)
Nuveen, LLC (U.S.)
VOYA Financial, Inc. (U.S.)
Fidelity Investments (U.S.)
Franklin Templeton Investments (U.S.)
Invesco (U.S.)
AGF Investments (Canada)
Mackenzie Investments (Canada)
Other fund companies and plan
administrator providers
Managed Investments
PFS Investments (dba Primerica Advisors)
(as a program sponsor) (U.S.)
Variable Annuities
Corebridge Financial, Inc. (U.S.)
Brighthouse Financial, Inc. (U.S.)
Equitable Distributors, LLC (U.S.)
Lincoln National Corporation (U.S.)
Fixed Indexed Annuities
Corebridge Financial, Inc. (U.S.)
Lincoln National Corporation (U.S.)
Trans-Oceanic Life Insurance Company
(Puerto Rico)
Universal Life Insurance Company (Puerto
Rico)
Fixed Annuities
Corebridge Financial, Inc. (U.S.)
Trans-Oceanic Life Insurance Company
(Puerto Rico)
Universal Life Insurance Company (Puerto
Rico)
Segregated Funds
Primerica Life Canada (Canada)
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ITEM 1. BUSINESS
Operating Segment
Principal Product Offerings
Principal Sources of Products
(Applicable Geographic Territory)
Corporate and Other
Distributed Products
Mortgage Loans (1)(2)
Rocket Mortgage, LLC (U.S.)
Spring EQ LLC (U.S.)
Rocket Mortgage Canada ULC (Canada)
8Twelve Mortgage Corp. (Canada)
Prepaid Legal Services
Pre-Paid Legal Services, Inc. (U.S. and
Canada)
ID Theft Defense
Pre-Paid Legal Services, Inc. (U.S. and
Canada)
Supplemental Health and
Accidental Death & Disability
Insurance
The Edge Benefits Inc. and its affiliates
(Canada)
Auto and Homeowners’
Insurance (2)
Various insurance companies, as offered
through Answer Financial, Inc. (U.S.)
SurexDirect.com Ltd. (Canada)
Home Automation Solutions
Vivint, Inc. (U.S.)
(1)
In the U.S., mortgage loans are made by Rocket Mortgage, LLC and Spring EQ LLC. In Canada, representatives refer mortgage
loans to Rocket Mortgage Canada ULC (a subsidiary of Rocket Companies, Inc.) and 8Twelve Mortgage Corp.
(2)
In Canada, referrals only.
Term Life Insurance
Through our three life insurance subsidiaries – Primerica Life, NBLIC and Primerica Life Canada – we offer
term life insurance to clients in the United States, its territories, and Canada. We are a leading provider of
individual term life insurance in the United States.
We believe that term life insurance is generally a better alternative for middle-income clients than cash
value life insurance. Term life insurance provides a guaranteed death benefit if the insured dies during the
fixed coverage period of an in-force policy, thereby providing financial protection for his or her named
beneficiaries in return for the periodic payment of premiums. Term insurance products, which are
sometimes referred to as pure protection products, have no savings or investment features. By buying
term life insurance rather than cash value life insurance, a policyholder pays a lower premium over the
level term period and, as a result, may have funds available to invest for retirement and other needs. We
also believe that a person’s need for life insurance is inversely proportional to that person’s need for
retirement savings, a concept we refer to as the theory of decreasing responsibility. Young adults with
children, new mortgages and other obligations need to buy higher amounts of insurance to protect their
family from the loss of future income resulting from the death of a primary earner. With its lower
premium over the level term period, term life insurance lets young families buy more coverage for their
premium dollar when their needs are greatest and still have the ability to have funds for their retirement
and other savings goals.
We design our term life insurance products to be easily understood by, and meet the needs of, our clients.
Clients purchasing our term life insurance products generally seek stable, longer-term income protection
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
products for themselves and their families. In response to this demand, we offer term life insurance
products with initial level-premium coverage periods that range from 10 to 35 years and a wide range of
coverage face amounts. Policies remain in-force until expiration of the coverage period or until the
policyholder ceases to make premium payments and terminates the policy. Our in-force term life
insurance policies have level premiums for the stated term period. As such, the policyholder pays the
same amount each year. After the initial policy term, the policyholder has the option to continue coverage
by renewing or exchanging their contract. Both options result in higher premiums due to the
policyholder’s more advanced age.
In October 2022, we introduced our new generation of life insurance products in all jurisdictions except
New York where we continue to sell our legacy term life insurance products. The Primerica PowerTerm
(“PowerTerm”) product is our rapid issue term life product that provides for face amounts of up to
$300,000 (local currency). PowerTerm allows an independent sales representative to submit an application
via TurboApps, during which the Company collects information compliant with the Fair Credit Reporting
Act (“FCRA”) from external data sources to inform the underwriting process. The Company uses this data
and the client’s responses to application questions to determine any additional underwriting
requirements. Results of these processes are reported in real time to our underwriting system, which then
determines whether or not we can rapidly issue a policy.
We also offer our Primerica PrecisionTerm (“PrecisionTerm”) product, which is our traditionally
underwritten term insurance product for face amounts in excess of $150,000 (local currency).
PrecisionTerm allows an independent sales representative to submit an application via TurboApps. The
Company then collects information from external data sources that are traditional in nature, excluding
credit scores. Most applicants are required to undergo traditional paramedical testing requirements to
complete the underwriting process; however, certain applicants may have testing waived based on
application and external data information. Policies with face amounts less than or equal to $300,000 and
greater than $150,000 may be issued as either PowerTerm or PrecisionTerm products depending on the
underwriting method the insured prefers.
The average face amount of our in-force policies issued in 2024 was approximately $255,200. The
following table sets forth the number of term life insurance policies issued:
Year ended December 31,
2024(1)
2023(1)
2022
Adjusted
2022
(estimated)(1)
Life insurance issued:
Number of policies issued
370,396
358,860
291,918
333,020
(1)
For the year ended December 31, 2022, the previously reported number of new policies issued has been adjusted for
comparability purposes as a result of our new term life insurance products introduced in October 2022, which modified how
policies are structured in relation to individual lives. Historically, two adult lives could be covered under a single policy by
adding a spouse rider. To better align risk and pricing in our new life insurance products, we eliminated this rider and now sell a
separate policy for each insured life. Results for the years ended December 31, 2024 and 2023 reflect additional policies issued
to reflect the former spouse rider with a separate policy in the new life insurance products. To make year-over-year
comparisons more consistent, we have provided estimates for the year ended December 31, 2022.
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ITEM 1. BUSINESS
The following table sets forth selected information regarding our term life insurance product portfolio:
Year ended December 31,
2024
2023
2022
Life insurance issued:
Face amount issued (in millions)
$
122,233
$
119,102
$
103,822
December 31,
2024
2023
2022
Life insurance in force:
Number of policies in force
3,003,909
2,959,006
2,896,667
Face amount in force (in millions)
$
953,583
$
944,609
$
916,808
Pricing and Underwriting. We believe that effective pricing and underwriting are significant drivers of
the profitability of our life insurance business and we have established our pricing assumptions to be
consistent with our underwriting practices. We set pricing assumptions for expected claims, lapses and
expenses based on our experience and other factors, while also considering the competitive environment.
These other factors include:
•
expected changes from relevant experience due to changes in circumstances, such as (i) revised
underwriting procedures affecting future mortality and reinsurance rates, (ii) new product features,
and (iii) revised administrative programs affecting sales levels, expenses, and client continuation or
termination of policies; and
•
observed trends in experience that we expect to continue, such as general mortality changes in the
general population and better or worse policy persistency (the period over which a policy remains in
force) due to changing economic conditions.
Under our current underwriting guidelines, we individually assess each insurable adult applicant and place
each applicant into one of ten risk classifications that has specific criteria based on current health, medical
history, and other risk factors. We may decline an applicant’s request for coverage if his or her health or
activities create unacceptable risks. Our PowerTerm and PrecisionTerm products cover one adult life per
policy, which is a change from our historical term life products which offered family coverage with
multiple lives on an individual policy.
Independent sales representatives ask applicants a series of questions regarding the applicant’s medical
history and other risk factors. We may also consider information about the applicant from FCRA compliant
third-party sources. If we believe that further information regarding an applicant’s medical history is
necessary, we use a third-party provider and its trained personnel to contact the applicant to obtain a
more detailed medical history. The report resulting from this process is electronically transmitted to us
and is evaluated in our underwriting process. Paramedical requirements may also be required.
To accommodate the significant volume of insurance business that we process, we and the independent
sales force use specialized technology. We offer independent sales representatives an electronic life
insurance application that supports our term life insurance products. Almost all of the life insurance
applications we received in 2024 were submitted electronically via TurboApps. Independent sales
representatives may utilize video collaboration tools to assist with the completion of the life insurance
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
application and submit completed applications through TurboApps. Our PowerTerm and PrecisionTerm
electronic life insurance applications have technology to streamline the application process and deliver a
superior experience by using industry-standard security, identity verification (in the U.S. only), precise and
real-time underwriting to speed up processing time and reduce errors in submitted applications.
Electronic disclosure delivery and digital client signatures through third-party technology, seamless
banking information importation, and simple policy language provide a convenient client experience.
Claims Management. Our insurance subsidiaries processed over 17,500 life insurance benefit claims in
2024 on policies underwritten by us and sold by independent sales representatives. Claims fall into three
categories: death, waiver of premium (applicable to disabled policyholders who purchased this benefit for
which we agree to waive life insurance premiums during a qualifying disability), or terminal illness. The
claim may be reported by an independent sales representative, a beneficiary or, in the case of qualifying
disability or terminal illness, the policyholder. Following are the benefits paid by us for each category of
claim:
Year ended December 31,
2024
2023
2022
(In thousands)
Death
$
1,793,402
$
1,779,822
$
1,903,179
Waiver of premium
61,816
57,737
55,394
Terminal illness (1)
20,510
16,433
16,044
(1)
We consider claims paid for terminal illness to be loans made to the policyholder that are repaid to us from the death benefit
upon the death of the insured.
In the United States, after coverage has been in force for two years, we may not contest the policy for
misrepresentations in the application. The contestability period for suicide of the insured is one to two
years depending on state regulation. In Canada, we have a similar two-year contestability period, but we
are permitted to contest insurance fraud at any time. As a matter of policy, we do not contest any
coverage issued by us to replace the face amount of another insurance company’s individual coverage to
the extent the replaced coverage would not be contestable by the replaced company. We believe this
approach helps independent sales representatives sell replacement policies, as it reassures clients that
claims made under their replacement policies are not more likely to be contested as to the face amount
replaced. Through our claims administration system, we record, process and pay the appropriate benefit
for any reported claim. Our claims system is used by our home office claims adjusters to order medical
and investigative reports from third-party providers, calculate amounts due to the beneficiary (including
interest), and report payments to the appropriate reinsurance providers.
Primerica Life and NBLIC regularly consult the Social Security Administration’s Death Master File in
accordance with applicable state requirements. These processes help identify potential deceased insureds
for whom claims have not been presented in the normal course of business. If unreported deaths are
identified, Primerica Life and NBLIC attempt to determine if a valid claim exists, to locate beneficiaries, and
to pay benefits accordingly.
Reinsurance. We use reinsurance primarily to reduce the volatility risk with respect to mortality. Since
1994, we have reinsured death benefits in the United States on a first dollar quota share yearly renewable
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ITEM 1. BUSINESS
term basis. Since 2012, we have reinsured death benefits in Canada on a first dollar quota share yearly
renewable term basis. We pay premiums to each reinsurer based on rates in the applicable agreement.
We generally reinsure between 80% and 90% of the mortality risk for all term life insurance policies,
excluding coverage under certain riders. We reinsure substandard cases in limited circumstances based on
the extensive experience some of our reinsurers have with substandard cases. A substandard case has a
level of risk that is acceptable to us, but at higher premium rates than a standard case because of the
health, habits or occupation of the applicant.
While most of our reinsurance agreements have indefinite terms, both we and our reinsurers are entitled
to discontinue any reinsurance agreement as to future policies by giving advance notice of 90 days to the
other. Each reinsurer’s ability to terminate coverage for existing policies is limited to circumstances such
as a material breach of contract or nonpayment of premiums by us. Each reinsurer has the right to
increase rates with certain restrictions. If a reinsurer increases rates, we have the right to immediately
recapture the business. Either party may offset any balance due from the other party. For additional
information on our reinsurance, see Note 1 (Description of Business, Basis of Presentation, and Summary
of Significant Accounting Policies) and Note 7 (Reinsurance) to our consolidated financial statements
included elsewhere in this report.
Financial Strength Ratings. Ratings with respect to financial strength are an important factor in
establishing our competitive position and maintaining public confidence in us and our ability to market
products. Ratings organizations review the financial performance and condition of most insurers and
provide opinions regarding financial strength, operating performance and ability to meet obligations to
policyholders. For additional information, see “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Liquidity and Capital Resources – Financial Ratings.”
Investment and Savings Products
We believe that many middle-income families have significant unmet retirement and savings needs.
Independent sales representatives help our clients understand their current financial situations and how
they can use time-tested financial principles, such as prioritizing personal savings, to reach their savings
goals. Our product offerings include saving and investment vehicles that seek to meet the needs of clients
in all stages of life.
Through PFS, PFS Investments, Primerica Life Canada, PFSL Investments Canada, and licensed
independent sales representatives, we distribute and sell to our clients a variety of investment products:
mutual funds; managed investments; variable, index-linked, fixed and fixed indexed annuities; and
segregated funds. As of December 31, 2024, approximately 25,493 independent sales representatives
were licensed to distribute mutual funds in the United States (including Puerto Rico) and Canada. As of
December 31, 2024, approximately 13,524 independent sales representatives were licensed and appointed
to distribute annuities in the United States and approximately 10,506 independent sales representatives
were licensed to sell segregated funds in Canada.
Mutual Funds. In the United States, licensed independent sales representatives distribute mutual funds
primarily from selected asset management firms that are on our proprietary platform. The selected firms
have diversified product offerings, including domestic and international equity, fixed-income and money
market funds. Each firm continually evaluates its fund offerings and adds new funds on a regular basis.
Additionally, their product offerings reflect diversified asset classes and varied investment styles. We
believe that these selected asset management firms provide funds that meet the investment needs of our
clients.
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
During 2024, Franklin Templeton, Invesco, American Funds and Fidelity collectively accounted for
approximately 98% of our mutual fund sales in the United States. Franklin Templeton and Invesco each
have large wholesaling teams that support the independent sales force in distributing their mutual fund
products. Our selling agreements with these firms all have indefinite terms and provide for termination at
will.
A wholly owned indirect subsidiary of the Parent Company and affiliate of PFS Investments, Primerica
Shareholder Services, Inc. (“PSS”), provides transfer agent recordkeeping services to investors who
purchase shares of mutual funds offered by certain of our fund families through PFS Investments. In
exchange for these services, PSS receives recordkeeping and account maintenance fees from the
applicable fund company. PSS has retained BNY Mellon Asset Servicing to perform the necessary transfer
agent recordkeeping services for these accounts on its proprietary SuRPAS system. PFS Investments
serves as the Internal Revenue Service (“IRS”) approved non-bank custodian for customers that open
individual retirement accounts (“IRAs”) (or certain other retirement accounts) with PFS Investments and
invest in shares of mutual funds offered by certain of our fund families. For these services, PFS
Investments receives an annual custodian fee.
As a result of Canadian regulatory changes, in July 2022 PFSL Investments Canada’s services became
focused on acting as the exclusive principal distributor for two families of mutual funds (the “PD Funds”)
that are managed by well-established, unrelated investment fund managers. The PD Funds are: (i) the AGF
Platform Funds, which consist of a range of mutual funds managed by AGF Investments Inc. (“AGF”); and
(ii) the Mackenzie FuturePath Funds, which consist of a range of mutual funds managed by Mackenzie
Financial Corporation. PFSL Investments Canada has an exclusive right to distribute the PD Funds and, as a
principal distributor, it markets the PD Funds through its representatives. PFSL Investments Canada
representatives no longer recommend other mutual funds (the “Legacy Canada Mutual Funds”) that were
previously available for purchase through PFSL Investments Canada. Like our U.S. fund family, the PD
Funds asset management partners we have chosen in Canada have a diversified offering of equity, fixed-
income and money market funds, including domestic and international funds with a variety of investment
styles. The regulatory changes continue to be examined by Canadian regulators and may be modified.
In addition to the PD Funds, under limited circumstances, PFSL Investments Canada can offer investments
in the Legacy Canada Mutual Funds, which include the Primerica-branded Concert™ Series funds and
other non-proprietary funds. PFSL Fund Management is the Investment Fund Manager of the Concert™
Series funds. These limited circumstances primarily consist of pre-authorized purchases made pursuant to
a systemic investment plan for existing clients. Our Concert™ Series funds consist of six different asset
allocation funds and a money market fund with varying investment objectives. Each Concert™ Series fund
is a fund of funds that allocates fund assets among equity, income and money market mutual funds of
AGF. The asset allocation within each Concert™ Series fund is determined on an advisory contract basis by
an independent portfolio adviser.
A key part of our investment philosophy for our clients is the long-term benefits of dollar cost averaging
through systematic investing. To accomplish this, we assist our clients by facilitating monthly
contributions to their investment accounts by bank drafts against their checking accounts for as little as
$25 per month. During the year ended December 31, 2024, average client assets held in individual
retirement accounts in the United States and Canada accounted for an estimated 74% and 64%,
respectively, of total average client account assets. The Canadian counterpart to IRAs in the United States
are Registered Retirement Savings Plans (“RRSPs”). RRSPs and IRAs behave similarly, providing tax
advantaged treatment and enabling clients to earn income on a tax-deferred basis. Our high
concentration of retirement plan accounts and our systematic savings philosophy are beneficial to us as
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ITEM 1. BUSINESS
these accounts tend to have lower redemption rates than the industry and, therefore, generate more
recurring asset-based revenues.
In the United States, we also offer Employer Sponsored Retirement Plans (“ESRP”), such as 401(k) plans,
primarily to small and medium-sized businesses. The ESRPs we distribute are offered by a limited number
of third-party providers, including American Funds Distributors, Inc., Equitable Distributors, LLC and VOYA
Financial, Inc., which together account for most of our ESRP business. In addition, we distribute 457(b)
plans to governmental entities. Our licensed representatives generally provide educational and
administrative services with respect to ESRPs, which include helping our ESRP clients understand the
benefits of offering a tax-deferred retirement plan and assisting their employees to realize the need to
save for retirement and the benefits of doing so in an ESRP.
Managed Investments. PFS Investments (dba Primerica Advisors) is a registered investment advisor in the
United States, and it offers a managed investments program, Primerica Advisors Lifetime Investment
Program (the “Lifetime Investment Program”), which we launched in 2017. The Lifetime Investment
Program is a robust advisory offering designed for clients who have at least $25,000 of investable assets. It
provides our customers access to investment models designed and managed by several unaffiliated
investment advisers. PFS Investments, as sponsor and portfolio manager of the program, evaluates
models for inclusion in the program and conducts ongoing due diligence of the models and unaffiliated
investment advisers made available through the program. As of December 31, 2024, we used 12
unaffiliated investment advisers. Primerica Brokerage Services, Inc. (“PBSI”), a wholly owned affiliate of
Primerica, is the introducing broker-dealer for customer accounts managed through the Lifetime
Investment Program. Pershing LLC (“Pershing”), an unaffiliated clearing firm, provides custody, trade
execution, clearing, settlement and related services through a fully disclosed clearing agreement with
PBSI.
Variable Annuities. U.S. securities licensed independent sales representatives also distribute variable
annuities issued by American General Life Insurance Company and its affiliates (“Corebridge”), Equitable
Financial Life Insurance Company (“Equitable Life”), Lincoln National Life Insurance Company and its
affiliates (“Lincoln National”) and Brighthouse Life Insurance Company (“Brighthouse Life”). Variable
annuities are insurance products that enable our clients to invest in accounts with attributes similar to
mutual funds, but also have benefits not found in mutual funds, including death benefits that protect
beneficiaries from losses due to a market downturn and income benefits that guarantee future income
payments for the life of the policyholder(s). We also offer index-linked annuities issued by Equitable Life,
Brighthouse Life and Lincoln National. Index-linked annuities are insurance contracts that provide
investors with potential growth, subject to a cap, and partial downside protection against losses. Gains
and losses are measured over a fixed period, typically three to six years, based on the performance of a
securities index. Although linked to an index, an investment in these contracts does not involve ownership
of any underlying portfolio securities by the client. Each of these companies bears the insurance risk on its
variable annuities and index-linked variable annuities that we distribute.
Fixed Indexed Annuities. We offer fixed indexed annuity products in the U.S. through Corebridge,
Lincoln National, Trans-Oceanic Life Insurance Company (Puerto Rico) (“Trans-Oceanic Life”), and
Universal Life Insurance Company (Puerto Rico) (“Universal Life”). These products combine safety of
principal and guaranteed rates of return with additional investment options tied to equity market indices
that allow for returns that move based on the performance of an index. We believe these and other fixed
annuity products give both life and securities representatives more ways to assist our clients with their
retirement planning needs.
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
Fixed Annuities. In Puerto Rico, we currently offer two annuity products: a fixed annuity and a fixed
bonus annuity underwritten by Corebridge, Trans-Oceanic Life, and Universal Life. These products provide
guarantees against loss with several income options.
Segregated Funds. In Canada, we have underwritten segregated fund products, branded as our Common
Sense FundsTM, that have some of the characteristics of our variable annuity products distributed in the
United States. Our Common Sense FundsTM are underwritten by Primerica Life Canada and offer our
clients the ability to participate in a diversified managed investments program that can be opened for as
little as $25. While the assets and corresponding liability (reserves) are recognized on our consolidated
balance sheets, the assets are held in separate accounts for the benefit of the segregated fund contract
owners and are not commingled with the general assets of the Company. As a result of Canadian
regulatory changes that became effective in June 2023, sales of segregated funds products underwritten
by Primerica Life Canada have significantly decreased.
There are three fund products within our segregated funds: the Asset Builder Funds, the Strategic
Retirement Income Fund (“SRIF”), and a money market fund known as the Cash Management Fund. The
investment objective of Asset Builder Funds is long-term capital appreciation combined with some
guarantee of principal. Unlike mutual funds, our Asset Builder Funds product guarantees clients at least
75% of their net contributions (net of withdrawals) at the earlier of the date of their death or at the Asset
Builder Funds’ maturity date, which is selected by the client. The portfolio consists of both equities and
fixed-income securities with the equity component consisting of a pool of primarily large cap Canadian
and U.S. equities and the fixed-income component consisting of Canadian federal government zero
coupon treasuries and government-backed floating rate notes. The portion of the Asset Builder Funds’
portfolio allocated to zero coupon treasuries are held in sufficient quantity to satisfy the guarantees
payable at the maturity date of each Asset Builder Fund. As a result, our potential loss exposure is very
low as it comes from the guarantees payable upon the death of the client prior to the maturity date.
The investment objective of the SRIF is to provide income during retirement plus the opportunity for
modest capital appreciation. The SRIF product guarantees clients 75% of their net contributions (net of
withdrawals) at the earlier of the date of their death or age 100. The portfolio consists of both equities
and fixed-income securities, with the equities consisting of a pool of primarily large cap Canadian and U.S.
equities that are capped at 25% of the portfolio. The balance is a fixed-income portfolio consisting of
investment-grade government and corporate bonds. The high quality of the investments and the
percentage cap on equities results in a relatively low potential loss exposure. All accounts in the SRIF are
held as Registered Retirement Income Funds which carry government-mandated minimum annual
withdrawals. Similar to the Asset Builder Funds, our potential exposure for loss associated with the SRIF is
very low because its investment allocations are conservatively aligned with the risks of the client contracts.
The Cash Management Fund invests in government guaranteed short-term bonds and short-term
commercial and bank papers, with the principal investment objective being the provision of interest
income while maintaining liquidity and preserving capital.
With the guarantee level at 75% and in light of the time until the scheduled maturity of our segregated
funds contracts, we currently do not believe it is necessary to allocate any corporate capital as reserves for
segregated fund contract benefits.
We recently reached an agreement with The Canada Life Assurance Company (“Canada Life”), a third-
party insurance company, to distribute segregated fund contracts underwritten by Canada Life as our
primary new segregated fund product offering. In early 2025, we began the process of rolling out our
distribution of these segregated fund contracts. We do not expect the distribution of segregated funds
products to materially impact our Investment and Savings Product segment revenues in the near term.
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ITEM 1. BUSINESS
Investment and Savings Products Revenue. In the United States, we earn revenue from our Investment
and Savings Products business in three ways: up front commissions and payments earned on the sale of
such products; trailing fees and payments earned based upon client asset values; and account-based
revenue. On the sale of mutual funds (not including managed investments) and annuities, we earn a
dealer re-allowance or commission on new purchases as well as trail commissions on the assets held in
our clients’ accounts. We also receive marketing and distribution fees from most of our mutual fund and
annuity providers. These payments are typically a percentage of sales or a percentage of the clients’ total
asset values, or a combination of both. For investments into the Lifetime Investment Program, we receive
an asset-based fee as compensation for the investment advisory and other administrative services we
provide.
As the IRS-approved non-bank custodian for certain funds noted above, PFS Investments receives annual
fees on a per-account basis for as long as it services the account. As explained above, PSS receives
transfer agent recordkeeping fees for the services it provides to the fund families noted above in “Mutual
Funds” section. An individual client account may include multiple fund positions for which we earn
recordkeeping fees.
Because the total amount of these fees fluctuates with the number of such accounts and positions within
those accounts, the opening or closing of accounts has a direct impact on our revenues. From time to
time, the fund companies for which we provide these services request that accounts or positions with
small balances be closed.
In Canada, we earn revenue from the distribution of PD Funds primarily in the form of fees paid based
upon client asset values, which include dealer services fees that are paid monthly to us by clients and
principal distributor fees which are paid to us on a periodic basis by the PD Fund managers. PFSL
Investments Canada also earns revenue from sales-based up-front commissions on PD Funds if such
commissions are negotiated between investors and PFSL Investments Canada independent sales
representatives. PFSL Investments Canada may also earn annual account maintenance fees for PD Funds
client accounts under certain conditions. PFSL Investments Canada continues to earn revenue from Legacy
Canada Mutual Funds in the form of up-front commissions on mutual fund sales (only if negotiated
between the independent sales representative and the investor) and fees paid based upon client asset
values. For segregated fund products underwritten by Primerica Life Canada, we earn revenue primarily
from fees paid based upon client asset values in the form of investment advisory fees. We may also earn
deferred sales charges for early withdrawals at an annual declining rate within seven years of an investor’s
contribution date for segregated funds contracts underwritten by Primerica Life Canada and entered into
prior to June 2023. For segregated fund contracts underwritten by Canada Life, we receive an ongoing
trail commission as well as a revenue share based on the value of the assets in the segregated fund
contracts. We may also earn revenue from sales-based up-front commissions paid by the investor (if such
commissions are negotiated between investors and the independent sales representatives) or from sales-
based up-front commissions paid by Canada Life (subject to chargeback upon early withdrawal by the
investor).
Other Distributed Products
In the United States, we distribute other products, including mortgage loans through mortgage-licensed
loan originators, prepaid legal services, auto and homeowners’ insurance referrals and home automation
solutions. In Canada, we offer mortgage loan referrals, auto and homeowners’ insurance referrals and
insurance offerings for small businesses. While some of these products are Primerica-branded, all of them
are underwritten or otherwise provided by a third party.
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
We have a contractual arrangement with Rocket Mortgage, LLC (“Rocket Mortgage”), a mortgage lender,
whereby Primerica Mortgage, LLC (“Primerica Mortgage”), a state-licensed mortgage broker, offers
refinance mortgages and purchase-money mortgages through its mortgage loan originator licensed
representatives. We also have a program with Spring EQ LLC, a mortgage lender, whereby Primerica
Mortgage offers second mortgages and home equity lines of credit through its mortgage loan originator
licensed representatives. In 2024, we continued to expand our mortgage program into new states.
We receive compensation from the mortgage lenders for each closed loan based on a fixed percentage of
the loan amount (subject to regulatory maximums) for mortgage brokering services provided and pay
compensation to the representatives for services rendered.
We offer our U.S. and Canadian clients a Primerica-branded prepaid legal services program on a
subscription basis that is underwritten and provided by Pre-Paid Legal Services, Inc. The prepaid legal
services program offers a network of attorneys in all states, and certain provinces and territories, to assist
subscribers with legal matters such as drafting wills, living wills and powers of attorney, trial defense and
motor vehicle-related matters. We receive commissions based on sales and renewals of these
subscriptions.
We have a contractual arrangement with Answer Financial, Inc. (“Answer Financial”), an independent
insurance agency, whereby U.S. independent sales representatives refer clients to Answer Financial to
receive multiple, competitive auto and homeowners’ insurance quotes. Answer Financial’s comparative
quote process allows clients to easily identify the underwriter that is most competitively priced for their
type of risk. We receive commissions based on completed auto and homeowners’ placement of insurance
and policy renewals and pay independent sales representatives a flat referral fee for each completed
application and policy renewal.
We have a contractual arrangement with Vivint, Inc. (“Vivint”), a company that offers homeowners in the
U.S. a comprehensive suite of products and services to protect and remotely control, monitor and manage
their homes using any Internet-connected smart device. We receive commissions based on referrals that
result in a subscription to Vivint’s home services and pay independent sales representatives a referral fee
for each such subscription.
In the Canadian provinces of Alberta, Ontario and British Columbia (with respect to homeowners’
insurance only), we have an arrangement with SurexDirect.com Ltd. (“Surex Direct”), an independent
insurance agency, whereby independent sales representatives refer clients to Surex Direct to receive
multiple, competitive auto, commercial, and homeowners’ insurance quotes. Surex Direct’s comparative
quote process allows clients to easily identify the underwriter that is most competitively priced for their
type of risk. We receive referrals based on completed auto, commercial, and homeowners’ placement of
insurance and policy renewals and pay independent sales representatives a flat referral fee for each
completed application and policy renewal.
In Canada, we have a referral program for mortgage loan products offered by third-party lenders Rocket
Mortgage Canada ULC and 8Twelve Mortgage Corp. Due to regulatory requirements, independent sales
representatives in Canada only refer clients to the lender and are not involved in the loan application and
closing process. We receive referral fees based on the funded loan amount and, in turn, pay a commission
to independent sales representatives.
In Canada, we offer insurance products, including supplemental medical and dental, accidental death, and
disability, to small businesses. These insurance products are underwritten and provided by The Edge
Benefits Inc. and its affiliates. We receive a commission based on sales and renewals of these policies.
24
ITEM 1. BUSINESS
Regulation
Our business is subject to extensive laws and governmental regulations, including administrative
determinations, court decisions and similar constraints. The purpose of the laws and regulations affecting
our business is primarily to protect our clients and other consumers. Many of the laws and regulations to
which we are subject are regularly re-examined, and existing or future laws and regulations may become
more restrictive or otherwise adversely affect our operations.
Regulatory authorities periodically make inquiries regarding compliance by us and our subsidiaries with
insurance, securities and other laws and regulations regarding the conduct of our insurance and securities
businesses. At any given time, a number of financial or market conduct examinations of our subsidiaries
may be ongoing. We cooperate with such inquiries and take corrective action when warranted.
Regulation of Our Insurance Business. Primerica Life, as a Tennessee-domiciled insurer, is regulated by
the Tennessee Department of Commerce and Insurance and is licensed to transact business in the United
States (except New York), and most U.S. territories. NBLIC, as a New York-domiciled life insurance
underwriting company and a wholly owned subsidiary of Primerica Life, is regulated by the New York
State Department of Financial Services and is licensed to transact business in all 50 U.S. states, the District
of Columbia and the U.S. Virgin Islands.
State insurance laws and regulations regulate all aspects of our U.S. insurance business. Such regulation is
vested in state agencies having broad administrative and, in some instances, discretionary power dealing
with many aspects of our business, which may include, among other things, premium rates and increases
thereto, reserve requirements, marketing practices, advertising, privacy, policy forms, algorithmic
underwriting, grace periods, reinsurance reserve requirements, acquisitions, mergers, and capital
adequacy.
Our U.S. insurance subsidiaries are required to file certain annual, quarterly and periodic reports with the
supervisory agencies in the jurisdictions in which they do business, and their business and accounts are
subject to examination by such agencies at any time. These examinations generally are conducted under
National Association of Insurance Commissioners (“NAIC”) guidelines. Under the rules of these
jurisdictions, insurance companies are examined periodically (generally every three to five years) by one or
more of the supervisory agencies on behalf of the states in which they do business. Our most recent
examinations of the financial condition and affairs of Primerica Life and NBLIC, as well as Vidalia Re, Inc.
(“Vidalia Re”), a special purpose financial captive insurance company and wholly owned subsidiary of
Primerica Life, performed by the respective domiciliary state insurance departments as of December 31,
2019, were completed during 2021 with no material findings or recommendations noted.
Primerica Life Canada is federally incorporated and provincially licensed and is required to file periodic
reports with Canadian regulatory agencies. It transacts business in all Canadian provinces and territories.
Primerica Life Canada is regulated federally by the Office of the Superintendent of Financial Institutions
Canada (“OSFI”) and provincially by the Superintendents of Insurance for each province and territory.
Canadian federal and provincial insurance laws regulate all aspects of our Canadian insurance business.
OSFI regulates insurers’ corporate governance, financial and prudential oversight, and regulatory
compliance, while provincial and territorial regulators oversee insurers’ market conduct practices and
related compliance.
Primerica Life Canada files quarterly and annual financial statements prepared in accordance with
International Financial Reporting Standards (“IFRS”) and other locally accepted standards with OSFI in
compliance with legal and regulatory requirements. OSFI conducts periodic detailed examinations of
insurers’ business and financial practices, including the control environment, internal and external auditing
Primerica 2024 Annual Report
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ITEM 1. BUSINESS
and capital adequacy, surpluses and related testing, legislative compliance and appointed actuary
requirements. These examinations also address regulatory compliance with anti-money laundering
practices, outsourcing, related-party transactions, privacy and corporate governance. Provincial regulators
conduct periodic market conduct examinations of insurers doing business in their jurisdictions.
In addition to federal and provincial oversight, Primerica Life Canada is also subject to the guidelines set
out by the Canadian Life and Health Insurance Association (“CLHIA”). CLHIA is an industry association that
works closely with federal and provincial regulators to establish market conduct guidelines and sound
business and financial practices addressing matters such as independent sales representative suitability
and screening, insurance illustrations and partially guaranteed savings products.
The laws and regulations governing our U.S. and Canadian insurance businesses include numerous
provisions governing the marketplace activities of insurers, including policy filings, payment of insurance
commissions, disclosures, advertising, product replacement, sales and underwriting practices and
complaints and claims handling. The state insurance regulatory authorities in the United States and the
federal and provincial regulators in Canada generally enforce these provisions through periodic market
conduct examinations.
In addition, most U.S. states and Canadian provinces and territories, as well as the Canadian federal
government, have laws and regulations governing the financial condition of insurers, including standards
of solvency, types and concentration of investments, establishment and maintenance of reserves,
reinsurance and requirements of capital adequacy. As discussed previously, U.S. state insurance law and
Canadian provincial insurance law also require certain licensing of insurers and their agents.
Insurance Holding Company Regulation; Limitations on Dividends. The states in which our U.S. insurance
subsidiaries are domiciled have enacted legislation and adopted regulations regarding insurance holding
company systems. These laws require registration of, and periodic reporting by, insurance companies
domiciled within the jurisdiction that control, or are controlled by, other corporations or persons so as to
constitute an insurance holding company system. These laws also affect the acquisition of control of
insurance companies as well as transactions between insurance companies and companies controlling
them.
The Parent Company is a holding company that has no significant operations. Our primary asset is the
capital stock of our subsidiaries, and our primary liability is $600.0 million in principal amount of senior
unsecured notes (the “Senior Notes”). As a result, we depend on dividends or other distributions from our
insurance and other subsidiaries as the principal source of cash to meet our obligations, including the
payment of interest on, and repayment of, principal of any debt obligations.
The states in which our U.S. insurance subsidiaries are domiciled impose certain restrictions on our
insurance subsidiaries’ ability to pay dividends to us. In Canada, dividends can be paid subject to the
paying insurance company’s continuing compliance with regulatory requirements and upon notice to
OSFI. We determine the dividend capacity of our insurance subsidiaries using statutory accounting
principles (“SAP”) promulgated by the NAIC and each subsidiary’s domiciliary state in the United States
and using IFRS in Canada.
26
ITEM 1. BUSINESS
The following table sets forth the amount of cash and distributions paid or payable by our direct
insurance subsidiaries:
Year ended December 31,
2024
2023
2022
(In thousands)
Primerica Life
$
290,000
$
330,000
$
255,000
Primerica Life Canada
21,759
22,348
22,929
For additional information on dividend capacity and restrictions, see Note 17 (Statutory Accounting and
Dividend Restrictions) to our consolidated financial statements included elsewhere in this report.
Policy and Contract Reserve Sufficiency Analysis. Under the laws and regulations of their jurisdictions of
domicile, our U.S. insurance subsidiaries are required to conduct annual analyses of the sufficiency of their
life insurance statutory reserves. In addition, other U.S. jurisdictions in which our U.S. subsidiaries are
licensed may have certain reserve requirements that differ from those of their domiciliary jurisdictions. In
each case, a qualified actuary must submit an opinion that states that the aggregate statutory reserves,
when considered in light of the assets held with respect to such reserves, make good and sufficient
provision for the associated contractual obligations and related expenses of the insurer. If such an opinion
cannot be provided, then the affected insurer must set up additional reserves by moving funds from
surplus. Our U.S. insurance subsidiaries most recently submitted these opinions without qualification to
applicable insurance regulatory authorities.
Primerica Life Canada is also required to conduct regular analyses of the sufficiency of its life insurance
statutory reserves. Life insurance reserving and reporting requirements are completed by Primerica Life
Canada’s appointed actuary. Materials provided by the appointed actuary are filed with OSFI as part of
our annual filing and are subject to OSFI’s review. Based upon this review, OSFI may institute remedial
action against Primerica Life Canada as OSFI deems necessary. Primerica Life Canada has not been subject
to any such remediation or enforcement by OSFI.
Surplus and Capital Requirements. U.S. insurance regulators have the discretionary authority, in connection
with the ongoing licensing of our U.S. insurance subsidiaries, to limit or prohibit the ability of an insurer to
issue new policies if, in the regulators’ judgment, the insurer is not maintaining a minimum amount of
surplus or is in hazardous financial condition. Insurance regulators may also limit the ability of an insurer
to issue new life insurance policies and annuity contracts above an amount based upon the face amount
and premiums of policies of a similar type issued in the prior year. We do not believe that the current or
anticipated levels of statutory surplus of our U.S. insurance subsidiaries present a material risk that any
such regulator would limit the amount of new policies that our U.S. insurance subsidiaries may issue.
The NAIC has established risk-based capital (“RBC”) standards for U.S. life insurance companies, as well as
a risk-based capital model act (the “RBC Model Act”) that has been adopted by the state insurance
regulatory authorities. The RBC Model Act provides that life insurance companies must submit an annual
RBC report to state regulators regarding their RBC based upon four categories of risk: asset risk; insurance
risk; interest rate risk; and business risk. For each category, the capital requirement is determined by
applying factors that vary based upon the degree of risk to various asset, premium and policy benefit
reserve items. The formula is intended to be used by insurance regulators as an early warning tool to
identify possible weakly capitalized companies for purposes of initiating further regulatory action. If an
insurer’s RBC falls below specified levels, then the insurer would be subject to different degrees of
Primerica 2024 Annual Report
27
ITEM 1. BUSINESS
regulatory action depending upon the level. These actions range from requiring the insurer to propose
actions to correct the capital deficiency to placing the insurer under regulatory control.
In Canada, OSFI has authority to request an insurer to enter into a prudential agreement implementing
measures to maintain or improve the insurer’s safety and soundness. OSFI also may issue orders to an
insurer directing it to refrain from unsafe or unsound practices or to take action to remedy financial
concerns. OSFI has neither requested that Primerica Life Canada enter into any prudential agreement nor
issued any order against Primerica Life Canada.
In Canada, OSFI requires federally-regulated life insurance companies to maintain adequate capital in
accordance with regulatory Capital Guidelines. The Capital Guidelines define and establish criteria and
limits for determining an insurer’s required capital to support defined risks and the amount of qualifying
regulatory available capital. In addition, OSFI requires companies to set internal target levels of capital
sufficient to provide for all risks of the insurer, including risks specified in OSFI’s Capital Guidelines.
NAIC Pronouncements and Reviews. The NAIC promulgates model insurance laws and regulations for
adoption by the states in order to standardize insurance industry accounting and reporting guidance.
Although many state regulations emanate from NAIC model statutes and pronouncements, SAP continue
to be established by individual state laws, regulations and permitted practices. Certain changes to NAIC
model statutes and pronouncements, particularly as they affect accounting issues, may take effect
automatically without affirmative action by a given state. With respect to some financial regulations and
guidelines, non-domiciliary states sometimes defer to the interpretation of the insurance department of
the state of domicile. However, neither the action of the domiciliary state nor the action of the NAIC is
binding on a non-domiciliary state. Accordingly, a non-domiciliary state could choose to follow a different
interpretation.
The NAIC has established guidelines to assess the financial strength of insurance companies for U.S. state
regulatory purposes. The NAIC conducts annual reviews of the financial data of insurance companies
primarily through the application of 12 financial ratios prepared on a statutory basis. The annual
statements are submitted to state insurance departments to assist them in monitoring insurance
companies in their states.
Statutory Accounting Principles. SAP is a basis of accounting developed by U.S. insurance regulators to
monitor and regulate the solvency of insurance companies. In developing SAP, insurance regulators were
primarily concerned with evaluating an insurer’s ability to pay all of its current and future obligations to
policyholders. As a result, statutory accounting focuses on conservatively valuing the assets and liabilities
of insurers, generally in accordance with standards specified by the insurer’s domiciliary jurisdiction.
Uniform statutory accounting practices are established by the NAIC and generally adopted by regulators
in the various U.S. jurisdictions. These accounting principles and related regulations determine, among
other things, the amounts our insurance subsidiaries may ultimately pay to us as dividends, and they differ
in many instances from U.S. generally accepted accounting principles (“U.S. GAAP”), which are designed to
measure a business on a going-concern basis. Under U.S. GAAP, incremental direct costs of successful
policy acquisitions are capitalized when incurred and then amortized over the life of the associated
policies. The valuation of assets and liabilities under U.S. GAAP is based in part upon best estimate
assumptions made by the insurer. U.S. GAAP-basis stockholders’ equity represents the ownership interest
in the U.S. GAAP-measured net assets held by stockholders. As a result, the values for assets, liabilities and
equity reflected in financial statements prepared in accordance with U.S. GAAP will be different from those
reflected in financial statements prepared under SAP.
State Insurance Guaranty Funds Laws. Under most state insurance guaranty fund laws, insurance
companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred
28
ITEM 1. BUSINESS
by insolvent companies. Most insurance guaranty fund laws currently provide that an assessment may be
excused or deferred if it would threaten an insurer’s own financial strength. In addition, assessments may
be partially offset by credits against future state premium taxes.
Other Regulatory Changes. From time to time, various jurisdictions make changes to the state or provincial
licensing examination process that may make it more difficult for independent sales representatives to
obtain their life insurance licenses. In addition, certain jurisdictions have passed laws or proposed
regulations that require insurers and insurance agents in the sale of life insurance, including term life
insurance and annuities, to disclose conflicts of interest to consumers or meet standards of care requiring
that their advice be in the customer’s best interest. The impact on our business and the level of resources
necessary to conform to such new regulations will vary depending on the extent of changes required and
the jurisdictions that adopt such regulations.
Regulation of Our Investment and Savings Products Business. PFS Investments is registered with, and
regulated by, FINRA and the Securities and Exchange Commission (“SEC”) as a broker-dealer. PFS
Investments operates as an introducing broker-dealer, which does not hold client accounts. As an
investment adviser, PFS Investments is registered with and regulated by the SEC. PFS Investments also is
subject to regulation by the Department of Labor (“DOL”) with respect to certain retirement plans, and by
state securities agencies.
PFS Investments is registered in all 50 U.S. states and certain territories. All aspects of PFS Investments’
business are regulated, including sales methods and charges, trade practices, the use and safeguarding of
customer securities, capital structure, recordkeeping, data protection, conduct and supervision of
registered representatives.
PFS Investments is required to file quarterly reports as well as annual audited financial statements with the
SEC pursuant to Section 17 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
Rule 17a-5 thereunder. As part of filing these reports, PFS Investments is subject to minimum net capital
requirements, as mandated by Rule 15c3-1 of the Exchange Act.
In the United States, clients acquire securities products from PFS Investments in either a brokerage or
advisory relationship. In a brokerage relationship, a PFS Investments registered representative making
recommendations is subject to a “best interest” standard under SEC regulations and FINRA rules and, in
some cases, state rules. PFS Investments markets mutual funds and variable annuities on a brokerage
basis. In an advisory relationship, namely our managed investment offerings, PFS Investments and its
investment advisory representative have a fiduciary obligation to the client and conduct ongoing
monitoring of the client’s investments. PFS Investments’ independent sales representatives making
recommendations with respect to retirement accounts also may have fiduciary obligations under DOL
regulations.
PFS Investments is also approved as a non-bank custodian under IRS regulations and, in that capacity,
may act as a custodian or trustee for certain retirement accounts. In addition, PFS Investments is an SEC-
registered investment advisor and, under the name Primerica Advisors, offers managed investment
programs. In most states, independent sales representatives are required to obtain an additional license
to offer these programs.
PBSI is registered with, and regulated by, FINRA and the SEC, and is registered in all 50 U.S. states and
certain territories. PBSI operates as the introducing broker-dealer for the accounts managed through the
Lifetime Investment Program and does not hold customer accounts. PBSI introduces all accounts to
Pershing, an unaffiliated clearing firm that provides order execution, custody, clearing, settlement and
related services to PBSI’s customers. PBSI is required to file quarterly reports as well as annual audited
Primerica 2024 Annual Report
29
ITEM 1. BUSINESS
financial statements with the SEC pursuant to Section 17 of the Exchange Act, and Rule 17a-5 thereunder.
PBSI is subject to minimum net capital requirements as mandated by Rule 15c3-1 of the Exchange Act.
PSS is registered with the SEC as a transfer agent and, accordingly, is subject to SEC rules and
examinations. Acting in this capacity, PSS and third-party vendors employed by PSS are responsible for
certain client investment account shareholder services.
PFSL Investments Canada is a mutual fund dealer registered with and regulated by the Canadian
Investment Regulatory Organization (“CIRO”), the national self-regulatory organization that overseas all
investment dealers, mutual fund dealers and trading activity on Canada’s debt and equity marketplaces.
PFSL Investments Canada is also registered with provincial and territorial securities commissions
throughout Canada (collectively referred to as the Canadian Securities Administrators (“CSA”)). As a
registered mutual fund dealer, PFSL Investments Canada performs the suitability review of mutual fund
investment recommendations, and like our U.S. broker-dealers, it does not hold client accounts. PFSL
Investments Canada is subject to the rules and regulations established by the CSA for the sale of
securities, which include standards of conduct for the firm and its independent sales representatives.
PFSL Investments Canada is required to file monthly and annual financial statements and reports with
CIRO that are prepared to comply with the prescribed CIRO reporting requirements. CIRO has established
a risk adjusted capital standard for mutual fund dealers. Its formula is designed to provide advance
warning of a member encountering difficulties. If a mutual fund dealer falls below specified levels, then
restrictions would apply until rectified, including not being able to act on certain matters without prior
written consent from CIRO.
The independent sales representatives in Canada are required to be registered in the provinces and
territories in which they do business, including regulation by the Autorité des marchés financiers in
Quebec, and are also subject to regulation by CIRO. These regulators have broad administrative powers,
including the power to limit or restrict the conduct of our business and impose censures or fines for
failure to comply with the law or regulations.
PFSL Fund Management in Canada is registered as an Investment Fund Manager in connection with our
Concert™ Series mutual funds and is regulated by provincial securities commissions.
PFSL Fund Management is required to file quarterly and annual financial statements with the Ontario
Securities Commission (“OSC”) prepared to meet the requirements of National Instrument 31-103,
Registration Requirements, Exemptions and Ongoing Registrant Obligations, based on the financial
reporting framework specified in National Instrument 52-107, Acceptable Accounting Principles and
Auditing Standards. PFSL Fund Management is required to maintain a minimum level of capital and file its
quarterly and annual calculation of excess working capital with the OSC. As an Investment Fund Manager,
PFSL Fund Management is required to file periodic reports with provincial and territorial securities
commissions throughout Canada for its Concert™ Series mutual funds. Such reports include semi-annual
and annual financial statements prepared in accordance with IFRS.
As the segregated funds are separate accounts of Primerica Life Canada, the segregated funds are also
regulated by OSFI and included as part of the quarterly and annual financial statement filings for
Primerica Life Canada. In addition, the segregated funds are also subject to the guidelines set out by the
CLHIA.
Regulation of Our Mortgage Brokerage Business. In the United States, state mortgage banking,
brokering and lending laws regulate our mortgage brokerage business. In the United States, Primerica
Mortgage is regulated at the state and local level by state banking commissioners and other equivalent
regulators and at the federal level principally by the Consumer Financial Protection Bureau. Our mortgage
30
ITEM 1. BUSINESS
brokerage business must comply with the laws, rules and regulations, as well as judicial and administrative
decisions, in all of the jurisdictions in which we are licensed to offer mortgage loans, as well as an
extensive body of federal laws and regulations. These state and federal laws and regulations address the
type of loan products that can be offered to consumers through predatory lending and high cost loan
laws and the type of licenses that must be obtained by individuals and entities seeking to solicit mortgage
loan applications from consumers. As a mortgage broker licensee, Primerica Mortgage is subject to
periodic examinations by regulators.
To offer mortgage loan products, Primerica Mortgage must hold an active mortgage company license in
each state in which mortgage products are offered. Independent sales representatives engaged in the
mortgage loan brokerage business must also be individually licensed as mortgage loan originators (and in
some states also licensed as mortgage brokers) by each state in which they do business and be sponsored
in the Nationwide Multistate Licensing System to conduct mortgage loan brokerage business exclusively
on behalf of Primerica Mortgage.
In addition, our mortgage brokerage business is subject to various other federal laws, including the Truth
In Lending Act and its implementing regulation, Regulation Z, the Equal Credit Opportunity Act and its
implementing regulation, Regulation B, the Fair Housing Act and the Home Ownership Equity Protection
Act. We are also subject to the Real Estate Settlement Procedures Act and its implementing regulation,
Regulation X, which requires timely disclosures related to the nature and costs of real estate settlement
amounts and limits those costs and compensation to amounts reasonably related to the services
performed. We are also subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act and
any implementing regulations.
In Canada, our loan activities are more limited and the independent sales representatives only provide
mortgage loan referrals to Rocket Mortgage Canada ULC and 8Twelve Mortgage Corp. The independent
sales representatives are not required to obtain mortgage loan licensure from any regulatory entity to
make these referrals.
Other Laws and Regulations. Our business is subject to a number of additional laws and regulations.
The USA Patriot Act of 2001 (the “Patriot Act”) contains anti-money laundering and financial transparency
laws and mandates the implementation of various regulations applicable to broker-dealers and other
financial services companies, including insurance companies. The Patriot Act seeks to promote
cooperation among financial institutions, regulators and law enforcement entities in identifying parties
that may be involved in terrorism or money laundering.
U.S. federal and state laws and regulations require financial institutions, including insurance companies, to
protect the security and confidentiality of consumer financial information and to notify consumers about
their policies and practices relating to their collection and disclosure of consumer information and their
policies relating to protecting the security and confidentiality of that information. Similarly, federal and
state laws and regulations also govern the disclosure and security of consumer health information. In
particular, regulations promulgated by the U.S. Department of Health and Human Services regulate the
disclosure and use of protected health information by health insurers and others (including certain life
insurers), the physical and procedural safeguards employed to protect the security of that information and
the electronic storage and transmission of such information. Congress and state legislatures are expected
to consider additional legislation relating to privacy and other aspects of consumer information.
The Federal Trade Commission, through the Federal Trade Commission Act, is responsible for protecting
consumers and competition by preventing anticompetitive, deceptive, and unfair business practices. This
includes regulation of deceptive trade practices such as pyramiding and unsubstantiated earnings or
lifestyle claims in advertisements, including on social media.
Primerica 2024 Annual Report
31
ITEM 1. BUSINESS
The Gramm-Leach-Bliley Act (“GLBA”) regulates the use and disclosure of certain data that we collect from
consumers, and it requires us to provide consumers with notice regarding how their nonpublic personal
health and financial information is used and the opportunity to “opt out” of certain disclosures before
sharing such information with third parties. GLBA generally requires safeguards for the protection of
personal information.
The Telephone Consumer Protection Act of 1991 restricts telemarketing and the solicitation of customers
without proper consent.
The Financial Consumer Agency of Canada (“FCAC”), a Canadian federal regulatory body, is responsible
for ensuring that federally regulated financial institutions, which include Primerica Life Canada, comply
with federal consumer protection laws and regulations, voluntary codes of conduct and their own public
commitments. The Financial Transactions and Reports Analysis Centre of Canada is Canada’s financial
intelligence unit. Its mandate includes ensuring that entities subject to the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act comply with reporting, recordkeeping and other obligations
under that act. We are also subject to privacy laws under the jurisdiction of federal and provincial privacy
commissioners and the consumer complaints provisions of federal insurance laws under the mandate of
the FCAC, which requires insurers to belong to a complaints ombud-service and file a copy of their
complaints handling policy with the FCAC.
Competition
We operate in a highly competitive environment with respect to the sale of financial products and the
retention of the more productive members of the independent sales force. Competitors with respect to
our term life insurance products consist both of stock and mutual insurance companies, as well as other
financial intermediaries. Competitive factors affecting the sale of life insurance products include the level
of premium rates, benefit features, risk selection practices, compensation of independent sales
representatives and financial strength ratings from ratings agencies such as A.M. Best.
In offering our securities products, independent sales representatives compete with a range of other
advisers, broker-dealers and direct channels, including wirehouses, regional broker-dealers, independent
broker-dealers, insurers, banks, asset managers, registered investment advisers, mutual fund companies
and other direct distributors. The mutual funds that we offer face competition from other mutual fund
families and alternative investment products, such as exchange-traded funds, while our managed
investment programs compete with other fee-based advisory services offered by financial services firms.
Our annuity products compete with products from numerous other companies. Competitive factors
affecting the sale of annuity products include price, product features, investment performance,
commission structure, perceived financial strength, claims-paying ratings, service and distribution
capabilities.
Privacy and Information Security
Our business prioritizes maintaining a secure, confidential environment for our clients, employees and
other partners’ information. We have built sophisticated information technology platforms to support our
clients and operations and the independent contractor sales force. Our data center houses an enterprise-
class IBM mainframe as well as modern distributed and cloud technology infrastructure. Our business
applications, many of which are proprietary, are supported by application developers and data center
staff.
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ITEM 1. BUSINESS
Primerica’s information security teams provide services, including project consulting, threat management,
application and infrastructure assessments, secure configuration management, and information security
administration. Additionally, we support advanced business continuity and disaster recovery capabilities.
For a discussion of the Company’s risk management, strategy, and governance related to cybersecurity,
see “Item 1C. Cybersecurity”, which is incorporated herein by reference.
Human Capital Management
Employees
General. The following table provides information about our 2,874 employees as of December 31, 2024.
U.S.
Canada
Full-time employees
2,006
283
Part-time employees
16
1
On-call and temporary employees(1)
509
59
Total
2,531
343
(1)
Represents employees who provided services on an as-needed or temporary basis.
The following table provides information about the diversity of our U.S. employees(1) at December 31,
2024:
Female
Male
Asian/Pacific
Islander
Black or
African
American
Hispanic
or Latino
Other (6)
White
Executive Management(2)
50.6%
49.4%
5.6%
11.2%
2.2%
0.0%
81.0%
Non-Executive
Management(3)
61.8%
38.2%
5.9%
24.3%
8.0%
0.0%
61.8%
Professionals(4)
54.2%
45.8%
17.3%
25.4%
8.3%
2.5%
46.5%
All Other Employees(5)
69.4%
30.6%
5.1%
37.6%
15.6%
4.2%
37.5%
63.0%
37.0%
8.9%
31.0%
11.8%
2.9%
45.4%
(1)
Reflects U.S. employees only as comparable data is not required by law to be collected in Canada.
(2)
Includes Primerica employees at the Senior Vice President level and above.
(3)
Includes Primerica employees at the Assistant Vice President and Vice President levels, and non-Assistant Vice President
managers.
(4)
All remaining exempt (as defined by the Fair Labor Standards Act) employees.
(5)
All remaining non-exempt employees.
(6)
Includes employees with two or more races and employees who choose not to disclose their race.
The Corporate Governance Committee (the “Corporate Governance Committee”) of our Board of Directors
(the “Board of Directors” or “Board”) has responsibility for oversight of our human capital management
initiatives. Our Chief People Officer is responsible for the development and implementation of our human
capital management strategy. Identifying, developing, and fostering a diverse workforce is at the center of
our efforts to ensure that all employees have opportunities that allow them to learn, grow and thrive at
Primerica.
Primerica 2024 Annual Report
33
ITEM 1. BUSINESS
Primerica prides itself on having a collaborative culture with our employees. As such, none of our
employees are members of any labor union, and we have never experienced any business interruption as
a result of any labor disputes. For a more detailed description of our employee initiatives, see our 2024
Corporate Sustainability Report (available at https://investors.primerica.com), which is not incorporated by
reference into this report or any filings with the SEC into which this report is incorporated by reference.
Talent Development. A core strength is that many of our employees, including our executives, have been
with Primerica for over 20 years. The result of this longevity and loyalty is that many of our long-term
executives and employees will reach retirement age over the coming years. Executive management
continues to be focused on enhancing succession planning and talent pipeline identification and
development both through the hiring of external talent and internal programs. The Corporate Governance
Committee has responsibility for oversight of our strategy for talent development. The Corporate
Governance Committee meets regularly with our Chief People Officer and endeavors to interact regularly
with rising talent.
Compensation and Total Rewards. Primerica’s compensation philosophy is designed to attract, retain and
motivate highly competent employees at all levels through compensation programs and practices. For
2024, approximately 720 of our employees participate in an annual incentive program that reflects both
corporate performance and individual achievement. Incentive awards to officers are paid in both cash and
equity (with a higher proportion being paid in equity for higher level officers) while Assistant Vice
Presidents, managers, and senior level professionals receive all of their incentive awards in cash. All other
employees can qualify for cash bonuses based on individual achievement.
Among other things, our employee benefits package includes health and dental insurance, various paid-
leave options, parental leave, a robust employee assistance program, and a 401(k) retirement savings plan
with a generous company match.
Employee Engagement and Wellness. Employees are highly satisfied at Primerica, as evidenced by our
employee retention rate in 2024 of 91%. Further, we were recognized as a regional Top Workplace by the
Atlanta Journal-Constitution for eleven consecutive years from 2014 through 2024. From 2021 through
2024, we were also nationally recognized as a Top Workplace USA by the employee engagement service
partner that conducted the regional survey. In 2024, we were recognized by Newsweek as one of
America’s Greatest Workplaces, one of America’s Greatest Workplaces for Women, and one of America’s
Greatest Workplaces for Diversity. Forbes awarded us one of America’s Best Midsize Employers in 2024.
From 2019 through 2024, we were recognized by Forbes as a Best Employer for Women, and we were
named to the Bloomberg Gender Equality Index from 2020 through 2023. In order to monitor employee
satisfaction, we conduct annual employee surveys and provide detailed results to managers and our
Board of Directors. Changes to policies, programs, and benefits packages are made based on this
feedback. In addition, each year we hold a series of town hall meetings at our U.S. headquarters in Duluth,
Georgia and our Canadian head office in Mississauga, Ontario during which employees hear updates on
the Company’s performance and strategic direction, as well as information on benefits enhancements,
policy changes, and other workplace topics. Employees have the opportunity to ask questions of senior
management and are encouraged to raise issues of concern and offer suggestions for improvement.
Independent Contractors. A description of the independent contractor sales force is included elsewhere
in this section. See “— Our Distribution Model”, “— Recruitment of Independent Sales Representatives”,
“— Sales Force Motivation, Training, Communication and Sales Support Tools” “— Performance-Based
Compensation Structure” and “— Supervision and Compliance.” The independent contractor sales force is
extremely diverse, as it reflects the communities in which the independent sales representatives live and
34
ITEM 1. BUSINESS
work. Further, the independent sales force utilizes strategic market groups to encourage professional and
personal growth and development, including Women in Primerica, the African American Leadership
Council, the Hispanic American Leadership Council and the Asian-Pacific and Islanders Leadership Council,
which we refer to as our Strategic Markets. These groups provide opportunities for networking and
mentorship, sales and business management training and deep learning opportunities customized for
these respective market segments. For a more detailed description of sales force initiatives, see our 2024
Corporate Sustainability Report on our investor relations website (https://investors.primerica.com), which is
not incorporated by reference into this report or any filings with the SEC into which this report is
incorporated by reference.
Board of Directors. We strive to offer an inclusive business environment that benefits from diversity of
thought, experience and people. This also holds true for our Board, which is comprised of individuals from
an array of backgrounds and with different areas of expertise that best serves our business and the
middle-income market. The Board has a Diversity Policy that seeks out Board candidates based on merit,
and that looks broadly at individuals of all backgrounds. This has resulted in a Board that reflects the
diversity of the independent sales force and the markets we serve. The Board Diversity Policy is available
on our investor relations website (https://investors.primerica.com).
Available Information
We make available free of charge on our investor relations website (https://investors.primerica.com) our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as
soon as reasonably practicable upon filing such information with, or furnishing it to, the SEC. The
Company’s reports are also available on the SEC’s website (www.sec.gov). The SEC maintains an Internet
site that contains reports, proxy and information statements, and other information regarding issuers that
file electronically with the SEC, at www.sec.gov. We routinely post financial and other information,
including information about our corporate responsibility and sustainability efforts on the investor
relations page of our corporate website (https://investors.primerica.com). Information included on any
Company websites is not incorporated by reference into this report or any other filings with the SEC into
which this report is incorporated by reference.
Primerica 2024 Annual Report
35
ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS.
Risks Related to Our Distribution Structure
Our failure to continue to attract new recruits, retain independent sales representatives or
license or maintain the licensing of independent sales representatives would materially
adversely affect our business, financial condition and results of operations.
New independent sales representatives provide us with access to new clients, enable us to increase sales
and provide the next generation of successful independent sales representatives. As is typical with
distribution businesses, we experience a high rate of turnover among part-time independent sales
representatives, which requires us to attract, retain and motivate a large number of independent sales
representatives. Recruiting is performed by current independent sales representatives, and the
effectiveness of recruiting is generally dependent upon our reputation as a provider of a rewarding and
potentially lucrative income opportunity, as well as the general competitive and economic environment.
Whether recruits are motivated to complete their training and licensing requirements and commit to
selling our products depends in part on the effectiveness of our compensation and promotional
programs, as well as the competitiveness of such programs compared with other companies, including
other part-time business opportunities and the recruits’ desire to help middle-income families in their
communities.
If our new business opportunity and the products we distribute do not generate sufficient interest to
attract new recruits, motivate them to become licensed independent sales representatives and maintain
their licenses, and incentivize them to sell our products and recruit other new independent sales
representatives, our business would be materially adversely affected.
Certain Regional Vice Presidents (“RVPs”) have large sales organizations. These RVPs are responsible for
attracting, motivating, supporting and assisting the independent sales representatives in their sales
organizations. The loss of key RVPs together with substantial numbers of independent sales
representatives from their related sales organizations for any reason could adversely affect our business
and could impact our recruitment of new independent sales representatives.
Like many other companies with large independent sales organizations, we have written agreements with
independent sales representatives that define the contractual terms of the relationships both during and
after their affiliations with the Company. From time to time, current and former independent sales
representatives violate these agreements, and the Company takes steps to enforce them. If former or
current independent sales representatives are successful in legally challenging our written agreements,
then our business could be adversely impacted.
Furthermore, if we or any other businesses with a similar distribution structure engage in practices
resulting in increased negative public attention for our business model, the resulting reputational
challenges could adversely affect our ability to attract new recruits. Companies such as ours that distribute
through independent agents to sell directly to customers have been and may continue to be the subject
of negative commentary on website postings, social media and other media. This negative commentary
can spread inaccurate or incomplete information about distribution companies in general or the Company
in particular, which can make our recruiting more difficult.
From time to time, various jurisdictions make changes to the state or provincial licensing examination
process that may make it more difficult for independent sales representatives to obtain or retain their life
insurance and/or securities licenses. For example, the Financial Industry Regulatory Authority (“FINRA”)
has changed the continuing education (“CE”) regulatory requirement from a three-year period to an
36
ITEM 1A. RISK FACTORS
annual requirement for securities-licensed representatives. In addition, the North American Securities
Administrators Association approved a model rule for participating states that imposes a CE requirement
for investment adviser representatives. Such changes place an increased burden on representatives to
maintain their securities licenses, which could negatively impact the size of the active securities sales force
in the event that representatives do not complete the applicable CE requirements on a timely basis.
A number of laws and regulations could apply to our independent contractor distribution
model, which could require us to modify our distribution structure.
We have not been, and are not currently, subject to business opportunity laws because the amounts paid
by the new independent sales representatives to us: (i) are less than the minimum thresholds set by many
state statutes and (ii) are not fees paid for the right to participate in a business, but rather are for bona
fide expenses such as state-required insurance examinations and pre-licensing training. We have not
been, and are not currently, subject to franchise laws for similar reasons. However, there is a risk that a
governmental agency or court could disagree with our assessment or that these laws and regulations
could change. In addition, we do not believe that the Federal Trade Commission’s (“FTC”) current Business
Opportunity Rule applies to the Company. January 13, 2025, the FTC announced proposed amendments
to the Business Opportunity Rule that would expand the rule but also would exempt models like ours
from its scope. Nonetheless, the rule ultimately could be amended or interpreted in a manner inconsistent
with our current interpretation. Becoming subject to business opportunity or franchise laws or regulations
could require us to provide additional disclosures and regulate the manner in which we recruit
independent sales representatives that may increase the expense of, or adversely impact our recruitment
of, new independent sales representatives.
There are various laws and regulations, including laws of general application such as the Federal Trade
Commission Act (“FTC Act”), which prohibit fraudulent or deceptive practices, including but not limited to,
pyramid schemes and misrepresentations regarding distributors’ earnings potential. On January 13, 2025,
the FTC announced a proposed Earnings Claims Rule Regarding Multi-Level Marketing with an embedded
Advance Notice of Proposed Rulemaking regarding earnings claims. Likewise, the FTC has exercised its
Penalty Offense Authority found in Section 5(m)1(B) of the FTC Act by issuing Notices of Penalty Offenses
as a reminder of the law on earnings claims and as a deterrence against violations. The application of
these laws and regulations to a given set of business practices is inherently fact-based and, therefore, is
subject to interpretation by applicable enforcement authorities. Although we believe that our business
practices comply with applicable laws and regulations, there is a risk that a governmental agency or court
could disagree with our assessment, or that these laws and regulations could change in actuality or in
application, which could require us to restructure our operations or result in regulatory fines, penalties or
other costs, or reputational harm, or could otherwise adversely affect our business, financial condition and
results of operations. Additionally, if an earnings claims rule like that proposed by the FTC were to
become final, it could have an adverse impact on our recruitment and sales.
Various unfair and deceptive trade practices laws and regulations could potentially be invoked to
challenge aspects of our recruiting of independent sales representatives. In particular, we and the
independent sales representatives use promotional materials in recruiting that describe the potential
business opportunity of becoming an independent sales representative and information with respect to
earnings and lifestyle statements. These materials and statements made by us or the independent sales
representatives may be deemed to be unfair, deceptive, or misleading under the FTC Act or other federal,
state and provincial laws or regulations and could result in regulatory fines, penalties or other costs, or
reputational harm. Being out of compliance with the aforementioned laws and regulations could require
Primerica 2024 Annual Report
37
ITEM 1A. RISK FACTORS
changes to the recruiting of independent sales representatives, which could have a materially adverse
effect on our business, financial condition and results of operations.
There may be adverse tax, legal or financial consequences if the classification of the
independent contractor sales representatives is changed.
Sales representatives are independent contractors who operate their own businesses. Although we believe
that we have properly classified these sales representatives as independent contractors, there is a risk that
the Internal Revenue Service (“IRS”), the Department of Labor (“DOL”), the Canada Revenue Agency, a
court or other authority will take a different view. Furthermore, the tests governing the determination of
whether an individual is considered to be an independent contractor or an employee are fact-sensitive
and vary from jurisdiction to jurisdiction. Laws and regulations that govern the status and classification of
independent sales representatives are subject to change or interpretation.
The classification of workers as independent contractors continues to be the subject of increasing federal,
state and provincial legislative, regulatory and judicial interest. Legislative and regulatory proposals have
been introduced by federal and state authorities, and judicial decisions have been made, that call for or
result in greater scrutiny of independent contractor classifications. In January 2024, the DOL, issued a final
rule interpreting the “economic realities” worker classification standard applicable to the Fair Labor
Standards Act. The DOL’s interpretation generally aligns with legal precedent, relying on an analysis of six
typical factors indicating worker status and taking into account the “totality of the circumstances”. Other
federal and state legislative and regulatory proposals regarding worker classification have also come
under consideration. It is difficult to predict what the outcome of worker classification activity may be.
Changes to worker classifications could have a material adverse impact on our business, financial
condition and results of operations because sales representatives are independent contractors.
If there is an adverse determination with respect to the classification of some or all of the independent
contractors by a court or governmental agency, we could incur significant costs complying with such laws
and regulations, including tax withholding, social security payments, retirement plan contributions and
recordkeeping, employee benefits, payment of wages or modification of our business model, any of which
could have a material adverse effect on our business, financial condition and results of operations. In
addition, there is the risk that we may be subject to significant monetary liabilities arising from fines or
judgments as a result of any such actual or alleged non-compliance with federal, state, or provincial laws.
The Company’s or the independent sales representatives’ violation of, or non-compliance
with, laws and regulations and related claims and proceedings could expose us to material
liabilities.
Extensive federal, state, provincial and territorial laws regulate our product offerings, imposing certain
requirements that independent sales representatives must follow in dealing with clients. Instances of non-
compliance or violations on the part of the independent sales representatives could have a material
adverse effect on our business, financial condition and results of operations.
In addition to imposing requirements on independent sales representatives when dealing with clients,
federal, state, provincial and territorial laws and regulations generally require us to maintain a system of
controls and supervision reasonably designed to ensure that independent sales representatives comply
with the requirements to which they are subject. We have policies and procedures to comply with these
laws and regulations. Further, at any given time, we may have pending state, federal or provincial
38
ITEM 1A. RISK FACTORS
examinations or inquiries of our investment and savings products, insurance, mortgage, and other
businesses. However, despite these compliance and supervisory efforts, the breadth of our operations and
the broad regulatory requirements could result in oversight failures and instances of non-compliance or
violations on the part of the Company or independent sales representatives.
From time to time, we are subject to private litigation as a result of alleged misconduct by independent
sales representatives. Non-compliance with or violations of laws or regulations could result in adverse
findings in either examinations or litigation and could subject us to sanctions, monetary liabilities,
restrictions on or the loss of the operation of our business, or reputational harm, any of which could have
a material adverse effect on our business, financial condition and results of operations.
Risks Related to Our Insurance Business and Reinsurance
Our life insurance business may face significant losses or volatility if our actual experience
differs from our expectations regarding mortality, persistency, disability or reinsurance.
We set prices for life insurance policies based upon expected claim payment patterns derived from
assumptions we make about the mortality rates, or likelihood of death, of our policyholders in any given
year. The long-term profitability of these products depends upon how our actual mortality rates compare
to our pricing assumptions. For example, if mortality rates are higher than those assumed in our pricing
assumptions, we could be required to make more death benefit payments under our life insurance
policies or to make such payments sooner than we had projected, which may decrease the profitability of
our term life insurance products.
The prices and expected future profitability of our life insurance products are also based, in part, upon
assumptions related to persistency. Actual persistency that is lower than our persistency assumptions
could have an adverse effect on profitability, especially in the early years of a policy, primarily because we
may not collect sufficient revenue to cover our acquisition costs. Actual persistency that is higher than our
persistency assumptions could have an adverse effect on profitability in the later years of a block of
policies because the anticipated claims experience is higher in these later years. We are precluded from
adjusting premiums on our in-force business during the initial term of the policies, and our ability to
adjust premiums on in-force business after the initial policy term is limited to the maximum premium
rates in the policy.
Our profitability is also affected by the extent actual disability rates underlying our waiver benefits,
including recovery rates for individuals currently disabled, differ from actuarial assumptions. The waiver
benefit is secondary to the death benefit coverage provided. However, the waiver benefit is not reinsured
and material changes in assumptions compared to expectations can have a disproportionate impact on
our financial results.
We reinsure 80-90% of our mortality risk. Interest in reinsuring our mortality risk could diminish if there is
increased volatility in the reinsurance market and/or a change in the perceived value of reinsuring
Primerica’s business. As a result, in the future we may not be able to access reinsurance on new business
and we could be forced to reinsure a smaller percentage of our mortality risk or the same percentage but
at higher costs much greater than we have historically paid.
Our life insurance business is highly regulated, and statutory and regulatory changes may
materially adversely affect our business, financial condition and results of operations.
Life insurance statutes and regulations are generally designed to protect the interests of the public and
policyholders. Those interests may conflict with the interests of our stockholders. Currently, in the United
Primerica 2024 Annual Report
39
ITEM 1A. RISK FACTORS
States, the power to regulate insurance resides almost exclusively with the states, which grant state
insurance regulators broad powers to regulate almost all aspects of our insurance business. Much of this
state regulation follows model statutes or regulations developed or amended by the National Association
of Insurance Commissioners (“NAIC”), which is composed of the insurance commissioners of each U.S.
jurisdiction. The NAIC re-examines and amends existing model laws and regulations (including holding
company regulations), in addition to determining whether new ones are needed.
The Federal Insurance Office is authorized to, among other things, study methods to modernize and
improve insurance regulation. We cannot predict with certainty whether, or in what form, reforms will be
enacted and, if so, whether the enacted reforms will materially affect our business. Changes in federal
statutes, financial services regulation and federal taxation, in addition to changes to state statutes and
regulations, may be more restrictive than current requirements or may result in higher costs, and could
materially adversely affect our business, financial condition and results of operations.
Most U.S. states have adopted, and others are proposing to adopt, NAIC-approved rules requiring
insurance producers to act in the “best interest” of consumers when recommending an annuity. In
addition, the New York Department of Financial Services as amended its “best interest” rules that apply to
both life insurance and annuities. These rules impose a higher standard of care than previously required,
as well as enhanced disclosures and other obligations with respect to recommendations, which may
increase our regulatory or litigation risk.
Federal and provincial insurance laws regulate all aspects of our Canadian insurance business. Changes to
federal or provincial statutes and regulations may be more restrictive than current requirements or may
result in higher costs, which could materially adversely affect our business, financial condition and results
of operations. If the Office of the Superintendent of Financial Institutions (“OSFI”) determines that our
corporate actions do not comply with applicable Canadian law, Primerica Life Insurance Company of
Canada (“Primerica Life Canada”) could face sanctions or fines, and be subject to increased capital
requirements or other requirements.
The Minister of Finance (Canada) approved our indirect acquisition of Primerica Life Canada in 2010 with
the expectation that we will provide ongoing financial, managerial or operational support to this
subsidiary as necessary. If OSFI determines Primerica Life Canada is not receiving adequate support from
the Parent Company under applicable Canadian law, Primerica Life Canada may be subject to increased
capital requirements or other requirements deemed appropriate by OSFI.
If there are extraordinary changes to U.S. or Canadian statutory or regulatory requirements, we may be
unable to fully comply with or maintain all required insurance licenses and approvals. As a result, the
regulatory authorities could preclude or temporarily suspend us from conducting some or all of our
insurance activities or impose fines or penalties on us, which could materially adversely affect our
business, financial condition and results of operations. We cannot predict with certainty the effect any
proposed or future legislation or regulatory initiatives may have on the conduct of our business.
A decline in the regulatory capital ratios of our insurance subsidiaries could result in
increased scrutiny by insurance regulators and ratings agencies and have a material adverse
effect on our business, financial condition and results of operations.
Each of our U.S. insurance subsidiaries is subject to Risk-Based Capital (“RBC”) standards (imposed under
the laws of its respective jurisdiction of domicile). The RBC formula for U.S. life insurance companies
generally establishes capital requirements relating to asset, insurance, interest rate and business risks. Our
U.S. insurance subsidiaries are required to report RBC calculations annually to the applicable state
40
ITEM 1A. RISK FACTORS
department of insurance and the NAIC. Our Canadian life insurance subsidiary is subject to the Life
Insurance Capital Adequacy Test Guideline (“LICAT”) and is required to provide its capital ratio calculations
to the Canadian regulators. The capitalization of our insurance subsidiaries is maintained at levels in
excess of the effective minimum requirements of the NAIC in the United States and OSFI in Canada. In any
particular year, statutory capital and surplus amounts and RBC and LICAT ratios may increase or decrease
depending on a variety of factors, many of which are outside of our control.
Our financial strength and credit ratings are significantly influenced by the statutory surplus amounts and
RBC and LICAT ratios of our insurance company subsidiaries. Ratings agencies may change their internal
models, effectively increasing or decreasing the amount of statutory capital our insurance subsidiaries
must hold to maintain their current ratings. Ratings agencies also may downgrade the ratings of securities
held in our insurance subsidiaries’ portfolios, which could result in a reduction of our insurance
subsidiaries’ statutory capital and surplus and RBC. Our insurance subsidiaries may need additional capital
and, if needed, we may not be able to provide it to maintain the targeted RBC and LICAT levels to support
their business operations, either of which may impact our financial strength and credit ratings.
The failure of any of our insurance subsidiaries to meet its applicable RBC and LICAT requirements or
minimum capital and surplus requirements could subject it to further examination or corrective action
imposed by insurance regulators, including limitations on its ability to write additional business,
supervision by regulators or seizure or liquidation. Any corrective action imposed could have a material
adverse effect on our business, financial condition and results of operations. A decline in RBC or LICAT
also limits the ability of our insurance subsidiaries to pay dividends or make distributions and could be a
factor in causing ratings agencies to downgrade the financial strength ratings of our insurance
subsidiaries. Such downgrades would have an adverse effect on our ability to write new insurance policies
and, therefore, could have a material adverse effect on our business, financial condition and results of
operations.
A significant ratings downgrade by a ratings organization could materially adversely affect
our business, financial condition and results of operations.
Each of our non-captive life insurance subsidiaries has been assigned a financial strength rating by A.M.
Best. Primerica Life currently also has an insurer financial strength rating from each of Standard & Poor’s
(“S&P”) and Moody’s.
The financial strength ratings of our rated insurance subsidiaries are subject to periodic review using,
among other things, the ratings agencies’ proprietary capital adequacy models and are subject to revision
or withdrawal at any time. Insurance financial strength ratings are directed toward the concerns of
policyholders and are not intended for the protection of stockholders or as a recommendation to buy,
hold or sell securities. Our financial strength ratings will affect our competitive position relative to other
insurance companies. If the financial strength ratings of our insurance subsidiaries fall below certain levels,
some of our policyholders may move their business to our competitors. In addition, the models used by
ratings agencies to determine financial strength are different from the capital requirements set by
insurance regulators.
Ratings organizations review the financial performance and financial conditions of insurance companies
and provide opinions regarding financial strength, operating performance and ability to meet obligations
to policyholders. A significant downgrade in the financial strength ratings of any of our insurance
subsidiaries, or the announced potential for a downgrade, could have a material adverse effect on our
business, financial condition and results of operations.
Primerica 2024 Annual Report
41
ITEM 1A. RISK FACTORS
If the rating agencies or regulators change their approach to financial strength ratings and statutory
capital requirements, we may need to take action to maintain current ratings and capital adequacy ratios,
which could have a material adverse effect on our business, financial condition and results of operations.
The Parent Company currently has investment grade credit ratings from S&P, Moody’s, and A.M. Best.
These ratings are indicators of a debt issuer’s ability to meet the terms of debt obligations and are
important factors in its ability to access liquidity in the debt markets. A rating downgrade by a rating
agency can occur at any time if the rating agency perceives an adverse change in our financial condition,
results of operations or ability to service debt. If such a downgrade occurs, it could have a material
adverse effect on our financial condition and results of operations in many ways, including adversely
limiting our access to capital in the unsecured debt market and potentially increasing the cost of such
debt.
The failure by any of our reinsurers or reserve financing counterparties to perform its
obligations to us could have a material adverse effect on our business, financial condition and
results of operations.
We rely on a limited number of reinsurers in the United States and Canada to diversify our risk and to
manage our loss exposure to mortality risk. Reinsurance does not relieve us of our direct liability to our
policyholders, even when the reinsurer is liable to us. We, as the insurer, are required to pay the full
amount of death benefits even in circumstances where we are entitled to receive payments from the
reinsurer. Our reinsurers may be unable to pay the amounts they owe us on a timely basis or at all.
Further, reinsurers might refuse or fail to pay losses that we cede to them or might delay payment. Since
death benefit claims may be paid long after a policy is issued, we bear credit risk with respect to our
reinsurers. The creditworthiness of our reinsurers may change before we can recover amounts to which we
are entitled. Any such failure to pay by our reinsurers could have a material adverse effect on our
business, financial condition and results of operations.
We also have in place coinsurance agreements that we originally entered into at the time of our initial
public offering (the “IPO”) in 2010, pursuant to which we ceded between 80% and 90% of the risks and
rewards of our term life insurance policies that were in force at year-end 2009. Under this arrangement,
our existing reinsurance agreements remain in place. Each coinsurer entered into trust agreements with
our respective insurance subsidiaries and a trustee pursuant to which the coinsurer placed assets
(primarily treasury and fixed-income securities) in trust for such subsidiary’s benefit to secure the
coinsurer’s obligations to such subsidiary. Each such coinsurance agreement requires the relevant
coinsurer to maintain assets in trust, the amount of which will not be less than the amount of the statutory
reserves for the coinsured liabilities. In Canada, the IPO coinsurer must hold pledged assets in an amount
sufficient for us to take credit for reinsurance in a Canadian financial institution, not affiliated with the IPO
coinsurer. Our Canadian insurance company has an enforceable security interest that has priority over any
other security interest for the pledged assets. Furthermore, our insurance subsidiaries have the right to
recapture the business upon the occurrence of an event of default under their respective coinsurance
agreement subject to any applicable cure periods. While any such recapture would be at no cost to us,
such recapture would result in a substantial increase in our insurance exposure and require us to be fully
responsible for the management of the assets set aside to support statutory reserves. The type of assets
we might obtain as a result of a recapture may not be as liquid as our current invested asset portfolio and
could result in an unfavorable impact on our risk profile.
There is no assurance that the relevant coinsurer will pay the coinsurance obligations owed to us now or
in the future or that it will pay these obligations on a timely basis. If any of the coinsurers becomes
insolvent and the trust account to support the obligations of such coinsurer is insufficient to pay such
42
ITEM 1A. RISK FACTORS
coinsurer’s obligations to us and we fail to enforce our right to recapture the business, it could have a
material adverse effect on our business, financial condition and results of operations.
We finance redundant statutory reserves of certain issue years of our term life insurance business. Under
this transaction, we pay a fee to a financial counterparty for its commitment to support redundant
reserves and provide corresponding statutory reinsurance credit, allowing us to more efficiently manage
our capital. If the financial strength of this counterparty was significantly impaired to the extent that its
support of our redundant reserves could no longer be relied upon, it could have a material adverse effect
on our business, financial condition, and results of operations.
Risks Related to Our Investment and Savings Products Business
Our Investment and Savings Products segment is heavily dependent on a limited platform of
mutual fund and annuity products offered by a relatively small number of companies and
managers. If these products fail to remain competitive with other investment options, our
business, financial condition and results of operations could be materially adversely affected.
We offer mutual funds and annuities through our U.S. retail broker-dealer, but not exchange traded funds,
individual stocks and bonds, or alternative investments. Our advisory program in the U.S. offers a wider
menu of investment types; however, fewer of the independent sales representatives are eligible to offer
the program. Our current investment products in Canada consist of two families of mutual funds that
include a diversified offering of equity, fixed-income and money market funds. Because of these
limitations, our business could be materially adversely impacted if consumer demand were to shift toward
products we do not offer. In addition, if any of our investment and savings products fail to achieve
satisfactory investment performance, our clients may seek higher yielding or lower cost investment
options, and we could experience higher redemption rates.
If our relationship with one or more of the manufacturers of the funds and annuities we
distribute or investment managers we make available is significantly altered or terminated or
there is a shift in the business mix, our business, financial condition and results of operations
could be materially adversely affected.
We receive revenue and other marketing and support fees from the manufacturers of the investment and
savings products we distribute and the investment managers we make available. We earn a significant
portion of our earnings through our relationships with a small group of mutual fund and annuity
companies. A decision by one or more of these companies to alter or discontinue their current
arrangements or product offerings with us, or a change in law or regulation that compels us to alter or
discontinue such arrangements, could materially adversely affect our business, financial condition and
results of operations.
In addition, we derive a growing portion of our earnings through our asset-based advisory platform. A
shift in the business mix of new investments across our products and platforms could materially impact
cash flows to our business, financial condition and results of operations.
In addition to sales commissions and asset-based compensation, a portion of our earnings from
investment and savings products comes from recordkeeping services that we provide to mutual fund
companies and from fees earned for custodial services that we provide to clients with retirement plan
accounts in the funds of these mutual fund companies.
Primerica 2024 Annual Report
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ITEM 1A. RISK FACTORS
A decision by one or more of our fund companies, annuities companies, or managers to alter or
discontinue their current arrangements with us, or a change in law or regulation that compels us to alter
or discontinue such arrangements, would materially adversely affect our business, financial condition and
results of operations.
The Company’s or the securities-licensed independent sales representatives’ violations of, or
non-compliance with, laws and regulations of the securities business could expose us to
material liabilities.
Our subsidiary broker-dealers, Primerica Brokerage Services, Inc. (“PBSI”) and PFS Investments Inc. (“PFS
Investments”), and the independent sales representatives, are subject to federal and state regulation of
the securities business. PFS Investments is additionally a registered investment adviser and its investment
adviser representatives likewise are held to a high standard of conduct. Our subsidiary, Primerica
Shareholder Services, Inc. (“PSS”), is a registered transfer agent engaged in the recordkeeping business
and is subject to regulation by the Securities and Exchange Commission (“SEC”). Violations of, or non-
compliance with, laws or regulations applicable to the activities of PFS Investments or PSS, or violations by
a third party with which PFS Investments or PSS contracts, could subject us to regulatory actions and/or
litigation. Such events could result in the imposition of cease and desist orders, fines or censures,
restitution to clients, suspension or revocation of SEC registration, suspension or expulsion from FINRA,
reputational damage and legal expense, any of which could materially adversely affect our business,
financial condition and results of operations.
Our Canadian broker-dealer subsidiary, PFSL Investments Canada and the independent sales
representatives are subject to the securities laws of the provinces and territories of Canada in which we
sell our mutual fund products and to the rules of the Canadian Investment Regulatory Organization
(“CIRO”), the self-regulatory organization governing mutual fund dealers (except in the province of
Quebec, the Autorité des Marchés Financiers (“AMF”)). PFSL Investments Canada is subject to periodic
review by both the CIRO and the provincial and territorial securities commissions to assess its compliance
with, among other things, applicable capital requirements and sales practices and procedures. These
regulators have broad administrative powers and may impose sanctions that could materially adversely
affect our business, financial condition and results of operations.
If heightened standards of conduct are imposed on us or the independent sales
representatives by federal, state or provincial authorities, or selling compensation is reduced
as a result of new legislation or regulations, it could have a material adverse effect on our
business, financial condition and results of operations.
The U.S. independent sales representatives are subject to federal and state regulation as well as state
licensing requirements. PFS Investments, which is regulated as a broker-dealer and registered investment
adviser, and U.S. independent sales representatives are currently subject to general anti-fraud limitations
under the Securities Exchange Act of 1934, as amended, the Investment Advisers Act of 1940 (the
“Investment Advisers Act”) and SEC rules and regulations, as well as other conduct standards prescribed
by the FINRA. These standards generally require that broker-dealers, investment advisers, and their sales
representatives disclose and mitigate conflicts of interest that might affect the advice or
recommendations they provide and require them to make investment recommendations in the best
interest of customers. In 2019, the SEC adopted rules addressing the standards of conduct applicable to
broker-dealers and their associated persons (collectively, “Reg BI”). Among other things, Reg BI created a
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ITEM 1A. RISK FACTORS
“best interest” standard of conduct similar to the fiduciary standard applicable to investment advisers. In
2020, the DOL issued PTE 2020-02, an exemption for the retention of compensation by a fiduciary. In
October 2023, the DOL proposed a new definition to determine fiduciary status and proposed
amendments to PTE 2020-02, among other proposals. Reg BI and the DOL regulations impose higher
standards of care and enhanced obligations that increase regulatory and litigation risk to our business.
In addition to federal regulators, certain states have proposed or passed laws or proposed or issued
regulations requiring investment advisers, broker-dealers, and/or insurance agents to meet fiduciary
standards or standards of care that their advice be in the customer’s best interest, and to mitigate and
disclose conflicts of interest to consumers of investment and insurance products. The severity of the
impact that such state laws or regulations could have on our business vary from state to state depending
on the content of the legislation or regulation and how it would be applied by state regulators and
interpreted by the courts. Therefore, such laws or regulations could disrupt our brokerage business in the
relevant state. We cannot quantify the financial impact, if any, of any changes to our business that may be
necessary in order to comply with such laws or regulations at this time.
The organization of provincial and territorial securities regulators (collectively referred to as the Canadian
Securities Administrators (“CSA”)) implemented rule amendments that prohibit up-front sales
commissions by fund companies for the sale of mutual funds offered under a prospectus in Canada (the
“DSC Ban”), effective June 1, 2022. During 2022, in response to the DSC Ban, we began to offer through
the independent sales representatives, a unique and exclusive range of funds under Principal Distributor
agreements (the “PD Funds”) with two third-party mutual fund companies (the “Principal Distributor
model”).
While we received regulatory approval for the Principal Distributor model, we were advised at the time of
approval that the CSA intends to closely re-examine the Principal Distributor provisions of National
Instrument 81-105, through a public Request for Comment that was released on November 28, 2024. The
Request for Comment proposes banning multiple fund manager relationships with one principal
distributor, an arrangement we have in our Canadian mutual fund business. If this proposal is adopted
and we are not granted an exemption, then we could be required to restructure our Principal Distributor
model for the sale of mutual funds, or discontinue use, which could have a material adverse effect on our
investment advisory business in Canada.
The Canadian Council of Insurance Regulators mandated a cessation of deferred sales charges on
segregated fund contracts entered into after May 31, 2023. Deferred sales charges will continue to be
allowed on subsequent deposits of existing segregated funds contracts for a period of time; however,
insurance regulators will be further evaluating whether to allow its continued use. As we anticipated, we
experienced a decline in segregated funds product sales beginning in June 2023. We expect to begin
distributing segregated funds on behalf of a third party in 2025 which could be negatively impacted if
there is further regulation on allowable segregated funds compensation practices and could have a
further material adverse effect on Primerica Life Canada’s investment and savings products business.
Heightened standards of conduct or restrictions on compensation as a result of any of the above items or
other similar proposed rules or regulations could also increase the compliance and regulatory burdens on
the independent sales representatives and could lead to increased litigation and regulatory risks, changes
to our business model, a decrease in the number of licensed independent sales representatives and a
reduction in the products we offer to our clients, any of which could have a material adverse effect on our
business, financial condition and results of operations.
Primerica 2024 Annual Report
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ITEM 1A. RISK FACTORS
If our suitability policies and procedures, or our policies and procedures for compliance with
federal, state or provincial regulations governing standards of care, were deemed
inadequate, it could have a material adverse effect on our business, financial condition and
results of operations.
We review the account applications that we receive for our investment and savings products for
suitability, for compliance with Reg BI, the Investment Advisers Act, the DOL regulations, in Canada the
Fair Treatment of Customers and the Client Focused Reforms, and for compliance with other federal, state
or provincial regulations governing standards of care, as applicable. We believe that the policies and
procedures we implement to help independent sales representatives assist clients in making investment
choices are reasonably designed to achieve compliance with applicable securities laws and regulations
and to satisfy other applicable federal, state, and provincial standards of care. Nonetheless, it is possible
that the SEC, FINRA, the DOL, the IRS, state securities and insurance regulators, CIRO or AMF may not
agree. Further, we could be subject to regulatory actions or private litigation, which could materially
adversely affect our business, financial condition and results of operations.
The support tools we make available to the independent sales force are designed to educate potential
and existing clients, help identify their financial needs, generally introduce the potential benefits of our
product offerings, and identify suitable investment products. The tools themselves or the assumptions and
methods of analyses embedded in them could be challenged and subject us to regulatory action by the
SEC, the DOL, FINRA or other regulators, or private litigation, which could materially adversely affect our
business, financial condition and results of operations.
Non-compliance with applicable regulations could lead to revocation of our subsidiary’s
status as a non-bank custodian, which could have a material adverse effect on our business,
financial condition and results of operations.
PFS Investments is a non-bank custodian of retirement accounts, as permitted under Treasury Regulation
1.408-2. A non-bank custodian is an entity that is not a bank and that is permitted by the IRS to act as a
custodian for retirement plan account assets of our clients. The IRS retains authority to revoke or suspend
that status if it finds that PFS Investments is unwilling or unable to administer retirement accounts in a
manner consistent with the requirements of the applicable regulations. Revocation of PFS Investments’
non-bank custodian status would affect its ability to earn revenue for providing such services and,
consequently, could materially adversely affect our business, financial condition and results of operations.
Risks Related to Our Mortgage Brokerage Business
Licensing requirements will impact the size of the mortgage loan sales force, which could
adversely affect our mortgage brokerage business.
To offer mortgage loan products, independent sales representatives must be individually licensed as
mortgage loan originators by the states in which they do business and, in some states, they must also be
individually licensed as mortgage brokers. These licensing requirements include enrollment in the
Nationwide Multistate Licensing System, application to state regulators for individual licenses, a minimum
of 20 hours of pre-licensing education, an annual minimum of eight hours of CE, and the successful
completion of both national and state tests or a national test with uniform state content. Compliance with
these licensing regimes (including background and credit checks) have proven to be a barrier for many
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ITEM 1A. RISK FACTORS
independent sales representatives. In addition, the tests have historically been challenging for the
independent sales representatives to pass. Primerica Mortgage, LLC (“Primerica Mortgage”) must also be
licensed at the company level as a mortgage broker (or equivalent) and, in almost all states,
representatives’ offices must be licensed as branch offices. To offer mortgage loans in a state,
independent sales representatives, offices, and Primerica Mortgage must be licensed as required by state
law. These licenses must be renewed on an annual basis. Failure of independent sales representatives to
obtain the required licenses and comply with ongoing licensing requirements would adversely affect the
size of the mortgage loan sales force, which could adversely affect our mortgage brokerage business.
Our mortgage brokerage business is highly regulated and subject to various federal, state
and provincial laws and regulations in the U.S. and Canada. Changes in, non-compliance
with, or violations of, such laws and regulations could affect the cost or our ability to
distribute our products and could adversely affect our business, financial condition and
results of operations.
Our U.S. mortgage brokerage business is subject to a wide array of laws at the federal, state, and local
levels. It is regulated by federal, state and local regulators, including the Consumer Financial Protection
Bureau, state mortgage and licensing regulators, state attorneys general, state and local consumer
protection offices, the FTC, the Department of Housing and Urban Development, and the Department of
Justice, which have the authority to examine, supervise, investigate, and enforce applicable laws,
regulations and policies. Federal law and regulations impose prohibitions and restrictions on the manner
and amount of compensation paid in connection with a mortgage loan transaction and establish a federal
ability to repay standard for all mortgage loans. Other laws could have the effect of limiting the
availability of certain loan products in the market and adversely impact the range of products offered and
the volume of loan business.
Additionally, we must comply with various state and local laws and policies concerning the lender,
compensation, fair lending, supervision, the provision of consumer disclosures, net branching, predatory
lending and high cost loans and recordkeeping. Differing interpretations of, changes in, or violations of,
any of these laws or regulations could subject us to damages, fines, or sanctions and could affect the cost
or our ability to distribute our products, which could materially adversely affect our business, financial
condition, and results of operations. Remediation for noncompliance with federal, state or local laws could
be costly and significant fines may be incurred. Failure to comply with applicable laws could result in
potential litigation liability. Further, the lender must comply with applicable federal, state, and local laws
and regulations, and any noncompliance by such lender may adversely impact our U.S. mortgage
brokerage business.
In Canada, independent sales representatives offer mortgage loans on a referral basis only. Various
provincial mortgage brokerage laws strictly prescribe the requirements applicable to a mortgage referral
program in order for individuals who make the referrals to be exempt from the requirement to be licensed
as mortgage brokers. Differing interpretations of, changes in, or violations of, any of the applicable
exemptions under mortgage brokerage laws could subject us to damages, fines or sanctions and could
have a material adverse effect on our ability to offer mortgage loan referrals in Canada. In addition,
independent sales representatives selling mutual funds must comply with the disclosure requirements of
CIRO and applicable securities laws governing mortgage referral arrangements. Failure to comply with
such disclosure requirements could result in regulatory sanctions, which could have an adverse effect on
our ability to offer mortgage loan referrals in Canada.
Primerica 2024 Annual Report
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ITEM 1A. RISK FACTORS
In the United States, we broker mortgage loans based on contractual agreements with a very
limited number of mortgage lenders. A significant change to or disruption in the mortgage
lenders’ mortgage businesses or an inability of the mortgage lenders to satisfy their
contractual obligations to us could adversely affect our business, financial condition and
results of operations.
Through a contractual agreement with Rocket Mortgage, LLC, Primerica Mortgage offers mortgage loans
through the independent sales representatives who are licensed as mortgage loan originators. Primerica
Mortgage also offers, through its mortgage loan originators, second mortgages and home equity lines of
credit based on a contractual agreement with Spring EQ LLC. A significant change to or disruption in the
lenders’ businesses or their inability to satisfy their contractual obligations to Primerica Mortgage could
have an adverse impact on our business, financial condition and results of operations.
Our U.S. mortgage brokerage business is impacted by U.S. mortgage interest rates. Changes
in prevailing mortgage interest rates or U.S. monetary policies that affect mortgage interest
rates could adversely affect our business, financial condition and results of operations.
The U.S. Federal Reserve, which serves as the primary driver of U.S. monetary policies impacting mortgage
interest rates, implemented multiple interest rate increases over recent years to address continued
elevated inflation. Elevated mortgage interest rates lowered the demand for refinance mortgages and
purchase-money mortgages offered by Primerica Mortgage. Continued elevated mortgage interest rates
could continue to impact consumer demand for refinance mortgages and purchase-money mortgages,
which could have an adverse impact on our mortgage brokerage business in the U.S.
Risks Related to Economic Downcycles, Public Health Crises or Catastrophes, and
Disasters
The effects of economic downcycles, issues affecting the national, regional and/or global
economy or geopolitical event(s), or any combination thereof, could impact the cost of living
for our middle-income clients and could materially adversely affect our business, financial
condition and results of operations.
Our business, financial condition and results of operations may be materially adversely affected by
economic downturns in the United States and Canada, as well as issues in the national, regional and/or
global economy such as elevated inflation resulting in a higher cost of living that may have repercussions
on our markets. Economic downturns can result from a multitude of reasons and are often characterized
by conditions such as elevated inflation and higher cost of living, declines in capital markets, higher
unemployment, lower household income, lower valuation of retirement savings accounts, lower corporate
earnings, lower business investment and/or lower consumer spending. These conditions can impact the
disposable income of middle-income consumers, which can influence their spending and investment
decisions. With respect to our term life insurance business, we may continue to experience an elevated
incidence of lapses or surrenders of term life insurance policies, which adversely impacts the amount of
insurance premiums we collect. Consumer spending and borrowing levels affect how consumers evaluate
their savings and debt management plans. In 2024, interest rates, equity market returns and our
customers’ perception of the strength of the capital markets continued to impact consumer demand for
the savings and investment products we distribute. Elevated interest rates relative to the performance of
the equity markets and the perceived attractiveness of investing in equity markets versus other
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ITEM 1A. RISK FACTORS
investments, such as U.S. Treasury bills and money market funds, could adversely impact consumer
demand for the mutual funds, annuities, and managed accounts we distribute. Continued elevated
producer prices have caused and may continue to cause higher labor costs and increased vendor and
supplier costs. Economic conditions, including continued elevated producer prices have impacted and
may continue to impact prospective recruits’ perceptions of the business opportunity that becoming an
independent sales representative offers, which can drive or dampen recruiting.
Our investment and savings products business is sensitive to the performance of the equity markets. A
protracted long-term downturn in equity market performance brought about by an economic downturn
and/or geopolitical event(s) could adversely affect new sales and cause clients to liquidate mutual funds
and other investments sold by independent sales representatives. This could cause a decrease in the asset
value of client accounts which reduce our trailing commission revenues. Further, volatility or downturns in
equity markets could dampen purchases of the investment products that we distribute and could have a
material adverse effect on our business, including our ability to recruit and retain independent sales
representatives. In addition, disruptions in credit markets caused by an economic downturn could result in
a decline in the fair value of our fixed-maturity invested asset portfolio as well as increased credit losses
on these invested assets.
Major public health pandemics, epidemics or outbreaks (such as the COVID-19 pandemic) or
other catastrophic events, have impacted and could again materially adversely impact our
business, financial condition and results of operations.
Our operations are exposed to the risk of major public health pandemics, epidemics or outbreaks (a
“major public health crisis”), such as the COVID-19 pandemic, or other catastrophic events (“catastrophic
events”), which, among other things, has caused and could again cause a large number of premature
deaths of our insureds. Although we have ceded a significant majority of our mortality risk to reinsurers, a
major public health crisis or catastrophic event could cause: (i) substantial volatility in our financial results
for a period of time; (ii) material harm to the financial condition of our reinsurers; (iii) increases in the
probability of default on reinsurance recoveries; (iv) decreases in the availability of reinsurance on new
business; or (v) increases in reinsurance costs on new business and/or rates during the post-level term
period. In addition, most of the jurisdictions in which our insurance subsidiaries are licensed to transact
business require life insurers to participate in guaranty associations, which raise funds to pay contractual
benefits owed pursuant to insurance policies issued by impaired, insolvent or failed issuers. A major public
health crisis or catastrophic event could require extraordinary assessments on our insurance companies,
which could have a material adverse effect on our business, financial condition and results of operations.
A major public health crisis or catastrophic event has impacted and could again negatively impact our
ability to attract new recruits, train and license the independent sales force, and incentivize the
independent sales force to sell our products. If a significant number of independent sales representatives
were to be impacted by a major public health crisis or catastrophic event, it could have a material adverse
effect on recruiting, licensing, and our ability to write new business. A major public health crisis or
catastrophic event could again cause significant volatility in global financial markets and disrupt the
economy and the demand for the term life insurance, investment and savings, and other financial
products that we distribute. Our investment portfolio and the valuations of invested assets we hold could
also be materially adversely affected.
Primerica 2024 Annual Report
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ITEM 1A. RISK FACTORS
In the event of a disaster, our business continuity plan may not be sufficient, which could
have a material adverse effect on our business, financial condition and results of operations.
Our infrastructure supports a combination of local and remote recovery solutions for business resumption
in the event of a disaster, including a security incident. Our Canadian and U.S. operations utilize a data
center located in our main campus in Duluth, Georgia. In the event of either a main campus destruction or
the inability to access our data center or main campus in Duluth, Georgia, our business recovery plan
provides for our employees to perform their work functions via a dedicated business backup/recovery site
located about 20 miles from our main campus or by remote access from an employee’s home. In addition
to this site, the Company uses a business resumption vendor that will provide the hardware required for
recovery within a reasonable timeframe in the event of a disaster. However, in the event of main campus
destruction, our business recovery plan may be inadequate, and our employees and the independent
sales representatives may be unable to carry out their work immediately, which could have a material
adverse effect on our business, financial condition and results of operations.
Risks Related to Information Technology and Cybersecurity
If one of our, or a third-party partner’s, significant information technology systems fails, if its
security is compromised, or if the Internet becomes disabled or unavailable, our business,
financial condition and results of operations may be materially adversely affected.
Our business is highly dependent upon the effective operation of our information technology systems and
third-party technology systems, networks and clouds to record, process, transmit and store information,
including sensitive customer and proprietary information. We rely on these systems throughout our
business for a variety of functions including to conduct many of our business activities and transactions
with customers, independent sales representatives, vendors and other third parties, to prepare our
financial statements and to communicate with our Board of Directors. Further, our information technology
systems and applications run a variety of third-party and proprietary software intended to support the
independent sales force. Our business also relies on the use by employees, independent sales
representatives and other third parties of electronic mobile devices, such as laptops, tablets and
smartphones, which are particularly vulnerable to loss and theft.
Maintaining the integrity of these systems and networks is critical to the success of our business
operations, including the retention of independent sales representatives and customers, and to the
protection of our proprietary information and our customers’ confidential and personal information. We
could experience a failure of one or more of these systems or could fail to complete all necessary data
reconciliation or other conversion controls when implementing new software systems. In addition, despite
the implementation of security and back-up measures, our information technology systems may be
vulnerable to physical or electronic intrusions, viruses or other attacks, programming errors and similar
disruptions.
We are subject to international, federal, state, and provincial regulations, and in some cases contractual
obligations, that require us to establish and maintain policies and procedures designed to protect
sensitive customer, employee, independent sales representative and third-party information. We have
implemented and maintain security measures, including industry-standard commercial technology,
designed to protect against breaches of security and other interference with our systems and networks
resulting from attacks by third parties, including hackers, and from employee or independent sales
representative error or malfeasance. We continually assess our ability to monitor, respond to, and recover
from such threats. We also require third-party vendors, who in the provision of services to us are provided
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ITEM 1A. RISK FACTORS
with or process information pertaining to our business or our customers, to meet certain information
security standards. Despite the measures we have taken and may in the future take to address and
mitigate cybersecurity and technology risks, we cannot assure that our systems and networks will not be
subject to breaches or interference. Any such breaches or interference by third parties or by independent
sales representatives or employees that may occur in the future, including the failure of any one of these
systems for any reason, could cause significant interruptions to our operations, which could have a
material adverse effect on our business, financial condition and results of operations.
Anyone who is able to circumvent our security measures and penetrate our information technology
systems could access, view, misappropriate, alter, or delete information in the systems, including
personally-identifiable client information, health information, and proprietary business information. In
addition, an increasing number of regulators require that regulators and clients be notified if a security
breach results in the disclosure of personally-identifiable client information or health information, which
could exacerbate the harm to our business, financial condition or results of operations. We cannot be
certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit
vulnerabilities in our systems, data thefts, physical system, network or cloud break-ins or inappropriate
access, or other developments will not compromise or breach the technology or other security measures
protecting the networks and systems used in connection with our business.
Operating system failures, ineffective system implementation, loss of the Internet or the compromise of
security with respect to internal, external or third-party operating systems or electronic devices could
subject us to significant civil and criminal liability, harm our reputation, interrupt our business operations,
deter people from purchasing our products, require us to incur significant technical, legal and other
expenses, and adversely affect our internal control over financial reporting, business, financial condition,
or results of operations.
Any failure to protect the confidentiality of client information could adversely affect our
reputation and have a material adverse effect on our business, financial condition and results
of operations.
Various government bodies have established rules protecting the privacy and security of personal
information, which vary significantly from jurisdiction to jurisdiction. Many independent sales
representatives, employees, and third-party service providers have access to, and routinely process,
personal information of clients on paper and on personal and Company-owned hardware, the cloud and
mobile devices through a variety of media, including the Internet and software applications. We rely on
internal processes and controls to protect the confidentiality of client information that is accessible to, or
in the possession of, our Company, our employees and the independent sales representatives. If: (i) an
independent sales representative, employee, or third-party service provider intentionally or
unintentionally discloses or misappropriates confidential client information; (ii) our data is the subject of a
cybersecurity attack; (iii) we fail to maintain adequate internal controls; or (iv) independent sales
representatives, employees or third-party service providers fail to comply with our policies and
procedures, then misappropriation or intentional or unintentional inappropriate disclosure or misuse of
client information could occur. Such internal control inadequacies or non-compliance could materially
damage our reputation or lead to civil or criminal penalties, which could have a material adverse effect on
our business, financial condition and results of operations.
Primerica 2024 Annual Report
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ITEM 1A. RISK FACTORS
The current legislative and regulatory climate with regard to privacy and cybersecurity could
adversely affect our business, financial condition, and results of operations.
Various international, federal and state legislative and regulatory bodies are considering or have
considered, proposed, or adopted new standards and rules regarding protection of personally-identifiable
information. All 50 U.S. states and Canada have breach notification requirements. New York State
Department of Financial Services’ Cybersecurity Requirements for Financial Services Companies (“NYDFS
Cybersecurity Requirements”) require covered financial services institutions to implement a cybersecurity
program with policies and controls designed to protect information systems and data. The NAIC has
adopted the Insurance Data Security Model Law (“Model Law”), which among other things, requires
insurers and insurance producers to develop and maintain a written information security program,
conduct risk assessments, and assess the data security practices of third-party service providers. The
Model Law, which has some similarities as well as differences from the NYDFS Cybersecurity
Requirements, has been adopted by a significant number of states. In May 2024, the SEC adopted
amendments to Regulation S-P that impose cybersecurity requirements on covered entities regarding
policies and procedures, incident response and notification procedures, and cybersecurity risk
management. In addition, various regulators and legislators are proposing, have proposed, and have
passed more stringent privacy requirements, including the California Consumer Privacy Act of 2018, its
updates in the California Privacy Rights Act of 2023, and related regulations (“CCPA”). The CCPA is
designed to give consumers more control over their personal data and imposes strict liability for security
incidents under certain circumstances.
Such laws or regulations could require us to implement new technologies or revise and maintain policies
and procedures designed to protect sensitive customer, employee, independent sales representative and
third-party information. Being subject to, or out of compliance with, the aforementioned laws and
regulations could result in material costs, fines, penalties or litigation, which could materially adversely
affect our business, financial condition and results of operations.
Financial Risks Affecting Our Business
Credit deterioration in, and the effects of interest rate fluctuations on, our invested asset
portfolio and other assets that are subject to changes in credit quality and interest rates could
materially adversely affect our business, financial condition and results of operations.
A large percentage of our invested asset portfolio is invested in fixed-income securities. As a result, credit
deterioration and interest rate fluctuations could materially affect the value of and earnings generated by
our invested asset portfolio. During periods of declining market interest rates, we must invest the cash we
receive as interest, return of principal on our investments and cash from operations in lower-yielding,
high-grade instruments or in lower-credit instruments to maintain comparable returns. Issuers of fixed-
income securities could also decide to prepay their obligations to borrow at lower market rates, which
would increase our reinvestment risk. If interest rates generally increase, the fair value of our fixed rate
income portfolio decreases. Additionally, if the fair value of any security in our invested asset portfolio
decreases, we may realize losses if we deem the value of the security to be impaired due to a credit loss.
We also have an asset on deposit with a coinsurer backing a 10% coinsurance agreement entered into at
the time of our IPO. The fair value of this asset is influenced by fluctuation in credit spreads and interest
rates, and changes in fair value are recognized in income. To the extent that any fluctuations in fair value
or interest rates are significant or we recognize impairments that are material, it could have a material
adverse effect on our business, financial condition and results of operations.
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ITEM 1A. RISK FACTORS
Valuation of our investments and the determination of expected credit losses when the fair
value of our available-for-sale invested assets is below amortized cost are both based on
estimates that may prove to be incorrect, which could adversely affect our financial condition
and results of operations.
Our portfolio of invested assets primarily consists of fixed-maturity securities that are classified as
available-for-sale. When the fair value of any of our available-for-sale invested assets declines below
amortized cost, an impairment exists and we recognize a loss in either our consolidated statement of
income or in other comprehensive income based on our assessment of expected credit losses. The
determination of the fair value of certain invested assets, particularly those that do not trade on a regular
basis, requires an assessment of available data and the use of assumptions and estimates. Once it is
determined that the fair value of an available-for-sale security is below its carrying value, we first
determine if we intend to sell or will more-likely-than-not be required to sell the security before the
expected recovery of its amortized cost. If we intend to sell or will more-likely-than-not be required to sell
the security, then we recognize the impairment as a credit loss in our consolidated statement of income
by writing down the security’s amortized cost to its fair value. If we do not intend to sell or it is not more-
likely-than-not that we will be required to sell the security before the expected recovery of its amortized
cost, we recognize the portion of the impairment that is due to a credit loss, if any, in our consolidated
statement of income through an allowance. The portion of the impairment that is due to factors other
than a credit loss is recognized in other comprehensive income in the consolidated statement of
comprehensive income as an unrealized loss. The determination of whether an impairment is due to credit
factors is subjective and involves a variety of assumptions and estimates.
There are various risks and uncertainties associated with determining whether an impairment is due to
credit factors when the fair value of available-for-sale securities declines below amortized cost. To the
extent that we are incorrect in our determination of the fair value of our investment securities or our
determination of whether an impairment is due to credit factors for available-for-sale securities, we may
realize losses that never actually materialize and are subsequently reversed, or we may fail to recognize
losses within the appropriate reporting period.
Changes in accounting standards can be difficult to predict and could adversely impact how
we record and report our financial condition and results of operations.
Our accounting policies and methods are fundamental to how we record and report our financial
condition and results of operations. United States generally accepted accounting principles (“U.S. GAAP”)
is a continuously evolving set of financial accounting and reporting standards that governs the
preparation of our financial statements. Changes to U.S. GAAP can be difficult to implement and can
materially impact how we record and report our financial condition and results of operations. Future
financial reporting standard changes by the Financial Accounting Standards Board and the SEC could
adversely impact our ability to maintain effective control over financial reporting given the changes that
are needed to adopt such standards.
Additionally, the Company’s insurance company subsidiaries prepare statutory financial statements in
accordance with accounting principles designated by regulators in the jurisdictions in which they are
domiciled. The financial statements of our U.S. insurance subsidiaries are prepared in accordance with
statutory accounting principles (“SAP”) prescribed or permitted by state insurance departments and the
NAIC. SAP, including actuarial methodologies for estimating reserves, are subject to continuous evaluation
by the NAIC and state insurance departments. Similarly, our Canadian life insurance subsidiary is required
to prepare statutory financial statements in accordance with International Financial Reporting Standards,
as prescribed by the OSFI in Canada. The statutory financial statements of our insurance company
Primerica 2024 Annual Report
53
ITEM 1A. RISK FACTORS
subsidiaries are used to determine dividend capacity and risk-based capital and are monitored closely by
regulators. Changes in accounting standards and interpretations of those standards could adversely
impact our insurance companies’ ability to pay dividends to the Parent Company and comply with the
financial statement requirements stipulated by the applicable insurance regulators.
The inability of our subsidiaries to pay dividends or make distributions or other payments to
us in sufficient amounts would impede our ability to meet our obligations and return capital
to our stockholders.
Operations of the Company are conducted by its subsidiaries. As such, Primerica, Inc. is a holding
company that has no significant operations. Our primary asset is the capital stock of our subsidiaries and
our primary liability is our senior unsecured notes (the “Senior Notes”). We rely primarily on dividends and
other payments from our subsidiaries to meet our operating costs, other corporate expenses, and Senior
Notes obligations, as well as to return capital to our stockholders. The ability of our subsidiaries to pay
dividends to us depends on their earnings, covenants contained in existing and future financing or other
agreements and on regulatory restrictions. The ability of our insurance subsidiaries to pay dividends will
further depend on their statutory income and surplus. If the cash we receive from our subsidiaries is
insufficient for us to fund our obligations or if a subsidiary is unable to pay dividends to us, we may be
required to raise cash through the incurrence of debt, the issuance of equity or the sale of assets.
However, given the risk of volatility in the capital markets, there is no assurance that we would be able to
raise cash by these means.
The jurisdictions in which our insurance subsidiaries are domiciled impose certain restrictions on their
ability to pay dividends to us. In the United States, these restrictions are based, in part, on the prior year’s
statutory income and surplus. In general, dividends up to specified levels are considered ordinary and may
be paid without prior approval. Dividends in larger amounts are subject to approval by the insurance
commissioner of the state of domicile. In Canada, dividends can be paid, subject to the paying insurance
company continuing to meet the regulatory requirements for capital adequacy and liquidity and upon 15
days’ minimum notice to OSFI. More stringent restrictions could be adopted from time to time by
jurisdictions in which our insurance subsidiaries are domiciled, and such restrictions could have the effect,
under certain circumstances, of significantly reducing dividends or other amounts payable to us by our
subsidiaries without prior approval by regulatory authorities. In addition, in the future, we may become
subject to debt covenants or other agreements that limit our ability to return capital to our stockholders.
The ability of our insurance subsidiaries to pay dividends to us is also limited by our need to maintain the
financial strength ratings of our subsidiaries assigned by the ratings agencies.
If any of our subsidiaries were to become insolvent, liquidate, or otherwise reorganize, we, as sole
stockholder, will have no right to proceed against the assets of that subsidiary. Furthermore, with respect
to our insurance subsidiaries, we, as sole stockholder, will have no right to cause the liquidation,
bankruptcy, or winding-up of the subsidiary under the applicable liquidation, bankruptcy or winding-up
laws, although, in Canada, we could apply for permission to cause liquidation. The applicable insurance
laws of the jurisdictions in which each of our insurance subsidiaries is domiciled would govern any
proceedings relating to that subsidiary. The insurance authority of that jurisdiction would act as a
liquidator or rehabilitator for the subsidiary. Both creditors of the subsidiary and policyholders (if an
insurance subsidiary) would be entitled to payment in full from the subsidiary’s assets before we, as the
sole stockholder, would be entitled to receive any distribution from the subsidiary.
If the ability of our insurance or non-insurance subsidiaries to pay dividends or make other distributions
or payments to us is materially restricted by regulatory requirements, bankruptcy, or insolvency, or our
need to maintain our financial strength ratings, or is limited due to operating results or other factors, it
could materially adversely affect our ability to fund our obligations and return capital to our stockholders.
54
ITEM 1A. RISK FACTORS
Risks Related to Legislative and Regulatory Changes
We are subject to various federal, state and provincial laws and regulations in the United
States and Canada, changes in which may require us to alter our business practices and
could materially adversely affect our business, financial condition and results of operations.
Our business is subject to many regulations that relate to, among other things, consumer protection, fair
credit reporting, financial privacy, consumer fraud, anti-money laundering, worker classification standards,
corporate taxation, artificial intelligence or algorithmic underwriting, and transactions with certain
countries. These laws and regulations often are subject to the political climate.
Changes in any of these laws or regulations may require additional compliance procedures, which could
have a material adverse effect on our business, financial condition, and results of operations.
The current legislative and regulatory climate with regard to financial services may adversely
affect our business, financial condition, and results of operations.
The volume of legislative and regulatory activity relating to financial services has increased substantially in
recent years, and the level of enforcement actions and investigations by federal, state and provincial
regulators may increase correspondingly. Legislative, regulatory and enforcement activity at the federal
level may contribute to heightened activity at the state and provincial level. If we or the independent sales
representatives become subject to new requirements or regulations, it could result in increased litigation,
regulatory risks, changes to our business model, a decrease in the number of securities-licensed
representatives, increased compliance costs, or a reduction in the products we offer to our clients or the
profits we earn, which could have a material adverse effect on our business, financial condition and results
of operations.
Regulators could also adopt laws or interpret existing laws in a way that would require retroactive
changes to our business, accounting practices, or redundant reserve financing structure. Any such
retroactive changes could have a material adverse effect on our business, financial condition and results of
operations.
The current regulatory climate with regard to climate change may adversely affect our
business, financial condition, and results of operations.
Activity by federal, state and provincial regulators relating to the possible impacts of climate change on
companies and their constituents has resulted in heightened legislative and regulatory activity at the
federal, state and provincial levels. For example, on March 6, 2024, the SEC issued a final rule aimed at
enhancing and standardizing climate-related disclosures (the “SEC Climate-Related Disclosures rule”).
Multiple legal challenges led the SEC to stay the SEC Climate-Related Disclosures rule pending completion
of judicial review of the consolidated lawsuits in the U.S. Court of Appeals for the Eighth Circuit. The
outcome of the pending judicial review is uncertain. Depending on the outcome of the U.S. Court of
Appeals for the Eighth Circuit’s review or a potential withdrawal of the rule by the SEC, preparation of new
disclosures may require significant assistance from third-party vendor(s), for which there may be high
demand and limited availability.
On October 7, 2023, California enacted The Climate Corporate Accountability Act (“SB 253”) and The
Climate-Related Financial Risk Act (“SB 261”), which impose extensive new climate-related reporting
requirements on any U.S. business entity with annual revenues over $1 billion and $500 million (for SB 253
and SB 261, respectively) doing business in California. SB 253 requires disclosure of Scope 1 and 2
Primerica 2024 Annual Report
55
ITEM 1A. RISK FACTORS
greenhouse gas (“GHG”) emissions beginning in 2026 and Scope 3 GHG emissions beginning in 2027. SB
261 requires covered entities to biennially report on climate-related financial risk and measures adopted
to reduce and adapt to such risk; however, the Company appears to be exempt from SB 261 because it
already completes the Climate Risk Disclosure Survey, an annual survey administered by the California
Department of Insurance. The Company is awaiting clarification as to whether the Company is exempt
from SB 261. On September 27, 2024, California enacted Senate Bill 219 (“SB 219”), amending SB 253 and
SB 261 by, among other things, (i) extending the deadline for the California Air Resources Board (“CARB”)
to implement regulations from January 1, 2025 to July 1, 2025; (ii) authorizing reporting entities to
consolidate emissions disclosures at the parent company level; and (iii) granting CARB discretion to set
Scope 3 GHG emissions disclosure in 2027. In addition, on March 7, 2023, OSFI issued its final Guideline B-
15, which sets out expectations for the management and disclosure of climate-related risks for federally
regulated financial institutions in Canada, including disclosure of Scope 1, 2 and 3 GHG emissions by the
end of 2025. Guideline B-15 also includes OSFI’s expectation that applicable entities to conduct internal
and standardized climate scenario analyses and report the results to OSFI periodically. OSFI’s
Standardized Climate Scenario Exercise, which was due in December 2024, was intended to help OSFI
assess exposure to climate-related risks among the entities it regulates for future reporting to OSFI.
Compliance with SB 253, SB 261, SB 219, Guideline B-15 and any other climate disclosure rules applicable
to the Company may require significant assistance from third-party vendor(s). Factors that could adversely
impact our ability to comply with any new climate disclosure rules include, but are not limited to, failure to
secure the assistance of a third-party vendor(s), inability to gather the requisite data in a timely manner or
at all, and/or significant associated financial costs.
General Risk Factors
Litigation and regulatory investigations and actions may result in financial losses and harm
our reputation.
We face a risk of litigation and regulatory investigations and actions in the ordinary course of operating
our businesses. From time to time, we are subject to private litigation as a result of alleged independent
sales representative misconduct or alleged failure of the Company to follow applicable insurance,
securities or other laws or regulations. If we become subject to any such litigation, the associated legal
expense and any judgment or settlement of the claims could have a material adverse effect on our
business, financial condition and results of operations.
We are also routinely subject to regulatory inquiries, such as information requests, subpoenas and books
and record examinations, from state, provincial and federal regulators and other authorities and from time
to time, regulatory investigations as a result of alleged independent sales representative misconduct or
alleged failure of the Company to follow applicable laws or regulations. A substantial legal liability or a
significant regulatory action against us could have a material adverse effect on our business, financial
condition and results of operations.
Moreover, even if we ultimately prevail in any litigation, regulatory action or investigation, we could suffer
significant reputational harm and we could incur significant legal expenses, either of which could have a
material adverse effect on our business, financial condition and results of operations. In addition,
increased regulatory scrutiny and any resulting investigations or proceedings could result in new legal
precedents and industry-wide regulations or practices that could materially adversely affect our business,
financial condition and results of operations.
56
ITEM 1A. RISK FACTORS
A significant change in the competitive environment in which we operate could negatively
affect our ability to maintain or increase our market share and profitability.
We face competition in all of our business lines. Our competitors include financial services companies,
banks, investment management firms, broker-dealers, registered investment advisers, insurance
companies, insurance brokers, direct sales companies, and technology companies. In many of our product
offerings, we face competition from competitors that may have greater market share or breadth of
distribution, offer a broader range of products, services or features, assume a greater level of risk, have
lower profitability expectations, have lower fee and expense ratios, have higher financial strength ratings,
offer more robust digital tools and self-service capabilities than we do or made use of emerging
technologies more fully or rapidly than us. More recently, significant capital has been invested in direct-
to-consumer offerings, including wealth management, retirement and life insurance products. In addition,
regulatory changes and competitive factors are leading to innovations in product offerings and
compensation structures. To the extent these entrants create a significant change in the competitive
environment, our ability to maintain or increase our market share and profitability could be materially
adversely affected.
Primerica’s continued success requires a high-performing and stable team of employees
across all levels, and the loss of key employees could negatively affect our financial condition
and impair our ability to implement our business strategy.
In addition to intense competition for talent, workforce dynamics are constantly evolving. A
disproportionate loss of staff can negatively impact morale, productivity and service levels. If the
Company does not manage these changing workforce dynamics effectively, leading to prolonged
employee attrition, or reasonable security measures with respect to senior management when traveling
on behalf of the Company fail, it could materially adversely affect the Company’s financial condition,
results of operations, and inhibit our long-term business strategy.
Further, our success substantially depends on our ability to attract and retain members of our senior
management team. The efforts, level of engagement, and leadership of our senior managers have been,
and will continue to be, critical to our success. Many of our most senior managers are very tenured and
we expect instances of retirement in 2025. The loss of service of members of our senior management
team for any reason and without adequate succession planning and talent management could reduce our
ability to successfully motivate the independent sales representatives or implement our business plan,
which could have a material adverse effect on our business, financial condition and results of operations.
Although our executive officers have entered into employment agreements with us, there is no assurance
that they will complete the term of their employment agreements or that such agreements will be
renewed.
We regularly undertake business initiatives to enhance our technology, products, and
services. The efficiency and success of these initiatives may vary significantly and may cause
unanticipated costs, errors, or disruptions which could have a material adverse effect on our
business, financial condition and results of operations.
We regularly evaluate and undertake business initiatives to improve and support our competitiveness and
grow our business. Business initiatives that we are currently developing or executing, for example, include
enhancements to information technology, our client relationship manager tool, and other systems,
updates to our client and independent sales representative-facing software tools and applications, and
Primerica 2024 Annual Report
57
ITEM 1A. RISK FACTORS
streamlining of our off-channel communications systems. Our ability to implement these initiatives often
may be dependent on our ability to integrate systems, develop and invest in new technologies and evolve
existing methods and tools. The execution of these initiatives also may depend on our ability to change
vendors, and implementation of certain initiatives may be dependent on third parties. In addition, these
initiatives may take longer than anticipated to implement, and our ability to execute these initiatives in a
timely manner may impact the outcomes. Likewise, technological and other changes made in connection
with these initiatives may result in increased or unanticipated costs, inadvertent data disclosures,
operating errors, disruptions to our business, or may present other unanticipated technical or operational
hurdles. The expansion of services or changes of vendors may involve client, regulatory and other third-
party data use, storage and security challenges, as well as other regulatory compliance, business
continuity and other considerations. As a result, we may not achieve some or all of the anticipated
benefits or other intended results associated with these initiatives, which could have a material adverse
effect on our business, financial condition and results of operations.
We may not be able to effectively execute our corporate strategy, which could have a
material adverse effect on our business, financial condition and results of operations.
Our mission to create financially independent families has remained unchanged. In 2025, we updated our
corporate strategy to re-align our mission, strategic vision, guiding principles and growth pillars to help us
continue to deliver on our mission. An inability to effectively execute our corporate strategy could have a
material adverse effect on our business, financial condition and results of operations.
We may be materially adversely affected by currency fluctuations in the United States dollar
versus the Canadian dollar.
The Canadian dollar is the functional currency for our Canadian subsidiaries and our financial results,
reported in U.S. dollars, are affected by changes in the currency exchange rate. The assets, liabilities,
revenues, and expenses of our Canadian subsidiaries are generally all denominated in Canadian dollars.
However, the Canadian dollar financial statements of our Canadian subsidiaries are translated into U.S.
dollars in our consolidated financial statements. Therefore, significant exchange rate fluctuations between
the U.S. dollar and the Canadian dollar could have a material adverse effect on our financial condition and
results of operations. A weaker Canadian dollar relative to the U.S. dollar would result in lower levels of
reported revenues, expenses, net income, assets, liabilities and accumulated other comprehensive income
as translated in our U.S. dollar reporting currency financial statements. In addition, our net investment in
our Canadian subsidiaries is significantly affected by fluctuations in the exchange rate between the U.S.
dollar and the Canadian dollar.
The market price of our common stock may fluctuate.
The stock market in general, and the market for companies in the financial services industry in particular,
have experienced extreme price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of these companies. Also, broad market and industry
factors may negatively affect the market price of our common stock, regardless of our actual operating
performance. Our stock could be subject to wide fluctuations in price in response to various factors, many
of which are beyond our control.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
58
ITEM 1C. CYBERSECURITY
ITEM 1C. CYBERSECURITY.
Risk Management and Strategy
Primerica has processes in place aimed at assessing, identifying, and managing material risks from
cybersecurity threats which are integrated into Primerica’s enterprise risk management system. Primerica’s
enterprise risk management and internal audit functions conduct regular assessments and audits of risks
from cybersecurity threats and report the results to the Board of Directors at least quarterly. The Board
considers cybersecurity risk as part of its business strategy, risk management, and financial oversight.
Primerica institutes a three-lines-of-defense model for information security risk assurance, in which
management owns the risk, our enterprise risk management team assesses the risk and oversees
compliance with internal guidelines and policies, and our internal audit team reviews the effectiveness of
the first two lines of defense. Management works with external assessors, consultants, auditors, and other
third parties from time to time in conducting maturity and technical assessments.
Primerica has processes in place to oversee and identify material risks from cybersecurity threats
associated with its use of third-party service providers. The Company maintains a policy governing
information security, which includes risk assessment policies and procedures relating to third-party
vendors, as well as a data loss prevention policy. The Company’s policies address technical requirements
needed to protect the environments in which data is processed, as well as how it is maintained, governed,
and protected. Primerica also imposes mandatory privacy and information security controls and data
security protection requirements on the independent contractor sales force. We train all regular
employees in information security and privacy-related risks and we perform regular tests to determine
whether our employees can recognize phishing emails. Similarly, our annual compliance training for the
independent sales representatives includes training on maintaining data security and privacy.
We have an incident response plan designed to help us monitor the prevention, detection, mitigation, and
remediation of information security incidents. The incident response plan documents the roles and
responsibilities of Primerica personnel in responding to information security incidents, including the
process by which the Chief Information Security Officer, the Chief Information Officer, senior
management, and the Board is informed about such incidents.
The Chief Information Security Officer leads the Company’s Incident Advisory Committee (“IAC”), which is
notified in the event of high or medium severity incidents. The IAC includes representatives from
information technology, legal, and often the impacted business unit. The Incident Response Team (“IRT”)
consists of the IAC and a larger group of managers that is typically notified of more significant
incidents. The IRT reports findings to management and the Board as necessary. Each IRT member has
specific responsibilities related to his or her function at the Company. On a semi-annual basis, the IRT and
management undertake facilitator-led trainings and simulations of information security incidents.
Previous cybersecurity incidents have not materially affected the Company. For a discussion of risks to the
Company related to cybersecurity threats, see “Item 1A. Risk Factors – Risks Related to Information
Technology and Cybersecurity”, which is incorporated herein by reference.
Governance
The Board of Directors has responsibility for oversight of risks from cybersecurity threats. The Board
receives a quarterly report from the Chief Information Officer and Chief Information Security Officer on
risks from cybersecurity threats and, under the Company’s incident reporting plan, the Board is informed
Primerica 2024 Annual Report
59
ITEM 1C. CYBERSECURITY
by management of certain cybersecurity incidents as appropriate. In 2024, the Board participated in a
facilitator-led training and simulation of an information security incident.
Primerica’s senior executive leadership is actively involved in managing material risks from cybersecurity
threats. Primerica’s cybersecurity operations risk steering group is chaired by the Chief Insurance Officer
and holds quarterly meetings. It includes key executives from the Company’s technology, security, privacy,
and legal teams, coordinates corporate security initiatives and provides high-level guidance on
technology-and security-related issues. The Chief Information Security Officer has responsibility for
assessing and managing the Company’s material risks from cybersecurity threats. The Chief Information
Security Officer has served in various roles in information technology and information security for 36
years, including serving as the Company’s Chief Information Security Officer for over 24 years.
ITEM 2. PROPERTIES.
Our executive offices and business operations are housed primarily at our home office facility located in
Duluth, Georgia. Our home office facility consists of approximately 345,000 square feet of general office
space where our primary business operations are maintained including our information technology
infrastructure and our media production studios. The lease for this building is scheduled to expire on
December 31, 2035. This office space is used by all of our operating segments.
We also maintain a regional head office location for our Canadian operations in Mississauga, Ontario. Our
Canadian head office location consists of general office space under a lease expiring in October 2030. This
office space is used by all of our operating segments.
We lease general office space for our NBLIC subsidiary in Long Island City, New York under a lease
expiring in March 2030. This office space is primarily used by the Corporate and Other Distributed
Products segment.
We believe that our existing facilities in the U.S. and Canada are adequate for our current requirements
and for our operations for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS.
We are involved from time to time in legal disputes, regulatory inquiries and arbitration proceedings in
the normal course of business. Additional information regarding certain legal proceedings to which we
are a party is described under “Contingent Liabilities” in Note 18 (Commitments and Contingent
Liabilities) to our consolidated financial statements included elsewhere in this report, and such
information is incorporated herein by reference. As of the date of this report, we do not believe any
pending legal proceeding to which Primerica or any of its subsidiaries is a party is required to be disclosed
pursuant to this item.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
60
ITEM X. INFORMATION ABOUT OUR EXECUTIVE
OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES
ITEM X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND CERTAIN
SIGNIFICANT EMPLOYEES
The name, age at February 28, 2025, and position of each of our executive officers and certain significant
employees are presented below. These officers comprise our senior management team.
Name
Age
Position
Executive Officers:
Glenn J. Williams
65
Chief Executive Officer
Peter W. Schneider
68
President
Tracy X. Tan
54
Executive Vice President and Chief Financial Officer
Certain Significant Employees:
John A. Adams
66
Executive Vice President; Chief Executive Officer of Primerica Life Insurance Company
of Canada
Michael C. Adams
68
Executive Vice President, Special Strategic Projects
Lisa A. Brown
55
Executive Vice President and Chief People Officer
Nicholas E. Craven
40
Executive Vice President and Chief Insurance Officer
Stacey K. Geer
58
Executive Vice President, Deputy General Counsel, Chief Governance and
Risk Officer, and Corporate Secretary
Kathryn E. Kieser
55
Executive Vice President and Chief Reputation Officer
Michael W. Miller
47
Executive Vice President
Rosie Orlando
58
Executive Vice President; President of Primerica Life Insurance Company of Canada
Robert H. Peterman, Jr.
59
Executive Vice President and Chief Operating Officer
Gregory C. Pitts
62
Executive Vice President
Paul E. Regard
52
Executive Vice President; Chief Executive Officer of PFS Investments Inc.
Brett A. Rogers
59
Executive Vice President and General Counsel
Julie A. Seman
55
Executive Vice President and Chief Marketing and Innovation Officer
Dale A.M. Tuck
52
Executive Vice President and Chief Information Technology Officer
Set forth below is biographical information concerning our executive officers, who were elected by our
Board of Directors and serve subject to their respective employment agreements.
Glenn J. Williams has served as Chief Executive Officer since April 2015. He served as President from 2005
through March 2015. Previously, he served as Executive Vice President of Field and Product Marketing for
international operations from 2000 to 2005, as President and Chief Executive Officer of Primerica Canada
from 1996 to 2000, and in roles of increasing responsibility as part of Primerica’s international expansion
team in Canada from 1985 to 2000. He began his career with Primerica in 1981 as a member of the
Company’s independent sales force and joined the home office team in 1983. Mr. Williams earned his B.S.
degree in Education from Baptist University of America. He has served on the board of trustees for the
Georgia Baptist Foundation since October 2024 and from 2019 to 2023.
Peter W. Schneider has served as President since April 2015. He served as Executive Vice President, General
Counsel, and Chief Administrative Officer from 2000 to April 2015 and as Corporate Secretary from 2000
through January 2014. He began his professional career as an Associate at the law firm of Paul, Weiss,
Rifkind, Wharton & Garrison and worked as a Partner at the law firm of Rogers & Hardin LLP in Atlanta,
Primerica 2024 Annual Report
61
ITEM X. INFORMATION ABOUT OUR EXECUTIVE
OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES
Georgia from 1988 to 2000. Mr. Schneider earned both his B.S. degree in political science and industrial
relations and his J.D. from the University of North Carolina at Chapel Hill. He serves on the Advisory
Council of the Securities Industry and Financial Markets Association (SIFMA), the board of directors of
Camp John W. Hanes (YMCA), the board of visitors of the University of North Carolina at Chapel Hill and
the National Commission of the Anti-Defamation League.
Tracy X. Tan has served as Executive Vice President and Chief Financial Officer (CFO) since December
2023. She joined Primerica in October 2023 as Executive Vice President, Finance and was designated at
that time as the next CFO. Prior to joining Primerica, from 2018 to October 2023, Ms. Tan served as CFO of
Strategic Link Consulting, a fintech enterprise. From 2015 to 2018, Ms. Tan was Senior Vice President and
CFO for Assurant Global Housing, a subsidiary of Assurant, Inc. From 2013 to 2015, she served as Vice
President (VP) of Finance and Divisional CFO for Novelis North America in Novelis Inc. From 2005 to 2013,
she was VP and Divisional CFO for the Electrical and Industrial Divisions of Southwire Company. Ms. Tan
began her career at General Electric Company in 1996, where she held various roles with increasing
responsibilities across four industries, including as VP and CFO for GE Intelligent Platform Embedded
Systems from 2003 to 2005. Ms. Tan has an M.B.A. degree from Bowling Green State University. She is also
an alumna of GE’s Experienced Financial Leadership Program and Financial Management Program.
Set forth below is biographical information concerning certain significant employees, who were elected as
officers by our Board of Directors.
John A. Adams has served as the Chief Executive Officer of Primerica Life Canada since 2003. He previously
served Primerica Life Canada as Chief Financial Officer and before that as Vice President of Finance. Before
joining Primerica, Mr. Adams served as the Director of Finance of a major Canadian university and
Treasurer of an insurance group of companies. He began his career in 1980 with KPMG LLP. He graduated
from Trinity College at the University of Toronto with a Bachelor of Commerce degree and is a Chartered
Accountant and Chartered Professional Accountant. Mr. Adams has provided industry leadership as a
board member of the Investment Funds Institute of Canada (the mutual fund industry association) since
2005, having served as its Board Chairman from 2015 to 2017. He also serves as a board member of the
Federation of Independent Dealers.
Michael C. Adams has served as Executive Vice President, Special Strategic Projects since October 2024. He
previously served as Executive Vice President and Chief Business Technology Officer from May 2021 to
October 2024 and was responsible for business technology since 1988. He was Co-Head of Business
Technology from 2017 to May 2021 and served in various capacities at the Company since 1980. Mr.
Adams earned his B.A. degree in business and economics from Hendrix College in 1978.
Lisa A. Brown has served as Executive Vice President and Chief People Officer since October 2024. She
previously served as Chief Administrative Officer from October 2020 to October 2024. In her current role,
she oversees Human Resources (HR) and Talent Management, driving the Company’s people strategy,
cultural transformation, and succession planning. Ms. Brown also leads the Company’s diversity, equality,
inclusion and belonging initiatives and manages the Strategic Markets business groups that support the
Company’s independent sales force. Prior to joining Primerica, Ms. Brown spent over 21 years at Delta Air
Lines where she held various leadership roles in Human Resources. Her responsibilities included
overseeing functions for Delta Air Lines’ subsidiaries, leading talent development programs, and serving
as the senior HR leader in multiple customer functions. She holds a B.S. degree in Human Resources
Administration from Michigan State University and a Masters of Business Administration from Kennesaw
State University. Ms. Brown serves on the Broad College of Business Advisory Board at Michigan State
University and serves on the board of Junior Achievement of Georgia. Additionally, she is a dedicated
member of the Delta Sigma Theta Sorority, Inc.
62
ITEM X. INFORMATION ABOUT OUR EXECUTIVE
OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES
Nicholas E. Craven has served as Executive Vice President and Chief Insurance Officer of the Company
since October 2024. In this role, he oversees the operations of Primerica Life Insurance Company (PLIC) as
well as agent life insurance licensing, data analytics and technology company wide. Previously, he served
as President of PLIC from April 2021 through December 2024 and as Senior Vice President and Chief
Information Officer of PLIC from August 2018 to April 2021. Prior to joining Primerica, he advanced
through various consulting roles of increasing seniority at Ernst & Young, LLP from 2013 to 2018. Mr.
Craven has a Bachelor of Business Administration from Georgia State University.
Stacey K. Geer has served as Executive Vice President, Deputy General Counsel, Chief Governance Officer
and Corporate Secretary of Primerica, Inc. since March 2015. She was named the Company’s Chief Risk
Officer in May 2024. In these capacities, she has responsibility for all corporate governance matters,
including matters relating to the board of directors, SEC disclosure, financings and company equity,
mergers and acquisitions and sustainability, and she also supervises certain of the Company’s non-
governance related legal functions. Ms. Geer joined Primerica in February 2010. Prior to joining Primerica,
Ms. Geer served as Deputy General Counsel of Mueller Water Products, Inc. from 2007 to February 2010,
as the Chief Securities Counsel of BellSouth Corporation from 2001 to 2007, and as a Partner at King &
Spalding in Atlanta, Georgia from 2000 to 2001. Ms. Geer received a B.S degree in Economics from The
Wharton School of the University of Pennsylvania and a J.D. from the UCLA School of Law.
Kathryn E. Kieser has served as Executive Vice President and Chief Reputation Officer of Primerica, Inc. and
President and Chair of the Primerica Foundation since January 2019, leading public relations, social media,
search engine optimization, enterprise research and philanthropy. Previously, she served as Executive Vice
President of Investor Relations from April 2010 to December 2018. Ms. Kieser joined Primerica in October
1995 and has held many positions over her career including Vice President of Sales and Product
Marketing, Senior Vice President of Auto and Homeowners Insurance, and Chief Marketing Officer for
Primerica Life Insurance Company (PLIC). Ms. Kieser earned her B.S. degree in Business Administration
from Auburn University and a Master of Science degree from Georgia State University. She serves on the
boards of directors for the Gwinnett Chamber of Commerce and the Community Foundation for
Northeast Georgia and on the board of advisors for the Metro Atlanta Chamber of Commerce.
Michael W. Miller has served as Executive Vice President since 2015, President of Primerica Mortgage, LLC
from January 2018 through December 2024 and Executive Chairman of the Board of Directors of Primerica
Health, LLC from July 2021 to September 2024. He served as Head of Corporate Development and
Strategic Planning of Primerica, Inc. from September 2015 to August 2021. Prior to joining Primerica, Mr.
Miller was senior investment banker at Lazard from 2006 to September 2015, where he specialized in
providing strategic advice to a broad array of financial institutions and their regulators. While at Lazard,
Mr. Miller advised on over $85 billion of successful transactions and restructuring assignments. Mr. Miller
also worked in the insurance industry in various capacities. He holds a B.S. degree from Brigham Young
University in Business Administration and Finance and earned the Chartered Property & Casualty
Underwriter designation.
Rosie Orlando has served as Executive Vice President of Primerica, Inc. since October 2024 and as
President of Primerica Life Insurance Company of Canada (PLICC) since November 2022. She previously
served as Executive Vice President and Chief Operating Officer of PLICC from February 2006 to November
2022, Senior Vice President, Training and Development from January 2022 to February 2006 and in various
roles since joining the Company in 1992. Ms. Orlando obtained her Bachelor of Arts from York University
in Toronto.
Robert H. Peterman, Jr. has served as Executive Vice President and Chief Operating Officer since October
2024. He previously served as Executive Vice President and Chief Distribution Officer from March 2023 to
October 2024 and as Executive Vice President and Chief Marketing Officer from 2018 to March 2023. He
Primerica 2024 Annual Report
63
ITEM X. INFORMATION ABOUT OUR EXECUTIVE
OFFICERS AND CERTAIN SIGNIFICANT EMPLOYEES
served as President of Primerica Distribution from 2013 to 2018, where he was responsible for recruiting,
licensing, licensing education, field compensation, field equity, and decision support. In 2005, he became
Executive Vice President and was given responsibility for the Company’s Grow the Sales Force initiative.
He also served as Chief Executive Officer of Primerica’s New York Life Insurance Company from 2017 to
2018. Mr. Peterman joined the Company in 1984 and has served in many varying roles throughout the
business.
Gregory C. Pitts has served as Executive Vice President since October 2024. He served as Executive Vice
President and Chief Operating Officer from December 2009 to October 2024, as Executive Vice President
since 1995 with responsibilities for the Term Life Insurance and Investment and Savings Products
segments, and with responsibilities for the information technology division and in various capacities at the
Company since 1985. Mr. Pitts earned his B.S. in Business Administration from the University of Arkansas.
He serves on the board of directors of the Boy Scouts of America Atlanta Area Council.
Paul E. Regard has served as Executive Vice President of Primerica, Inc. since October 2024 and as Chief
Executive Officer and President of PFS Investments Inc. since October 2023. Since joining Primerica in
September 2015, he has held various roles in the Company’s securities business, including building and
launching the Company’s managed account platform. Before joining Primerica, Mr. Regard was a Director
at The Bank of New York Mellon Corporation (BNY Mellon) from 2008 to 2013 where he helped develop
BNY Mellon’s asset management business for Asian financial intermediaries. Mr. Regard has a B.S. in
Finance from the University of Notre Dame.
Brett “Ben” A. Rogers has served as Executive Vice President and General Counsel since May 2019.
Previously, he was a Partner at Rogers & Hardin LLP in Atlanta, Georgia, where he represented Primerica
as outside counsel for more than 20 years. At Rogers & Hardin, his practice focused on complex business
matters, including securities litigation, arbitration, and general commercial litigation. Mr. Rogers received
a B.A. degree from Dickinson College and his J.D. with honors from Florida State University.
Julie A. Seman has served as Executive Vice President and Chief Marketing and Innovation Officer since
March 2023, responsible for the marketing of our Life, Investment and Savings, and Legal Protection
products, Digital & Field Distribution and Meetings & Conventions. She previously served as Executive
Vice President and Chief Marketing Officer of Field Distribution, Digital Distribution, Primerica Life, Client
Solutions, and Strategic Markets from May 2018 to March 2023. Since 2014 she has been responsible for
sales force growth and increased product distribution through the training and development of financial
services representatives in the United States, Canada, Puerto Rico and Guam. In addition, Ms. Seman
previously supported Primerica’s Strategic Markets, which include African American, Asian Pacific Islander,
Hispanic, Partnership and Women with a focus on personal financial education and entrepreneurship.
Prior thereto, she was Senior Vice President of Client Solutions from 2010 to 2014 where she supervised
all front-end products and oversaw field communication tools. Ms. Seman joined the Company in 1998
and has served in many roles with increasing responsibility. Ms. Seman received her B.S. degree in
Business Management from Southern Illinois University.
Dale A.M. Tuck has served as Executive Vice President and Chief Information Technology Officer of
Primerica, Inc. since October 2024. Since September 2020, he has served as Executive Vice President of
Primerica Life Insurance Company (PLIC) and since October 2024 as Chief Information Technology Officer,
overseeing information technology initiatives across the Company. He served as Senior Vice President,
Technology Strategy and Governance from February 2019 to September 2020. Prior to joining Primerica,
Mr. Tuck served as Head of Digital Business at Neudesic, an IBM company, from 2018 to February 2019
and in various roles throughout his nearly 20 year technology-related career. He obtained a Higher
Diploma (HD) in Marketing Management from the Institute of Marketing Management in in Durban,
South Africa and a Masters in Business Administration from the University of Manchester in the United
Kingdom.
64
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “PRI.”
Holders
As of January 31, 2025, we had 319 holders of record of our common stock.
Dividends
In the first quarter of 2025, we declared a quarterly dividend to stockholders of $1.04 per share. We
currently expect to continue to pay comparable quarterly cash dividends to holders of our common stock.
Our payment of cash dividends is at the discretion of our Board of Directors in accordance with applicable
law after taking into account various factors, including our financial condition, operating results, current
and anticipated cash needs and plans for growth. Under Delaware law, we can only pay dividends either
out of surplus or out of the current or the immediately preceding year’s earnings. Therefore, no assurance
is given that we will continue to pay any dividends to our common stockholders, or as to the amount of
any such dividends.
Issuer Purchases of Equity Securities
Depending on market conditions, shares of our common stock may be repurchased from time to time at
prevailing market prices through open market or privately negotiated transactions.
The Parent Company has no obligation to repurchase any shares. Subject to applicable corporate and
securities laws, repurchases may be made at such times and in such amounts as management deems
appropriate. Repurchases under a publicly announced program can be discontinued at any time if
management believes additional repurchases are not warranted.
Primerica 2024 Annual Report
65
ITEM 5. COMMON STOCK AND STOCKHOLDER MATTERS
During the quarter ended December 31, 2024, we repurchased shares of our common stock as follows:
Period
Total number of
shares purchased (1)
Average price
paid
per share (1)
Total number of
shares
purchased as part of
publicly announced
plans or programs (2)
Approximate dollar
value of shares that
may yet be
purchased under the
plans or programs (2)(3)
October 1 - 31, 2024
157,699
$
274.60
154,651
$
1,890,837
November 1 - 30, 2024
6,914
277.85
6,804
450,000,000
December 1 - 31, 2024
1,575
301.18
—
450,000,000
Total
166,188
$
274.99
161,455
450,000,000
(1)
Consists of repurchases of (a) 4,733 shares of common stock at an average price of $277.43 arising from share-based
compensation tax withholdings and (b) open market repurchases of shares of common stock under the share repurchase
program approved by our Board of Directors.
(2)
On November 16, 2023, our Board of Directors authorized, and the Company announced, a share repurchase program for
purchases of up to $425.0 million of our outstanding common stock from November 16, 2023 through December 31, 2024.
(3)
On November 14, 2024, our Board of Directors authorized, and the Company announced, a share repurchase program for
purchases of up to $450.0 million of our outstanding common stock from November 14, 2024 through December 31, 2025.
For more information on our share repurchases, see Note 14 (Stockholders’ Equity) to our consolidated
financial statements included elsewhere in this report.
66
ITEM 5. COMMON STOCK AND STOCKHOLDER MATTERS
Stock Performance Table (1)
The following graph compares the performance of our common stock to the S&P MidCap 400 Index and
the S&P 500 Insurance Index by assuming $100 was invested in each investment option as of December
31, 2019 and the reinvestment of all dividends. The S&P MidCap 400 Index measures the performance of
the United States middle market capitalization (“mid-cap”) equities sector. The S&P 500 Insurance Index is
a capitalization-weighted index of domestic equities of insurance companies traded on the NYSE and
NASDAQ. Our common stock is included in the S&P MidCap 400 index.
Period Ended
Index
12/31/2019
12/30/2020
12/31/2021
12/31/2022
12/31/2023
12/30/2024
Primerica, Inc.
$
100.00
$
103.91
$
120.40
$
113.26
$
166.58
$
222.58
S&P 500
Insurance
100.00
99.56
131.54
144.86
158.28
200.73
S&P MidCap 400
100.00
113.66
141.80
123.28
143.55
163.55
(1)
The stock performance table is not deemed “soliciting material” or subject to Section 18 of the Exchange Act.
ITEM 6. [RESERVED]
Not applicable.
Primerica 2024 Annual Report
67
ITEM 7. MD&A
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is
intended to inform the reader about matters affecting the financial condition and results of operations of
Primerica, Inc. (the “Parent Company”) and its subsidiaries (collectively, “we”, “us” or the “Company”) for
the three-year period ended December 31, 2024. As a result, the following discussion should be read in
conjunction with the consolidated financial statements and accompanying notes that are included herein.
This discussion contains forward-looking statements that constitute our plans, estimates and beliefs.
These forward-looking statements involve numerous risks and uncertainties, including, but not limited to,
those discussed in “Item 1A. Risk Factors”. Actual results may differ materially from those contained in any
forward-looking statements.
This MD&A is divided into the following sections:
•
Business Trends and Conditions
•
Factors Affecting Our Results
•
Critical Accounting Estimates
•
Results of Operations
•
Financial Condition
•
Liquidity and Capital Resources
The Company previously reported a Senior Health segment, which consisted of e-TeleQuote Insurance,
Inc. and subsidiaries, a marketer of Medicare-related insurance products underwritten by third-party
health insurance carriers to eligible Medicare beneficiaries (the “Senior Health business”) that was
disposed of as of September 30, 2024, and is now reported in discontinued operations for all periods
presented. Refer to Note 2 (Discontinued Operations) to our consolidated financial statements included
elsewhere in this report for further details.
Business Trends and Conditions
The relative strength and stability of financial markets and economies in the United States and Canada
affect our growth and profitability. Our business is, and we expect will continue to be, influenced by a
number of industry-wide and product-specific trends and conditions. Economic conditions, including
unemployment levels and consumer confidence, influence investment and spending decisions by middle-
income consumers, who are generally our primary clients. These conditions and factors also impact
prospective recruits’ perceptions of the business opportunity that becoming an independent sales
representative offers, which can drive or dampen recruiting. Consumer spending and borrowing levels
affect how consumers evaluate their savings and debt management plans. In addition, equity market
returns and interest rates impact consumer demand for the investment and savings products we
distribute. Our customers’ perception of the strength of the capital markets may also influence their
decisions to invest in the investment and savings products we distribute.
The financial and distribution results of our operations in Canada, as reported in U.S. dollars, are affected
by changes in the currency exchange rate. As a result, changes in the Canadian dollar exchange rate may
significantly affect the results of our business for all amounts translated and reported in U.S. dollars.
Volatility in capital markets in recent periods has continued to impact our business. Strong equity
performance has influenced product sales and client asset values that drive revenue in the Investment and
68
ITEM 7. MD&A
Savings Products segment. In addition, the sharp rise in market interest rates during 2022 and further rate
increases in 2023 have largely driven the unrealized losses that have accumulated in our investment
portfolio. We have not recognized losses caused by interest rate volatility in the income statement for
securities where we have no present intention to dispose of them and we have the ability to hold these
investments until maturity or a market price recovery. Elevated interest rates have also led to increases in
net investment income as we are able to earn higher returns on our new debt securities purchases and
cash balances.
Significant inflation that followed the peak of the COVID-19 pandemic has led to an elevated cost of living
for middle-income families. We believe that the higher cost of living has adversely impacted persistency
for term life insurance policies. While the rate of inflation has been normalizing from its peak in 2022,
lapses of term life insurance policies have remained above long-term historical levels. The continuation of
the elevated cost of living could adversely impact demand for our products.
The effects of these trends and conditions are discussed below, in the Results of Operations section and in
the Financial Condition section.
Size of the Independent Sales Force. Our ability to increase the size of the independent sales force
(“independent sales representatives” or “independent sales force”) is largely based on the success of the
independent sales force’s recruiting efforts as well as training and motivating recruits to get licensed to
sell life insurance. We believe that recruitment and licensing levels are important to independent sales
force trends, and growth in recruiting and licensing is usually indicative of future growth in the overall size
of the independent sales force. Recruiting changes do not always result in commensurate changes in the
size of the licensed independent sales force because new recruits may obtain the requisite licenses at
rates above or below historical levels.
Details on recruiting and life-licensed independent sales representative activity were as follows:
Year ended December 31,
2024
2023
2022
New recruits
445,425
361,925
359,735
New life-licensed independent sales representatives
56,320
49,096
45,147
Life-licensed independent sales representatives, at period
end
151,611
141,572
135,208
The number of new recruits increased in 2024 compared to 2023. The year-over-year increase was
primarily driven by the momentum following our biennial convention held in July 2024 and special
recruiting incentives that were offered in connection with the convention. Approximately 81,000
individuals were recruited while the special incentives were in place. Recruiting activity was strong in 2023
without the benefit of significant recruiting incentives as compared with recruiting activity in 2022, which
benefited from the impact of the biennial convention held in June 2022 and associated recruiting
incentives. Positive sentiment regarding interest in our business opportunity along with the demand for
supplemental income likely contributed to the strong recruiting activity in the comparable periods.
New life-licensed independent sales representatives increased in 2024 compared to 2023 and 2022 as the
pipeline of recruits has increased each year-over-year.
The number of life-licensed independent sales representatives increased each year reflecting strong
recruiting and licensing activity as discussed above.
Primerica 2024 Annual Report
69
ITEM 7. MD&A
Term Life Insurance Product Sales and Face Amount In Force. The average number of life-licensed
independent sales representatives and the number of term life insurance policies issued, as well as the
average monthly rate of new policies issued per life-licensed independent sales representative (historically
between 0.20 and 0.24, as adjusted (1)), were as follows:
Year ended December 31,
2024
2023
2022
Adjusted
2022
(estimated)
Average number of life-licensed independent sales
representatives
145,975
137,760
132,077
132,077
Number of new policies issued(1)
370,396
358,860
291,918
333,020
Average monthly rate of new policies issued per
life-licensed(1) independent sales representative
0.21
0.22
0.18
0.21
(1)
For the year ended December 31, 2022, the previously reported number of new policies issued has been adjusted for
comparability purposes as a result of our new term life insurance products introduced in October 2022, which modified how
policies are structured in relation to individual lives. Historically, two adult lives could be covered under a single policy by
adding a spouse rider. To better align risk and pricing in our new life insurance products, we eliminated this rider and now sell a
separate policy for each insured life. Results for the years ended December 31, 2024 and 2023 reflect additional policies issued
to reflect the former spouse rider with a separate policy in the new life insurance products. To make year-over-year
comparisons more consistent, we have provided estimates for the year ended December 31, 2022.
The average number of life-licensed independent sales representatives increased each year as a result of
strong recruiting and licensing activity that drove growth in the size of the independent sales force as
discussed above.
New policies issued increased each year primarily due to year-over-year growth in the number of life-
licensed independent sales representatives.
Productivity in 2024, 2023, and adjusted 2022 measured by the average monthly rate of new policies
issued per life-licensed independent sales representative, was in line with our adjusted historical range.
70
ITEM 7. MD&A
The changes in the face amount of our in-force book of term life insurance policies were as follows:
Year ended December 31,
2024
% of
beginning
balance
2023
% of
beginning
balance
2022
% of
beginning
balance
(Dollars in millions)
Face amount in-force, beginning of
period
$
944,609
$
916,808
$
903,403
Net change in face amount:
Issued face amount
122,233
13%
119,102
13%
103,822
11%
Terminations
(103,872)
(11)%
(94,230)
(10)%
(82,894)
(9)%
Foreign currency
(9,387)
*
2,929
*
(7,523)
*
Net change in face amount
8,974
*
27,801
3%
13,405
1%
Face amount in-force, end
of period
$
953,583
$
944,609
$
916,808
* Less than 1%.
The face amount of term life policies in-force increased each year as the face amount issued continued to
exceed the face amount terminated. Issued face amounts increased each year due to the increase in the
number of new policies issued as discussed above. Policy terminations increased year-over-year but were
consistent when measured as a percentage of beginning face amount in-force. Policy terminations were
elevated in all periods with the high cost of living a likely key contributing factor. In 2024 and 2022, the
effect of a stronger U.S. dollar in relation to the Canadian dollar unfavorably impacted the translated face
amount in-force. During 2023, the strengthening of the Canadian dollar relative to the U.S. dollar
contributed to the increase in face amount.
Our average issued face amount per new policy was approximately $255,200 in 2024 compared to
$256,100 in 2023 and $228,000 in 2022, using the adjusted 2022 number of new policies issued as
discussed above. The average issued face amount per new policy was generally flat in 2024 compared to
2023. The average issued face amount per new policy in 2023 was higher compared with adjusted 2022
due to our new term life insurance products launched in October 2022, which drove an increase in
demand for policies at higher face amount levels.
Primerica 2024 Annual Report
71
ITEM 7. MD&A
Investment and Savings Product Sales, Asset Values and Accounts/Positions. Investment and savings
product sales were as follows:
Year ended December 31,
2024 vs. 2023
change
2023 vs. 2022
change
2024
2023
2022
$
%
$
%
(Dollars in millions)
Product sales:
U.S. retail mutual funds
$
4,795
$
3,898
$
4,266
$
897
23%
$
(368)
(9)%
Canada retail mutual funds - with
up-front sales commissions
665
478
912
$
187
39%
$
(434)
(48)%
Annuities and other
3,968
2,818
2,629
1,150
41%
189
7%
Total sales-based revenue
generating product sales
9,428
7,194
7,807
2,234
31%
(613)
(8)%
Managed investments
1,787
1,212
1,513
575
47%
(301)
(20)%
Canada retail mutual funds - no
up-front sales commissions
798
691
494
107
15%
197
40%
Segregated funds
66
115
195
(49)
(43)%
(80)
(41)%
Total product sales
$ 12,079
$
9,212
$ 10,009
$
2,867
31%
$
(797)
(8)%
The rollforward of asset values in client accounts was as follows:
Year ended December 31,
2024
% of
beginning
balance
2023
% of
beginning
balance
2022
% of
beginning
balance
(Dollars in millions)
Asset values, beginning of period
$
96,735
$
83,949
$
97,312
Net change in asset values:
Inflows
12,079
12%
9,212
11%
10,009
10%
Redemptions
(10,207)
(11)%
(7,663)
(9)%
(6,587)
(7)%
Net flows
1,872
2%
1,549
2%
3,422
4%
Change in fair value, net
14,849
15%
10,865
13%
(15,855)
(16)%
Foreign currency, net
(1,374)
(1)%
372
*
(930)
*
Net change in asset values
15,347
16%
12,786
15%
(13,363)
(14)%
Asset values, end of period
$
112,082
$
96,735
$
83,949
* Less than 1%.
72
ITEM 7. MD&A
Average client asset values were as follows:
Year ended December 31,
2024 vs. 2023
change
2023 vs. 2022
change
2024
2023
2022
$
%
$
%
(Dollars in millions)
Average client asset
values:
U.S. retail mutual funds
$
51,731
$
43,673
$
42,508
$
8,058
18% $
1,165
3%
Canada retail mutual funds
13,627
11,613
11,314
2,014
17%
299
3%
Annuities and other
28,218
24,229
23,947
3,989
16%
282
1%
Managed investments
9,852
7,663
6,951
2,189
29%
712
10%
Segregated funds
2,314
2,295
2,474
19
*
(179)
(7)%
Total average client asset
values
$ 105,742
$
89,473
$
87,194
$
16,269
18% $
2,279
3%
* Less than 1%.
Average number of fee-generating positions was as follows:
Year ended December 31,
2024 vs. 2023
change
2023 vs. 2022
change
2024
2023
2022
Positions
%
Positions
%
(Positions in thousands)
Average number of fee-
generating positions (1):
Recordkeeping and custodial
2,384
2,335
2,281
49
2%
54
2%
Recordkeeping only
861
836
814
25
3%
22
3%
Total average number of fee-
generating positions
3,245
3,171
3,095
74
2%
76
2%
(1)
We receive transfer agent recordkeeping fees by mutual fund positions. An individual client account may include multiple
mutual fund positions. We may also receive fees, which are earned on a per account basis, for custodial services that we provide
to clients with retirement plan accounts that hold positions in these mutual funds.
Product sales. Investment and savings product sales increased in 2024 from 2023, primarily due to our
ability to leverage increased demand across all product lines except for Canadian segregated funds. The
increase in demand was driven by strong equity market performance in the period leading up to and
including 2024. In particular, variable annuity product sales continued to lead the growth in sales as the
guarantees offered by these products have become more appealing to investors given strong equity
market performance and elevated interest rates. Marginally offsetting the increase in product sales was
lower year-over-year sales of Canadian segregated funds as sales of investments in new Canadian
segregated fund accounts significantly decreased after May 2023 due to implemented regulations in
Canada. See “Regulatory Changes” below for more information on Canadian regulations.
Primerica 2024 Annual Report
73
ITEM 7. MD&A
Investment and savings product sales decreased in 2023 from 2022, resulting primarily from lower year-
over-year product sales during the first half of 2023. The impact of market volatility, the higher cost of
living, and the availability of high yield money market and savings account alternatives likely drove the
reduction in demand for U.S. mutual funds, total Canadian mutual funds and managed accounts during
the first half of 2023. By comparison, product sales in the early part of 2022 reflected strong demand that
followed a period of positive equity market returns. The majority of Canadian mutual fund product sales
shifted to a no up-front sales commission model in 2023 compared to an up-front sales commission
model in the first part of 2022 as a result of the introduction of our new principal distributor Canadian
mutual fund product in July 2022. The principal distributor model results in higher asset-based trail
commission revenues over time in lieu of up-front compensation at the time of sale. Additionally, lower
year-over-year sales of Canadian segregated funds as sales of investments in new Canadian segregated
fund accounts significantly decreased starting in June 2023 due to new regulations in Canada. Partially
offsetting these decreases were higher sales of variable annuities in 2023 as investor demand for the
guarantee features of these products increased likely due to market volatility during that year.
Rollforward of client asset values. Ending client asset values increased in 2024 from 2023 primarily due to
the differences in market performance during each respective year. Net flows increased in 2024 from
2023. Partially offsetting the increase was movement in the foreign exchange rate as the U.S. dollar
strengthened in relation to the Canadian dollar, which negatively impacted client asset values during
2024.
Ending client asset values increased in 2023 from 2022 primarily due to the difference in market
performance during each respective year. Net flows remained positive during 2023 but were lower than
net flows in 2022.
Average client asset values. Average client asset values increased in 2024 compared to 2023. The increase
was driven by the cumulative effect of strong market performance and net client inflows, partially offset
by the effect of a stronger U.S. dollar in relation to the Canadian dollar.
Average client asset values increased modestly in 2023 compared to 2022. The increase was driven by the
timing and changes in market conditions that affected the balance of client assets during each year
combined with the impact of positive net flows.
Average number of fee-generating positions. The average number of fee-generating positions increased in
2024 compared to 2023 and in 2023 compared to 2022 primarily due to the continued cumulative effect
of retail mutual fund sales in recent periods that led to an increase in the number of retail mutual fund
positions serviced on our transfer agent recordkeeping platform.
Regulatory Changes.
Restrictions on compensation models in Canada. In response to regulatory changes in Canada by the
Canadian Securities Administrators (“CSA,” the provincial and territorial securities commissions), we
developed a set of mutual fund products with two third-party mutual fund companies that are sold
exclusively by the independent sales representatives (the “Principal Distributor funds”). The revenue we
receive is primarily in the form of asset-based distribution fees from the mutual fund companies and
asset-based service fees that are charged to investors. In turn, the primary compensation we offer
independent sales representatives is the option of an up-front sales commission or higher asset-based
commissions over time. Although we received the requisite approval, the CSA indicated to us at the time
of such approval that the CSA has been closely examining the Principal Distributor funds model, and it
launched a public consultation on the model and related sales practices. In response to its public
consultation, the CSA may consider future amendments that would require modifications to our Principal
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ITEM 7. MD&A
Distributor model, including with respect to its up-front commission features. Comments on the
consultation are due by April 28, 2025. At this time, we cannot quantify the financial impact, if any, of
future changes to our business that may be necessary if our Principal Distributor funds model is required
to be modified or discontinued. During the year ended December 31, 2024, Canadian mutual funds
represented approximately 12% of our total investment and savings product sales and approximately 13%
of our average client asset values.
As mandated by insurance regulators in Canada, a cessation of deferred sales charges on new segregated
fund contracts entered into after May 31, 2023 went into effect as previously announced. Deferred sales
charges will continue to be allowed on subsequent deposits to existing segregated funds contracts for a
period of time; however, insurance regulators will be further evaluating whether to allow this continued
use. Our Canadian segregated funds products were primarily sold on a deferred sales charge basis and we
paid up-front commissions to the independent sales representatives for the sale of these products. As we
anticipated, we experienced a decline in segregated funds product sales beginning in June 2023. Without
further clarity from regulators on allowable segregated funds compensation practices, we are unable to
evaluate and introduce new compensation practices for the sale of our segregated funds or similar
products we could potentially distribute on behalf of third parties. We earn revenue from Canadian
segregated funds products based on a percentage of client assets under management. During the year
ended December 31, 2024, Canadian segregated funds represented less than 1% of our total investment
and savings product sales and approximately 2% of our average client asset values. Partly in response to
the decline in sales discussed above, we entered into an agreement with The Canada Life Assurance
Company, a third-party insurance company, to distribute segregated funds underwritten by it. In early
2025, we began the process of rolling out our distribution of these segregated fund contracts. We do not
expect the distribution of segregated funds products to materially impact our Investment and Savings
Product segment revenues in the near term.
Factors Affecting Our Results
Term Life Insurance Segment. The Term Life Insurance segment results are primarily driven by sales
volumes, how closely actual experience matches our actuarial assumptions, terms and use of reinsurance,
and expenses.
Sales and policies in-force. Sales of term policies and the size and characteristics of our in-force book of
policies are vital to our results over the long term. Premium revenue is recognized as it is earned over the
term of the policy. However, because we incur significant cash outflows at or about the time policies are
issued, including the payment of sales commissions and underwriting costs, changes in life insurance sales
volume in a period will have a more immediate impact on our cash flows than on revenue.
Historically, we have found that while sales volume of term life insurance products between fiscal periods
may vary based on a variety of factors, the productivity of independent sales representatives generally
remains within a range (i.e., an average monthly rate of new policies issued per life-licensed independent
sales representative between 0.20 and 0.24, as adjusted). The volume of term life insurance products sales
will fluctuate in the short term, but over the longer term, our sales volume generally correlates to the size
of the independent sales force.
Actuarial assumptions. The actuarial assumptions that underlie our reserves are based upon our best
estimates of mortality, persistency, disability, and interest rates. Our results will be affected to the extent
there is a variance between our actuarial assumptions and actual experience. These variances will be
reflected in our financial results by unlocking assumptions and cash flows underlying the liability for future
policy benefits (“LFPB”) and ceded reserves that are part of the reinsurance recoverables. See Note 11
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ITEM 7. MD&A
(Future Policy Benefits) to our consolidated financial statements included elsewhere in this report for more
information on LFPB. The variances are also reflected in the projection of future face amount that is the
basis for amortizing deferred policy acquisition costs (“DAC”).
•
Persistency. Persistency is a measure of how long our insurance policies stay in-force. As a general
matter, persistency that is lower than our actuarial assumptions adversely affects our results over the
long term because we lose the recurring revenue stream associated with the policies that lapse. In
general, persistency differences have a minimal impact on our financial results from period to period
since DAC is generally amortized on a straight-line basis and the unlocking of the LFPB adjusts both
expected net premiums and expected future policy benefits and spreads any variances over the
remaining contract period.
•
Mortality. Our profitability will fluctuate to the extent actual mortality rates differ from actuarial
assumptions. We mitigate a significant portion of our mortality exposure through reinsurance. Long
term mortality variances that result in an assumption change may have a significant impact on our
financial results.
•
Disability. Our profitability will fluctuate to the extent actual disability rates underlying our waiver
premium benefits, including recovery rates for individuals currently disabled, differ from actuarial
assumptions. The waiver of premium benefit is secondary to the death benefit coverage provided.
However, the waiver of premium benefit is not reinsured on a yearly renewable term (“YRT”) basis
and material changes in assumptions compared to expectations can have a disproportionate impact
on our financial results.
•
Interest Rates. We use a locked-in assumption for future interest rates for reserves underlying our
segment results. Policies issued prior to the January 1, 2021 transition date of the Company’s
adoption of Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944) —
Targeted Improvements to the Accounting for Long-Duration Contracts (the “Transition Date”) use an
interest rate that reflects the portfolio’s current reinvestment rate while policies issued on or after
the Transition Date use an upper-medium grade fixed income instrument yield during the period of
issue.
Reinsurance. We use reinsurance extensively, which has a significant effect on our results of operations.
We have generally reinsured between 80% and 90% of the mortality risk on term life insurance (excluding
coverage under certain riders) on a quota share YRT basis. To the extent actual mortality experience is
more or less favorable than the contractual rate, the reinsurer will earn incremental profits or bear the
incremental cost, as applicable. In contrast to coinsurance, which is intended to eliminate all risks (other
than counterparty risk of the reinsurer) and rewards associated with a specified percentage of the block of
policies subject to the reinsurance arrangement, the YRT reinsurance arrangements we enter into are
intended only to reduce volatility associated with variances between estimated and actual mortality rates.
In 2010, as part of our corporate reorganization and the initial public offering of our common stock, we
entered into significant coinsurance transactions (the “IPO coinsurance transactions”) with entities then
affiliated with Citigroup, Inc. (collectively, the “IPO coinsurers”) and ceded between 80% and 90% of the
risks and rewards of term life insurance policies that were in-force at year-end 2009. We administer all
such policies subject to these coinsurance agreements. Policies reaching the end of their initial level term
period are no longer ceded under the IPO coinsurance transactions.
The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our
consolidated statements of income follows:
•
Ceded premiums. Ceded premiums are the premiums we pay to reinsurers. These amounts are
deducted from the direct premiums we earn to calculate our net premium revenues. Similar to direct
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ITEM 7. MD&A
premium revenues, ceded coinsurance premiums remain level over the initial term of the insurance
policy. Ceded YRT premiums increase over the period that the policy has been in-force. Accordingly,
ceded YRT premiums generally constitute an increasing percentage of direct premiums over the
policy term.
•
Benefits and claims. Benefits and claims include incurred claim amounts and changes in future policy
benefit reserves. Reinsurance reduces incurred claims in direct proportion to the percentage ceded,
and reinsurance cash flows are reflected in the ceded reserves included in reinsurance recoverables.
Changes in ceded reserves offset changes in future policy benefit reserves.
•
Insurance expenses. Insurance expenses are reduced by the allowances received from coinsurance.
There is no impact on insurance expenses associated with our YRT contracts.
We may alter our reinsurance practices at any time due to the unavailability of YRT reinsurance at
attractive rates or the availability of alternatives to reduce our risk exposure. We intend to continue ceding
approximately 90% of our U.S. and Canadian mortality risk on new business.
Expenses. Results are also affected by variances in client acquisition, maintenance and administration
expense levels.
Investment and Savings Products Segment. The Investment and Savings Products segment results are
primarily driven by sales, the value of assets in client accounts for which we earn ongoing management,
marketing and support, and distribution fees, and the number of transfer agent recordkeeping positions
and non-bank custodial fee-generating accounts we administer.
Sales. We earn commissions and fees, such as dealer re-allowances and marketing and distribution fees,
based on sales of mutual fund products and annuities in the United States and sales of certain mutual
fund products in Canada. Sales of investment and savings products are influenced by the overall demand
for investment and savings products in the United States and Canada, as well as by the size and
productivity of the independent sales force. We generally experience seasonality in the Investment and
Savings Products segment results due to our high concentration of sales of retirement account products.
These accounts are typically funded in February through April, coincident with our clients’ tax return
preparation season. While we believe the size of the independent sales force is a factor in driving sales
volume in this segment, there are a number of other variables, such as economic and market conditions,
which may have a significantly greater effect on sales volume in any given fiscal period.
Asset values in client accounts. We earn marketing and distribution fees (trail commissions or, with respect
to U.S. mutual funds, 12b-1 fees) on mutual fund and annuity assets in the United States and Canada. In
the United States, we also earn investment advisory and administrative fees on assets in managed
investments. In Canada, we earn marketing, distribution, and shareholder services fees on mutual fund
assets for which we serve as the principal distributor and management fees on the segregated funds for
which we serve as investment manager. Asset values are influenced by new product sales, ongoing
contributions to existing accounts, redemptions and the change in market values in existing accounts.
While we offer a wide variety of asset classes and investment styles, our clients’ accounts are primarily
invested in equity funds. Volatility in equity markets will impact the value of assets in client accounts and,
as a result, the revenue we earn on those assets.
Positions. We earn transfer agent recordkeeping fees for administrative functions we perform on behalf of
several of our mutual fund providers. An individual client account may include multiple fund positions for
which we earn transfer agent recordkeeping fees. We may also receive fees earned for non-bank custodial
services that we provide to clients with retirement plan accounts.
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ITEM 7. MD&A
Sales mix. While our investment and savings products all provide similar long-term economic returns to
the Company, our results in a given fiscal period will be affected by changes in the overall mix of products
within these categories. Examples of changes in the sales mix that influence our results include the
following:
•
sales of annuity products in the United States will generate higher revenues in the period such sales
occur than sales of other investment products that either generate lower up-front revenues or, in the
case of managed investments and segregated funds, no up-front revenues;
•
sales of a higher proportion of managed investments, Canadian mutual funds, and segregated funds
products will spread the revenues generated over time because we earn higher revenues based on
assets under management for these accounts each period as opposed to earning up-front revenues
based on product sales; and
•
sales of a higher proportion of mutual fund products sold in the United States will impact the timing
and amount of revenue we earn given the distinct transfer agent recordkeeping and non-bank
custodial services we provide for certain mutual fund products we distribute.
Corporate and Other Distributed Products Segment. We earn revenues and pay commissions and
referral fees within the Corporate and Other Distributed Products segment for mortgage loan originations,
prepaid legal services, auto and homeowners’ insurance referrals, and other financial products, all of
which are originated by third parties. The Corporate and Other Distributed Products segment also
includes in-force policies from several discontinued lines of insurance underwritten by National Benefit
Life Insurance Company (“NBLIC”).
The Corporate and Other Distributed Products segment includes net investment income recognized by
the Company. Net investment income is impacted by the size and performance of our invested asset
portfolio, which can be influenced by interest rates, credit spreads, and the mix of invested assets. Net
investment income also is influenced by short-term interest rates and the amount of cash and cash
equivalents on hand.
The Corporate and Other Distributed Products segment also includes corporate income and expenses not
allocated to our other segments, general and administrative expenses (other than expenses that are
allocated to the Term Life Insurance and Investment and Savings Products segments), interest expense on
notes payable, a redundant reserve financing transaction and our revolving credit facility (“Revolving
Credit Facility”), as well as realized gains and losses on our invested asset portfolio.
Capital Structure. Our financial results are affected by our capital structure, which includes our senior
unsecured notes (the “Senior Notes”), a redundant reserve financing transaction, our Revolving Credit
Facility, and our common stock. See Note 12 (Debt), Note 14 (Stockholders’ Equity) and Note 18
(Commitments and Contingent Liabilities) to our consolidated financial statements included elsewhere in
this report for more information on changes in our capital structure.
Foreign Currency. The Canadian dollar is the functional currency for our Canadian subsidiaries and our
consolidated financial results, reported in U.S. dollars, are affected by changes in the currency exchange
rate. As such, the translated amount of revenues, expenses, assets and liabilities attributable to our
Canadian subsidiaries will be higher or lower in periods where the Canadian dollar appreciates or weakens
relative to the U.S. dollar, respectively.
The year-end exchange rates (U.S. dollar per Canadian dollar) used by the Company to translate our
Canadian dollar functional currency assets and liabilities into U.S. dollars decreased by 8% in 2024 from
2023. Also, the average exchange rates used by the Company in 2024 to translate our Canadian dollar
functional currency revenues and expenses into U.S. dollars decreased 1% compared to 2023. The 2023
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ITEM 7. MD&A
year-end exchange rates increased by 3% from 2022 and the average exchange rates decreased 4%
compared to 2022.
See the Results of Operations section, the Financial Condition section, and “Quantitative and Qualitative
Disclosures About Market Risk – Canadian Currency Risk” and Note 4 (Segment and Geographical
Information) to our consolidated financial statements included elsewhere in this report, for more
information on our Canadian subsidiaries and the impact of foreign currency on our financial results.
Income Taxes. The profitability of the Company and its subsidiaries is affected by income taxes assessed
by federal, state, and U.S. territorial jurisdictions in the U.S. and federal and provincial jurisdictions in
Canada. Changes in tax legislation may impact the measurement of our deferred tax assets and liabilities
and the amount of income tax expense we incur.
Critical Accounting Estimates
We prepare our financial statements in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”). These principles are established primarily by the Financial Accounting Standards Board. The
preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and
assumptions based on currently available information when recording transactions resulting from
business operations. Our significant accounting policies are described in Note 1 (Description of Business,
Basis of Presentation, and Summary of Significant Accounting Policies) to our consolidated financial
statements included elsewhere in this report. The most significant items on our consolidated balance
sheets are based on fair value determinations, accounting estimates and actuarial determinations, which
are susceptible to changes in future periods and could affect our results of operations and financial
position.
The estimates that we deem to be most critical to an understanding of our results of operations and
financial position are those related to DAC, future policy benefit reserves and corresponding amounts
recoverable from reinsurers, income taxes, and the valuation of investments. The preparation and
evaluation of these critical accounting estimates involve the use of various assumptions developed from
management’s analyses and judgments. Subsequent experience or use of other assumptions could
produce significantly different results.
Deferred Policy Acquisition Costs. We defer incremental direct costs of successful contract acquisitions
that result directly from and are essential to the contract transaction(s) and that would not have been
incurred had the contract transaction(s) not occurred. These costs include commissions and policy issue
expenses. Deferrable Term Life Insurance policy acquisition costs are amortized on a constant-level basis
over the expected term of the contracts using face amount as the unit of measure. Interest is not accrued
on unamortized DAC balances, and DAC is not subject to impairment testing. Contracts are grouped by
cohorts consistent with the grouping used in estimating the LFPB. The cohorts are defined by the legal
entity that issued the policy and the year the policy was issued.
Assumptions of face amounts used to amortize DAC for term life policies, including persistency and
mortality, are consistent with the assumptions used in estimating the LFPB. Changes in persistency would
have the most notable impact on DAC amortization; however, the differences primarily affect DAC
amortization on a go-forward basis. If annual lapse rate assumptions at each policy duration were 5%
higher during 2024, we would have recognized approximately $10 million of additional amortization of
DAC expense for 2024, before the impact of tax, and the rate of DAC amortization would increase in
future years. Conversely, if annual lapse rate assumptions were 5% lower during 2024, we would have
recognized approximately $10 million of lower DAC amortization for 2024, before the impact of tax, and
the rate of DAC amortization would decrease in future years. We believe that a plus or minus 5% annual
lapse rate change is a reasonably possible variation. Changes in persistency assumptions also impact the
balance of future policy benefit reserves and reinsurance recoverables as discussed below.
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ITEM 7. MD&A
For additional information on DAC, see Note 1 (Description of Business, Basis of Presentation, and
Summary of Significant Accounting Policies) and Note 8 (Deferred Policy Acquisition Costs) to our
consolidated financial statements included elsewhere in this report.
Future Policy Benefit Reserves and Reinsurance. Liabilities for future policy benefits on our term life
insurance products are reserves established for death claims, waiver of premium benefits, and claim
settlement expenses. The LFPB is calculated as the present value of expected future benefits less the
present value of expected future net premiums receivable under the contracts. Net premiums are defined
as the portion of policyholder gross premiums that are needed to pay for all benefits.
The assumptions underlying the LFPB include mortality, persistency, discount rates, disability rates, and
other assumptions that reflect our best estimate based on our historical experience and modified, as
necessary, to reflect non-recurring and/or anticipated trends.
The LFPB is estimated by grouping insurance policies into cohorts. Policy cohorts for the Term Life
Insurance segment are based on the legal entity that issued the policy and the year the policy was issued.
The cash flows and assumptions underlying the LFPB are unlocked each quarter to reflect differences
between actual and expected experience. In general, assumption changes, such as mortality, lapse and
disability, to the extent necessary, are expected to only occur during the third quarter when we update
our experience studies. However, they may occur at any time based on emerging experience.
The impact of unlocking assumptions, such as mortality, lapse and disability, will be partly reflected in the
current period and partly spread to future periods based on the remaining duration of the impacted
cohort(s). The catch-up is retroactive back to the later of the Transition Date or issue date, after
reinsurance recoverables and is recognized as a remeasurement gain or loss as a separate component of
benefits and claims expense in the consolidated statements of income.
The ceded policy reserve balances included in reinsurance recoverables are calculated in the same manner
as the LFPB by cohort and apply best estimate assumptions and quarterly unlocking.
The Company uses discount rates applied by country to align with local currency cash flows. Discount
rates consist of yield curves that are developed using Bloomberg’s Evaluated Pricing Product based on
senior unsecured fixed rate bonds ratings of A+, A, or A-. The discount rate assumption is updated
quarterly, and the impact of remeasuring the net LFPB, after reinsurance recoverables from changes in the
locked-in discount rate assumption is reflected in other comprehensive income (loss) in the consolidated
statements of comprehensive income (loss).
The LFPB is necessarily based on estimates, assumptions and our analysis of historical experience. Factors
that could cause prospective assumptions to be different from historical experience include but are not
limited to changes to our term life product series, economic and societal trends, new pharmaceutical
drugs, and the impact of regulatory changes. The assumptions and estimates underlying the LFPB require
significant judgment, and therefore, are inherently uncertain. The following table provides illustrated net
impact of changes in assumptions affecting both the LFPB and reinsurance recoverables that we believe
are reasonably possible, before the impact of tax:
Assumption
Sensitivity assumption change
Estimated impact at December 31, 2024
Lapse
5% decrease / 5% increase
($34 million) / $34 million(1)
Mortality
5% increase / 5% decrease
($44 million) / $44 million(1)
Disability
5% increase / 5% decrease
($17 million) / $17 million(1)
Discount rate
100 bps decrease / 100 bps
increase
($634 million) / $527 million(2)
(1)
Changes in lapse, mortality and disability affect the benefits and claims expense on the consolidated statements of income.
Estimated impacts show the (decrease) / increase in income before income taxes. The assumption change sensitivities shown
are based on a consistent percentage change across all policy durations.
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ITEM 7. MD&A
(2)
Changes in discount rate affect the effect of change in discount rate assumptions on the liability for future policy benefits on
the consolidated statements of comprehensive income (loss). Estimated impacts show the (decrease) / increase in accumulated
other comprehensive income (loss) before income taxes. The assumption change is based on a parallel shift in the discount rate
curve.
As discussed above, changes in lapse, mortality, and disability assumptions would also affect the net
premium ratio used to recognize benefits expenses in future periods.
For additional information on future policy benefits, reinsurance and the impact to accumulated other
comprehensive income (loss) see Note 1 (Description of Business, Basis of Presentation, and Summary of
Significant Accounting Policies), Note 7 (Reinsurance), and Note 11 (Future Policy Benefits) to our
consolidated financial statements included elsewhere in this report.
Income Taxes. We account for income taxes using the asset and liability method. We recognize deferred
tax assets and liabilities for the future tax consequences attributable to (i) temporary differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and (ii) operating loss and tax credit carryforwards. Deferred tax assets are recognized subject to
management’s judgment that realization is more likely than not applicable to the periods in which we
expect the temporary difference will reverse. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled.
In light of the multiple tax jurisdictions in which we operate, our tax returns are subject to routine audit by
the Internal Revenue Service and other taxation authorities. These audits at times may produce alternative
views regarding particular tax positions taken in the year(s) of review. As a result, the Company records
uncertain tax positions, which require recognition at the time when it is deemed more likely than not that
the position in question will be upheld. Although management believes that the judgment and estimates
involved are reasonable and that the necessary provisions have been recorded, changes in circumstances
or unexpected events could adversely affect our financial position, results of operations, and cash flows.
For additional information on income taxes, see Note 1 (Description of Business, Basis of Presentation,
and Summary of Significant Accounting Policies) and Note 13 (Income Taxes) to our consolidated financial
statements included elsewhere in this report.
Invested Assets. We hold primarily fixed-maturity securities, including bonds and redeemable preferred
stocks. We have classified these invested assets as available-for-sale, except for the securities of our U.S.
broker-dealer subsidiaries, which we have classified as trading securities. We also hold a credit-enhanced
note, which we classified as a held-to-maturity security that was issued in exchange for a surplus note (the
“Surplus Note”) with an equal principal amount as part of a redundant reserve financing transaction. All of
these securities are carried at fair value, except for the held-to-maturity security, which is carried at
amortized cost. Unrealized gains and losses on available-for-sale securities are included as a separate
component of other comprehensive income (loss) in our consolidated statements of comprehensive
income (loss).
We also hold equity securities, including common and non-redeemable preferred stock. These equity
securities are measured at fair value, and changes in unrealized gains and losses are recognized in net
income. Changes in fair value of trading securities are included in net income in our consolidated
statements of income in the period in which the change occurred.
Fair value. Fair value is the price that would be received upon the sale of an asset in an orderly transaction
between market participants at the measurement date. Fair value measurements are based upon
observable and unobservable inputs. Observable inputs reflect market data obtained from independent
sources, while unobservable inputs reflect our view of market assumptions in the absence of observable
market information. We classify and disclose all invested assets carried at fair value in one of the three fair
value measurement hierarchy categories prescribed by U.S. GAAP.
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As of each reporting period, we classify all invested assets in their entirety based on the lowest level of
input that is significant to the fair value measurement. Significant levels of estimation and judgment are
required to determine the fair value of certain of our investments. The factors influencing these
estimations and judgments are subject to change in subsequent reporting periods.
Credit losses for available-for-sale fixed-maturity securities. For available-for-sale securities in an unrealized
loss position that we intend to sell or would more-likely-than-not be required to sell before the expected
recovery of the amortized cost basis, we recognize the impairment as a credit loss in our consolidated
statements of income by writing down the amortized cost basis to the fair value. For available-for-sale
securities in an unrealized loss position that we do not intend to sell or it is not more-likely-than-not that
we will be required to sell before the expected recovery of the amortized cost basis, we recognize the
portion of the impairment that is due to a credit loss in our consolidated statements of income through
an allowance for credit losses. We reverse credit losses previously recognized in the allowance for credit
losses in situations where the estimate of credit losses on those securities has declined. We do not
consider the length of time an available-for-sale security has been in an unrealized loss position when
estimating credit losses.
Analyses that we perform to determine whether an impairment is due to a credit loss or other factors
involve the use of estimates, assumptions, and subjectivity. We evaluate a number of quantitative and
qualitative factors when determining the credit loss on individual securities, including issuer-specific risks
as well as relevant macroeconomic risks. If these factors or future events change, we could experience
material credit losses recognized in our consolidated statements of income for available-for-sale securities
in future periods, which could adversely affect our financial condition, results of operations and the size
and quality of our invested assets portfolio.
For additional information on our invested assets, see Note 1 (Description of Business, Basis of
Presentation, and Summary of Significant Accounting Policies), Note 5 (Investments) and Note 6 (Fair
Value of Financial Instruments) to our consolidated financial statements included elsewhere in this report.
Results of Operations
Revenues. Our revenues consist of the following:
•
Net premiums. Reflects direct premiums payable by our policyholders on our in-force insurance
policies, primarily term life insurance, net of reinsurance premiums that we pay to reinsurers.
•
Commissions and fees. Consists primarily of dealer re-allowances earned on the sales of investment
and savings products, trail commissions and management fees based on the asset values of client
accounts, marketing and distribution fees from product originators, fees for non-bank custodial
services rendered in our capacity as nominee on client retirement accounts funded by mutual funds
on our servicing platform, transfer agent recordkeeping fees for mutual funds on our servicing
platform, and fees associated with the sale of other distributed products.
•
Net investment income. Represents income, net of investment-related expenses, generated on cash,
cash equivalents, and our invested asset portfolio, which consists primarily of interest income earned
on fixed-maturity investments. Investment income recorded on our held-to-maturity invested asset
and the offsetting interest expense recorded for our Surplus Note are included in net investment
income.
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ITEM 7. MD&A
•
Investment gains (losses). Primarily reflects the difference between amortized cost and amounts
realized on the sale of available-for-sale securities, credit losses recognized on available-for-sale
securities and changes in the fair value of equity securities.
•
Other, net. Reflects revenues generated from the fees charged for access to Primerica Online (“POL”),
our primary independent sales force support tool, as well as revenues from the sale of other
miscellaneous items.
Benefits and Expenses. Our operating expenses consist of the following:
•
Benefits and claims. Reflects the benefits and claims payable on insurance policies, changes in our
reserves for future policy claims and reserves for other benefits payable, net of reinsurance.
•
Future policy benefits remeasurement (gain) loss. Represents the impact on the starting LFPB, net of
reinsurance recoverables, from unlocking current period cash flows and assumptions. It reflects the
catch-up on the net liability that is retroactive back to the later of the Transition Date or issue date
up to the current reporting date.
•
Amortization of DAC. Represents the amortization of capitalized costs directly associated with the
sale of an insurance policy or segregated fund, including sales commissions, medical examination
and other underwriting costs, and other eligible policy issuance costs.
•
Sales commissions. Represents commissions to the independent sales representatives in connection
with the sale of investment and savings products, and products other than insurance products.
•
Insurance expenses. Reflects non-capitalized insurance expenses, including staff compensation,
technology and communications, insurance independent sales force-related costs, printing, postage
and distribution of insurance sales materials, outsourcing and professional fees, premium taxes, and
other corporate and administrative fees and expenses related to our insurance operations. Insurance
expenses also include both indirect policy issuance costs and costs associated with unsuccessful
efforts to acquire new policies.
•
Insurance commissions. Reflects sales commissions with respect to insurance products that are not
eligible for deferral.
•
Interest expense. Reflects interest on our note payable, any interest and the commitment fee on our
Revolving Credit Facility, fees paid for the credit enhancement feature on our held-to-maturity
invested asset, and a finance charge incurred pursuant to one of our coinsurance agreements with
an IPO coinsurer.
•
Other operating expenses. Consists primarily of staff compensation, technology and communications,
various independent sales force-related costs, non-bank custodial and transfer agent recordkeeping
administrative costs, outsourcing and professional fees, and other corporate and administrative fees
and expenses.
Insurance expenses and other operating expenses directly attributable to the Term Life Insurance and
Investment and Savings Products segments are recorded directly to the applicable segment. We allocate
certain other revenue and operating expenses that are not directly attributable to a specific operating
segment using methods expected to reasonably measure the benefit received by each reporting segment.
Such methods include time studies, recorded usage, revenue distribution, and independent sales force
representative distribution. These allocated items include fees charged for access to POL and costs
incurred for technology, independent sales force support, occupancy and other general and
administrative costs. Costs that are not directly charged or allocated to our two primary operating
segments are included in the Corporate and Other Distributed Products segment.
Primerica 2024 Annual Report
83
ITEM 7. MD&A
Primerica, Inc. and Subsidiaries Results. Our results of operations for the years ended December 31,
2024, 2023, and 2022 were as follows:
2024 vs. 2023
2023 vs. 2022
Year ended December 31,
change
change
`
2024
2023
2022
$
%
$
%
(Dollars in thousands)
Revenues:
Direct premiums
$
3,393,604
$
3,312,125
$
3,230,120
$
81,479
2%
$
82,005
3%
Ceded premiums
(1,664,433)
(1,651,811)
(1,629,892)
12,622
*
21,919
*
Net premiums
1,729,171
1,660,314
1,600,228
68,857
4%
60,086
4%
Commissions and fees
1,082,889
892,853
897,256
190,036
21%
(4,403)
*
Investment income net of investment expenses
218,153
201,311
156,987
16,842
8%
44,324
28%
Interest expense on surplus note
(62,652)
(65,474)
(63,922)
(2,822)
(4)%
(1,552)
2%
Net investment income
155,501
135,837
93,065
19,664
14%
42,772
46%
Realized investment gains (losses)
1,015
(645)
1,444
1,660
*
(2,089)
*
Other investment gains (losses)
1,221
(5,251)
(2,439)
6,472
*
(2,812)
*
Investment gains (losses)
2,236
(5,896)
(995)
8,132
*
(4,901)
*
Other, net
119,346
65,399
67,897
53,947
82%
(2,498)
(4)%
Total revenues
3,089,143
2,748,507
2,657,451
340,636
12%
91,056
3%
Benefits and expenses:
Benefits and claims
648,163
642,979
632,403
5,184
*
10,576
2%
Future policy benefits remeasurement (gain)
loss
(25,920)
(384)
1,626
(25,536)
*
(2,010)
*
Amortization of DAC
298,136
275,816
261,629
22,320
8%
14,187
5%
Sales commissions
573,249
457,444
462,764
115,805
25%
(5,320)
(1)%
Insurance expenses
255,619
235,460
235,405
20,159
9%
55
*
Insurance commissions
32,008
34,222
30,261
(2,214)
(6)%
3,961
13%
Interest expense
25,034
26,594
27,237
(1,560)
(6)%
(643)
(2)%
Other operating expenses
343,607
304,638
287,470
38,969
13%
17,168
6%
Total benefits and expenses
2,149,896
1,976,769
1,938,795
173,127
9%
37,974
2%
Income from continuing operations
before income taxes
939,247
771,738
718,656
167,509
22%
53,082
7%
Income taxes from continuing operations
219,118
180,556
163,942
38,562
21%
16,614
10%
Income from continuing operations
720,129
591,182
554,714
128,947
22%
36,468
7%
Loss from discontinued operations, net of
income taxes, including loss attributable
to noncontrolling interest (“NCI”)
(249,611)
(14,581)
(87,684)
235,030
*
(73,103)
*
Net income
470,518
576,601
467,030
(106,083)
(18)%
109,571
23%
Net loss attributable to NCI
-
-
(5,038)
-
*
5,038
*
Net income attributable to Primerica,
Inc.
$
470,518
$
576,601
$
472,068
$
(106,083)
(18)%
$
104,533
22%
* Less than 1% or not meaningful
84
ITEM 7. MD&A
2024 compared to 2023
Total revenues. Total revenues increased in 2024 from 2023 due to increases in commissions and fees
earned in our Investment and Savings Products segment, net premiums earned in our Term Life Insurance
segment, and net investment income and investment gains earned in our Corporate and Other
Distributed Products segment. Also contributing to the increase was a $50.0 million gain recognized in
2024 within other, net revenue in our Corporate and Other Distributed Products segment related to
proceeds received under a Representation and Warranty insurance policy purchased in connection with
the acquisition of the Senior Health business. For more information on the Representation and Warranty
insurance policy proceeds, see Note 4 (Segment and Geographical Information) to our consolidated
financial statements included elsewhere in this report. These movements are further discussed in detail in
the Segment Results sections below.
Total benefits and expenses. Total benefits and expenses increased in 2024 from 2023 largely due to
higher sales commissions in our Investment and Savings Products segment. In addition, higher
amortization of DAC, insurance expenses and benefits and claims in our Term Life Insurance segment
contributed to the increase in benefits and expenses. Also contributing to the increase in 2024 was higher
other operating expenses in our Investment Savings Products and Corporate and Other Distributed
Products segments. Insurance expenses and other operating expenses were higher in 2024 due to higher
variable growth-related costs, technology investments, and employee-related costs, which includes higher
incentive compensation due to strong company performance. Partially offsetting these increases was a
higher future policy benefits remeasurement gain compared to 2023 in our Term Life Insurance segment
and lower benefits and claims in our Corporate and Other Distributed Products segment. These
movements are discussed in further detail in the Segment Results section below.
Income taxes. Our effective income tax rate from continuing operations for 2024 of 23.3% was largely
consistent with 23.4% in 2023.
Loss from discontinued operations, net of income taxes. Loss from discontinued operations, net of income
taxes relates to the Senior Health business, which was disposed of as of September 30, 2024 and is
reported in discontinued operations for all periods presented. Refer to Note 2 (Discontinued Operations)
to our consolidated financial statements included elsewhere in this report for further details.
2023 compared to 2022
Total revenues. Total revenues increased in 2023 from 2022 due to increases in net premiums earned in
our Term Life Insurance segment, asset-based commissions and fees earned in our Investment and
Savings Products segment, and net investment income earned in our Corporate and Other Distributed
Products segment. Partially offsetting these increases in total revenues were lower sales-based
commissions and fees earned in our Investment and Savings Products segment. These movements are
further discussed in detail in the Segment Results sections below.
Total benefits and expenses. Total benefits and expenses increased in 2023 from 2022 primarily due to
increases in asset-based sales commissions expenses in our Investment and Savings Products segment,
amortization of DAC, and other operating expenses during 2023. The increase in other operating
expenses was due to increased technology spending as well as higher employee-related and growth-
related costs. Partially offsetting these increases were lower sales-based commissions expenses in our
Investment and Savings Products segment. These movements are discussed in further detail in the
Segment Results section below.
Primerica 2024 Annual Report
85
ITEM 7. MD&A
Income taxes. Our effective income tax rate for 2023 was 23.4% compared to 22.8% in 2022. The year-
over-year increase in the effective tax rate was primarily due to higher state income taxes in 2023.
Loss from discontinued operations, net of income taxes. Loss from discontinued operations, net of income
taxes relates to the Senior Health business, which was disposed of as of September 30, 2024 and is
reported in discontinued operations for all periods presented. Refer to Note 2 (Discontinued Operations)
to our consolidated financial statements included elsewhere in this report for further details.
Net loss attributable to NCI. The net loss attributable to noncontrolling interest during 2022 was due to
losses incurred by e-TeleQuote Insurance, Inc. and subsidiaries prior to the redemption of the
noncontrolling interest on July 1, 2022.
For additional information, see the discussions of results of operations by segment below.
Term Life Insurance Segment. Our results for the Term Life Insurance segment for the years ended
December 31, 2024, 2023, and 2022 were as follows:
2024 vs. 2023
2023 vs. 2022
Year ended December 31,
change
change
2024
2023
2022
$
%
$
%
(Dollars in thousands)
Revenues:
Direct premiums
$ 3,375,282
$ 3,292,760
$ 3,209,088
$
82,522
3%
$
83,672
3%
Ceded premiums
(1,659,348)
(1,648,004)
(1,623,442)
11,344
*
(24,562)
*
Net premiums
1,715,934
1,644,756
1,585,646
71,178
4%
59,110
4%
Other, net
52,306
48,286
50,320
4,020
8%
(2,034)
(4)%
Total revenues
1,768,240
1,693,042
1,635,966
75,198
4%
57,076
3%
Benefits and expenses:
Benefits and claims
635,354
622,084
619,997
13,270
2%
2,087
*
Future policy benefits
remeasurement (gain) loss
(31,265)
(213)
554
(31,052)
*
(767)
*
Amortization of DAC
291,488
268,803
254,875
22,685
8%
13,928
5%
Insurance expenses
250,957
230,390
230,796
20,567
9%
(406)
*
Insurance commissions
17,664
19,814
15,335
(2,150)
(11)%
4,479
29%
Total benefits and expenses
1,164,198
1,140,878
1,121,557
23,320
2%
19,321
2%
Income before income taxes
$
604,042
$
552,164
$
514,409
$
51,878
9%
$
37,755
7%
* Less than 1% or not meaningful
2024 compared to 2023
Net premiums. Direct premiums increased in 2024 from 2023 largely due to the layering effect of new
policy sales that contributed to growth in the in-force book of business. This increase is partially offset by
an increase in ceded premiums, which includes $34.6 million in higher non-level YRT reinsurance ceded
premiums as business not subject to the IPO coinsurance transactions ages, reduced by $23.3 million in
lower coinsurance ceded premiums due to the run-off of business subject to the IPO coinsurance
transactions.
86
ITEM 7. MD&A
Benefits and claims. Benefits and claims increased during 2024 compared to 2023. Direct benefits and
claims increased due to the growth in the business. Year-over-year claims incurred in 2024 were
consistent with amounts incurred in 2023 despite the growth in the in-force book of business. Claims
experience was lower than our long-term actuarial assumptions as discussed in Note 11 (Future Policy
Benefits) to our consolidated financial statements included elsewhere in this report.
Future policy benefits remeasurement (gain) loss. Future policy benefits remeasurement gain increased
during 2024 compared to 2023 and represents the impact of long-term assumption changes made during
the third quarter of 2024 in connection with the annual assumption review as well as differences in
experience variances that occurred in each period. The gain recognized in 2024 is primarily due to an
assumption change related to the reduction of the expected cost of waiver of premium disability benefits.
Refer to Note 11 (Future Policy Benefits) to our consolidated financial statements included elsewhere in
this report for further details.
Amortization of DAC. The amortization of DAC increased in 2024 from 2023 primarily due to continued
growth in the in-force book of business.
Insurance expenses. Insurance expenses increased during 2024 compared to 2023 due to higher costs
resulting from growth in the business, employee-related costs, and higher variable expenses to support
recruiting and licensing.
Insurance commissions. Insurance commissions decreased in 2024 from 2023 as a result of lower non-
deferrable independent sales force activities.
2023 compared to 2022
Net premiums. Direct premiums increased in 2023 from 2022 largely due to the layering effect of new
policy sales that contributed to growth in the in-force book of business. In addition, direct premiums
continued to increase in 2023 despite the impact of elevated lapses due to the growth in new policy sales.
This increase is partially offset by an increase in ceded premiums, which includes $61.9 million in higher
non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions
ages, reduced by $37.4 million in lower coinsurance ceded premiums due to the run-off of business
subject to the IPO coinsurance transactions.
Benefits and claims. Benefits and claims were generally flat during 2023 compared to 2022. Direct benefits
and claims increased with the growth in the business but were mostly offset by an increase in ceded
benefit reserves from YRT reinsurance. YRT reinsurance ceded benefit reserves will fluctuate based on the
specifics of premiums ceded and claims incurred during each period. Year-over-year claims incurred in
2023 were flat compared to 2022, despite growth in the in-force business, as claims experience in 2022
was elevated due to the COVID-19 pandemic.
Future policy benefits remeasurement (gain) loss. Future policy benefits remeasurement (gain) loss was
generally flat during 2023 compared to 2022 and represent differences in experience variances that
occurred in each respective period.
Amortization of DAC. The amortization of DAC increased in 2023 from 2022 primarily due to continued
growth in the in-force book of business.
Insurance expenses. Insurance expenses decreased slightly during 2023 compared to 2022 due to costs
incurred for the additional sales force leadership event held in 2022 largely offset by higher growth-
related, employee-related, and technology costs in 2023.
Insurance commissions. Insurance commissions increased in 2023 from 2022 as a result of higher non-
deferrable sales force activities.
Primerica 2024 Annual Report
87
ITEM 7. MD&A
Investment and Savings Products Segment. Our results of operations for the Investment and Savings
Products segment for the years ended December 31, 2024, 2023, and 2022 were as follows:
2024 vs. 2023
2023 vs. 2022
Year ended December 31,
change
change
2024
2023
2022
$
%
$
%
(Dollars in thousands)
Revenues:
Commissions and fees:
Sales-based revenues
$
394,432
$
296,617
$
326,378
$
97,815
33%
$
(29,761)
(9)%
Asset-based revenues
553,555
462,955
434,053
90,600
20%
28,902
7%
Account-based revenues
95,272
93,189
90,391
2,083
2%
2,798
3%
Other, net
13,483
12,504
12,610
979
8%
(106)
*
Total revenues
1,056,742
865,265
863,432
191,477
22%
1,833
*
Expenses:
Amortization of DAC
5,443
5,479
5,581
(36)
*
(102)
(2)%
Insurance commissions
13,638
13,148
13,834
490
4%
(686)
(5)%
Sales commissions:
Sales-based
275,582
212,482
234,711
63,100
30%
(22,229)
(9)%
Asset-based
278,042
226,542
206,838
51,500
23%
19,704
10%
Other operating expenses
181,792
164,788
156,578
17,004
10%
8,210
5%
Total expenses
754,497
622,439
617,542
132,058
21%
4,897
*
Income before income
taxes
$
302,245
$
242,826
$
245,890
$
59,419
24%
$
(3,064)
(1)%
* Less than 1% or not meaningful
2024 compared to 2023
Commissions and fees. Commissions and fees increased during 2024 compared to 2023 primarily driven
by higher sales-based and asset-based revenues. The increase in sales-based revenue was largely the
result of higher product sales for variable annuities and U.S. mutual fund product sales. Higher asset-
based revenues were driven by an increase in average client assets in 2024 versus the prior year.
Sales commissions. The increase in sales-based commissions in 2024 from 2023 was generally in line with
the increases in sales-based revenues although modestly lower due to a mix shift towards higher margin
variable annuity sales. Asset-based commissions were up in 2024 and were consistent with the movement
in asset-based revenues when excluding Canadian segregated funds revenue. Asset-based commissions
for our Canadian segregated funds are reflected within insurance commissions and amortization of DAC.
Other operating expenses. Other operating expenses increased in 2024 from 2023 primarily due to higher
growth-related costs and employee-related costs.
88
ITEM 7. MD&A
2023 compared to 2022
Commissions and fees. Commissions and fees increased slightly during 2023 compared to 2022 led by
higher asset-based revenues. The year-over-year increase in asset-based revenues was higher than the
year-over-year increase in average client asset values due to a mix shift to asset-based products that earn
higher fees, including managed accounts and Canadian mutual funds under the new principal distributor
model. Also contributing to the increase in commissions and fees in 2023 were higher account-based
revenues due to the cumulative effect of incremental retail mutual funds sales that we service on our
transfer agent recordkeeping platform. Substantially offsetting the increases were lower sales-based
revenues during 2023 primarily due to the adverse impact on revenue-generating product sales from the
increased cost of living and the availability of high yield money market and savings account alternatives in
the first half of 2023. Another contributing factor to the decrease in sales-based revenues was the
discontinuation of most up-front sales-based revenue on the sale of Canadian mutual funds, which are
now sold under the principal distributor model. The principal distributor funds we now distribute in
Canada primarily shift the revenue we earn to asset-based that is recognized over time.
Sales commissions. The decrease in sales-based commissions in 2023 from 2022 was in line with the
decrease in sales-based revenue. Asset-based commissions were up for 2023 and were generally
consistent with the movement in asset-based revenues when excluding Canadian segregated funds
revenue. Asset-based commissions for our Canadian segregated funds are reflected within insurance
commissions and amortization of DAC.
Other operating expenses. Other operating expenses increased in 2023 from 2022 due to increased
employee-related and technology costs.
Primerica 2024 Annual Report
89
ITEM 7. MD&A
Corporate and Other Distributed Products Segment. Our results of operations for the Corporate and
Other Distributed Products segment for the years ended December 31, 2024, 2023, and 2022 were as
follows:
2024 vs. 2023
2023 vs. 2022
Year ended December 31,
change
change
2024
2023
2022
$
%
$
%
(Dollars in thousands)
Revenues:
Direct premiums
$
18,322
$
19,365
$
21,032
$ (1,043)
(5)%
$ (1,667)
(8)%
Ceded premiums
(5,085)
(3,807)
(6,450)
1,278
34%
(2,643)
(41)%
Net premiums
13,237
15,558
14,582
(2,321)
(15)%
976
7%
Commissions and fees
39,630
40,092
46,434
(462)
(1)%
(6,342)
(14)%
Investment income net of investment
expenses
218,153
201,311
156,987
16,842
8%
44,324
28%
Interest expense on surplus note
(62,652)
(65,474)
(63,922)
(2,822)
(4)%
1,552
2%
Net investment income
155,501
135,837
93,065
19,664
14%
42,772
46%
Realized investment gains (losses)
1,015
(645)
1,444
1,660
*
(2,089)
*
Other investment gains (losses)
1,221
(5,251)
(2,439)
6,472
*
(2,812)
*
Investment gains (losses)
2,236
(5,896)
(995)
8,132
*
(4,901)
*
Other, net
53,557
4,609
4,967
48,948
*
(358)
(7)%
Total revenues
264,161
190,200
158,053
73,961
39%
32,147
20%
Benefits and expenses:
Benefits and claims
12,809
20,895
12,406
(8,086)
(39)%
8,489
68%
Future policy benefits remeasurement
(gain) loss
5,345
(171)
1,072
5,516
*
(1,243)
*
Amortization of DAC
1,205
1,534
1,173
(329)
(21)%
361
31%
Insurance expenses
4,662
5,070
4,609
(408)
(8)%
461
10%
Insurance commissions
706
1,260
1,092
(554)
(44)%
168
15%
Sales commissions
19,625
18,420
21,215
1,205
7%
(2,795)
(13)%
Interest expense
25,034
26,594
27,237
(1,560)
(6)%
(643)
(2)%
Other operating expenses
161,815
139,850
130,892
21,965
16%
8,958
7%
Total benefits and expenses
231,201
213,452
199,696
17,749
8%
13,756
7%
Income (loss) before income taxes
$
32,960
$
(23,252)
$
(41,643)
$ 56,212
*
$18,391
(44)%
* Less than 1% or not meaningful
2024 compared to 2023
Total revenues. Total revenues increased in 2024 from 2023 primarily due to higher net investment
income, higher investment gains, and the $50.0 million gain within other, net revenue related to proceeds
90
ITEM 7. MD&A
received under a Representation and Warranty insurance policy. For more information on the
Representation and Warranty insurance policy proceeds, see Note 4 (Segment and Geographical
Information) to our consolidated financial statements included elsewhere in this report. Net investment
income increased in 2024 from 2023 due primarily to $9.6 million from higher yields in the invested asset
portfolio, $8.6 million from a larger invested asset portfolio, and a $0.4 million higher total return on the
deposit asset backing our 10% coinsurance agreement compared to the prior year. Investment income net
of investment expenses includes interest earned on our held-to-maturity asset, which is offset by interest
expense on the Surplus Note, thereby eliminating any impact on net investment income. Amounts
recognized for each line item will remain offsetting and will fluctuate from period to period along with the
principal amounts of the held-to-maturity asset and the Surplus Note based on the balance of reserves
being contractually supported under a redundant reserve financing transaction used by Vidalia Re, Inc.
(“Vidalia Re”). For more information on the Surplus Note, see Note 5 (Investments) and Note 12 (Debt) to
our consolidated financial statements included elsewhere in this report. The Company recorded
investment gains during 2024 compared to investment losses during 2023 primarily due to a $1.6 million
positive mark-to-market adjustment on equity securities held within our investment portfolio during 2024
compared to a $3.1 million negative mark-to-market adjustment during 2023. Partially offsetting these
changes were lower net premiums for our closed block of non-term life insurance.
Total benefits and expenses. Total benefits and expenses increased in 2024 from 2023 due to a future
policy benefits remeasurement loss in the third quarter of 2024 recorded in connection with the
refinement of assumptions on a closed block of non-term life insurance as well as higher other operating
expenses, largely higher employee-related costs, and to a lesser extent technology costs. The higher
employee-related costs were driven by increased incentive compensation due to strong company
performance. These increases were partially offset by a decrease in benefits and claims as a result of a
credit loss recognized during 2023 for the remaining ceded reserves on a closed block of non-term life
insurance business from an insolvent reinsurer that was ordered into liquidation.
2023 compared to 2022
Total revenues. Total revenues increased in 2023 from 2022 primarily due to higher net investment
income. Net investment income increased in 2023 from 2022 due primarily to $23.3 million from higher
yields in the invested asset portfolio, a $9.4 million higher total return on the deposit asset backing our
10% coinsurance agreement and $8.5 million from a larger invested asset portfolio compared to the prior
year. As noted above, investment income net of investment expenses includes interest earned on our
held-to-maturity asset, which is offset by interest expense on the Surplus Note, thereby eliminating any
impact on net investment income. This increase was partially offset by a year-over-year decline in revenue
from commissions and fees and investment gains (losses). Commissions and fees revenue earned from
our mortgage brokerage product offerings were lower during 2023 compared to 2022 primarily
attributable to higher mortgage interest rates that reduced demand for mortgage products. Investment
losses increased during 2023 compared to 2022 primarily due to higher credit losses recognized for debt
securities, differences in realized gains (losses) on investment sales, and changes in mark-to-market
adjustments on equity securities held within our investment portfolio. For detail of investment gains
(losses) recognized each period, see Note 5 (Investments) to our consolidated financial statements
included elsewhere in this report.
Total benefits and expenses. Total benefits and expenses increased in 2023 from 2022 due to higher
benefits and claims and other operating expenses. The increase in benefits and claims was primarily due
to two factors that occurred during 2023. The first item was the recognition of a credit loss for the
remaining ceded reserves on a closed block of non-term life insurance business from an insolvent
reinsurer that was liquidated. The second item was an adjustment to the estimated portion of ceded
Primerica 2024 Annual Report
91
ITEM 7. MD&A
claims to be recovered in excess of premiums ceded for a closed block of non-term life insurance. The
increase in other operating expenses in 2023 versus 2022 was primarily driven by higher employee-related
costs, technology, and legal expenses. Partially offsetting these increases was the decrease in sales
commissions for 2023 compared to 2022 that was in line with the decrease in commissions and fees
revenue from our mortgage brokerage product offerings.
Financial Condition
Investments. Our insurance business is primarily focused on selling term life insurance, which does not
include an investment component for the policyholder. The invested asset portfolio funded by premiums
from our term life insurance business does not involve the substantial asset accumulations and spread
requirements that exist with other non-term life insurance products. As a result, the profitability of our
term life insurance business is not as sensitive to the impact that interest rates have on our invested asset
portfolio and investment income as the profitability of other companies that distribute non-term life
insurance products.
We follow a conservative investment strategy designed to emphasize the preservation of our invested
assets and provide adequate liquidity for the prompt payment of claims. To meet business needs and
mitigate risks, our investment guidelines provide restrictions on our portfolio’s composition, including
limits on asset type, per issuer limits, credit quality limits, portfolio duration, limits on the amount of
investments in approved countries and permissible security types. We also manage and monitor our
allocation of investments to limit the accumulation of any disproportionate concentrations of risk among
industry sectors or issuer countries outside of the U.S. and Canada. In addition, as of December 31, 2024,
we did not hold any country of issuer concentrations outside of the U.S. or Canada that represented more
than 5% of the fair value of our available-for-sale invested asset portfolio or any industry concentrations
of corporate bonds that represented more than 10% of the fair value of our available-for-sale invested
asset portfolio.
We invest a portion of our portfolio in assets denominated in Canadian dollars to support our Canadian
operations. Additionally, to ensure adequate liquidity for payment of claims, we take into account the
maturity and duration of our invested asset portfolio and our general liability profile.
We also hold within our invested asset portfolio a credit enhanced note (“LLC Note”) issued by a limited
liability company owned by a third-party service provider which is classified as a held-to-maturity security.
The LLC Note, which is scheduled to mature on December 31, 2030, was obtained in exchange for the
Surplus Note of equal principal amount issued by Vidalia Re, a special purpose financial captive insurance
company and wholly owned subsidiary of Primerica Life Insurance Company (“Primerica Life”). For more
information on the LLC Note, see Note 5 (Investments) to our consolidated financial statements included
elsewhere in this report.
We have an investment committee composed of members of our senior management team that is
responsible for establishing and maintaining our investment guidelines and supervising our investment
activity. Our investment committee regularly monitors our overall investment results and our compliance
with our investment objectives and guidelines. We use a third-party investment advisor to assist us in the
management of our investing activities. Our investment advisor reports to our investment committee.
Our invested asset portfolio is subject to a variety of risks, including risks related to general economic
conditions, market volatility, interest rate fluctuations, liquidity risk and credit and default risk. Investment
guideline restrictions have been established to minimize the effect of these risks but may not always be
effective due to factors beyond our control. Interest rates and credit spreads are highly sensitive to many
factors, including governmental monetary policies, domestic and international economic and political
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ITEM 7. MD&A
conditions and other factors beyond our control. A significant increase in interest rates or credit spreads
could result in significant unrealized losses in the value of our invested asset portfolio. We believe that
fluctuations caused by movement in interest rates and credit spreads generally have little bearing on the
recoverability of our investments as we have the ability to hold these investments until maturity or a
market price recovery and we have no present intention to dispose of them.
Details on asset mix (excluding our held-to-maturity security) were as follows:
December 31, 2024
December 31, 2023
Fair
value
Cost or
amortized
cost
Fair
value
Cost or
amortized
cost
U.S. government and agencies
*
*
*
*
Foreign government
5%
4%
5%
5%
States and political subdivisions
3%
3%
4%
4%
Corporates
49%
50%
48%
48%
Mortgage- and asset-backed securities
23%
24%
23%
24%
Short-term investments
—%
—%
*
*
Equity securities
1%
1%
1%
1%
Trading securities
*
*
1%
1%
Cash and cash equivalents
19%
18%
18%
17%
Total
100%
100%
100%
100%
* Less than 1%.
The composition and duration of our portfolio will vary depending on several factors, including the yield
curve and our opinion of the relative value among various asset classes. The relative composition of our
asset portfolio did not change significantly from 2023 to 2024. The year-end average rating, duration and
book yield of our fixed-maturity portfolio (excluding our held-to-maturity security) were as follows:
December 31,
2024
December 31,
2023
Average rating of our fixed-maturity portfolio
A
A
Average duration of our fixed-maturity portfolio
5.1 years
4.7 years
Average book yield of our fixed-maturity portfolio
4.14%
3.83%
The increase in the average book yield of our fixed-maturity portfolio as of December 31, 2024 reflects
higher reinvestment rates compared to the yield on maturing investments during 2024.
Primerica 2024 Annual Report
93
ITEM 7. MD&A
Ratings for our investments in fixed-maturity securities are determined using Nationally Recognized
Statistical Rating Organizations designations and/or equivalent ratings. The distribution of our
investments in fixed-maturity securities (excluding our held-to-maturity security) by rating, including
those classified as trading securities, were as follows:
December 31, 2024
December 31, 2023
Amortized cost (1)
%
Amortized cost (1)
%
(Dollars in thousands)
AAA
$
615,348
20% $
556,936
19%
AA
414,052
13%
439,814
15%
A
770,616
24%
735,647
25%
BBB
1,315,973
42%
1,162,279
39%
Below investment grade
36,548
1%
58,221
2%
Not rated
2,957
*
698
*
Total
$
3,155,494
100% $
2,953,595
100%
(1)
Includes trading securities at carrying value and available-for-sale securities (excluding short-term investments) at amortized
cost.
* Less than 1%.
The ten largest holdings within our fixed-maturity securities invested asset portfolio (excluding our held-
to-maturity security and short-term investments) were as follows:
December 31, 2024
Issuer
Fair value
Amortized
cost (1)
Unrealized
gain (loss)
Credit
rating
(Dollars in thousands)
Province of Ontario Canada
$
15,014
$
15,107
$
(93)
A+
Government of Canada
14,693
15,215
(522)
AAA
Province of Alberta Canada
14,328
14,871
(543)
AA-
Province of Quebec Canada
13,551
13,728
(177)
AA-
Realty Income Corp
13,315
14,008
(693)
A-
Ontario Teachers’ Pension Plan
13,038
14,105
(1,067)
AA+
Province of New Brunswick Canada
12,553
12,779
(226)
A+
Berkshire Hathaway Inc
12,534
12,582
(48)
AA
ONEOK Inc
12,394
12,899
(505)
BBB
Intact Financial Corp
11,492
11,247
245
A+
Total – ten largest holdings
$
132,912
$
136,541
$
(3,629)
Total – fixed-maturity securities
$ 2,949,137
$ 3,155,494
Percent of total fixed-maturity securities
5%
4%
(1)
Includes trading securities at carrying value and available-for-sale securities at amortized cost.
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ITEM 7. MD&A
For additional information on our invested asset portfolio, see Note 5 (Investments) and Note 6 (Fair
Value of Financial Instruments) to our consolidated financial statements included elsewhere in this report.
Other Significant Assets and Liabilities. The balances of and changes in other significant assets and
liabilities were as follows:
December 31,
Change
2024
2023
$
%
(Dollars in thousands)
Assets:
Reinsurance recoverables
$ 2,744,165
$ 3,015,777
$
(271,612)
(9)%
Deferred policy acquisition costs, net
3,680,430
3,447,234
233,196
7%
Liabilities:
Future policy benefits
$ 6,503,064
$ 6,742,025
$
(238,961)
(4)%
Reinsurance recoverables. Reinsurance recoverables reflects future policy benefit reserves and claim
reserves ceded to reinsurers, including the IPO coinsurers. Reinsurance recoverables as of December 31,
2024 decreased compared with December 31, 2023, primarily due to the continued runoff of the IPO book
of business.
Deferred policy acquisition costs, net. The increase in DAC was primarily a result of the cumulative impact
of incremental commissions and expenses deferred as a result of new business in 2024 not subject to the
IPO coinsurance agreements.
Future policy benefits. The decrease in future policy benefits mostly resulted from the increase in market
observable interest rates at year-end that are used to discount the present value of the estimated future
cash flows included in the liability for future policy benefits.
For additional information, see the notes to our consolidated financial statements included elsewhere in
this report.
Liquidity and Capital Resources
Dividends and other payments to the Parent Company from its subsidiaries are our principal sources of
cash. The amount of dividends paid by the subsidiaries is dependent on their capital needs to fund future
growth and applicable regulatory restrictions. The primary uses of funds by the Parent Company include
the payments of stockholder dividends, interest on notes payable, general operating expenses, and
income taxes, as well as repurchases of shares of our common stock outstanding. During 2024, our life
insurance underwriting companies declared and paid ordinary dividends of $311.8 million to the Parent
Company. See Note 17 (Statutory Accounting and Dividend Restrictions) to our consolidated financial
statements included elsewhere in this report for more information on insurance subsidiary dividends and
statutory restrictions. In addition, in 2024 our non-life insurance subsidiaries declared and paid dividends
of $208.4 million to the Parent Company. At December 31, 2024, the Parent Company had cash and
invested assets of $496.8 million.
The Parent Company’s subsidiaries generate operating cash flows primarily from term life insurance
premiums (net of premiums ceded to reinsurers), income from invested assets, commissions and fees
collected from the distribution of investment and savings products, as well as other financial products. The
subsidiaries’ principal operating cash outflows include the payment of insurance claims and benefits (net
Primerica 2024 Annual Report
95
ITEM 7. MD&A
of ceded claims recovered from reinsurers), commissions to the independent sales force, insurance and
other operating expenses, interest expense for future policy benefit reserves financing transactions, and
income taxes.
The distribution and underwriting of term life insurance requires up-front cash outlays at the time the
policy is issued as we pay a substantial majority of the sales commission during the first year following the
sale of a policy and incur costs for underwriting activities at the inception of a policy’s term. During the
early years of a policy’s term, we generally receive level term premiums in excess of claims paid. We invest
the excess cash generated during earlier policy years in fixed-maturity and equity securities held in
support of future policy benefit reserves. In later policy years, cash received from the maturity or sale of
invested assets is used to pay claims in excess of level term premiums received.
Historically, cash flows generated by our businesses, primarily from our existing block of term life
insurance policies and our investment and savings products, have provided us with sufficient liquidity to
meet our operating requirements. We anticipate that cash flows from our businesses will continue to
provide sufficient operating liquidity over the next 12 months.
If necessary, we could seek to enhance our liquidity position or capital structure through sales of our
available-for-sale investment portfolio, changes in the timing or amount of share repurchases, borrowings
against our Revolving Credit Facility, or some combination of these sources. Additionally, we believe that
cash flows from our businesses and potential sources of funding will sufficiently support our long-term
liquidity needs.
Cash Flows. The components of the changes in cash and cash equivalents were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Net cash provided by (used in) operating activities
$
862,088
$
692,517
$
757,665
Net cash provided by (used in) investing activities
(232,250)
(90,051)
(200,048)
Net cash provided by (used in) financing activities
(551,141)
(479,621)
(457,850)
Effect of foreign exchange rate changes on cash
(4,024)
1,063
(3,028)
Change in cash and cash equivalents
$
74,673
$
123,908
$
96,739
Operating Activities. Cash provided by operating activities increased in 2024 from 2023 primarily driven by
the increase in net income excluding non-cash impairments recognized in discontinued operations as well
as the gain recognized from insurance proceeds received under a Representation and Warranty insurance
policy in 2024. In addition, timing differences of purchases and maturities of trading securities contributed
to the year-over-year increase in cash provided by operating activities.
Cash provided by operating activities decreased in 2023 from 2022. The largest factor contributing to the
decrease in cash provided by operating activities in 2023 compared to 2022 was the timing of cash
payments received from reinsurers in 2022. At the beginning of 2022, there was a large balance of ceded
claims due from reinsurers from claims paid during the height of the COVID-19 pandemic, which were
collected during 2022. Also contributing to the decrease were timing differences of purchases and
maturities of trading securities as well as the timing of cash disbursements for accounts payable and
claims checks.
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ITEM 7. MD&A
Investing Activities. Cash used in investing activities increased in 2024 from 2023 primarily due to
fluctuations in the timing of maturities and reinvestments of debt securities held in our available-for-sale
investment portfolio as well as an overall increase in the size of the portfolio given the increase in our
term life insurance in-force. In addition, $21.4 million of cash was included in the disposal of the Senior
Health business. The $50.0 million received under a Representation and Warranty insurance policy
partially offset the increase in cash used in investing activities in 2024.
Cash used in investing activities decreased in 2023 from 2022 primarily due to fluctuations in the timing of
maturities and reinvestment of debt securities held in our available-for-sale investment portfolio. In both
periods, cash provided by operating activities was used to fund investment purchases that increased the
size of our invested asset portfolio.
Financing Activities. Cash used in financing activities increased in 2024 from 2023 and in 2023 from 2022
primarily due to continued increases in our share repurchase program and the payment of stockholder
dividends.
Risk-Based Capital (“RBC”). The National Association of Insurance Commissioners (“NAIC”) has
established RBC standards for U.S. life insurers, as well as a risk-based capital model act (the “RBC Model
Act”) that has been adopted by the insurance regulatory authorities. The RBC Model Act requires that life
insurers annually submit a report to state regulators regarding their RBC based upon four categories of
risk: asset risk; insurance risk; interest rate risk and business risk. The capital requirement for each is
determined by applying factors that vary based upon the degree of risk to various asset, premiums and
policy benefit reserve items. The formula is an early warning tool to identify possible weakly capitalized
companies for purposes of initiating further regulatory action.
As of December 31, 2024, our U.S. life insurance subsidiaries maintained statutory capital and surplus
substantially in excess of the applicable regulatory requirements and remain well positioned to support
existing operations and fund future growth.
In Canada, an insurer’s minimum capital requirement is overseen by the Office of the Superintendent of
Financial Institutions (“OSFI”) and determined as the sum of the capital requirements for six categories of
risk: asset default risk, mortality/morbidity/lapse/expense risks, changes in interest rate environment risk,
operational risk, segregated funds risk and foreign exchange risk. As of December 31, 2024, Primerica Life
Insurance Company of Canada was in compliance with Canada’s minimum capital requirements as defined
by OSFI.
For more information regarding statutory capital requirements and dividend capacities of our insurance
subsidiaries, see Note 17 (Statutory Accounting and Dividend Restrictions) to our consolidated financial
statements included elsewhere in this report.
Redundant Reserve Financing. The Model Regulation entitled Valuation of Life Insurance Policies,
commonly known as Regulation XXX, requires insurers to carry statutory policy benefit reserves for term
life insurance policies with long-term premium guarantees which are often significantly in excess of the
future policy benefit reserves that insurers deem necessary to satisfy claim obligations (“redundant policy
benefit reserves”). Accordingly, many insurance companies have sought ways to reduce their capital needs
by financing redundant policy benefit reserves through bank financing, reinsurance arrangements and
other financing transactions.
We have established Vidalia Re as a special purpose financial captive insurance company and wholly
owned subsidiary of Primerica Life. Primerica Life has ceded certain term life insurance policies issued in
2011 through 2017 to Vidalia Re as part of a Regulation XXX redundant reserve financing transaction (the
“Vidalia Re Redundant Reserve Financing Transaction”). This redundant reserve financing transaction
allows us to more efficiently manage and deploy our capital. See Note 17 (Statutory Accounting and
Primerica 2024 Annual Report
97
ITEM 7. MD&A
Dividend Restrictions) and Note 18 (Commitments and Contingent Liabilities) to our consolidated financial
statements included elsewhere in this report for more information.
The NAIC has adopted a model regulation for determining reserves using a principle-based approach
(“principle-based reserves” or “PBR”), which is designed to reflect each insurer’s own experience in
calculating reserves and move away from a single prescriptive reserving formula. Primerica Life adopted
PBR as of January 1, 2018 and NBLIC adopted the New York amended version of PBR effective January 1,
2021. PBR significantly reduced the redundant statutory policy benefit reserve requirements while still
ensuring adequate liabilities are held. The regulation only applies for business issued after the effective
dates. See Note 5 (Investments), Note 12 (Debt) and Note 18 (Commitments and Contingent Liabilities) to
our consolidated financial statements included elsewhere in this report for more information on the
redundant reserve financing transaction.
Notes Payable. The Company has $600.0 million of publicly-traded Senior Notes outstanding issued at a
price of 99.55% with an annual interest rate of 2.80%, payable semi-annually in arrears on May 19 and
November 19. The Senior Notes are scheduled to mature on November 19, 2031. We were in compliance
with the covenants of the Senior Notes as of December 31, 2024. No events of default occurred during
the year ended December 31, 2024.
Financial Ratings. As of December 31, 2024, the investment grade credit ratings for our Senior Notes
were as follows:
Agency
Senior Notes rating
Moody’s
Baa1, stable outlook
Standard & Poor’s
A-, stable outlook
A.M. Best Company
a-, stable outlook
As of December 31, 2024, Primerica Life’s financial strength ratings were as follows:
Agency
Financial strength rating
Moody’s
A1, stable outlook
Standard & Poor’s
AA-, stable outlook
A.M. Best Company
A+, stable outlook
Securities Lending. We participate in securities lending transactions with brokers to increase investment
income with minimal risk. See Note 5 (Investments) to our consolidated financial statements included
elsewhere in this report for additional information.
Surplus Note. Vidalia Re issued a Surplus Note in exchange for the LLC Note as a part of the Vidalia Re
Redundant Reserve Financing Transaction. The Surplus Note has a principal amount equal to the LLC Note
and is scheduled to mature on December 31, 2030. For more information on the Surplus Note, see Note
12 (Debt) to our consolidated financial statements included elsewhere in this report.
Off-Balance Sheet Arrangements. We have no transactions, agreements or other contractual
arrangements to which an entity unconsolidated with the Company is a party, under which the Company
maintains any off-balance sheet obligations or guarantees as of December 31, 2024.
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ITEM 7. MD&A
Credit Facility Agreement. We maintain an unsecured $200.0 million Revolving Credit Facility with a
syndicate of commercial banks that has a scheduled termination date of June 22, 2026. Amounts
outstanding under the Revolving Credit Facility bear interest at a periodic rate equal to the Secured
Overnight Financing Rate (“SOFR”) rate loan or the base rate, plus in either case an applicable margin. The
Revolving Credit Facility contains language that allows for the Company and the lenders to agree on a
comparable or successor reference rate in the event SOFR is no longer available. The Revolving Credit
Facility also permits the issuance of letters of credit. The applicable margins are based on our debt rating
with such margins for SOFR rate loans and letters of credit ranging from 1.000% to 1.625% per annum
and for base rate loans ranging from 0.000% to 0.625% per annum. Under the Revolving Credit Facility, we
incur a commitment fee that is payable quarterly in arrears and is determined by our debt rating. This
commitment fee ranges from 0.100% to 0.225% per annum of the aggregate $200.0 million commitment
of the lenders under the Revolving Credit Facility. As of December 31, 2024, no amounts were outstanding
under the Revolving Credit Facility and we were in compliance with its covenants. Furthermore, no events
of default occurred under the Revolving Credit Facility in 2024.
Contractual Obligations. Our material cash requirements from known contractual and other obligations
primarily consist of following:
Future Policy Benefits. Our liability for future policy benefits, which is presented in the consolidated
balance sheets and Note 11 (Future Policy Benefits) to our consolidated financial statements included
elsewhere in this report, represents the present value of expected future benefits less the present value of
expected future net premiums receivable under the contracts. Net premiums are defined as the portion of
the gross premiums received from policyholders that are needed to pay for all benefits. These benefit
payments are contingent on policyholders continuing to renew their policies and make their premium
payments. We expect to fully fund the obligations for future policy benefits from cash flows from general
account invested assets, claims reimbursed by reinsurers, and from future premiums.
Policy Claims. Policy claims, which is presented in the consolidated balance sheets and Note 10 (Policy
Claims and Other Benefits Payable) to our consolidated financial statements included elsewhere in this
report, represents claims and benefits that have been incurred but not paid to policyholders and are
assumed to be due within a year.
Other Policyholder Funds. Other policyholder funds, which is presented in the consolidated balance sheets,
primarily represent claim payments left on deposit with us that are payable on demand.
Notes Payable and Interest Obligations. We have debt obligations for the principal balance of our Senior
Notes, which is presented in the consolidated balance sheets and described further in Note 12 (Debt) to
our consolidated financial statements included elsewhere in the report. We also maintain interest
obligations for interest on our Senior Notes, the commitment fee on our Revolving Credit Facility, fees
paid for the credit enhancement feature on the LLC Note and a finance charge incurred pursuant to one
of our IPO coinsurance agreements as of December 31, 2024. We do not expect the principal or interest
on the Surplus Note will result in any cash requirements as the payments due for these items are
contractually offset by the principal and interest on the LLC Note as long as we hold the LLC Note. The
Company asserts its positive intent and ability to hold the LLC Note until maturity.
Lease Obligations. Our lease obligations primarily represent payments for operating leases related to
office space. For additional information on leases see Note 21 (Leases) to our consolidated financial
statements included elsewhere in this report.
For additional information concerning our commitments and contingencies, see Note 18 (Commitments
and Contingent Liabilities) to our consolidated financial statements included elsewhere in this report.
Primerica 2024 Annual Report
99
ITEM 7A. MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices,
such as interest rates and foreign currency exchange rates. Market risk is directly influenced by the
volatility and liquidity in the markets in which the related underlying financial instruments are traded.
Sensitivity analysis measures the impact of hypothetical changes in interest rates, foreign exchange rates
and other market rates or prices on the profitability of market-sensitive financial instruments.
The following discussion about the potential effects of changes in interest rates and Canadian currency
exchange rates is based on shock-tests, which model the effects of interest rate and Canadian exchange
rate shifts on our financial condition and results of operations. Although we believe shock tests provide
the most meaningful analysis permitted by the rules and regulations of the SEC, they are constrained by
several factors, including the necessity to conduct the analysis based on a single point in time and by their
inability to include the extraordinarily complex market reactions that normally would arise from the
market shifts modeled. Although the following results of shock tests for changes in interest rates and
Canadian currency exchange rates may have some limited use as benchmarks, they should not be viewed
as forecasts. These disclosures also are selective in nature and address, in the case of interest rates, only
the potential direct impact on our financial instruments and, in the case of Canadian currency exchange
rates, the potential translation impact on net income from our Canadian subsidiaries. They do not include
a variety of other potential factors that could affect our business as a result of these changes in interest
rates and Canadian currency exchange rates.
Interest Rate Risk
The fair value of the fixed-maturity securities (excluding the held-to-maturity security) in our invested
asset portfolio as of December 31, 2024 and 2023 was $2.9 billion and $2.7 billion, respectively. One of the
primary market risks for this portion of our invested asset portfolio is interest rate risk. One means of
assessing the exposure of our fixed-maturity securities portfolios to interest rate changes is a duration-
based analysis that measures the potential changes in market value resulting from a hypothetical change
in interest rates of 100 basis points across all maturities. This model is sometimes referred to as a parallel
shift in the yield curve. Under this model, with all other factors constant and assuming no offsetting
change in the value of our liabilities, we estimated that such an increase in interest rates would cause the
fair value of our fixed-maturity securities portfolios to decline by $130.3 million, or 4%, based on our
actual securities positions as of December 31, 2024. For comparative purposes, the same increase in rates
would have caused the fair value of our fixed-maturity securities portfolios to decline by $111.8 million, or
4%, based on our actual securities positions as of December 31, 2023.
Canadian Currency Risk
We also have exposure to foreign currency exchange risk to the extent we conduct business in Canada. A
strong Canadian dollar relative to the U.S. dollar results in higher levels of reported revenues, expenses,
net income, assets, liabilities, and accumulated comprehensive income (loss) in our U.S. dollar financial
statements, and a weaker Canadian dollar would have the opposite effect. Generally, our Canadian dollar-
denominated assets are held in support of our Canadian dollar-denominated liabilities. For the year ended
December 31, 2024, 13% of our revenues, excluding realized investment gains, and 13% of income from
continuing operations before income taxes were generated by our Canadian operations. For the year
ended December 31, 2023, 13% of our revenues, excluding realized investment gains, and 14% of income
from continuing operations before income taxes were generated by our Canadian operations.
100
ITEM 7A. MARKET RISK
One means of assessing exposure to changes in Canadian currency exchange rates is to model the effects
on reported income using a sensitivity analysis. We analyzed our Canadian currency exposure for the year
ended December 31, 2024. Net exposure was measured assuming a 10% decrease in the value of the
Canadian dollar relative to the U.S. dollar. We estimated that such a decrease would decrease our income
from continuing operations before income taxes for the year ended December 31, 2024 by $12.3 million.
Our investment in the net assets of our Canadian operations is also subject to Canadian currency risk. If
we were to assume a 10% decrease in Canadian currency exchange rates compared to the U.S. dollar, the
translated value of our net investment in our Canadian subsidiaries in U.S. dollars would decrease by $35.1
million based on net assets as of December 31, 2024. For comparative purposes, a similar decrease in
Canadian currency exchange rates compared to the U.S. dollar would have caused the translated value of
our net investment in our Canadian subsidiaries in U.S. dollars to decline by $32.9 million based on net
assets as of December 31, 2023. Historically, we have not hedged this exposure, although we may elect to
do so in future periods. The impact of translating the balance of net assets of our Canadian operations is
recorded in our consolidated balance sheets within the accumulated other comprehensive income (loss)
component of stockholders’ equity.
Credit Risk
We extensively use reinsurance in the United States to diversify our insurance and underwriting risk and to
manage our loss exposure to mortality risk. Reinsurance does not relieve us of our direct liability to our
policyholders. Due to factors such as insolvency, adverse underwriting results or inadequate investment
returns, our reinsurers may not be able to pay the amounts they owe us on a timely basis or at all. Further,
reinsurers might refuse or fail to pay losses that we cede to them or might delay payment. To limit our
exposure with any one reinsurer, we monitor the concentration of credit risk we have with our reinsurance
counterparties, as well as their financial condition. We manage this reinsurer credit risk through analysis
and monitoring of the credit-worthiness of each of our reinsurance partners to minimize collection issues.
Also, for reinsurance contracts with unauthorized reinsurers, we require collateral such as letters of credit.
For information on our reinsurance exposure and reinsurers, see Note 7 (Reinsurance) to our consolidated
financial statements included elsewhere in this report.
Concurrent with the execution of the Vidalia Re Redundant Reserve Financing Transaction between Vidalia
Re and Primerica Life, Vidalia Re entered into a Surplus Note Purchase Agreement (the “Surplus Note
Purchase Agreement”) with Hannover Life Reassurance Company of America and certain of its affiliates
(collectively, “Hannover Re”) and a newly-formed limited liability company (the “LLC”) owned by a third-
party service provider. Under the Surplus Note Purchase Agreement, Vidalia Re issued the Surplus Note to
the LLC in exchange for the LLC Note of equal principal amount. The Company assumes credit risk
associated with a credit enhancement feature provided by Hannover Re, which bears the obligation to
absorb the LLC’s losses in the event of a Surplus Note default in exchange for a fee.
For information on the Surplus Note Purchase Agreement, see Note 5 (Investments) and Note 12 (Debt)
to our consolidated financial statements included elsewhere in this report.
We also bear credit risk on our investment portfolio related to the uncertainty associated with the
continued ability of an obligor to make timely payments of principal and interest. In an effort to meet
business needs and mitigate credit and other portfolio risks, we established investment guidelines that
provide restrictions on our portfolio’s composition, including limits on asset type, per issuer limits, credit
quality limits, portfolio duration, limits on the amount of investments in approved countries and
permissible security types. See “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Financial Condition” for details on our investment portfolio, including investment
strategy, asset mix and credit ratings.
Primerica 2024 Annual Report
101
ITEM 8. FINANCIAL STATEMENTS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Primerica, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Primerica, Inc. and subsidiaries (the
Company) as of December 31, 2024 and 2023, the related consolidated statements of income,
comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year
period ended December 31, 2024, and the related notes and financial statement schedules I, II, III and IV
(collectively, the consolidated financial statements). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and
2023, and the results of its operations and its cash flows for each of the years in the three-year period
ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28,
2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over
financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We
are a public accounting firm registered with the PCAOB and are required to be independent with respect
to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial
102
ITEM 8. FINANCIAL STATEMENTS
statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
Liability for future policy benefits for term life insurance contracts
As described in Notes 1 and 11 to the consolidated financial statements, the liability for future policy
benefits is measured as the present value of expected future benefits less the present value of expected
future net premiums receivable under the contracts. The cash flow assumptions underlying the liability
for future policy benefits include mortality, persistency, and disability rates. The cash flow assumptions
used to measure the liability for future policy benefits are reviewed at least annually and updated as
necessary. As of December 31, 2024, the liability for future policy benefits was $6,503 million, which
included the liability for future policy benefits for term life insurance contracts of $6,301 million.
We identified the evaluation of the liability for future policy benefits for term life insurance contracts as a
critical audit matter. Specifically, the evaluation of the mortality, persistency, and disability rate cash flow
assumptions (collectively, key assumptions) used in estimating the liability for future policy benefits for
term life insurance contracts required subjective auditor judgment and specialized skills and knowledge.
The following are the primary procedures we performed to address this critical audit matter. With the
assistance of actuarial professionals with specialized skills and knowledge, we evaluated the design and
tested the operating effectiveness of certain internal controls related to the Company’s process for
estimating the liability for future policy benefits for term life insurance contracts. This included controls
related to the actuarial methodologies and the key assumptions. We also involved actuarial
professionals with specialized skills and knowledge, who assisted in:
•
assessing the actuarial methodologies used to estimate the liability for future policy benefits for
term life insurance contracts for consistency with generally accepted actuarial methodologies
•
evaluating the Company’s key assumptions by comparing them to the Company’s relevant
historical experience data and anticipated trends
•
recalculating the projected cash flows for a selection of term life insurance contracts and
comparing the results to the Company’s estimates.
/s/ KPMG LLP
We have served as the Company’s auditor since 2007.
Atlanta, Georgia
February 28, 2025
Primerica 2024 Annual Report
103
ITEM 8. FINANCIAL STATEMENTS
PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2024
December 31, 2023
(In thousands, except per-share amounts)
Assets:
Investments:
Fixed-maturity securities available-for-sale, at fair value (amortized cost: $3,152,483
in 2024 and $2,935,212 in 2023)
$
2,946,126
$
2,719,467
Fixed-maturity security held-to-maturity, at amortized cost (fair value: $1,227,428 in
2024 and $1,334,892 in 2023)
1,303,880
1,386,980
Short-term investments available-for-sale, at fair value (amortized cost: $276 in 2023)
—
276
Equity securities, at fair value (historical cost: $22,935 in 2024 and $27,106 in 2023)
27,144
29,680
Trading securities, at fair value (cost: $3,562 in 2024 and $18,761 in 2023)
3,011
18,383
Policy loans and other invested assets
50,881
51,175
Total investments
4,331,042
4,205,961
Cash and cash equivalents
687,821
594,148
Accrued investment income
28,100
23,958
Reinsurance recoverables
2,744,165
3,015,777
Deferred policy acquisition costs, net
3,680,430
3,447,234
Agent balances, due premiums and other receivables
282,607
269,216
Intangible asset
45,275
45,275
Income tax receivable
—
3,441
Deferred income taxes
122,664
116,594
Operating lease right-of-use assets
47,023
51,506
Other assets
403,608
439,940
Separate account assets
2,209,287
2,395,842
Assets from discontinued operations entities
—
418,840
Total assets
$
14,582,022
$
15,027,732
Liabilities and stockholders’ equity:
Liabilities:
Future policy benefits
$
6,503,064
$
6,742,025
Unearned and advance premiums
15,606
14,876
Policy claims and other benefits payable
488,350
513,803
Other policyholders’ funds
402,323
435,094
Note payable
594,512
593,709
Surplus note
1,303,556
1,386,592
Income tax payable
57,987
22,669
Deferred income taxes
57,624
53,588
Operating lease liabilities
55,478
58,893
Other liabilities
549,160
579,045
Payable under securities lending
86,034
99,785
Separate account liabilities
2,209,287
2,395,842
Liabilities from discontinued operations entities
—
65,844
Commitments and contingent liabilities (see Commitments and Contingent Liabilities
note)
Total liabilities
12,322,981
12,961,765
Stockholders’ equity:
Common stock ($0.01 par value; authorized 500,000 shares in 2024 and 2023; issued
and outstanding 33,368 shares in 2024 and 34,996 shares in 2023)
334
350
Paid-in capital
—
—
Retained earnings
2,231,483
2,276,946
Accumulated other comprehensive income (loss), net of income tax:
Effect of change in discount rate assumptions on the liability for future policy benefits
224,833
(39,086)
Unrealized foreign currency translation gains (losses)
(34,767)
(2,235)
Net unrealized investment gains (losses) on available-for-sale securities
(162,842)
(170,008)
Total stockholders’ equity
2,259,041
2,065,967
Total liabilities and stockholders’ equity
$
14,582,022
$
15,027,732
See accompanying notes to consolidated financial statements.
104
ITEM 8. FINANCIAL STATEMENTS
PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Year ended December 31,
2024
2023
2022
(In thousands, except per-share amounts)
Revenues:
Direct premiums
$
3,393,604
$
3,312,125
$
3,230,120
Ceded premiums
(1,664,433)
(1,651,811)
(1,629,892)
Net premiums
1,729,171
1,660,314
1,600,228
Commissions and fees
1,082,889
892,853
897,256
Investment income net of investment expenses
218,153
201,311
156,987
Interest expense on surplus note
(62,652)
(65,474)
(63,922)
Net investment income
155,501
135,837
93,065
Realized investment gains (losses)
1,015
(645)
1,444
Other investment gains (losses)
1,221
(5,251)
(2,439)
Investment gains (losses)
2,236
(5,896)
(995)
Other, net
119,346
65,399
67,897
Total revenues
3,089,143
2,748,507
2,657,451
-
Benefits and expenses:
Benefits and claims
648,163
642,979
632,403
Future policy benefits remeasurement (gain) loss
(25,920)
(384)
1,626
Amortization of deferred policy acquisition costs
298,136
275,816
261,629
Sales commissions
573,249
457,444
462,764
Insurance expenses
255,619
235,460
235,405
Insurance commissions
32,008
34,222
30,261
Interest expense
25,034
26,594
27,237
Other operating expenses
343,607
304,638
287,470
Total benefits and expenses
2,149,896
1,976,769
1,938,795
Income from continuing operations before income taxes
939,247
771,738
718,656
Income taxes from continuing operations
219,118
180,556
163,942
Income from continuing operations
720,129
591,182
554,714
Loss from discontinued operations, net of income taxes
(249,611)
(14,581)
(87,684)
Net income
470,518
576,601
467,030
Net loss attributable to noncontrolling interest (“NCI”)
-
-
(5,038)
Net income attributable to Primerica, Inc.
$
470,518
$
576,601
$
472,068
Basic earnings per share attributable to common stockholders:
Continuing operations
$
21.02
$
16.37
$
14.53
Discontinued operations
(7.29)
(0.40)
(2.16)
Basic earnings per share attributable to common stockholders
$
13.73
$
15.97
$
12.37
Diluted earnings per share attributable to common stockholders:
Continuing operations
$
20.99
$
16.34
$
14.49
Discontinued operations
(7.28)
(0.40)
(2.16)
Diluted earnings per share attributable to common stockholders
$
13.71
$
15.94
$
12.33
Weighted-average shares used in computing earnings
per share:
Basic
34,142
35,954
37,997
Diluted
34,199
36,027
38,106
See accompanying notes to consolidated financial statements.
Primerica 2024 Annual Report
105
ITEM 8. FINANCIAL STATEMENTS
PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
Year ended December 31,
2024
2023
2022
(In thousands)
Net income
$
470,518
$
576,601
$
467,030
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses) on available-for-sale
securities:
Change in unrealized holding gains (losses) on available
-for-sale securities
9,950
87,390
(385,735)
Reclassification adjustment for investment (gains) losses
included in net income
(562)
2,811
(1,387)
Effect of change in discount rate assumptions on the
liability for future policy benefits
334,035
(216,301)
1,739,762
Foreign currency translation adjustments:
Change in unrealized foreign currency translation gains
(losses)
(32,532)
10,044
(20,826)
Total other comprehensive income (loss) before
income taxes
310,891
(116,056)
1,331,814
Income tax expense (benefit) related to items of other
comprehensive income (loss)
72,338
(27,458)
288,689
Other comprehensive income (loss), net of income
taxes
238,553
(88,598)
1,043,125
Total comprehensive income (loss)
709,071
488,003
1,510,155
Net loss attributable to NCI
—
—
(5,038)
Comprehensive income (loss) attributable to
Primerica, Inc.
$
709,071
$
488,003
$
1,515,193
See accompanying notes to consolidated financial statements.
106
ITEM 8. FINANCIAL STATEMENTS
PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity
Year ended December 31,
2024
2023
2022
(In thousands, except per-share amounts)
Equity attributable to Primerica, Inc./Permanent stockholders’ equity
Common stock:
Balance, beginning of period
$
350
$
368
$
394
Repurchases of common stock
(18)
(21)
(28)
Net issuance of common stock
2
3
2
Balance, end of period
334
350
368
Paid-in capital:
Balance, beginning of period
-
-
5,224
Share-based compensation
35,408
32,130
33,624
Net issuance of common stock
(2)
(3)
(2)
Repurchases of common stock
(35,406)
(32,127)
(41,079)
Redemption of NCI in consolidated entities
-
-
2,233
Balance, end of period
-
-
-
Retained earnings:
Balance, beginning of period
2,276,946
2,153,617
2,085,665
Net income
470,518
576,601
472,068
Dividends
(112,814)
(93,715)
(83,783)
Repurchases of common stock
(403,167)
(359,557)
(320,333)
Balance, end of period
2,231,483
2,276,946
2,153,617
Accumulated other comprehensive income (loss):
Balance, beginning of period
(211,329)
(122,731)
(1,165,856)
Effect of change in discount rate assumptions on the liability for future
policy benefits, net of income taxes
263,919
(169,502)
1,368,596
Change in foreign currency translation adjustment, net of income taxes
(32,532)
10,044
(20,826)
Change in net unrealized investment gains (losses) during the period, net of
income taxes
7,166
70,860
(304,645)
Balance, end of period
27,224
(211,329)
(122,731)
Total permanent stockholders’ equity
$
2,259,041
$
2,065,967
$
2,031,254
Redeemable NCI in consolidated entities/Temporary stockholders’ equity
Balance, beginning of period
$
-
$
-
$
7,271
Net loss attributable to NCI
-
-
(5,038)
Redemption of NCI in consolidated entities
-
-
(2,233)
Balance, end of period
$
-
$
-
$
-
Dividends declared per share
$
3.30
$
2.60
$
2.20
See accompanying notes to consolidated financial statements.
Primerica 2024 Annual Report
107
ITEM 8. FINANCIAL STATEMENTS
PRIMERICA, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year ended December 31,
2024
2023
2022
(In thousands)
Cash flows from operating activities:
Net income
$
470,518
$
576,601
$
467,030
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Change in future policy benefits and other policy liabilities
144,269
102,540
(35,831)
Deferral of policy acquisition costs
(547,595)
(514,970)
(503,336)
Amortization of deferred policy acquisition costs
298,136
275,816
261,629
Deferred tax provision
(110,597)
(43,380)
(52,802)
Change in income taxes
46,567
(8,842)
26,398
Investment (gains) losses
(2,236)
5,896
995
Accretion and amortization of investments
(3,384)
(2,034)
3,329
Depreciation and amortization
23,401
31,964
34,174
Change in reinsurance recoverables
190,953
237,328
461,925
Change in agent balances, due premiums and other receivables
(12,299)
(18,761)
(475)
Change in renewal commissions receivable
22,675
9,785
19,845
Trading securities sold, matured, or called (acquired), net
15,308
(14,552)
19,962
Share-based compensation
25,075
18,911
22,361
Impairment of goodwill and other long-lived assets
253,607
-
60,000
Gain on insurance proceeds received from acquisition representation and warranty policy
(50,000)
-
-
Loss on disposal of discontinued operations, excluding income tax benefit
95,787
-
-
Change in other operating assets and liabilities, net
1,903
36,215
(27,539)
Net cash provided by (used in) operating activities
862,088
692,517
757,665
Cash flows from investing activities:
Available-for-sale investments sold, matured or called:
Fixed-maturity securities — sold
7,363
19,230
23,628
Fixed-maturity securities — matured or called
420,742
263,443
359,717
Short-term investments — sold
-
28,799
28,251
Short-term investments — matured or called
268
61,782
85,302
Equity securities — sold
-
3,051
16
Equity securities — matured or called
4,375
-
3,063
Available-for-sale investments acquired:
Fixed-maturity securities
(664,178)
(412,262)
(580,485)
Short-term investments
-
(19,767)
(97,415)
Equity securities — acquired
(211)
(430)
(187)
Purchases of property and equipment and other investing activities, net
(29,228)
(33,897)
(25,805)
Cash collateral received (returned) on loaned securities, net
(13,751)
(1,153)
6,409
Sales (purchases) of short-term investments using securities lending collateral, net
13,751
1,153
(6,409)
Insurance proceeds received from acquisition representation and warranty policy
50,000
-
-
Disposal of cash in discontinued operations
(21,381)
-
-
Purchase of business, net of cash acquired
-
-
3,867
Net cash provided by (used in) investing activities
(232,250)
(90,051)
(200,048)
Cash flows from financing activities:
Dividends paid
(112,814)
(93,715)
(83,783)
Common stock repurchased
(428,425)
(375,062)
(356,306)
Payment on note issued to seller of business
-
-
(12,364)
Tax withholdings on share-based compensation
(9,646)
(10,579)
(5,135)
Finance leases
(256)
(265)
(262)
Net cash provided by (used in) financing activities
(551,141)
(479,621)
(457,850)
Effect of foreign exchange rate changes on cash
(4,024)
1,063
(3,028)
Change in cash and cash equivalents
74,673
123,908
96,739
Cash and cash equivalents, beginning of period
613,148
489,240
392,501
Cash and cash equivalents, end of period
$
687,821
$
613,148
$
489,240
Supplemental disclosures of cash flow information:
Income taxes paid
$
140,252
$
227,271
$
178,218
Interest paid
24,224
27,279
27,060
See accompanying notes to consolidated financial statements.
108
FINANCIAL STATEMENTS — NOTE 1
PRIMERICA, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Description of Business, Basis of Presentation, and Summary of Significant
Accounting Policies
Description of Business. Primerica, Inc. (the “Parent Company”), together with its subsidiaries
(collectively, “we”, “us” or the “Company”), is a leading provider of financial products and services to
middle-income households in the United States and Canada through a network of independent
contractor sales representatives (“independent sales representatives” or “independent sales force”). We
assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds,
annuities, managed investments and other financial products, which we distribute primarily on behalf of
third parties. Our other primary subsidiaries include the following entities: Primerica Financial Services, LLC
(“PFS”), a general agency and marketing company; Primerica Life Insurance Company (“Primerica Life”),
our principal life insurance company; Primerica Financial Services (Canada) Ltd., a holding company for our
Canadian operations, which includes Primerica Life Insurance Company of Canada (“Primerica Life
Canada”) and PFSL Investments Canada Ltd.; and PFS Investments Inc. (“PFS Investments”), an investment
products company and broker-dealer. Primerica Life, domiciled in Tennessee, owns National Benefit Life
Insurance Company (“NBLIC”), a New York insurance company. Vidalia Re, Inc. (“Vidalia Re”) is a special
purpose financial captive insurance company and wholly owned subsidiary of Primerica Life. Vidalia Re has
entered into a separate coinsurance agreement with Primerica Life whereby Primerica Life has ceded
certain level-premium term life insurance policies to Vidalia Re (the “Vidalia Re Coinsurance Agreement”).
We acquired 80% of e-TeleQuote Insurance, Inc. and subsidiaries (collectively, “e-TeleQuote”), a marketer
of Medicare-related insurance products underwritten by third-party health insurance carriers to eligible
Medicare beneficiaries (the “Senior Health business”), through our subsidiary, Primerica Health, Inc.
(“Primerica Health”) on July 1, 2021 and the remaining 20% of e-TeleQuote on July 1, 2022. On September
30, 2024, the Company abandoned its ownership in e-TeleQuote. Refer to Note 2 (Discontinued
Operations) for more information.
Basis of Presentation. We prepare our financial statements in accordance with U.S. generally accepted
accounting principles (“U.S. GAAP”). These principles are established primarily by the Financial Accounting
Standards Board (“FASB”).
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires us to
make estimates and assumptions that affect financial statement balances, revenues and expenses and
cash flows, as well as the disclosure of contingent assets and liabilities. Management considers available
facts and knowledge of existing circumstances when establishing the estimates included in our financial
statements. The most significant items that involve a greater degree of accounting estimates and actuarial
determinations subject to change in the future are the valuation of investments, deferred policy
acquisition costs (“DAC”), liability for future policy benefits (“LFPB”) and corresponding amounts
recoverable from reinsurers, and income taxes. Estimates for these and other items are subject to change
and are reassessed by management in accordance with U.S. GAAP. Actual results could differ from those
estimates.
Consolidation. The accompanying consolidated financial statements include the accounts of the
Company and those entities required to be consolidated under U.S. GAAP. All material intercompany
profits, transactions, and balances among the consolidated entities have been eliminated.
Primerica 2024 Annual Report
109
FINANCIAL STATEMENTS — NOTE 1
Reclassifications. Certain reclassifications have been made to prior period amounts to conform to
current period reporting classifications. These reclassifications had no impact on net income or total
stockholders’ equity and were primarily related to discontinued operations. See Note 2 (Discontinued
Operations) for more information.
Foreign Currency Translation. Assets and liabilities of our Canadian subsidiaries are translated into U.S.
dollars using year-end exchange rates, and the translation adjustments are reported in other
comprehensive income (loss). Revenues and expenses of our Canadian subsidiaries are translated monthly
at amounts that approximate weighted-average exchange rates.
Investments. Investments are reported on the following bases:
•
Available-for-sale (“AFS”) fixed-maturity securities, including bonds and redeemable preferred
stocks, are carried at fair value.
•
Our held-to-maturity fixed-maturity security is carried at amortized cost.
•
Equity securities, including common and nonredeemable preferred stocks, are carried at fair value.
Changes in fair value of equity securities are included in realized investment gains (losses) in the
period in which the change occurred.
•
Trading securities, which primarily consist of bonds held by PFS Investments, are carried at fair value.
Changes in fair value of trading securities are included in realized investment gains (losses) in the
period in which the change occurred.
•
Policy loans are carried at unpaid principal balances, which approximate fair value.
Investment transactions are recorded on a trade-date basis. We use the specific-identification method to
determine the realized gains or losses from securities transactions and report the investment gains or
losses in the accompanying consolidated statements of income.
Unrealized gains and losses on AFS securities are included as a separate component of other
comprehensive income (loss), except for credit loss impairment discussed below.
For an AFS security with an amortized cost that exceeds its fair value, we first determine if we intend to
sell or will more-likely-than-not be required to sell the security before the expected recovery of its
amortized cost. If we intend to sell or will more-likely-than-not be required to sell the security, then we
recognize the impairment as a credit loss in our consolidated statements of income by writing down the
security’s amortized cost to its fair value. If we do not intend to sell or it is not more-likely-than-not that
we will be required to sell the security before the expected recovery of its amortized cost, we recognize
the portion of the impairment that is due to a credit loss, if any, in our consolidated statements of income
through an allowance. The portion of the impairment that is due to factors other than a credit loss is
recognized in other comprehensive income (loss) in the consolidated statements of comprehensive
income (loss) as an unrealized loss. Credit losses recognized in the allowance for credit losses are reversed
in situations where the estimate of credit losses on those securities has declined. When determining
whether an impairment is due to a credit loss or other factors, we determine the extent to which we do
not expect to recover the security’s amortized cost and record such amount, if any, as a credit loss. Factors
we consider in determining whether the security’s decline in fair value is below amortized cost due to a
credit loss include the magnitude of the security’s decline in fair value below its amortized cost, the
financial condition, long and near-term prospects for the issuer, industry conditions and trends, rating
agency actions, the payment structure of the security, likelihood of the recoverability of principal and
interest, and our ability and intent to hold the security for a period of time sufficient to allow for the
anticipated recovery of its amortized cost. In assessing our ability and intent to hold the security for a
period of time to allow for the anticipated recovery of its amortized cost, we also consider our anticipated
110
FINANCIAL STATEMENTS — NOTE 1
sources of cash to fund operating activities and share repurchases. If we do not anticipate recovering a
security’s amortized cost basis, we estimate the present value of the security’s expected cash flows and
recognize the difference from amortized cost (using fair value as a floor) as a credit loss.
Interest income on fixed-maturity securities is recorded when earned by determining the effective yield,
which gives consideration to amortization of premiums, accretion of discounts, and any previous credit
losses. Dividend income on equity securities is recorded when declared. These amounts are included in
net investment income in the accompanying consolidated statements of income.
Included within fixed-maturity securities are loan-backed and asset-backed securities. Amortization of the
premium or accretion of the discount uses the retrospective method. The effective yield used to
determine amortization/accretion is calculated based on actual and historical projected future cash flows
and updated quarterly.
Cash and Cash Equivalents. Cash and cash equivalents include cash on hand, money market
instruments, and all other highly liquid investments purchased with an original or remaining maturity of
three months or less at the date of acquisition.
Reinsurance. We use reinsurance extensively, utilizing yearly renewable term (“YRT”) and coinsurance
agreements. Under YRT agreements, we reinsure only the mortality risk, while under coinsurance, we
reinsure a proportionate part of all risks arising under the reinsured policy. Under coinsurance, the
reinsurer receives a proportionate part of the premiums, less commission allowances, and is liable for a
corresponding part of all benefit payments.
All reinsurance contracts in effect for the three-year period ended December 31, 2024 transfer a
reasonable possibility of substantial loss to the reinsurer or are accounted for under the deposit method
of accounting.
Ceded premiums are treated as a reduction to direct premiums and are recognized when due to the
assuming company. Ceded claims are treated as a reduction to direct benefits and are recognized when
the claim is incurred on a direct basis. Ceded policy benefit reserve changes are also treated as a
reduction to benefits and claims expense and are recognized during the applicable financial reporting
period.
Reinsurance premiums, commissions, expense reimbursements and ceded policy benefit reserves related
to reinsured long-duration contracts are accounted for over the life of the underlying contracts using
assumptions consistent with those used to account for the underlying policies. Amounts recoverable from
reinsurers are estimated in a manner consistent with the claim liabilities and the LFPB associated with
reinsured policies. Ceded policy benefit reserves and claims liabilities relating to insurance ceded are
shown as reinsurance recoverables on the consolidated balance sheets.
We analyze and monitor the credit-worthiness of each of our reinsurance partners to minimize collection
issues. For reinsurance contracts with unauthorized reinsurers, we require collateral such as letters of
credit.
To the extent we receive ceding allowances to cover policy and claims administration under reinsurance
contracts, these allowances are treated as a reduction to insurance commissions and expenses and are
recognized when due from the assuming company. To the extent we receive ceding allowances
reimbursing commissions that would otherwise be deferred, the amount of commissions deferrable will
be reduced. The corresponding DAC balances are reduced on a pro rata basis by the portion of the
business reinsured with reinsurance agreements that meet risk transfer provisions. The reduced DAC will
result in a corresponding reduction of amortization expense.
Primerica 2024 Annual Report
111
FINANCIAL STATEMENTS — NOTE 1
We estimate and recognize lifetime expected credit losses for reinsurance recoverables. In estimating the
allowance for expected credit losses for reinsurance recoverables, we factor in the underlying collateral for
reinsurance agreements where available. Specifically, for reinsurers with underlying trust assets, we
compare the reinsurance recoverables balance to the underlying trust assets that mitigate the potential
exposure to credit losses. We also analyze the financial condition of the reinsurers, as determined by
third-party rating agencies, to determine the probability of default for the reinsurers. We then utilize a
third-party credit default study to calculate an expected credit loss given default rate or recovery rate. The
probability of default and loss given default rates are then applied to the reinsurers’ recoverable balances,
while also factoring in any third-party letters of credit that support the reinsurance agreement, in order to
calculate our allowance for credit losses.
DAC. We defer incremental direct costs of successful contract acquisitions that result from and are
essential to the contract transaction(s) and that would not have been incurred had the contract
transaction(s) not occurred. These deferred policy acquisition costs mainly include commissions,
underwriting costs and certain other policy issuance expenses associated with successful contract
acquisitions and renewals. All other acquisition-related costs, including unsuccessful acquisition and
renewal efforts, are charged to expense as incurred. Also, administrative costs, rent, depreciation,
occupancy, equipment, and all other general overhead costs are considered indirect costs and are
charged to expense as incurred.
DAC for term life insurance policies is amortized on a constant-level basis over the expected term of the
contracts using face amount as the unit of measure. Contracts are grouped by cohorts consistent with the
grouping used in estimating the LFPB. The cohorts are defined by the legal entity that issued the policy
and the year the policy was issued. Assumptions of face amounts used to amortize DAC for term life
insurance policies, including persistency and mortality, are consistent with the assumptions used in
estimating the LFPB.
DAC for Canadian segregated funds is amortized on a constant-level basis over the expected term of the
contracts using policy count as the unit of measure. Contracts are grouped by cohorts based on the issue
year of the policy.
Interest is not accrued on unamortized DAC balances, and DAC is not subject to impairment testing.
Intangible Asset. We have an indefinite-lived intangible asset on our consolidated balance sheets
related to the 1989 purchase of the right to contract with the independent sales force. This asset
represents the core distribution model of our business, which is our primary competitive advantage to
profitably distribute term life insurance and investment and savings products on a significant scale, and as
such, is considered to have an indefinite life. Any intangible asset that is deemed to have an indefinite
useful life is not amortized but is subject to an annual impairment test. An impairment exists if the
carrying value of the indefinite-lived intangible asset exceeds its fair value. This indefinite-lived intangible
asset is supported by a significant portion of the discounted cash flows of our future business. We
assessed this asset for impairment as of its annual assessment date, October 1, 2024, and determined that
no impairment had occurred.
112
FINANCIAL STATEMENTS — NOTE 1
Property and Equipment. Property and equipment, which are included in other assets, are stated at
cost, less accumulated depreciation. Depreciation is recognized on a straight-line basis over the asset’s
estimated useful life, which is estimated as follows:
Estimated Useful Life
Data processing equipment and software
3 to 7 years
Leasehold improvements
Lesser of 15 years or remaining life of lease
Furniture and other equipment
5 to 15 years
Depreciation expense is included in other operating expenses in the consolidated statements of income.
Depreciation expense was $18.2 million, $21.0 million, and $23.2 million for the years ended December 31,
2024, 2023, and 2022, respectively.
Property and equipment balances were as follows:
December 31,
2024
2023
(In thousands)
Data processing equipment and software
$
135,251
$
122,753
Leasehold improvements
18,965
18,052
Other, principally furniture and equipment
44,566
38,142
198,782
178,947
Accumulated depreciation
(158,084)
(141,343)
Net property and equipment
$
40,698
$
37,604
Separate Accounts. The separate accounts are primarily composed of contracts issued by the Company
through its subsidiary, Primerica Life Canada, pursuant to the Insurance Companies Act (Canada). The
Insurance Companies Act authorizes Primerica Life Canada to establish the separate accounts.
The separate accounts are represented by individual variable insurance contracts. Purchasers of variable
insurance contracts issued by Primerica Life Canada have a direct claim to the benefits of the contract that
entitles the holder to units in one or more investment funds (the “Funds”) maintained by Primerica Life
Canada. The Funds invest in assets that are held for the benefit of the owners of the contracts. The Funds’
assets are administered by Primerica Life Canada and are held separate and apart from the general assets
of the Company. The liabilities reflect the variable insurance contract holders’ interests in the Funds’ net
assets based upon actual investment performance of the respective Funds. Separate accounts operating
results relating to contract holders’ interests are excluded from our consolidated statements of income.
These Funds primarily consist of a series of branded investment funds known as the Asset Builder Funds, a
registered retirement fund known as the Strategic Retirement Income Fund (“SRIF”), and a money market
fund known as the Cash Management Fund. The principal investment objective of the Asset Builder Funds
is to achieve long-term growth while preserving capital. The principal objective of the SRIF is to provide a
stream of investment income during retirement plus the opportunity for modest capital appreciation. The
Asset Builder Funds and the SRIF use diversified portfolios of predominantly publicly-traded large cap
Canadian and U.S. stocks, investment-grade corporate bonds, and Government of Canada bonds to
Primerica 2024 Annual Report
113
FINANCIAL STATEMENTS — NOTE 1
achieve their objectives. The Cash Management Fund invests in government guaranteed short-term bonds
and short-term commercial and bank papers, with the principal investment objective being the provision
of interest income while maintaining liquidity and preserving capital.
Under these contract offerings, benefit payments to contract holders or their designated beneficiaries are
only due upon death of the annuitant or upon reaching a specific maturity date. Benefit payments are
based on the value of the contract holder’s units in the portfolio at the payment date, but are guaranteed
to be no less than 75% of the contract holder’s contribution, adjusted for withdrawals. Account values are
not guaranteed for withdrawn units if contract holders make withdrawals prior to the maturity dates.
Maturity dates for contracts investing in the Asset Builder Funds and Cash Management Fund vary by
contract and range from 10 years from the contract issuance date to December 31, 2070. Contracts
investing in the SRIF mature when the policyholder reaches age 100, which is a minimum of 20 years after
issue. The SRIF is designed to provide periodic retirement income payments and as such, regular
withdrawals, subject to legislated minimums, are anticipated. The cumulative effects of the periodic
withdrawals are expected to substantially reduce both account and minimum guaranteed values prior to
maturity.
Both the asset and the liability for the separate accounts reflect the net value of the underlying assets in
the portfolio as of the reporting date. Primerica Life Canada’s exposure to losses under the guarantee at
the time of account maturity is limited to contract holder accounts that have declined in value more than
25%, adjusted for withdrawals since the contribution date, prior to maturity. As maturity dates are of a
long-term nature, the likelihood that guarantee payments will be required at any given point is very small.
Additionally, the portfolios consist of a very large number of individual contracts, further spreading the
risk related to the guarantee. The length of the contract terms provides significant opportunity for the
underlying portfolios to recover any short-term losses prior to maturity or the death of the contract
holder. The Company has estimated the fair value associated with the market risk benefits provided by
these limited guarantees to be immaterial. Furthermore, the Funds’ investment allocations are aligned
with the maturity risks of the related contracts and include investments in Government Strip Bonds and
floating-rate notes.
Liability for Future Policy Benefits. The LFPB on traditional life insurance products is established for
future policy benefits, which includes death benefits, waiver of premium benefits and claim settlement
expenses. The LFPB is calculated as the present value of expected future benefits less the present value of
expected future net premiums receivable under the contracts. Net premiums are defined as the portion of
the gross premiums received from policyholders that are needed to pay for all benefits.
The assumptions underlying the LFPB include mortality, persistency, disability rates, and other
assumptions that reflect our best estimate based on our historical experience and modified, as necessary,
to reflect non-recurring and/or anticipated trends.
The LFPB is estimated by grouping insurance policies into cohorts. Policy cohorts for the Term Life
Insurance segment are based on the legal entity that issued the policy and the year the policy was issued.
The cash flows and assumptions underlying the LFPB are unlocked each quarter to reflect differences
between actual and expected experience. In general, assumption changes, to the extent necessary, are
expected to only occur during the third quarter when we update our experience studies. However, they
may occur at any time based on emerging experience.
The impact of unlocking will be partly reflected in the current period and partly spread to future periods
based on the remaining duration of the impacted cohort(s). The catch-up is retroactive back to the later of
the January 1, 2021 transition date of the Company’s adoption of Accounting Standards Update No. 2018-
12, Financial Services—Insurance (Topic 944) — Targeted Improvements to the Accounting for Long-
114
FINANCIAL STATEMENTS — NOTE 1
Duration Contracts (the “Transition Date”) or issue date, after reinsurance recoverables and is recognized
as a remeasurement gain or loss as a separate component of benefits and claims expense in the
consolidated statements of income.
The ceded reserve balances included in reinsurance recoverables are calculated in the same manner as the
LFPB by cohort and apply best estimate assumptions and quarterly unlocking.
The Company uses discount rates applied by country to align with local currency cash flows. Discount
rates consist of yield curves that are developed using Bloomberg’s Evaluated Pricing Product based on
senior unsecured fixed rate bonds ratings of A+, A or A-. The discount rate assumption is updated
quarterly and the impact of remeasuring the net LFPB, after reinsurance recoverables from changes in the
locked-in discount rate assumption is reflected in other comprehensive income (loss) in the consolidated
statements of comprehensive income (loss).
The LFPB we establish is necessarily based on estimates, assumptions and our analysis of historical
experience. Factors that could cause prospective assumptions to be different from historical experience
include but are not limited to our term life product series, economic and societal trends, new
pharmaceutical drugs, and the impact of regulatory changes. Our results depend upon the extent to
which our actual experience is consistent with the assumptions we use in determining the LFPB. The
assumptions and estimates underlying the LFPB require significant judgment and, therefore, are inherently
uncertain.
Unearned and Advance Premiums. Unearned and advance premiums primarily consist of premiums
received from policyholders in advance of the premiums due date. Unearned and advance premiums are
deferred upon collection and recognized as premiums revenue upon the premium due date.
Other Policyholders’ Funds. Other policyholders’ funds primarily represent claim payments left on
deposit with us.
Litigation. The Company is involved from time-to-time in legal disputes, regulatory inquiries and
arbitration proceedings in the normal course of business. Contingent litigation-related losses are
recognized when probable and can be reasonably estimated. Legal costs, such as attorneys’ fees and
other litigation-related expenses that are incurred in connection with resolving litigation are expensed as
incurred. These disputes are subject to uncertainties, including indeterminate amounts sought in certain
of these matters and the inherent unpredictability of litigation. Due to the difficulty of estimating costs of
litigation, actual costs may be substantially higher or lower than any amounts reserved.
Income Taxes. We are subject to the income tax laws of the United States, its states, municipalities, and
certain unincorporated territories, as well as foreign jurisdictions, most notably Canada. These tax laws can
be complex and subject to different interpretations by the taxpayer and the relevant governmental taxing
authorities. In establishing a provision for income tax expense, we must make judgments and
interpretations about the applicability of these tax laws. We also must make estimates about the future
impact certain items will have on taxable income in the various tax jurisdictions, both domestic and
foreign.
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of acquired assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized
subject to management’s judgment that realization is more-likely-than-not applicable to the periods in
which we expect the temporary difference will reverse.
Primerica 2024 Annual Report
115
FINANCIAL STATEMENTS — NOTE 1
Premium Revenues. Traditional life insurance products consist principally of those products with fixed
and guaranteed premiums and benefits, and are primarily related to term products. Premiums are
recognized as revenues when due.
Commissions and Fees. We receive commissions and fees revenue from the sale of various non-life
insurance products. Commissions revenue is generally received on the sale of mutual funds and annuities.
We also receive trail commissions revenue from mutual fund and annuity products based on the net asset
value of shares sold by us. We, in turn, pay sales commissions to the independent sales force. We also
receive investment advisory and administrative fees based on the average daily net asset value of client
assets held in managed investments programs and contracts related to separate account assets issued by
Primerica Life Canada. We, in turn, pay asset-based commissions to the independent sales force. We earn
recordkeeping fees for transfer agent recordkeeping services that we perform on behalf of several of our
mutual fund providers and custodial fees for services performed as a non-bank custodian of our clients’
retirement plan accounts. See Note 20 (Revenue from Contracts with Customers) for details related to our
commissions and fees revenue recognition policies.
Benefits and Expenses. Benefit and expense items are charged to income in the period in which they
are incurred. Both the change in policyholder liabilities, which is included in benefits and claims, and the
amortization of deferred policy acquisition costs will vary with policyholder persistency.
Share-Based Transactions. For employee and director share-based compensation awards, we
determine a grant date fair value based on the price of our publicly-traded common stock and recognize
the related compensation expense, adjusted for actual forfeitures, in the consolidated statements of
income on a straight-line basis over the requisite service period for the entire award. For non-employee
share-based compensation, we recognize the impact during the period of performance, and the fair value
of the award is measured as of the grant date, which occurs in the same quarter as the service period. To
the extent non-employee share-based compensation is an incremental direct cost of successful
acquisitions or renewals of life insurance policies that result directly from and are essential to the policy
acquisition(s) and would not have been incurred had the policy acquisition(s) not occurred, we defer and
amortize the fair value of the awards in the same manner as other deferred policy acquisition costs.
Earnings Per Share (“EPS”). The Company has outstanding equity awards that consist of restricted
stock units (“RSUs”) and performance-based stock units (“PSUs”). The RSUs maintain non-forfeitable
dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for
any future dividend declarations. Unvested RSUs are deemed participating securities for purposes of
calculating EPS as they maintain dividend rights.
See Note 15 (Earnings Per Share) for details related to the calculations of our basic and diluted EPS using
the two-class method.
116
FINANCIAL STATEMENTS — NOTE 1
New Accounting Standards Adopted in the Current Year.
Accounting standard
Adoption date
Description
Effects on the financial statements
Segment
Reporting (Topic
280)—
Improvements to
Reportable
Segment
Disclosures
ASU 2023-07
Annual periods
beginning after
December 15, 2023
and interim periods
thereafter. Early
adoption is
permitted.
Retrospective
transition for all
periods presented.
In November 2023, the FASB
issued the accounting
standard update (“ASU”) to
enhance segment disclosures.
The amendments (1) require
disclosure of significant
segment expenses that are
regularly provided to the chief
operating decision maker
(“CODM”) and included within
each reported measure of
segment profit or loss; (2)
require disclosure of “other
segment items” by reportable
segment, which is the
difference between segment
revenue and significant
segment expenses; (3) require
annual segment disclosures to
be included in interim
financial statements; (4) clarify
that if the CODM uses more
than one measure of a
segment’s profit or loss in
assessing segment
performance and deciding
how to allocate resources, an
entity may report one or more
of those additional measures;
and (5) require disclosure of
the title and position of the
CODM and an explanation of
how the CODM uses the
reported measure(s) of
segment profit or loss in
assessing segment
performance and deciding
how to allocate resources.
The Company adopted this
ASU on a retrospective basis.
The adoption of the ASU did
not have a material impact on
our consolidated financial
statements. The Company’s
revised disclosures in
accordance with the new
standard are primarily
included in Note 4 (Segment
and Geographical
Information).
Primerica 2024 Annual Report
117
FINANCIAL STATEMENTS — NOTE 1
New Accounting Standards Not Yet Adopted.
Accounting standard
Adoption date
Description
Effects on the financial statements
Income Taxes
(Topic 740)—
Improvements to
Income Tax
Disclosures
ASU 2023-09
Annual periods
beginning after
December 15, 2024.
Early adoption is
permitted.
Prospective
transition, although
retrospective
transition is
permitted.
In December 2023, the FASB
issued the ASU to increase
income tax transparency
through improvements
primarily related to the
existing rate reconciliation and
income taxes paid disclosures.
The amendments require (1)
consistent categories and
greater disaggregation of
information in the rate
reconciliation; and (2) income
taxes paid disaggregated by
jurisdiction.
The ASU also removes certain
disclosure requirements, such
as reasonably possible
significant changes in the total
amount of unrecognized tax
benefits within 12 months of
the reporting date.
We do not believe the
adoption of the standard will
have a material impact on
our consolidated financial
statements. We will revise
disclosures in accordance
with the new standard in our
annual 2025 financial
statements.
Disaggregation of
Income Statement
Expenses
ASU 2024-03
Annual periods
beginning after
December 15, 2026.
Early adoption is
permitted.
Amendments
should be applied
either (1)
prospectively to
financial statements
issued for reporting
periods after the
effective date or (2)
retrospectively to
any or all prior
periods presented.
In November 2024, the FASB
issued the ASU to increase
disclosures about types of
expenses incurred by
companies. The amendments
require disaggregating
expense information about
prescribed categories in
tabular format and qualitative
description of amounts not
separately disaggregated.
We do not believe the
adoption of the standard will
have a material impact on
our consolidated financial
statements but it will increase
the amount of expense
information provided by the
Company. We anticipate
providing further disclosures
in accordance with the new
standard in our annual 2027
financial statements.
Recently-issued accounting guidance not discussed above is not applicable, is immaterial to our
consolidated financial statements, or did not or is not expected to have a material impact on our business.
118
FINANCIAL STATEMENTS — NOTE 2
(2) Discontinued Operations
The Company reports the results of operations of a business as discontinued operations if (i) the business
has been disposed of or is classified as held for sale; (ii) the disposal of the business represents a strategic
shift that will have a major impact on the Company’s operations and financial results; (iii) the operations
and cash flows of the business have been or will be eliminated from the ongoing operations of the
Company as a result of the disposal; and (iv) the Company will not have any significant continuing
involvement in the operations of the business after the disposal. The results of discontinued operations
are reported in net income from discontinued operations in the consolidated statements of income for all
periods presented, commencing in the period in which the business is either disposed of or is classified as
held for sale, including any gain or loss recognized on closing or adjustment of the carrying amount to
fair value less costs to sell, as applicable. Assets and liabilities related to a business which meets the
criteria for discontinued operations are segregated in the consolidated balance sheets for the current and
prior periods.
In July 2024, the Board of Directors (“Board”) of the Company authorized the exit of the Senior Health
business. On September 30, 2024, the Company irrevocably and permanently surrendered and
relinquished all rights in e-TeleQuote to an independent third party without receipt of consideration and
with no continuing involvement in its management or operations.
The Company determined that the disposal represented a strategic shift that will have a major impact on
the Company’s operations and financial results. The disposal represented a strategic shift as the Senior
Health business had been designated as a separate operating segment, and the Board and management
recognized that its previously expected impact on the Company’s operations and financial results would
not be realized. Accordingly, the results of operations for the Senior Health business and related assets
and liabilities have been reported in discontinued operations for all periods presented in our consolidated
statements of income and our consolidated balance sheets, respectively. Related balances in the notes to
the consolidated financial statements have been restated to remove balances and activities related to the
discontinued operations except as otherwise noted.
We recognized an after-tax net gain on disposal of $2.0 million, which is comprised of the $95.8 million
write-off of e-TeleQuote’s assets and liabilities as of the abandonment date and the recognition of a $97.8
million income tax benefit.
Primerica 2024 Annual Report
119
FINANCIAL STATEMENTS — NOTE 2
The major classes of line items constituting discontinued operations in the consolidated statements of
income were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Revenues:
Commissions and fees
$
30,550
$
57,563
$
47,420
Other, net
2,056
9,621
15,262
Total revenues
32,606
67,184
62,682
Expenses:
Contract acquisition costs
45,594
55,233
68,431
Impairment of goodwill and other long-lived assets
253,607
—
60,000
Loss on disposition
95,787
—
—
Other operating expenses
31,956
32,009
32,924
Total expenses
426,944
87,242
161,355
Loss before income taxes
(394,338)
(20,058)
(98,673)
Income tax benefit
144,727
5,477
10,989
Loss from discontinued operations, net
of income taxes
$
(249,611)
$
(14,581)
$
(87,684)
120
FINANCIAL STATEMENTS — NOTE 2
Income tax benefit from discontinued operations is different from the amount determined by multiplying
loss from discontinued operations before income taxes by the U.S. statutory federal tax rate of 21% for
the years ended December 31, 2024, 2023 and 2022. The reconciliation for such difference follows:
Year ended December 31,
2024
2023
2022
Amount
Percentage
Amount
Percentage
Amount
Percentage
(Dollars in thousands)
Computed tax expense
$
(82,811)
21.0%
$
(4,212)
21.0% $
(20,721)
21.0%
State income taxes
(11,227)
2.8%
(1,187)
5.9%
(3,411)
3.5%
Write-off of net assets upon disposal
20,115
(5.1)%
—
—%
—
—%
Goodwill impairment loss
26,818
(6.8)%
—
—%
12,600
(12.8)%
Tax benefit of abandonment
(97,786)
24.8%
—
—%
—
—%
Other
164
—%
(78)
0.4%
543
(0.6)%
Total tax benefit / effective rate from
discontinuing operations
$ (144,727)
36.7%
$
(5,477)
27.3% $
(10,989)
11.1%
Primerica 2024 Annual Report
121
FINANCIAL STATEMENTS — NOTE 2
The carrying values of the major classes of assets and liabilities from discontinued operations entities
included on the consolidated balance sheets were as follows:
December 31,
2024
December 31,
2023
(In thousands)
Cash and cash equivalents
$
—
$
19,000
Renewal commissions receivable
—
128,886
Agent balances, due premiums and other receivables
—
3,850
Goodwill
—
127,707
Intangible assets, net (accumulated amortization:
$0 in 2024 and $26,250 in 2023)
—
129,750
Income tax receivable
—
3,479
Operating lease right-of-use assets
—
2,187
Other assets
—
3,981
Total assets from discontinued operations entities
$
—
$
418,840
Deferred income taxes
$
—
$
58,990
Operating lease liabilities
—
2,465
Other liabilities
—
4,389
Total liabilities from discontinued operations entities
$
—
$
65,844
Total operating and investing cash flows of the discontinued operations were as follows, which excludes
the Company’s use of $59.4 million of the total income tax benefit recognized on disposal to offset
federal income tax payments during 2024:
Year ended December 31,
2024
2023
2022
(In thousands)
Net cash provided by (used in) operating activities
$
(5,663)
$
8,372
$
19,760
Net cash provided by (used in) investing activities
$
(21,515)
$
(331)
$
(94)
122
FINANCIAL STATEMENTS — NOTE 3
(3) Other Comprehensive Income (Loss)
The components of other comprehensive income (loss) (“OCI”), including the income tax expense or
benefit allocated to each component, were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Foreign currency translation adjustments:
Change in unrealized foreign currency translation gains
(losses) before income taxes
$
(32,532)
$
10,044
$
(20,826)
Income tax expense (benefit) on unrealized foreign
currency translation gains (losses)
—
—
—
Change in unrealized foreign currency translation
gains (losses), net of income taxes
$
(32,532)
$
10,044
$
(20,826)
Unrealized gain (losses) on available-for-sale securities:
Change in unrealized holding gains (losses) arising
during period before income taxes
$
9,950
$
87,390
$
(385,735)
Income tax expense (benefit) on unrealized holding
gains (losses) arising during period
2,340
18,751
(82,185)
Change in unrealized holding gains (losses) on
available-for-sale securities arising during period,
net of income taxes
7,610
68,639
(303,550)
Reclassification from accumulated OCI to net income
for (gains) losses realized on available-for-sale
securities
(562)
2,811
(1,387)
Income tax (expense) benefit on (gains) losses
reclassified from accumulated OCI to net income
(118)
590
(292)
Reclassification from accumulated OCI to net income
for (gains) losses realized on available-for-sale
securities, net of income taxes
(444)
2,221
(1,095)
Change in unrealized gains (losses) on available-
for-sale securities, net of income taxes and
reclassification adjustment
$
7,166
$
70,860
$
(304,645)
Effect of change in discount rate assumptions on the
LFPB:
Change in effect in discount rate assumptions on the
LFPB before income taxes
$
334,035
$
(216,301)
$
1,739,762
Income tax expense (benefit) on the effect of change in
discount rate assumptions on the LFPB from
accumulated OCI to net income
70,116
(46,799)
371,166
Change in effect in discount rate assumptions on the
LFPB, net of income taxes
$
263,919
$
(169,502)
$
1,368,596
Primerica 2024 Annual Report
123
FINANCIAL STATEMENTS — NOTE 4
(4) Segment and Geographical Information
Segments. We have two primary operating segments — Term Life Insurance and Investment and Savings
Products. The Term Life Insurance segment includes underwriting profits on our in-force book of term life
insurance policies, net of reinsurance, which are underwritten by our life insurance company subsidiaries.
The Investment and Savings Products segment includes retail and managed mutual funds and annuities
distributed through licensed broker-dealer subsidiaries and includes segregated funds, an insurance
savings product that we have underwritten in Canada through Primerica Life Canada. In the United States,
we distribute mutual fund and annuity products of several third-party companies. We also earn fees for
transfer agent recordkeeping functions and non-bank custodial services that we provide for certain
mutual funds products we distribute. In Canada, we primarily offer a suite of mutual fund products, for
which we serve as the principal distributor, managed by two well-known mutual fund companies. The
Company previously reported a Senior Health segment, which consisted of the Senior Health business
that was disposed of as of September 30, 2024, and is now reported in discontinued operations. Refer to
Note 2 (Discontinued Operations) for additional information on the disposal.
We also have a Corporate and Other Distributed Products segment, which consists primarily of revenues
and expenses related to several discontinued lines of insurance other than our core term life insurance
products and the distribution of various other financial products generally underwritten or offered by
third-party providers. The Company’s net investment income, interest expense incurred by the Company,
and gains and losses on our invested asset portfolio are attributed entirely to the Corporate and Other
Distributed Products segment.
The Company’s chief operating decision maker (“CODM”) is a function that allocates the Company’s
resources and assesses the performance of the Company’s segments. We have defined the Company’s
CODM as the combined function of its Chief Executive Officer and its Chief Financial Officer. The CODM
uses segment net income (loss) before income taxes to evaluate segment performance and in deciding
how to allocate resources. The CODM does not use a measure of segment assets to evaluate segment
performance or in deciding how to allocate resources. The CODM’s evaluation of segment performance
occurs on a monthly basis, and the decision of how to allocate resources occurs primarily during the
periodic budget and forecasting process. The CODM considers budget-to-actual variances and variances
compared to the same period in the prior year when making decisions about allocating capital and
personnel to the segments.
124
FINANCIAL STATEMENTS — NOTE 4
Income (loss) before income taxes by segment, including significant expense categories, was as follows:
Year ended December 31,
2024
2023
2022
(Dollars in thousands)
Term life insurance segment:
Total revenues
$
1,768,240
$
1,693,042
$
1,635,966
Benefits and expenses:
Benefits and claims
635,354
622,084
619,997
Future policy benefits remeasurement (gain)
loss
(31,265)
(213)
554
Amortization of DAC
291,488
268,803
254,875
Insurance expenses
250,957
230,390
230,796
Insurance commissions
17,664
19,814
15,335
Total benefits and expenses
1,164,198
1,140,878
1,121,557
Income before income taxes
$
604,042
$
552,164
$
514,409
Year ended December 31,
2024
2023
2022
(Dollars in thousands)
Investment and savings products segment:
Total revenues
$
1,056,742
$
865,265
$
863,432
Expenses:
Amortization of DAC
5,443
5,479
5,581
Insurance commissions
13,638
13,148
13,834
Sales commissions:
Sales-based
275,582
212,482
234,711
Asset-based
278,042
226,542
206,838
Other operating expenses:
Fees based on client asset values
40,260
32,886
31,939
Fees based on fee-generating positions
42,839
41,483
40,073
Other expenses
98,693
90,419
84,566
Total expenses
754,497
622,439
617,542
Income before income taxes
$
302,245
$
242,826
$
245,890
Primerica 2024 Annual Report
125
FINANCIAL STATEMENTS — NOTE 4
Year ended December 31,
2024
2023
2022
(Dollars in thousands)
Corporate and other distributed products segment:
Total revenues
$
264,161
$
190,200
$
158,053
Benefits and expenses:
Benefits and claims
12,809
20,895
12,406
Future policy benefits remeasurement (gain) loss
5,345
(171)
1,072
Amortization of DAC
1,205
1,534
1,173
Insurance expenses
4,662
5,070
4,609
Insurance commissions
706
1,260
1,092
Sales commissions
19,625
18,420
21,215
Interest expense
25,034
26,594
27,237
Other operating expenses
161,815
139,850
130,892
Total benefits and expenses
231,201
213,452
199,696
Income (loss) before income taxes
$
32,960
$
(23,252)
$
(41,643)
The following table reconciles segment revenues to total revenues in the consolidated statements of
income:
Year ended December 31,
2024
2023
2022
(Dollars in thousands)
Revenues:
Term life insurance segment
$ 1,768,240
$ 1,693,042
$ 1,635,966
Investment and savings products segment
1,056,742
865,265
863,432
Corporate and other distributed products segment
264,161
190,200
158,053
Total revenues
$ 3,089,143
$ 2,748,507
$ 2,657,451
126
FINANCIAL STATEMENTS — NOTE 4
The following table reconciles segment income (loss) before income taxes to income from continuing
operations before income taxes in the consolidated statements of income:
Year ended December 31,
2024
2023
2022
(Dollars in thousands)
Income (loss) from continuing operations before
income taxes:
Term life insurance segment
$
604,042
$
552,164
$
514,409
Investment and savings products segment
302,245
242,826
245,890
Corporate and other distributed products segment
32,960
(23,252)
(41,643)
Total income from continuing operations before
income taxes
$
939,247
$
771,738
$
718,656
In April 2024, the Company executed agreements providing for the receipt of proceeds for certain claims
filed by the Company under a Representation and Warranty insurance policy negotiated and purchased in
connection with the acquisition of e-TeleQuote on July 1, 2021. The claims made by the Company
involved breaches of certain representations and warranties relating to the pre-acquisition financial
statements made by the sellers of e-TeleQuote in connection with the acquisition. The Company
recognized a gain during the year ended December 31, 2024 of $50.0 million, which is equal to the
aggregate proceeds received from the third-party insurers under the policy in May 2024, reflecting the full
coverage under the policy. The Company recognized this gain in Corporate and Other Distributed
Products segment revenues as it resulted from a corporate investment decision to purchase the insurance
policy. On a consolidated basis, this gain is included in Other, net revenue in the accompanying
consolidated statements of income.
The Company recorded corporate restructuring charges of $2.8 million for the year ended December 31,
2024 associated with the decision to exit the Senior Health business, which are included in the
determination of income (loss) from continuing operations before income taxes in the Corporate and
Other Distributed Products segment. There were no corporate restructuring charges recorded during the
years ended December 31, 2023 or 2022.
Insurance expenses and other operating expenses directly attributable to the Term Life Insurance and
Investment and Savings Products segments are recorded directly to the applicable segment. Other
operating expenses consists primarily of staff compensation, technology and communications, various
independent sales force-related costs, non-bank custodial and transfer agent recordkeeping
administrative costs, outsourcing and professional fees, and other corporate and administrative fees and
expenses. We allocate certain other revenue and operating expenses that are not directly attributable to a
specific operating segment using methods expected to reasonably measure the benefit received by each
reporting segment. Such methods include time studies, recorded usage, revenue distribution, and sales
force representative distribution. These allocated items include fees charged for access to Primerica
Online (“POL”) and costs incurred for technology, independent sales force support, occupancy and other
general and administrative costs. Costs that are not directly charged or allocated to our two primary
operating segments are included in the Corporate and Other Distributed Products segment.
Primerica 2024 Annual Report
127
FINANCIAL STATEMENTS — NOTE 4
Geographical Information. Results of operations by country and long-lived assets — primarily tangible
assets reported in other assets in our consolidated balance sheets —from continuing operations were as
follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Revenues by country:
United States
$
2,694,323
$
2,396,774
$
2,292,457
Canada
394,820
351,733
364,994
Total revenues
$
3,089,143
$
2,748,507
$
2,657,451
December 31, 2024
December 31, 2023
(In thousands)
Long-lived assets by country:
United States
$
38,064
$
34,968
Canada
2,634
2,636
Total long-lived assets
$
40,698
$
37,604
(5) Investments
AFS Securities. The amortized cost, gross unrealized gains and losses, and fair value of AFS fixed-maturity
securities were as follows:
December 31, 2024
Amortized cost
Gross
unrealized
gains
Gross
unrealized
losses
Fair value
(In thousands)
Securities available-for-sale, carried at fair
value:
Fixed-maturity securities:
U.S. government and agencies
$
9,822
$
7
$
(326)
$
9,503
Foreign government
171,033
1,597
(6,206)
166,424
States and political subdivisions
128,359
96
(14,886)
113,569
Corporates
1,929,350
11,853
(116,095)
1,825,108
Residential mortgage-backed securities
552,611
536
(66,590)
486,557
Commercial mortgage-backed securities
110,426
87
(11,068)
99,445
Other asset-backed securities
250,882
1,396
(6,758)
245,520
Total fixed-maturity securities
$ 3,152,483
$ 15,572
$ (221,929)
$ 2,946,126
128
FINANCIAL STATEMENTS — NOTE 5
December 31, 2023
Amortized cost
Gross
unrealized
gains
Gross
unrealized
losses
Fair value
(In thousands)
Securities available-for-sale, carried at fair
value:
Fixed-maturity securities:
U.S. government and agencies
$
9,974
$
18
$
(476)
$
9,516
Foreign government
170,354
1,616
(8,588)
163,382
States and political subdivisions
145,779
891
(14,681)
131,989
Corporates
1,723,023
14,787
(120,286)
1,617,524
Residential mortgage-backed securities
499,771
1,688
(63,928)
437,531
Commercial mortgage-backed securities
127,454
156
(15,443)
112,167
Other asset-backed securities
258,857
763
(12,262)
247,358
Total fixed-maturity securities
2,935,212
19,919
(235,664)
2,719,467
Short-term investments
276
—
—
276
Total fixed-maturity and short-term
investments
$ 2,935,488
$ 19,919
$ (235,664)
$ 2,719,743
All of our AFS mortgage- and asset-backed securities represent beneficial interests in variable interest
entities (“VIEs”). We are not the primary beneficiary of these VIEs because we do not have the power to
direct the activities that most significantly impact the entities’ economic performance. The maximum
exposure to loss as a result of our involvement in these VIEs equals the carrying value of the securities.
The scheduled maturity distribution of the AFS fixed-maturity securities portfolio as of December 31, 2024
was as follows:
Amortized cost
Fair value
(In thousands)
Due in one year or less
$
164,334
$
163,859
Due after one year through five years
734,771
718,204
Due after five years through 10 years
839,321
773,086
Due after 10 years
500,138
459,455
2,238,564
2,114,604
Mortgage- and asset-backed securities
913,919
831,522
Total AFS fixed-maturity securities
$
3,152,483
$
2,946,126
Primerica 2024 Annual Report
129
FINANCIAL STATEMENTS — NOTE 5
Expected maturities may differ from scheduled contractual maturities because issuers of securities may
have the right to call or prepay obligations with or without call or prepayment penalties.
Held-to-maturity Security. Concurrent with the execution of the Vidalia Re Coinsurance Agreement,
Vidalia Re entered into a Surplus Note Purchase Agreement (the “Surplus Note Purchase Agreement”)
with Hannover Life Reassurance Company of America and certain of its affiliates (collectively, “Hannover
Re”) and a newly formed limited liability company (the “LLC”) owned by a third- party service provider.
Under the Surplus Note Purchase Agreement, Vidalia Re issued a surplus note (the “Surplus Note”) to the
LLC in exchange for a credit enhanced note from the LLC with an equal principal amount (the “LLC Note”).
The principal amounts of the Surplus Note and the LLC Note have reached their peaks and are expected
to decrease over time to coincide with the amount of policy reserves contractually supported under the
Vidalia Re Coinsurance Agreement. Both the LLC Note and the Surplus Note mature on December 31,
2030 and bear interest at an annual interest rate of 4.50%. The LLC Note is guaranteed by Hannover Re
through a credit enhancement feature in exchange for a fee, which is reflected in interest expense in our
consolidated statements of income.
The LLC is a VIE as its owner does not have an equity investment at risk that is sufficient to permit the LLC
to finance its activities without Vidalia Re or Hannover Re. The Parent Company, Primerica Life, and Vidalia
Re share the power to direct the activities of the LLC with Hannover Re, but they do not have the
obligation to absorb losses or the right to receive any residual returns related to the LLC’s primary risks or
sources of variability. Through the credit enhancement feature, Hannover Re is the ultimate risk taker in
this transaction and bears the obligation to absorb the LLC’s losses in the event of a Surplus Note default
in exchange for the fee. Accordingly, the Company is not the primary beneficiary of the LLC and does not
consolidate the LLC within its consolidated financial statements. Hannover Re’s financial strength rating by
A.M. Best was A+ as of December 31, 2024.
The LLC Note is classified as a held-to-maturity debt security in the Company’s invested asset portfolio as
we have the positive intent and ability to hold the security until maturity. As of December 31, 2024, the
LLC Note had an estimated unrealized holding loss of $76.5 million based on its amortized cost and
estimated fair value. The estimated fair value of the LLC Note is expected to be at least equal to the
estimated fair value of the offsetting Surplus Note. See Note 6 (Fair Value of Financial Instruments) for
information on the fair value of our financial instruments and see Note 12 (Debt) for more information on
the Surplus Note.
As of December 31, 2024, no credit losses have been recognized on the LLC Note.
Investments on Deposit with Governmental Authorities. As required by law, we have investments on
deposit with governmental authorities and banks for the protection of policyholders. The fair value of
investments on deposit was $8.0 million and $7.3 million as of December 31, 2024 and 2023, respectively.
Securities Lending Transactions. We participate in securities lending transactions with broker-dealers
and other financial institutions to increase investment income with minimal risk. We require minimum
collateral on securities loaned equal to 102% of the fair value of the loaned securities. We accept collateral
in the form of securities, which we are not able to sell or encumber, and to the extent the collateral
declines in value below 100%, we require additional collateral from the borrower. Any securities collateral
received is not reflected on our consolidated balance sheets. We also accept collateral in the form of cash,
all of which we reinvest. For loans involving unrestricted cash collateral, the collateral is reported as an
asset with a corresponding liability representing our obligation to return the collateral. We continue to
carry the loaned securities as invested assets on our consolidated balance sheets during the terms of the
loans, and we do not report them as sales. Cash collateral received and reinvested was $86.0 million and
$99.8 million as of December 31, 2024 and 2023, respectively.
130
FINANCIAL STATEMENTS — NOTE 5
Net Investment Income. The components of net investment income were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Fixed-maturity securities (available-for-sale)
$
125,411
$
108,762
$
90,975
Fixed-maturity security (held-to-maturity)
62,652
65,474
63,922
Equity securities
1,363
1,523
1,509
Policy loans and other invested assets
1,545
1,297
1,046
Cash, cash equivalents and short-term investments
25,901
23,601
5,943
Total return on deposit asset underlying 10%
coinsurance agreement(1)
9,695
9,338
(65)
Gross investment income
226,567
209,995
163,330
Investment expenses
(8,414)
(8,684)
(6,343)
Investment income net of investment expenses
218,153
201,311
156,987
Interest expense on surplus note
(62,652)
(65,474)
(63,922)
Net investment income
$
155,501
$
135,837
$
93,065
(1)
Includes $1.0 million, $(0.4) million, and $(3.8) million of net gains (losses) recognized for the change in fair value of the deposit
asset underlying the 10% coinsurance agreement for the years ended December 31, 2024, 2023, and 2022, respectively.
Primerica 2024 Annual Report
131
FINANCIAL STATEMENTS — NOTE 5
The components of investment gains (losses), as well as details on gross realized investment gains (losses)
and other investment gains (losses) were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Realized investment gains (losses):
Gross gains from sales of available-for-sale fixed
maturity securities
$
1,253
$
504
$
2,036
Gross losses from sales of available-for-sale fixed
maturity securities
(238)
(1,149)
(592)
Net realized investment gains (losses):
1,015
(645)
1,444
Other investment gains (losses):
Credit losses impairment of available-for-sale
securities
(453)
(2,166)
(57)
Market gains (losses) recognized in net income
during the period on equity securities
1,629
(3,137)
(2,375)
Gains (losses) from equity method investments
19
12
—
Gains (losses) from bifurcated options
—
13
—
Gains (losses) on trading securities
26
27
(7)
Other investment gains (losses):
1,221
(5,251)
(2,439)
Investment gains (losses)
$
2,236
$
(5,896)
$
(995)
The proceeds from sales or other redemptions of AFS securities were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Proceeds from sales or other redemptions
$
428,373
$
373,254
$
496,898
Accrued Interest. Accrued interest is recorded in accordance with the contractual interest schedule of the
underlying security. In the event of default, the Company’s policy is to no longer accrue interest on these
securities and to write off any remaining accrued interest. As a result, the Company has made the policy
election to not record an allowance for credit losses on accrued interest.
132
FINANCIAL STATEMENTS — NOTE 5
Credit Losses for AFS Fixed-maturity Securities. The following tables summarize all AFS securities in an
unrealized loss position for which an allowance for credit losses has not been recorded as of December
31, 2024 and 2023, aggregated by major security type and by length of time such securities have
continuously been in an unrealized loss position:
December 31, 2024
Less than 12 months
12 months or longer
Fair value
Unrealized
losses
Fair value
Unrealized
losses
(In thousands)
Fixed-maturity securities:
U.S. government and agencies
$
3,529
$
(19)
$
5,660
$
(307)
Foreign government
15,044
(139)
83,923
(6,067)
States and political subdivisions
9,933
(350)
99,389
(14,536)
Corporates
398,232
(9,422)
1,000,264
(106,673)
Residential mortgage-backed
securities
106,276
(2,605)
327,850
(63,985)
Commercial mortgage-backed
securities
2,005
(1)
89,876
(11,067)
Other asset-backed securities
15,086
(81)
114,077
(6,677)
Total fixed-maturity securities
$
550,105
$
(12,617)
$ 1,721,039
$ (209,312)
Primerica 2024 Annual Report
133
FINANCIAL STATEMENTS — NOTE 5
December 31, 2023
Less than 12 months
12 months or longer
Fair value
Unrealized
losses
Fair value
Unrealized
losses
(In thousands)
Fixed-maturity securities:
U.S. government and agencies
$
—
$
—
$
9,188
$
(476)
Foreign government
17,209
(62)
104,827
(8,526)
States and political subdivisions
4,883
(46)
107,021
(14,635)
Corporates
39,783
(907)
1,231,694
(119,379)
Residential mortgage-backed
securities
14,872
(142)
360,987
(63,786)
Commercial mortgage-backed
securities
4,721
(107)
97,417
(15,336)
Other asset-backed securities
41,417
(159)
136,841
(12,103)
Total fixed-maturity securities
$
122,885
$
(1,423)
$ 2,047,975
$ (234,241)
The amortized cost of AFS securities with a cost basis in excess of their fair values were $2,493.1 million
and $2,406.5 million as of December 31, 2024 and 2023, respectively.
As of December 31, 2024 and 2023, no allowance for credit losses was recorded for AFS securities.
Substantially all of the unrealized losses were the result of change in market interest rates compared to
the date the securities were acquired rather than the credit quality of the securities, and we have no
present intention to dispose of them.
For the years ended December 31, 2024, 2023, and 2022, we recorded $0.5 million, $2.2 million, and less
than $0.1 million, respectively, for credit (gains) losses in the consolidated statements of income on AFS
securities. We recognize credit losses on securities due to: (i) our intent to sell them; (ii) adverse credit
events indicating that we will not receive the security’s contractual cash flows when contractually due,
such as news of an impending filing for bankruptcy; (iii) analyses of the issuer’s most recent financial
statements or other information indicating that significant liquidity deficiencies, significant losses and
large declines in capitalization exist; and (iv) analyses of rating agency information for issuances with
severe ratings downgrades indicating a significant increase in the possibility of default.
134
FINANCIAL STATEMENTS — NOTE 5
The rollforward of the allowance for credit losses on AFS securities was as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Allowance for credit losses, beginning of period
$
—
$
—
$
816
Additions to the allowance for credit losses on securities for which
credit losses were not previously recorded
—
—
—
Additional increases (decreases) to the allowance for credit losses on
securities that had an allowance recorded in a previous period
—
—
(81)
Write-offs charged against the allowance, if any
—
—
(735)
Allowance for credit losses, end of period
$
—
$
—
$
—
Derivatives. We have a deferred loss related to closed forward contracts, which were settled several years
ago, that were used to mitigate our exposure to foreign currency exchange rates that resulted from the
net investment in our Canadian operations. The amount of deferred loss included in accumulated other
comprehensive income (loss) was $26.4 million as of each of December 31, 2024 and 2023. These deferred
losses will not be recognized until such time as we sell or substantially liquidate our Canadian operations,
although we have no such intention.
Primerica 2024 Annual Report
135
FINANCIAL STATEMENTS — NOTE 6
(6) Fair Value of Financial Instruments
Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Invested assets recorded at fair
value are measured and classified in accordance with a three-tier fair value hierarchy based on observable
and unobservable inputs. Observable inputs reflect market data obtained from independent sources,
while unobservable inputs reflect our view of market assumptions in the absence of observable market
information. We classify and disclose all invested assets carried at fair value in one of the following three
levels:
•
Level 1. Quoted prices for identical instruments in active markets. Level 1 consists of financial
instruments whose value is based on quoted market prices in active markets, such as cash, cash
equivalents in money market funds, exchange-traded common stocks and actively traded mutual
fund investments;
•
Level 2. Quoted prices for similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations in which all significant
inputs are observable in active markets. Level 2 includes those financial instruments that are valued
using industry-standard pricing methodologies, models or other valuation methodologies. Various
inputs are considered in deriving the fair value of the underlying financial instrument, including
interest rate and yield curves, credit spread, and foreign exchange rates. All significant inputs are
observable, or derived from observable information in the marketplace or are supported by
observable levels at which transactions are executed in the marketplace. Financial instruments in this
category could include: cash equivalents and short-term investments in U.S. treasury securities;
certain public and private corporate fixed-maturity and equity securities; government or agency
securities; and certain mortgage- and asset-backed securities; and
•
Level 3. Valuations derived from valuation techniques in which one or more significant inputs are
unobservable. Level 3 consists of financial instruments whose fair value is estimated based on
industry-standard pricing methodologies and models using significant inputs not based on, nor
corroborated by, readily available market information. Valuations for this category primarily consist
of non-binding broker quotes. Financial instruments in this category could include less liquid
mortgage- and asset-backed securities and equity securities.
As of each reporting period, all assets and liabilities recorded at fair value are classified in their entirety
based on the lowest level of input (Level 3 being the lowest in the hierarchy) that is significant to the fair
value measurement. Significant levels of estimation and judgment are required to determine the fair value
of certain of our investments. The factors influencing these estimations and judgments are subject to
change in subsequent reporting periods.
136
FINANCIAL STATEMENTS — NOTE 6
The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair
value on a recurring basis were as follows:
December 31, 2024
Level 1
Level 2
Level 3
Total
(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies
$
—
$
9,503
$
—
$
9,503
Foreign government
—
166,424
—
166,424
States and political subdivisions
—
113,569
—
113,569
Corporates
3,787
1,821,321
—
1,825,108
Mortgage-and asset-backed securities:
Residential mortgage-backed securities
—
486,557
—
486,557
Commercial mortgage-backed securities
—
99,445
—
99,445
Other asset-backed securities
—
245,520
—
245,520
Total available-for-sale fixed-maturity
securities
3,787
2,942,339
—
2,946,126
Short term investments
—
—
—
—
Total available-for-sale securities
3,787
2,942,339
—
2,946,126
Equity securities
24,598
1,003
1,543
27,144
Trading securities
—
3,011
—
3,011
Cash and cash equivalents
687,821
—
—
687,821
Separate accounts
—
2,209,287
—
2,209,287
Total fair value assets
$ 716,206
$ 5,155,640
$ 1,543
$ 5,873,389
Fair value liabilities:
Separate accounts
$
—
$ 2,209,287
$
—
$ 2,209,287
Total fair value liabilities
$
—
$ 2,209,287
$
—
$ 2,209,287
Primerica 2024 Annual Report
137
FINANCIAL STATEMENTS — NOTE 6
December 31, 2023
Level 1
Level 2
Level 3
Total
(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies
$
—
$
9,516
$
—
$
9,516
Foreign government
—
163,382
—
163,382
States and political subdivisions
—
131,989
—
131,989
Corporates
3,951
1,613,573
—
1,617,524
Mortgage-and asset-backed securities:
—
Residential mortgage-backed securities
—
437,531
—
437,531
Commercial mortgage-backed securities
—
112,167
—
112,167
Other asset-backed securities
—
246,858
500
247,358
Total available-for-sale fixed-maturity
securities
3,951
2,715,016
500
2,719,467
Short term investments
—
276
—
276
Total available-for-sale securities
3,951
2,715,292
500
2,719,743
Equity securities
27,062
974
1,644
29,680
Trading securities
—
18,383
—
18,383
Cash and cash equivalents
594,148
—
—
594,148
Separate accounts
—
2,395,842
—
2,395,842
Total fair value assets
$ 625,161
$ 5,130,491
$ 2,144
$ 5,757,796
Fair value liabilities:
Separate accounts
$
—
$ 2,395,842
$
—
$ 2,395,842
Total fair value liabilities
$
—
$ 2,395,842
$
—
$ 2,395,842
In estimating fair value of our investments, we use a third-party pricing service for approximately all of our
securities that are measured at fair value on a recurring basis. The remaining securities are primarily thinly
traded securities, such as private placements, and are valued using models based on observable inputs on
public corporate spreads having similar characteristics (e.g., sector, average life and quality rating),
liquidity and yield based on quality rating, average life and U.S. Treasury yields. All observable data inputs
are corroborated by independent third-party data. We also corroborate pricing information provided by
our third-party pricing service by performing a review of selected securities. Our review activities include
obtaining detailed information about the assumptions, inputs and methodologies used in pricing the
security; documenting this information; and corroborating it by comparison to independently obtained
prices and/or independently developed pricing methodologies.
138
FINANCIAL STATEMENTS — NOTE 6
Furthermore, we perform internal reasonableness assessments on fair value determinations within our
portfolio throughout the year and as of year-end, including pricing variance analyses and comparisons to
alternative pricing sources and benchmark returns. If a fair value appears unusual relative to these
assessments, we will re-examine the inputs and may challenge a fair value assessment made by the
pricing service. If there is a known pricing error, we will request a reassessment by the pricing service. If
the pricing service is unable to perform the reassessment on a timely basis, we will determine the
appropriate price by requesting a reassessment from an alternative pricing service or other qualified
source as necessary. We do not adjust quotes or prices except in a rare circumstance to resolve a known
error.
Because many fixed-maturity securities do not trade on a daily basis, third-party pricing services generally
determine fair value using industry-standard methodologies, which vary by asset class. For corporates,
governments, and agency securities, these methodologies include developing prices by incorporating
available market information such as U.S. Treasury curves, benchmarking of similar securities including
new issues, sector groupings, quotes from market participants and matrix pricing. Observable information
is compiled and integrates relevant credit information, perceived market movements and sector news.
Additionally, security prices are periodically back-tested to validate and/or refine models as conditions
warrant. Market indicators and industry and economic events are also monitored as triggers to obtain
additional data. For certain structured securities (such as mortgage- and asset-backed securities) with
limited trading activity, third-party pricing services generally use industry-standard pricing methodologies
that incorporate market information, such as index prices or discounting expected future cash flows based
on underlying collateral, and quotes from market participants, to estimate fair value. If one or more of
these input measures are not deemed observable for a particular security, the security will be classified as
Level 3 in the fair value hierarchy.
Where specific market information is unavailable for certain securities, pricing models produce estimates
of fair value primarily using Level 2 inputs along with certain Level 3 inputs. These models include matrix
pricing. The pricing matrix uses current U.S. Treasury rates and credit spreads received from third-party
sources to estimate fair value. The credit spreads incorporate the issuer’s industry- or issuer-specific credit
characteristics and the security’s time to maturity, if warranted. Remaining unpriced securities are valued
using an estimate of fair value based on indicative market prices that include significant unobservable
inputs not based on, nor corroborated by, market information, including the utilization of non-binding
broker quotes.
The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows:
Year ended December 31,
2024
2023
(In thousands)
Level 3 assets, beginning of period
$
2,144
$
1,710
Net unrealized gains (losses) included in other comprehensive income (loss)
4
—
Investment gains (losses) and accretion (amortization) recognized in earnings
(101)
(66)
Purchases
—
500
Transfers out of Level 3
(504)
—
Level 3 assets, end of period
$
1,543
$
2,144
Primerica 2024 Annual Report
139
FINANCIAL STATEMENTS — NOTE 6
We obtain independent pricing quotes based on observable inputs as of the end of the reporting period
for all securities in Level 2. Those inputs include benchmark yields, reported trades, broker/dealer quotes,
issuer spreads, two-sided markets, benchmark securities, market bids/offers, quoted prices for similar
instruments in markets that are not active, and other relevant data. We monitor these inputs for market
indicators, industry and economic events. There were no material transfers between Level 1 and Level 3
during the years ended December 31, 2024 and 2023.
The carrying values and estimated fair values of our financial instruments were as follows:
December 31, 2024
December 31, 2023
Carrying
value
Estimated
fair value
Carrying
value
Estimated
fair value
(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)
$ 2,946,126
$ 2,946,126
$ 2,719,467
$ 2,719,467
Fixed-maturity security (held-to-maturity) (1)
1,303,880
1,227,428
1,386,980
1,334,892
Short-term investments (available-for-sale)
—
—
276
276
Equity securities
27,144
27,144
29,680
29,680
Trading securities
3,011
3,011
18,383
18,383
Policy loans (1)
40,884
40,884
38,975
38,975
Deposit asset underlying 10% coinsurance
agreement (1)
158,913
158,913
187,377
187,377
Separate accounts
2,209,287
2,209,287
2,395,842
2,395,842
Liabilities:
Note payable (2) (3)
594,512
513,862
593,709
508,832
Surplus note (1) (2)
1,303,556
1,225,708
1,386,592
1,329,159
Separate accounts
2,209,287
2,209,287
2,395,842
2,395,842
(1)
Classified as Level 3 fair value measurement.
(2)
Carrying value amounts shown are net of unamortized issuance costs.
(3)
Classified as Level 2 fair value measurement.
The fair values of financial instruments presented above are estimates of the fair values at a specific point
in time using various sources and methods, including market quotations and a complex matrix system
that takes into account issuer sector, quality, and spreads in the current marketplace.
Financial Instruments Recognized at Fair Value in the Balance Sheets. Estimated fair values of
investments in AFS securities are principally a function of current spreads and interest rates that are
corroborated by independent third-party data. Therefore, the fair values presented are indicative of
amounts we could realize or settle at the respective balance sheet date. We do not necessarily intend to
dispose of or liquidate such instruments prior to maturity. Trading securities and equity securities,
including common and nonredeemable preferred stocks, are carried at fair value. Segregated funds in
140
FINANCIAL STATEMENTS — NOTE 6
separate accounts are carried at the underlying value of the variable insurance contracts, which is fair
value.
The carrying amounts for cash and cash equivalents, trade receivables, accrued investment income,
accounts payable, cash collateral and payables for security transactions approximate their fair values due
to the short-term nature of these instruments. Consequently, such financial instruments are not included
in the above table.
(7) Reinsurance
We use reinsurance extensively, which has a significant effect on our results of operations. Reinsurance
arrangements do not relieve us of our primary obligation to the policyholder. Our reinsurance contracts
typically do not have a fixed term. In general, the reinsurers’ ability to terminate coverage for existing
cessions is limited to such circumstances as material breach of contract or nonpayment of premiums by
the ceding company. Our reinsurance contracts generally contain provisions intended to provide the
ceding company with the ability to cede future business on a basis consistent with historical terms.
However, either party may terminate any of the contracts with respect to the future business upon
appropriate notice to the other party. Generally, the reinsurance contracts do not limit the overall amount
of the loss that can be incurred by the reinsurer.
Our policy is to limit the amount of life insurance retained on the life of any one person to $1 million. To
limit our exposure with any one reinsurer, we monitor the concentration of credit risk we have with our
reinsurance counterparties, as well as their financial condition.
Reinsurance recoverables represents ceded policy benefit reserve balances, ceded claim liabilities, and
ceded claims paid that have not been reimbursed. The amounts of ceded claim liabilities included in
reinsurance recoverables that we paid and which are recoverable from those reinsurers were $39.1 million
and $22.0 million as of December 31, 2024 and 2023, respectively. Benefits and claims ceded to reinsurers
for 2024, 2023, and 2022 were $1,439.4 million, $1,376.4 million, and $1,340.6 million, respectively.
In connection with our corporate reorganization that included an initial public offering (“IPO”) of our
common stock by Citigroup, Inc. (“Citigroup”), Primerica Life, Primerica Life Canada and NBLIC entered
into significant coinsurance transactions (the “IPO coinsurance agreements”) on March 30, 2010 with three
insurance companies then affiliated with Citigroup (collectively, the “IPO coinsurers”). Under the IPO
coinsurance agreements, we ceded between 80% and 90% of the risks and rewards of our term life
insurance policies in force at year-end 2009. Because these agreements were part of a business
reorganization among entities under common control, they did not generate any deferred gain or loss
upon their execution. Concurrent with signing these agreements, we transferred the corresponding
account balances in respect of the coinsured policies along with the assets to support the statutory
liabilities assumed by the IPO coinsurers. Each of the account balances transferred were at book value
with no gain or loss recorded in net income. Beginning in 2017, policies reaching the end of their initial
term period are no longer ceded under the IPO coinsurance transactions, but the existing YRT reinsurance
already in place prior to the IPO will continue.
Primerica 2024 Annual Report
141
FINANCIAL STATEMENTS — NOTE 7
Three of the IPO coinsurance agreements satisfy U.S. GAAP risk transfer rules. Under these agreements,
we ceded between 80% and 90% of our term life future policy benefit reserves, and we transferred a
corresponding amount of assets to the IPO coinsurers. These transactions did not impact our future policy
benefit reserves. As such, we have recorded an asset for the same amount of risk transferred in
reinsurance recoverables. We also reduced DAC by a corresponding amount, which reduces future
amortization expenses. In addition, we are transferring between 80% and 90% of all future premiums and
benefits and claims associated with these policies to the corresponding reinsurance entities. We receive
ongoing ceding allowances, which are reflected as a reduction to insurance expenses, to cover policy and
claims administration expenses as well as certain corporate overhead charges under each of these
reinsurance contracts.
In the 10% Coinsurance Agreement, we ceded to Prime Reinsurance Company (“Prime Re”), an affiliate of
Citigroup, 10% of our U.S. (except New York) term life insurance business in force at year-end 2009
subject to an experience refund provision. As the 10% Coinsurance Agreement includes an experience
refund provision, it does not satisfy U.S. GAAP risk transfer rules. As a result, we have accounted for this
contract using deposit method accounting and have recognized a deposit asset in other assets on our
consolidated balance sheets for assets backing the economic reserves. The deposit asset held in support
of this agreement was $158.9 million and $187.4 million at December 31, 2024 and 2023, respectively. We
make contributions to the deposit asset during the life of the agreement to fulfill our responsibility of
funding the economic reserve. The market return on the deposit asset is reflected in net investment
income during the life of the agreement. Prime Re is responsible for ensuring that there are sufficient
assets to meet all statutory requirements. The finance charge on the statutory reserves in excess of
economic reserves funded by Prime Re in support of the 10% Coinsurance Agreement is 0.5% per annum
and is reflected in interest expense in our consolidated statements of income.
Details on in-force life insurance were as follows:
December 31,
2024
December 31,
2023
(Dollars in thousands)
Direct life insurance in-force
$
955,610,523
$
946,756,416
Amounts ceded to other companies
(817,825,296)
(810,145,801)
Net life insurance in-force
$
137,785,227
$
136,610,615
Percentage of reinsured life insurance in-force
86%
86%
142
FINANCIAL STATEMENTS — NOTE 7
The Company allocated reinsurance recoverables estimated at the cohort level to individual reinsurers for
disclosure purposes. Reinsurance recoverables estimated by reinsurer and the financial strength ratings of
those reinsurers were as follows:
December 31, 2024
December 31, 2023
Reinsurance
recoverables
A.M. Best
rating
Reinsurance
recoverables
A.M. Best
rating
(In thousands)
Swiss Re Life & Health America Inc.
(IPO coinsurance) (1)
$ 2,074,945
A+
$ 2,271,223
A+
Munich Re of Malta (1) (2)
210,822
NR
243,890
NR
SCOR Global Life Reinsurance Companies (3)
148,899
A
160,381
A
American Health and Life Insurance
Company (1)
127,601
B++
141,771
B++
Swiss Re Life & Health America Inc. (4)
43,826
A+
43,873
A+
RGA Reinsurance Company
44,132
A+
43,188
A+
Korean Reinsurance Company
40,781
A
41,373
A
Munich American Reassurance Company
36,487
A+
50,273
A+
All other reinsurers
17,887
—
20,925
—
Allowance for credit losses
(1,215)
(1,120)
Reinsurance recoverables
$ 2,744,165
$ 3,015,777
NR – not rated by A.M. Best
(1)
Reinsurance recoverables include balances ceded under coinsurance transactions of term life insurance policies that were in
force as of December 31, 2009. Amounts shown are net of their share of the reinsurance receivables from other reinsurers.
Arrangements with these reinsurers include collateral trust agreements held in support of reinsurance recoverables.
(2)
Entity is rated AA by S&P as of December 31, 2024.
(3)
Includes amounts ceded to Transamerica Reinsurance Companies and fully retroceded to SCOR Global Life Reinsurance
Companies.
(4)
Includes amounts ceded to Lincoln National Life Insurance and fully retroceded to Swiss Re Life & Health America Inc.
Certain reinsurers with which we do business receive group ratings. Individually, those reinsurers are SCOR
Global Life Americas Reinsurance Company, SCOR Global Life U.S.A. Reinsurance Company, SCOR Global
Life Re Insurance Company of Delaware, and SCOR Global Life of Canada.
The IPO coinsurance agreements include provisions to ensure that Primerica Life, Primerica Life Canada
and NBLIC receive full regulatory credit for the reinsurance treaties. Under these agreements, the ceded
business can be recaptured with no fee in the event the IPO coinsurers do not comply with the various
safeguard provisions in their respective IPO coinsurance agreements.
Primerica 2024 Annual Report
143
FINANCIAL STATEMENTS — NOTE 7
The rollforward of the allowance for credit losses (“ACL”) on reinsurance recoverables for the years ended
December 31, 2024, 2023, and 2022 were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Balance, beginning of period
$
1,120
$
2,936
$
2,942
Current period provision for expected credit losses
95
3,703
164
Writeoffs charged against the ACL, if any
—
(5,519)
—
Recoveries of amounts previously written off
—
—
(170)
Balance, at the end of period
$
1,215
$
1,120
$
2,936
(8) Deferred Policy Acquisition Costs
The balances and activity in DAC were as follows:
Year ended December 31,
2024
2023
(In thousands)
Term Life
Insurance
Segregated
Funds
(Canada)
Term Life
Insurance
Segregated
Funds
(Canada)
DAC balance, beginning of period
$ 3,366,281
$
63,029
$ 3,106,148
$
62,341
Capitalization
555,162
2,959
521,718
4,353
Amortization
(291,488)
(5,443)
(268,803)
(5,479)
Foreign exchange translation and other
(21,356)
(5,242)
7,218
1,814
DAC balance, end of period
$ 3,608,599
$
55,303
$ 3,366,281
$
63,029
Reconciliation of DAC by product was as follows:
December 31,
2024
December 31,
2023
(In thousands)
Term Life Insurance
$
3,608,599
$
3,366,281
Segregated Funds (Canada)
55,303
63,029
Other
16,528
17,924
Total DAC, net
$
3,680,430
$
3,447,234
There were no material changes to the judgments, assumptions and methods used to amortize DAC
during the years ended December 31, 2024 and 2023.
144
FINANCIAL STATEMENTS — NOTE 9
(9) Separate Accounts
The following table represents the fair value of assets supporting separate accounts by major investment
category:
December 31, 2024
December 31, 2023
(In thousands)
Fixed-income securities
$
708,225
$
876,524
Equity securities
1,490,628
1,436,122
Cash and cash equivalents
46,764
87,530
Due to/from funds
(36,350)
(4,357)
Other
20
23
Total separate account assets
$
2,209,287
$
2,395,842
The following table represents the balances of and changes in separate account liabilities:
Year ended December 31,
2024
2023
(In thousands)
Separate account liabilities balance, beginning of
period
$
2,395,842
$
2,305,717
Premiums, deposits and transfers
147,995
186,631
Surrenders, withdrawals and transfers
(378,126)
(343,473)
Investment performance
300,545
245,565
Management fees and other charges
(57,734)
(62,159)
Foreign exchange translation
(199,235)
63,561
Separate account liabilities balance, end of period
$
2,209,287
$
2,395,842
Cash surrender value
$
2,173,070
$
2,354,813
The cash surrender value represents the amount of the contract holders’ account balance distributable at
the balance sheet date less the Company’s estimate of the deferred sales charges that would be assessed
if the policyholders redeemed their contracts at the balance sheet date. This estimate requires the
Company to make certain assumptions regarding the underlying account balances by contribution year
and application of the contractually defined deferred sales charges that would be applicable to each
contribution year.
Primerica 2024 Annual Report
145
FINANCIAL STATEMENTS — NOTE 10
(10) Policy Claims and Other Benefits Payable
Changes in policy claims and other benefits payable were as follows:
Year ended December 31,
2024
2023
(In thousands)
Policy claims and other benefits payable, beginning of period
$
513,803
$
538,250
Less reinsured policy claims and other benefits payable
533,862
542,621
Net balance, beginning of period
(20,059)
(4,371)
Incurred related to current year
250,699
253,607
Incurred related to prior years (1)
(3,477)
(3,856)
Total incurred
247,222
249,751
Claims paid related to current year, net of reinsured policy claims
received
(295,148)
(283,808)
Reinsured policy claims received related to prior years, net of claims
paid
38,746
18,119
Total paid
(256,402)
(265,689)
Foreign currency translation
(621)
250
Net balance, end of period
(29,860)
(20,059)
Add reinsured policy claims and other benefits payable
518,210
533,862
Balance, end of period
$
488,350
$
513,803
(1)
Includes the difference between our estimate of claims incurred but not yet reported at year end and the actual incurred claims
reported after year end.
The liability for policy claims and other benefits payable on traditional life insurance products includes
estimated unpaid claims that have been reported to us and claims incurred but not yet reported. We
estimate claims incurred but not yet reported based on our historical claims activity, adjusted for any
current trends and conditions, and reported lag time experience.
146
FINANCIAL STATEMENTS — NOTE 11
(11) Future Policy Benefits
The following tables summarize balances and changes in the present value of expected net premiums and
the present value of expected future policy benefits underlying the LFPB:
Year ended December 31,
2024
2023
(Dollars in thousands)
Present Value of Expected Net Premiums
Term Life Insurance
Balance at then current discount rate, beginning of period
$
13,977,353
$
13,053,386
Balance at original discount rate, beginning of period
14,012,553
13,521,221
Effect of changes in cash flow assumptions
(74,233)
(5,364)
Effect of actual variances from expected experience
(373,646)
(229,884)
Adjusted balance, beginning of period
13,564,674
13,285,973
Issuances
1,884,054
1,836,290
Interest accrual at original discount rate
608,588
544,806
Net premiums collected
(1,733,262)
(1,682,924)
Foreign currency translation
(90,058)
28,408
Expected net premiums at original discount rate, end of period
14,233,996
14,012,553
Effect of changes in discount rate assumptions
(379,202)
(35,200)
Expected net premiums at then current discount rate, end of period
$
13,854,794
$
13,977,353
Present Value of Expected Future Policy Benefits
Balance at then current discount rate, beginning of period
$
20,508,435
$
19,143,253
Balance at original discount rate, beginning of period
20,391,694
19,706,818
Effect of changes in cash flow assumptions
(83,975)
(7,254)
Effect of actual variances from expected experience
(386,512)
(225,539)
Adjusted balance, beginning of period
19,921,207
19,474,025
Issuances
1,892,529
1,840,996
Interest accrual at original discount rate
929,078
856,727
Benefit payments
(1,841,162)
(1,823,542)
Foreign currency translation
(137,752)
43,488
Expected future policy benefits at original discount rate, end of period
20,763,900
20,391,694
Effect of changes in discount rate assumptions
(608,413)
116,741
Expected future policy benefits at then current discount rate, end of
period
$
20,155,487
$
20,508,435
LFPB
$
6,300,693
$
6,531,082
Less: reinsurance recoverables
2,729,022
3,001,074
Net LFPB, after reinsurance recoverables
$
3,571,671
$
3,530,008
Weighted-average duration of net LFPB (in years)
8.0
7.9
Primerica 2024 Annual Report
147
FINANCIAL STATEMENTS — NOTE 11
Our annual actuarial assumption review was performed during the third quarter of 2024. Assumptions
were updated using experience studies based on the Company’s own data including actual to expected
cash flow variances by policy cohort. Actuarial judgment was also used since prior historical experience
may not fully reflect future expected experience.
As a result of the assumption review, the LFPB recognized for the Term Life Insurance segment decreased
by $28 million, net of reinsurance, primarily due to the reduction of the expected cost of waiver of
premium benefits. The adjustment resulting from the assumption change was recognized as a
remeasurement gain in the accompanying consolidated statements of income during the year ended
December 31, 2024. The waiver of premium benefit offered for our term life insurance product is an
optional supplemental rider that waives the policyholder’s insurance premiums during a qualifying
disability. Lower than expected disability incidence rates have consistently been observed each year since
the COVID-19 pandemic. Unlike our mortality or lapse rates, which had both favorable and unfavorable
experience in the years since the onset of the pandemic, the disability incidence rates declined in 2020
and have remained at similar levels since then. Therefore, we have partially reflected this improvement in
recognizing our best estimate assumption in determining our LFPB. Waiver of premium benefits are not
reinsured on a yearly renewal term basis, therefore, most of the impact of this assumption change is
reflected in the future policy benefits remeasurement gain line item in the accompanying consolidated
statements of income.
In our recent experience, we continue to observe lower mortality and higher lapses compared to the
updated actuarial assumptions in our Term Life Insurance segment. However, we believe the majority of
these variances are likely temporary and experience will return to pre-COVID-19 pandemic levels in the
future. Slight changes were made to the mortality assumption that included rolling the mortality
improvement forward one calendar year. The early duration lapse rate assumption was also increased to
partially reflect recent experience. The LFPB impact, net of reinsurance, for both the mortality and lapse
assumption changes was de minimus.
We also performed our annual review of LFPB assumptions for our closed block of non-term life insurance
included in the Corporate and Other Distributed Products segment. Based on this review, we recognized a
remeasurement loss of approximately $5 million during the year ended December 31, 2024.
The only LFPB assumption that was changed during the year ended December 31, 2023 was shifting
forward our assumption for long-term mortality improvement one year for applicable cohorts in our Term
Life Insurance segment. The impact of this assumption change was immaterial to the measurement of the
LFPB in 2023.
Discount rates, while a material assumption to our LFPB, are not part of the assumption-setting process
since they are updated quarterly based on observable rates. There have been no changes with the
compilation of data sources used for this input.
Losses recognized as a result of capping the net premium ratio at 100% were immaterial during the years
ended December 31, 2024, 2023, and 2022.
148
FINANCIAL STATEMENTS — NOTE 11
The following table reconciles the LFPB to the consolidated balance sheets:
December 31, 2024
December 31, 2023
(In thousands)
Term Life Insurance
$
6,300,693
$
6,531,082
Other
202,371
210,943
Total
$
6,503,064
$
6,742,025
The following table reconciles the reinsurance recoverables to the consolidated balance sheets:
December 31, 2024
December 31, 2023
(In thousands)
Term Life Insurance
$
2,729,022
$
3,001,074
Other
15,143
14,703
Total
$
2,744,165
$
3,015,777
The amount of discounted (using the then current discount rate) and undiscounted expected gross
premiums and expected future benefit payments were as follows:
December 31, 2024
December 31, 2023
(In thousands)
Undiscounted
Discounted
Undiscounted
Discounted
Term Life Insurance
Expected future benefit
payments
$
33,966,483
$
20,155,489
$
33,342,272
$
20,508,435
Expected future gross premiums
$
39,389,917
$
26,414,010
$
38,701,869
$
26,687,880
The amount of revenue and interest recognized in our consolidated statements of income were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Term Life Insurance
Gross premiums
$
3,375,282
$
3,292,760
$
3,209,088
Interest accretion (expense)
$
(320,490)
$
(311,921)
$
(309,581)
Primerica 2024 Annual Report
149
FINANCIAL STATEMENTS — NOTE 11
The weighted-average discount rates were as follows:
December 31, 2024
December 31, 2023
Term Life Insurance
Original discount rate
4.95%
4.93%
Current discount rate
5.69%
4.91%
There were no changes to the methods used to determine the discount rates during the years ended
December 31, 2024, 2023, and 2022.
(12) Debt
Note Payable. Note payable consisted of the following:
December 31,
2024
December 31,
2023
(In thousands)
2.80% Senior Notes, due November 19, 2031
$
600,000
$
600,000
Unamortized issuance discount on note payable
(1,845)
(2,115)
Total note payable (1)
$
598,155
$
597,885
(1)
Excludes unamortized debt issuance costs.
As of December 31, 2024, we had outstanding $600.0 million in principal amount of publicly-traded,
senior unsecured notes (the “Senior Notes”). The Senior Notes were issued in November 2021 at a price of
99.55% of the principal amount with an annual interest rate of 2.80%, payable semi-annually in arrears on
May 19 and November 19, and are scheduled to mature on November 19, 2031. As of December 31, 2024,
we were in compliance with the covenants of the Senior Notes. No events of default occurred on the
Senior Notes during the year ended December 31, 2024.
As unsecured senior obligations, the Senior Notes rank equally in right of payment with all existing and
future unsubordinated indebtedness and senior to all existing and future subordinated indebtedness of
the Parent Company. The Senior Notes are structurally subordinated in right of payment to all existing
and future liabilities of our subsidiaries. In addition, the Senior Notes contain covenants that restrict our
ability to, among other things, create or incur any indebtedness that is secured by a lien on the capital
stock of certain of our subsidiaries, and merge, consolidate or sell all or substantially all of our properties
and assets.
150
FINANCIAL STATEMENTS — NOTE 12
Surplus Note. As of December 31, 2024, the principal amount outstanding on the Surplus Note issued by
Vidalia Re was $1.3 billion, which is equal to the principal amount of the LLC Note. The principal amounts
of the Surplus Note and the LLC Note have reached their peaks and are expected to decrease over time to
coincide with the amount of policy reserves being contractually supported under the Vidalia Re
Coinsurance Agreement. Both the LLC Note and the Surplus Note mature on December 31, 2030 and bear
interest at an annual interest rate of 4.50%. This financing arrangement is non-recourse to the Parent
Company and Primerica Life, meaning that neither of these companies has guaranteed the Surplus Note
or is otherwise liable for reimbursement for any payments triggered by the LLC Note’s credit
enhancement feature. The Parent Company has agreed to support Vidalia Re’s obligation to pay the credit
enhancement fee incurred on the LLC Note. See Note 5 (Investments) for more information on the LLC
Note.
Revolving Credit Facility. On June 22, 2021, we amended and restated our unsecured $200.0 million
revolving credit facility (“Revolving Credit Facility”) with a syndicate of commercial banks. The Revolving
Credit Facility has a scheduled termination date of June 22, 2026. Amounts outstanding under the
Revolving Credit Facility are borrowed, at our discretion, on the basis of either a Secured Overnight
Financing Rate (“SOFR”) rate loan, or a base rate loan. SOFR rate loans bear interest at a periodic rate
equal to one-, three-, or six-month Adjusted Term SOFR, plus an applicable margin. Base rate loans bear
interest at the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) one-month
Adjusted Term SOFR plus 1.00%, plus an applicable margin. The Revolving Credit Facility also permits the
issuance of letters of credit. The applicable margins are based on our debt rating with such margins for
SOFR rate loans and letters of credit ranging from 1.00% to 1.625% per annum and for base rate loans
ranging from 0.00% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee
that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges
from 0.10% to 0.225% per annum of the aggregate amount of the $200.0 million commitment of the
lenders under the Revolving Credit Facility that remains undrawn. During the year ended December 31,
2024, no amounts were drawn under the Revolving Credit Facility. As of December 31, 2024, we were in
compliance with the covenants of the Revolving Credit Facility. Furthermore, no events of default occurred
under the Revolving Credit Facility during the year ended December 31, 2024.
Primerica 2024 Annual Report
151
FINANCIAL STATEMENTS — NOTE 13
(13) Income Taxes
Income tax expense. Income tax expense (benefit) from continuing operations consists of the following:
Current
Deferred
Total
(In thousands)
Year ended December 31, 2024
Federal
$
200,297
$
(34,770)
$
165,527
Foreign
41,459
(8,066)
33,393
State and local
9,167
11,031
20,198
Income taxes from continuing
operations
$
250,923
$
(31,805)
$
219,118
Year ended December 31, 2023
Federal
$
177,240
$
(33,699)
$
143,541
Foreign
39,818
(11,318)
28,500
State and local
8,526
(11)
8,515
Income taxes from continuing
operations
$
225,584
$
(45,028)
$
180,556
Year ended December 31, 2022
Federal
$
159,507
$
(27,937)
$
131,570
Foreign
51,692
(24,340)
27,352
State and local
5,028
(8)
5,020
Income taxes from continuing
operations
$
216,227
$
(52,285)
$
163,942
Income from continuing operations before income taxes. Income from continuing operations before
income taxes by domestic and foreign were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Income from continuing operations before income
taxes by domestic and foreign
Domestic
$ 815,923
$ 666,923
$ 609,422
Foreign
123,324
104,815
109,234
Total income from continuing operations before income
taxes
$ 939,247
$ 771,738
$ 718,656
152
FINANCIAL STATEMENTS — NOTE 13
Effective tax rate reconciliation. Income taxes from continuing operations is different from the amount
determined by multiplying income from continuing operations before income taxes by the U.S. statutory
federal tax rate of 21% for the years ended December 31, 2024, 2023 and 2022. The reconciliation for such
difference follows:
Year ended December 31,
2024
2023
2022
Amount
Percentage
Amount
Percentage
Amount
Percentage
(Dollars in thousands)
Computed tax expense
$ 197,242
21.0%
$ 162,066
21.0% $ 150,917
21.0%
Gain on insurance proceeds
(10,500)
(1.1)%
-
—%
-
—%
Valuation allowance on state
net operating losses
11,080
1.2%
-
—%
-
—%
Other
21,296
2.2%
18,490
2.4%
13,025
1.8%
Total tax expense /
effective rate from
continuing operations
$ 219,118
23.3%
$ 180,556
23.4% $ 163,942
22.8%
Primerica 2024 Annual Report
153
FINANCIAL STATEMENTS — NOTE 13
Deferred tax assets and liabilities. The main components of deferred income tax assets and liabilities
were as follows:
December 31,
2024
2023
(In thousands)
Deferred tax assets:
Future policy benefit reserves and unpaid policy claims
$
473,121
$
492,138
Net operating losses
41,267
4,083
Investments
39,703
41,590
Future deductible liabilities
25,477
21,791
Foreign tax credits
20,002
26,637
Other
25,450
30,367
Total deferred tax assets before valuation allowance
625,020
616,606
Valuation allowance
(20,002)
(26,637)
Total deferred tax assets after valuation allowance
$
605,018
$
589,969
Deferred tax liabilities:
Deferred policy acquisition costs
$
(463,921)
$
(441,730)
Reinsurance deposit asset
(33,372)
(39,349)
Other
(42,685)
(45,884)
Total deferred tax liabilities
(539,978)
(526,963)
Net deferred tax assets (liabilities)
$
65,040
$
63,006
The majority of total deferred tax assets are attributable to future policy benefit reserves and unpaid
policy claims, which represents the difference between the financial statement carrying value and tax basis
for liabilities related to future policy benefits. The tax basis for future policy benefit reserves and unpaid
policy claims is actuarially determined in accordance with guidelines set forth in the respective
jurisdictional tax codes in the U.S. and Canada. The majority of total deferred tax liabilities are attributable
to DAC, which represents the difference between the policy acquisition costs capitalized for U.S. GAAP
purposes and those capitalized for tax purposes, as well as the difference in the resulting amortization
methods.
The Company has federal and state net operating losses resulting in a net deferred tax asset of $31.8
million and $9.5 million, respectively, as of December 31, 2024. The federal net operating losses have an
indefinite life while one-third of the state net operating losses are available for use through 2037 and
approximately two-thirds with an indefinite life. The Company has no other material net operating losses.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than
not that some portion or all of the deferred tax assets will not be realized. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income, carryback and carryforward
periods, and tax planning strategies in making this assessment. As of December 31, 2024, management
identified excess foreign tax credits of approximately $20.0 million that could not be used to offset the
154
FINANCIAL STATEMENTS — NOTE 13
mandatory deemed repatriation of foreign earnings tax stipulated by the Tax Cuts and Jobs Act of 2017
and believes it will not be able to utilize these foreign tax credits in the future. Therefore, the Company
established a deferred tax asset for these foreign tax credits with a corresponding full valuation allowance.
These foreign tax credits are available for use through 2027 with some beginning to expire in 2025. With
the exception of these foreign tax credits, management believes that it is more likely than not that the
results of future operations will generate sufficient taxable income to realize its deferred tax assets.
Therefore, there were no other significant deferred tax asset valuation allowances as of December 31,
2024 or 2023. The Company has no other material tax credit carryforwards.
Controlled foreign corporations. The Company has direct ownership of a group of controlled foreign
corporations. The tax effects of controlled foreign corporations other than in Canada were not material.
We have not made a permanent reinvestment assertion for any unremitted earnings in Canada; therefore,
we have recorded a deferred tax liability to account for Canadian withholding taxes that will occur upon
repatriation of such earnings and we continue to record deferred tax liabilities to account for Canadian
withholding taxes as earnings are recognized.
The Company has no intentions to sell or substantially liquidate our Canadian operations and, therefore,
has not provided for any additional outside basis difference for the amount of book basis in excess of tax
basis in its Canadian subsidiaries. In addition, it is not practicable to determine the amount of the
unrecognized deferred tax liability related to any additional outside basis difference in these entities.
Unrecognized tax benefits. The total amount of unrecognized benefits on uncertain tax positions that, if
recognized, would affect our effective tax rate was approximately $20.2 million and $18.6 million as of
December 31, 2024 and 2023, respectively. We recognize interest expense related to unrecognized tax
benefits in tax expense net of federal income tax. The total amount of accrued interest and penalties in
the consolidated balance sheets was $4.3 million and $3.9 million as of December 31, 2024 and 2023,
respectively. Additionally, we recognized less than $0.5 million of interest expense related to unrecognized
tax benefits in the consolidated statements of income for the years ended December 31, 2024, 2023, and
2022
A reconciliation of the change in the unrecognized income tax benefit for the years ended December 31,
2024, 2023, and 2022 is as follows:
December 31,
2024
2023
2022
(In thousands)
Unrecognized tax benefits, beginning of period
$
19,362
$
20,180
$
19,224
Change in prior period unrecognized tax benefits
(72)
(2,327)
(944)
Change in current period unrecognized tax benefits
4,128
3,551
3,993
Reductions as a result of settlements with taxing
authorities
(453)
-
-
Reductions as a result of a lapse in statute of
limitations
(2,011)
(2,042)
(2,093)
Unrecognized tax benefits, end of period
$
20,954
$
19,362
$
20,180
We have an immaterial amount of penalties included in calculating our provision for income taxes. There
is no significant change that is reasonably possible to occur within twelve months of the reporting date.
Primerica 2024 Annual Report
155
FINANCIAL STATEMENTS — NOTE 13
The major tax jurisdictions in which we operate are the United States and Canada. We are currently open
to tax audit by the Internal Revenue Service for the year ended December 31, 2021 and thereafter for
federal income tax purposes. We are currently open to audit in Canada for tax years ended December 31,
2020 and thereafter for federal and provincial income tax purposes.
Qualified investment tax credit projects. We have investments in various limited partnerships that
sponsor qualified affordable housing projects, which meet the definition of a VIE. We are not the primary
beneficiary of these VIEs because we do not have the power to direct the activities that most significantly
impact the entities’ economic performance. The maximum exposure to loss as a result of our involvement
in these VIEs equals the carrying value of the investments. The primary economic purpose of these
investments is to achieve a satisfactory return on capital through the receipt of tax credits. Our qualified
affordable housing project investments are accounted for using the proportional amortization method of
accounting. During the year ended December 31, 2024 and 2023, the amount of income tax benefits
recognized from these investments was insignificant.
Our investment in qualified affordable housing projects was $9.8 million and $11.5 million as of December
31, 2024 and 2023, respectively, and is included within policy loans and other invested assets on our
consolidated balance sheets. Additionally, unfunded commitments to provide additional capital to
investees in qualified affordable housing projects was $4.4 million and $9.1 million as of December 31,
2024 and 2023, respectively, and are included within other liabilities on our consolidated balance sheets.
Substantially all of the unfunded commitments as of December 31, 2024 are expected to be paid out
within the next two years.
During the years ended December 31, 2024 and 2023, we invested in a limited partnership that
constructed and operates a solar energy generation facility (“Solar Farm”), which meets the definition of a
VIE. We are not the primary beneficiary of this VIE because we do not have the power to direct the
activities that most significantly impact the entity’s economic performance. The maximum exposure to
loss from our involvement in this VIE equals the carrying value of the investment. The primary economic
purpose of this investment is to achieve a satisfactory return on capital through the receipt of tax credits
and other tax attributes. Our investment in the Solar Farm is accounted for using the equity method of
accounting. As of December 31, 2024 and 2023, the carrying amount of our investment in the Solar Farm
was $0.2 million and $0.7 million, respectively, and is included in Policy loans and other invested assets in
the accompanying consolidated balance sheets. The carrying value recognized includes capital
contributions of $22.2 million reduced by $22.0 million of tax credits and other tax attributes as of
December 31, 2024, and capital contributions of $16.2 million reduced by $15.5 million of tax credits and
other tax attributes as of December 31, 2023. The amount of investment income (loss) and income tax
benefit recognized in the accompanying consolidated statements of income were not material due to our
accounting policy of reducing the carrying value of the investment by the tax credits and other tax
attributes. As of December 31, 2024, we do not have any commitments to invest additional funds in the
Solar Farm tax credit investment.
156
FINANCIAL STATEMENTS — NOTE 14
(14) Stockholders’ Equity
The following table shows changes in our outstanding common stock:
Year ended December 31,
2024
2023
2022
(In thousands)
Common stock, beginning of period
34,996
36,824
39,368
Shares of common stock issued upon exercise of stock
options
—
60
—
Shares of common stock issued when sales restrictions on
RSUs
lapsed and PSUs were earned
178
207
236
Common stock retired
(1,806)
(2,095)
(2,780)
Common stock, end of period
33,368
34,996
36,824
The above table excludes RSUs and PSUs, which do not have voting rights. As sales restrictions on RSUs
lapse and PSUs are earned, we issue common shares with voting rights. As of December 31, 2024, we had
a total of 215,407 RSUs and director deferred shares outstanding and 58,619 PSUs outstanding. The PSU
outstanding balance is based on the number of PSUs granted pursuant to the award agreements;
however, the actual number of common shares earned could be higher or lower based on actual versus
targeted performance. See Note 16 (Share-Based Transactions) for a discussion of the PSU award
structure.
On November 16, 2023, our Board authorized a share repurchase program for up to $425.0 million of our
outstanding common stock for purchases from November 16, 2023 through December 31, 2024 (the
“Share Repurchase Program”). Under the Share Repurchase Program, we repurchased 1,767,682 shares of
our common stock in the open market for an aggregate purchase price of $425.0 million through
December 31, 2024. There is no remaining authority under the Share Repurchase Program as of December
31, 2024. On November 14, 2024, our Board authorized a new $450.0 million share repurchase program
(the “New Share Repurchase Program”) to occur from November 14, 2024 through December 31, 2025.
We did not repurchase any shares under the New Share Repurchase Program in 2024.
Primerica 2024 Annual Report
157
FINANCIAL STATEMENTS — NOTE 15
(15) Earnings Per Share
The Company has outstanding common stock and equity awards that consist of RSUs and PSUs. All
outstanding stock options were exercised during the year ended December 31, 2023. The RSUs maintain
non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with
common shares for any future dividend declarations.
Unvested RSUs are deemed participating securities for purposes of calculating EPS as they maintain
dividend rights. We calculate EPS using the two-class method. Under the two-class method, we allocate
earnings to common shares and vested RSUs outstanding for the period. Earnings attributable to
unvested participating securities, along with the corresponding share counts, are excluded from EPS as
reflected in our consolidated statements of income.
In calculating basic EPS, we deduct from net income any dividends and undistributed earnings allocated
to unvested RSUs and then divide the result by the weighted-average number of common shares and
vested RSUs outstanding for the period.
We determine the potential dilutive effect of PSUs and stock options outstanding (“contingently-issuable
shares”) on EPS using the treasury-stock method. Under this method, we determine the proceeds that
would be received from the issuance of the contingently- issuable shares if the end of the reporting
period were the end of the contingency period. The proceeds from the contingently-issuable shares
include the remaining unrecognized compensation expense of the awards and the cash received for the
exercise price on stock options. We then use the average market price of our common shares during the
period the contingently-issuable shares were outstanding to determine how many shares we could
repurchase with the proceeds raised from the issuance of the contingently-issuable shares. The net
incremental share count issued represents the potential dilutive securities. We then reallocate earnings to
common shares and vested RSUs by incorporating the increased fully-diluted share count to determine
diluted EPS.
158
FINANCIAL STATEMENTS — NOTE 15
The calculation of basic and diluted EPS attributable to common stockholders was as follows:
Year ended December 31,
2024
2023
2022
(In thousands, except per-share amounts)
Basic EPS attributable to common stockholders:
Numerator (continuing operations):
Income from continuing operations
$
720,129
$
591,182
$
554,714
Income attributable to unvested participating securities
(2,443)
(2,535)
(2,438)
Income from continuing operations used in calculating basic
EPS attributable to common stockholders
$
717,686
$
588,647
$
552,276
Numerator (discontinued operations):
Loss from discontinued operations
$
(249,611)
$
(14,581)
$
(82,646)
Loss attributable to unvested participating securities
701
53
307
Loss from discontinued operations used in calculating basic
EPS attributable to common stockholders
$
(248,910)
$
(14,528)
$
(82,339)
Denominator:
Weighted-average vested shares
34,142
35,954
37,997
Basic EPS attributable to common stockholders from continuing operations
$
21.02
$
16.37
$
14.53
Basic EPS attributable to common stockholders from discontinued operations
(7.29)
(0.40)
(2.16)
Basic EPS attributable to common stockholders
$
13.73
$
15.97
$
12.37
Diluted EPS attributable to common stockholders:
Numerator (continuing operations):
Income from continuing operations
$
720,129
$
591,182
$
554,714
Income attributable to unvested participating securities
(2,440)
(2,531)
(2,432)
Income from continuing operations used in calculating diluted
EPS attributable to common stockholders
$
717,689
$
588,651
$
552,282
Numerator (discontinued operations):
Loss from discontinued operations
$
(249,611)
$
(14,581)
$
(82,646)
Loss attributable to unvested participating securities
701
52
306
Loss from discontinued operations used in calculating
diluted EPS attributable to common stockholders
$
(248,910)
$
(14,529)
$
(82,340)
Denominator:
Weighted-average vested shares
34,142
35,954
37,997
Dilutive effect of incremental shares to be issued for
contingently-issuable shares
57
73
109
Weighted-average shares used in calculating diluted EPS
attributable to common stockholders
34,199
36,027
38,106
Diluted EPS attributable to common stockholders from
continuing operations
$
20.99
$
16.34
$
14.49
Diluted EPS attributable to common stockholders from
discontinued operations
(7.28)
(0.40)
(2.16)
Diluted EPS attributable to common stockholders
$
13.71
$
15.94
$
12.33
Primerica 2024 Annual Report
159
FINANCIAL STATEMENTS — NOTE 16
(16) Share-Based Transactions
The Company has outstanding equity awards under the Primerica, Inc. 2020 Omnibus Incentive Plan (the
“OIP”), which was approved by the Company’s stockholders on May 13, 2020. The OIP provides for the
issuance of equity awards, including stock options, stock appreciation rights, restricted stock, deferred
stock, RSUs, PSUs, and stock payment awards, as well as cash-based awards. In addition to time-based
vesting requirements, awards granted under the OIP may also be subject to specified performance criteria.
Under the OIP, the Company issues equity awards to our management (officers and other key employees),
non-employees who served on our Board, and independent sales force leaders. As of December 31, 2024,
we had 1.1 million shares available for future grants under the 2020 OIP.
Employee and Director Share-Based Compensation. As of December 31, 2024, the Company had
outstanding RSUs and PSUs issued to our management (officers and other key employees), as well as
RSUs issued to our directors, under the OIP.
RSUs.
•
RSUs granted to management generally have time-based vesting requirements with equal and
annual graded vesting over approximately three years subsequent to the grant date, but also
generally vest upon voluntary termination of employment by any employee who is “retirement
eligible” as of his or her termination date. The substantive service conditions in order to be
retirement eligible require that an employee must be at least 55 years old and his or her age plus
years of service with the Company must equal at least 75.
•
RSUs granted to directors have time-based vesting requirements with equal and quarterly graded
vesting over four quarters subsequent to the grant date.
•
In addition, certain directors elected to defer their cash and/or equity retainers into deferred RSUs,
which vest immediately (for cash deferrals) or, if applicable, on the dates the RSUs would have
vested.
All of our outstanding employee and director RSU awards are eligible for dividend equivalents regardless
of vesting status.
We recognized expense and tax benefit offsets as follows for employee and director RSU share-based
compensation (inclusive of discontinued operations):
Year ended December 31,
2024
2023
2022
(In thousands)
Total equity awards expense recognized
$
16,733
$
11,854
$
12,626
Tax benefit associated with total employee and director
share-based compensation
2,263
1,874
1,642
160
FINANCIAL STATEMENTS — NOTE 16
The following table summarizes employee and director RSU activity, which excludes director deferred
shares, during the years ended December 31, 2024, 2023, and 2022 (inclusive of discontinued operations).
Shares
Weighted-
average
measurement-
date fair value
per share
(Shares in thousands)
Unvested employee and director RSUs, December 31, 2021
153
$
132.85
Granted
113
117.06
Forfeited
(3)
123.38
Vested
(90)
129.89
Unvested employee and director RSUs, December 31, 2022
173
131.78
Granted
67
185.71
Forfeited
(3)
155.49
Vested
(91)
132.72
Unvested employee and director RSUs, December 31, 2023
146
155.63
Granted
65
247.36
Forfeited
(3)
182.99
Vested
(99)
159.99
Unvested employee and director RSUs, December 31, 2024
109
205.46
As of December 31, 2024, total compensation cost not yet recognized in our consolidated financial
statements related to employee and director RSU awards with time-based vesting conditions yet to be
reached was $4.7 million, and the weighted-average period over which cost will be recognized was 0.8
years.
PSUs.
The Company issued PSUs to certain of its executive officers under the OIP as part of their annual equity
compensation. To date, PSU awards have included a performance target of a specified average annual
Return on Adjusted Equity (“ROAE”) and EPS growth (starting with the 2020 award) for the Company over
a three-year performance period, as well as a threshold ROAE and EPS growth below which no shares
would be earned and an ROAE and EPS growth metric at which the maximum number of shares can be
earned. Awards are earned two months after the performance period ends. Depending on the ROAE and
EPS growth, if applicable, achieved within the specified range, recipients may receive shares of common
stock equal to between 0% and 150% of the number of PSUs granted. In addition, PSUs accrue forfeitable
dividend equivalents, which are also paid out based on the number of shares earned.
PSU awards provide for vesting upon the voluntary termination of employment by any employee who is
“retirement eligible” as of his or her termination date. The number of shares that will be earned for a
Primerica 2024 Annual Report
161
FINANCIAL STATEMENTS — NOTE 16
retirement-eligible employee is equal to the amount calculated using the Company’s actual performance
metrics for the entire performance period, even if that employee retires prior to the completion of the
performance period.
In connection with our granting of PSU awards, we recognized expense and tax benefit offsets as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Total employee PSU award expense
$
3,563
$
2,565
$
2,092
Tax benefit associated with total employee
PSU award expense
—
—
—
The following table summarizes PSU activity during the years ended December 31, 2024, 2023, and 2022.
Shares
Weighted-
average
measurement-
date fair value
per share
(Shares in thousands)
Unvested employee PSUs, December 31, 2021(1)
73
$
128.30
Granted
27
130.30
Forfeited
—
—
Performance Adjustment
2
122.62
Vested
(28)
122.62
Unvested employee PSUs, December 31, 2022(1)
74
130.97
Granted
17
185.24
Forfeited
—
—
Performance Adjustment
(5)
121.42
Vested
(21)
121.42
Unvested employee PSUs, December 31, 2023(1)
65
148.94
Granted
15
244.89
Forfeited
—
—
Performance Adjustment
(6)
143.04
Vested
(15)
143.04
Unvested employee PSUs, December 31, 2024(1)
59
175.70
(1)
The 2022 PSU awards outstanding are based on the actual performance for the 2022 to 2024 performance period. As a result of
the performance achieved during the performance period, recipients will receive an aggregate of 28,884 shares of common
162
FINANCIAL STATEMENTS — NOTE 16
stock on the vesting date of March 1, 2025, reflecting a payout rate of 109.1%. The 2023 PSU awards outstanding are based on
target. Depending upon the performance achieved during the performance period, recipients may receive between 0 and
25,709 shares of common stock. The 2024 PSU awards outstanding are based on target. Depending upon the performance
achieved during the performance period, recipients may receive between 0 and 22,508 shares of common stock.
As of December 31, 2024 the Company has $355,728 unrecognized compensation related to PSU awards.
Stock Options. From 2013 to 2016, the Company issued stock options to certain of its executive officers
under the OIP as part of their annual equity compensation. Stock options were granted with an exercise
price equal to the fair market value of our common stock on the grant date, and they would expire 10
years from the date of grant. These options had time-based restrictions with equal and annual graded
vesting over a three-year period. We did not issue any stock options and we did not have any
compensation expense or related tax benefits for stock option awards during the years ended December
31, 2024, 2023 or 2022. No stock options were exercised during the year ended December 31, 2022. All
remaining stock options representing approximately 60,000 shares were exercised with a weighted
average exercise price of $44.62 during the year ended December 31, 2023. The intrinsic value of the
options exercised during the year ended December 31, 2023 was $8.6 million, and the value of issued
shares withheld to satisfy option exercise price was $2.7 million.
Non-Employee Share-Based Compensation. Non-employee share-based transactions relate to the
granting of RSUs to members of the independent sales force (“agent equity awards”). Agent equity awards
are generally granted as a part of quarterly contests for successful life insurance policy acquisitions and
for sales of investment and savings products for which the grant and the service period occur within the
same quarterly reporting period.
The following table summarizes non-employee RSU activity during the years ended December 31, 2024,
2023, and 2022:
Shares
Weighted-average
measurement-date fair
value per share
(Shares in thousands)
Unvested non-employee RSUs, December 31, 2021
31
$
154.59
Granted
118
129.99
Vested
(117)
133.25
Unvested non-employee RSUs, December 31, 2022
32
141.60
Granted
79
189.64
Vested
(86)
167.07
Unvested non-employee RSUs, December 31, 2023
25
205.67
Granted
59
255.05
Vested
(68)
232.49
Unvested non-employee RSUs, December 31, 2024
16
271.72
Primerica 2024 Annual Report
163
FINANCIAL STATEMENTS — NOTE 16
Agent equity awards are measured using the fair market value at the grant date and vest during the
service period, which occur within the same quarterly reporting period.
To the extent that these awards are an incremental direct cost of successful acquisitions of life insurance
policies that result directly from and are essential to the policy acquisition(s) and would not have been
incurred had the policy acquisition(s) not occurred, we defer and amortize the fair value of the awards in
the same manner as other deferred policy acquisition costs. All agent equity awards that are not directly
related to the acquisition of life insurance policies are recognized as expense in the quarter granted and
earned.
Details on the granting and valuation of these awards were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Quarterly incentive awards expense recognized
currently
$
4,778
$
4,492
$
4,060
Quarterly incentive awards expense deferred
10,334
10,546
11,260
Tax benefit associated with incentive awards
2,939
2,965
3,056
As of December 31, 2024, all agent equity awards were fully vested with the exception of approximately
16,694 shares that vested on January 1, 2025.
The following table summarizes non-cash share-based compensation expense by segment included in
income from continuing operations:
Year ended December 31,
2024
2023
2022
(In thousands)
Non-cash share-based compensation expense:
Term life insurance segment
$
4,974
$
4,285
$
4,133
Investment and savings products segment
3,171
2,927
3,212
Corporate and other distributed products segment
15,390
11,031
14,806
Total non-cash share-based compensation
expense
$
23,535
$
18,243
$
22,151
(17) Statutory Accounting and Dividend Restrictions
U.S. Insurance Subsidiaries. Our two underwriting U.S. insurance subsidiaries are Primerica Life and
NBLIC. Primerica Life wholly owns Vidalia Re and ceded certain level-premium term life insurance policies
to Vidalia Re through the Vidalia Re Coinsurance Agreement.
164
FINANCIAL STATEMENTS — NOTE 17
Our U.S. insurance subsidiaries are required to report their results of operations and financial position to
state authorities on the basis of statutory accounting practices prescribed or permitted by such authorities
and the National Association of Insurance Commissioners (“NAIC”), which is a comprehensive basis of
accounting other than U.S. GAAP. Prescribed statutory accounting practices include a variety of
publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices not so prescribed. The Company’s
principal life insurance company, Primerica Life, prepares its statutory financial statements on the basis of
accounting practices prescribed or permitted by the NAIC and the Tennessee Department of Commerce
and Insurance (“Tennessee DOCI”) and includes the statutory financial statements of its wholly owned
insurance subsidiaries, NBLIC and Vidalia Re. NBLIC’s statutory financial statements are prepared on the
basis of accounting practices prescribed or permitted by the NAIC or the New York State Department of
Financial Services, while the statutory financial statements of Vidalia Re are prepared on the basis of
accounting practices prescribed or permitted by the NAIC and the Vermont Department of Financial
Regulation. Our U.S. insurance subsidiaries’ ability to pay dividends to their parent is subject to and
limited by the various laws and regulations of their respective states. There are no regulatory restrictions
on the ability of the Parent Company to pay dividends (other than limitations under the Delaware General
Corporation Law that provide that dividends on common stock shall be declared by the Board out of
surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared
and/or the preceding prior fiscal year).
Primerica Life’s statutory ordinary dividend capacity is based on the greater of: (1) the previous year’s
statutory net gain from operations (excluding pro rata distributions of any class of the insurer’s own
securities) or (2) 10% of the previous year-end statutory surplus (net of capital stock). Dividends that,
together with the amount of other distributions or dividends made within the preceding 12 months,
exceed this statutory limitation are referred to as extraordinary dividends and require advance notice to
the Tennessee DOCI, and are subject to potential disapproval. Dividends paid from other than statutory
unassigned surplus require approval of the commissioner of the Tennessee DOCI.
Primerica Life’s statutory capital and surplus as of December 31, 2024 and 2023 were as follows:
December 31, 2024
December 31, 2023
(In thousands)
Statutory capital and surplus
$
763,694
$
781,222
Primerica Life’s statutory net gain from operations was $271.8 million, $290.3 million, and $446.1 million
for 2024, 2023, and 2022, respectively. Primerica Life made no pro rata distributions of any class of its own
securities during 2024. During 2024, Primerica Life paid ordinary dividends of $290.0 million to the Parent
Company. As of January 1, 2025, the amount of dividends Primerica Life could pay from statutory
unassigned surplus without prior approval of the commissioner of the Tennessee DOCI was $266.0 million,
which is limited by the amount of statutory unassigned surplus on that date.
Canadian Insurance Subsidiary. Primerica Life Canada is incorporated under the provisions of the
Canada Business Corporations Act and is a domiciled Canadian Company subject to regulation under the
Insurance Companies Act (Canada) by the Office of the Superintendent of Financial Institutions in Canada
(“OSFI”) and by Provincial Superintendents of Financial Institutions/Insurance in those provinces in which
Primerica Life Canada is licensed. The statutory financial statements of Primerica Life Canada reported to
OSFI are prepared in accordance with International Financial Reporting Standards.
Primerica 2024 Annual Report
165
FINANCIAL STATEMENTS — NOTE 17
Primerica Life Canada’s capacity to pay ordinary dividends to its parent is limited by OSFI regulations to
the extent that its capital exceeds internal capital targets. OSFI requires companies to set internal target
levels of capital sufficient to provide for all the risks of the insurer, including risks specified in OSFI’s
capital guidelines. As of December 31, 2024 and 2023, Primerica Life Canada’s statutory capital and
surplus satisfied regulatory requirements and was $696.2 million and $682.9 million, respectively.
In Canada, dividends can typically be paid subject to the paying insurance company continuing to have
adequate capital and forms of liquidity as defined by OSFI following the dividend payment and upon 15
days minimum notice to OSFI. Primerica Life Canada’s dividend capacity at January 1, 2025 was estimated
to be $215.5 million, which was calculated based on satisfying the Company’s internal capital targets.
During 2024, Primerica Life Canada paid ordinary dividends of $21.0 million to its parent company.
(18) Commitments and Contingent Liabilities
The Company is involved from time-to-time in legal disputes, regulatory inquiries and arbitration
proceedings in the normal course of business. These disputes are subject to uncertainties, including the
large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability
of litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result
from these matters unless otherwise indicated.
(19) Benefit Plans
We sponsor defined contribution plans for the benefit of our employees. The expense associated with
these plans was approximately $12.0 million, $11.1 million, and $10.2 million in 2024, 2023, and 2022,
respectively.
(20) Revenue from Contracts with Customers
Our revenues from contracts with customers primarily include:
•
Commissions and fees earned for the marketing and distribution of investment and savings products
underwritten by mutual fund companies and annuity providers. For purposes of revenue recognition,
mutual fund companies and annuity providers are considered the customers in marketing and
distribution arrangements;
•
Fees earned for investment advisory and administrative services within our managed investments
program and shareholder service fees earned in Canada for mutual funds for which we serve as
principal distributor;
•
Account-based fees for transfer agent recordkeeping functions and non-bank custodial services;
•
Fees associated with mortgage brokerage and the distribution of other third-party financial
products; and
•
Other revenue from the sale of miscellaneous products and services including monthly subscription
fees from the independent sales representatives for access to POL, our primary independent sales
force support tool.
Premiums from insurance contracts we underwrite, fees received from segregated funds insurance
contracts we underwrite, and income earned on our invested assets are excluded from the definition of
revenues from contracts with customers in accordance with U.S. GAAP.
166
FINANCIAL STATEMENTS — NOTE 20
The disaggregation of our revenues from contracts with customers were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Term Life Insurance segment revenues:
Other, net
$
52,306
$
48,286
$
50,320
Total segment revenues from contracts with customers
52,306
48,286
50,320
Revenues from sources other than contracts with
customers
1,715,934
1,644,756
1,585,646
Total Term Life Insurance segment revenues
$ 1,768,240
$ 1,693,042
$ 1,635,966
Investment and Savings Products segment revenues:
Commissions and fees:
Sales-based revenues
$
394,432
$
296,617
$
326,378
Asset-based revenues
498,948
408,327
375,502
Account-based revenues
95,272
93,189
90,391
Other, net
13,483
12,504
12,610
Total segment revenues from contracts with customers
1,002,135
810,637
804,881
Revenues from sources other than contracts with
customers (segregated funds)
54,607
54,628
58,551
Total Investment and Savings Products segment
revenues
$ 1,056,742
$
865,265
$
863,432
Corporate and Other Distributed Products segment
revenues:
Commissions and fees
$
39,630
$
40,092
$
46,434
Other, net
3,557
4,609
4,967
Total segment revenues from contracts with
customers
43,187
44,701
51,401
Revenues from sources other than contracts with
customers
220,974
145,499
106,652
Total Corporate and Other Distributed Products
segment revenues
$
264,161
$
190,200
$
158,053
We recognize revenue upon the satisfaction of the related performance obligation, unless the transaction
price includes variable consideration that is constrained; in such case, we recognize revenue when the
uncertainty associated with the constrained amount is subsequently resolved. Variable consideration is
not treated as constrained to the extent it is probable that no significant reversal in the amount of
cumulative revenue recognized will occur when the uncertainty associated with the variable consideration
is resolved. We have no material obligations for refunds of commission and fees on contracts with
customers subsequent to completion of our performance obligation.
Investment and Savings Products Marketing and Distribution Services. We receive commissions and
fees from mutual fund companies and annuity providers for the marketing and distribution by the
licensed independent sales representatives of investment and savings products underwritten by such
Primerica 2024 Annual Report
167
FINANCIAL STATEMENTS — NOTE 20
companies and providers. We recognize the sales-based marketing and distribution revenue received
from such companies and providers at the point in time our performance obligation to them is satisfied,
which is the trade date. The sales-based commissions from mutual fund companies and annuity providers
are known and are due at the same time our performance obligation to such mutual fund companies and
annuity providers is satisfied. We also receive ongoing asset-based commissions from mutual fund
companies and annuity providers each reporting period based on client asset values. We do not recognize
revenue for asset-based marketing and distribution commissions until the end of each subsequent
reporting period when the amount becomes known and due from mutual fund companies or annuity
providers as this revenue represents variable consideration that is fully constrained at the point in time
our distinct performance obligation to mutual fund companies and annuity providers is satisfied. We
consider variable consideration in the form of asset-based marketing and distribution commissions to be
fully constrained as the amounts we will be entitled to collect are highly uncertain and susceptible to
factors outside of our control. Such factors include the market values of assets under management and
the length of time investors hold their accounts. Asset-based marketing and distribution commissions
recognized during the current period are almost exclusively attributable to distinct performance
obligations satisfied to mutual fund companies and annuity providers in previous periods.
Investment Advisory and Administrative Services. We provide investment advisory and administrative
services over time to investors in the managed investments program we offer. We recognize revenue as
our performance obligation is satisfied over time for daily investment advisory and administrative services
that are substantially the same and have the same pattern of delivery. Fees for these services, which are
based on a percentage of client assets in the managed investments program, become known and are
charged to investors during the same reporting period in which the daily investment advisory and
administrative services are performed.
Shareholder Services. We provide shareholder services over time to investors in the mutual funds in
which we serve as the principal distributor in Canada. We recognize revenue as our performance
obligation is satisfied over time for shareholder services that are substantially the same and have the same
pattern of delivery. Fees for these services, which are based on a percentage of client assets in the mutual
funds, become known and are charged to investors during the same reporting period in which the
shareholder services are performed.
Account-based Services. We provide distinct transfer agent recordkeeping services for certain mutual
funds we distribute and non-bank custodial services to investors purchasing investment products we
distribute through qualified retirement accounts in the United States. Fees charged for these account-
based services consist primarily of a stated fee for each investment position or each qualified retirement
account. Generally, our performance obligation for each account-based service arrangement is satisfied
over time and is substantially the same with the same pattern of delivery. We recognize revenue to which
we are entitled for each investment position or each qualified account over time based on the time-based
pro-rata amount earned each reporting period.
Distribution of Other Third-party Financial Products. We distribute various other financial products
on behalf of third parties to consumers. We receive up-front commissions and/or renewal commissions
from product providers for sales of other financial product sales we have arranged. We recognize revenue
at the point in time our performance obligation to product providers is satisfied, which is generally on the
date the financial product is purchased by the consumer from the product provider. For certain financial
products, most notably prepaid legal subscriptions and auto and homeowners’ insurance referrals, we
receive ongoing renewal commissions that coincide with recurring payments received by product
providers from active subscribers or policyholders. Ongoing renewal commissions represent variable
consideration that will not be resolved until after the reporting period in which our performance
168
FINANCIAL STATEMENTS — NOTE 20
obligation has been satisfied. We estimate variable consideration in the transaction price for these
financial products (with the exception of miscellaneous products for which we expect nominal ongoing
commissions) as the expected amount of commissions to be received over the life of the subscription or
referred policy and apply a constraint so that it is probable that a subsequent change in estimate will not
result in a significant revenue reversal. Management judgment primarily is required to determine the
average life of a subscription or referred policy, which we establish based on historical information. We
recognize variable consideration in excess of the amount constrained in subsequent reporting periods
when the uncertainty is resolved and the excess amounts are due from the product providers.
Revenue for Other Services. We recognize revenue from the sale of other miscellaneous products and
services, including monthly subscription fees from the independent sales representatives for access to
POL, upon the transfer of the promised product or service. For POL subscriptions, we satisfy our
performance obligation by providing subscribers access to the promised services over time during each
monthly subscription period. Revenue recognized from the sale of other miscellaneous products and
services becomes known and charged at the same time we satisfy the corresponding performance
obligation.
Renewal Commissions Receivable. For revenue associated with ongoing renewal commissions in the
Corporate and Other Distributed Products segment, we record a renewal commission receivable asset for
the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to
the satisfaction of the performance obligation, less amounts that are constrained in Other assets in the
accompanying consolidated balance sheets. The renewal commissions receivable is reduced for
commissions that are billed and become due receivables from product providers during the reporting
period.
Activity in the renewal commissions receivable account was as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Balance, beginning of period
$
61,372
$
60,644
$
59,443
Commissions revenue
21,955
25,188
25,325
Less: collections
(25,248)
(24,460)
(24,124)
Balance, at the end of period
$
58,079
$
61,372
$
60,644
Incremental costs to obtain or fulfill contracts, most notably sales commissions to the independent sales
representatives, are not incurred prior to the recognition of the related revenue. Therefore, we have no
assets recognized for incremental costs to obtain or fulfill contracts.
(21) Leases
We have operating leases for office space and other real estate and finance leases of office equipment.
During 2023, we extended the lease for our home office facility located in Duluth, Georgia. The lease was
set to expire in June 2028 and was extended to December 31, 2035. Upon modifying the lease, the
Company reassessed its classification and concluded the lease remains an operating lease. The lease
disclosures below reflect the extension of this lease.
Primerica 2024 Annual Report
169
FINANCIAL STATEMENTS — NOTE 21
In aggregate, our leases have remaining lease terms of less than 1 year to 11 years, some of which include
options to extend the leases for up to 10 years, and some of which include options to terminate the leases
within 2 years, exercisable at the Company’s discretion. Operating lease right-of-use assets and operating
lease liabilities are presented separately in our consolidated balance sheets. As of December 31, 2024 and
December 31, 2023, finance lease right-of-use assets of $1.0 million and $0.5 million, respectively, and
finance lease liabilities of $1.0 million and $0.5 million, respectively, were recorded within Other assets and
Other liabilities within our consolidated balance sheets. The Company determines its lease liabilities, which
are measured at the present value of future lease payments, using the Company’s incremental secured
borrowing rate at the lease commencement date that is commensurate with the term of the underlying
lease or the rate implicit in the lease if readily determinable.
The components of lease expense were as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Operating lease cost
Operating lease cost
$
7,463
$
7,548
$
7,643
Variable lease cost (includes taxes, common
area maintenance and insurance)
969
866
895
Finance lease cost
Depreciation of finance lease assets
263
258
271
Interest on lease liabilities
38
37
55
Total lease cost
$
8,733
$
8,709
$
8,864
Other information related to leases was as follows:
Year ended December 31,
2024
2023
2022
(In thousands)
Supplemental Cash Flows Information
Cash paid for amounts included in the
measurement of lease liabilities:
Operating cash flows used in operating
leases (1)
$
6,294
$
5,609
$
8,068
Operating cash flows used in finance leases (1)
37
37
55
Financing cash flows used in finance leases
256
265
262
(1)
Included in change in other operating assets and liabilities, net in the accompanying consolidated statements of cash flows.
170
FINANCIAL STATEMENTS — NOTE 21
December 31,
2024
December 31,
2023
Weighted Average Remaining Lease Term
Operating leases
10 years
10 years
Finance leases
4 years
2 years
Weighted Average Discount Rate
Operating leases
4.9%
4.9%
Finance leases
4.9%
5.7%
Future minimum lease payments under non-cancellable leases were as follows:
Operating Leases
Finance Leases
Year Ended December 31,
(In thousands)
2025 (1)
$
6,915
$
315
2026 (2)
7,389
278
2027
8,563
201
2028
5,474
201
2029
4,769
114
Thereafter
38,012
12
Total minimum rental commitments for operating leases
71,122
1,121
Less imputed interest
15,644
105
Total lease liabilities
$
55,478
$
1,016
(1)
Excludes $1.5 million of scheduled rent payments expected to be offset by a leasehold improvement allowance funded by the
landlord of our home office facility.
(2)
Excludes $1.1 million of scheduled rent payments expected to be offset by a leasehold improvement allowance funded by the
landlord of our home office facility.
Primerica 2024 Annual Report
171
FINANCIAL STATEMENTS — NOTE 22
(22) Unaudited Quarterly Financial Data
In management’s opinion, the following quarterly consolidated financial information fairly presents the
results of operations for such periods and is prepared on a basis consistent with our annual audited
consolidated financial statements. Financial information for the quarters presented was prepared on a
consolidated basis. This information is provided as the Company reclassified the results of the Senior
Health business as discontinued operations during the reporting period.
Quarter ended
Quarter ended
Quarter ended
Quarter ended
March 31, 2024
June 30, 2024
September 30, 2024
December 31, 2024
(In thousands, except per-share amounts)
Total revenues
$
735,950
$
790,955
$
774,129
$
788,109
Total benefits and expenses
542,561
518,186
519,551
569,598
Income from continuing
operations before income
taxes
193,389
272,769
254,578
218,511
Income taxes from continuing
operations
44,975
63,467
59,841
50,835
Income from continuing
operations
148,414
209,302
194,737
167,676
Loss from discontinued operations,
net of income taxes
(10,510)
(208,131)
(30,364)
(606)
Net income
$
137,904
$
1,171
$
164,373
$
167,070
Basic earnings per share attributable
to common stockholders:
Continuing operations
$
4.24
$
6.08
$
5.73
$
4.99
Discontinued operations
(0.30)
(6.05)
(0.89)
(0.02)
Basic earnings per share attributable to
common stockholders
$
3.94
$
0.03
$
4.84
$
4.97
Diluted earnings per share
attributable to common
stockholders:
Continuing operations
$
4.23
$
6.07
$
5.72
$
4.98
Discontinued operations
(0.30)
(6.04)
(0.89)
(0.02)
Diluted earnings per share attributable
to common stockholders
$
3.93
$
0.03
$
4.83
$
4.96
172
FINANCIAL STATEMENTS — NOTE 22
Quarter ended
Quarter ended
Quarter ended
Quarter ended
March 31, 2023
June 30, 2023
September 30, 2023
December 31, 2023
(In thousands, except per-share amounts)
Total revenues
$ 671,326
$ 673,495
$
697,496
$
706,190
Total benefits and expenses
500,622
478,567
491,112
506,468
Income from continuing
operations before income
taxes
170,704
194,928
206,384
199,722
Income taxes from continuing
operations
39,883
45,789
48,930
45,954
Income from continuing
operations
130,821
149,139
157,454
153,768
Loss from discontinued operations, net
of income taxes
(2,722)
(4,635)
(5,391)
(1,833)
Net income
$ 128,099
$ 144,504
$
152,063
$
151,935
Basic earnings per share attributable
to common stockholders:
Continuing operations
$
3.55
$
4.10
$
4.38
$
4.36
Discontinued operations
(0.08)
(0.13)
(0.15)
(0.06)
Basic earnings per share attributable to
common stockholders
$
3.47
$
3.97
$
4.23
$
4.30
Diluted earnings per share
attributable to common
stockholders:
Continuing operations
$
3.54
$
4.09
$
4.38
$
4.35
Discontinued operations
(0.08)
(0.12)
(0.15)
(0.05)
Diluted earnings per share attributable
to common stockholders
$
3.46
$
3.97
$
4.23
$
4.30
Primerica 2024 Annual Report
173
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
There have been no changes in, or disagreements with, accountants on accounting and financial
disclosure matters during the years ended December 31, 2024 and 2023.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”).
Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have
concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2024 that
have materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.
Management’s Annual Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting for the Company. With the participation of the Chief Executive Officer and the Chief Financial
Officer, our management conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework and criteria established in Internal Control—Integrated
Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, our management has concluded that our internal control over financial
reporting was effective as of December 31, 2024.
Our independent auditor, KPMG LLP, an independent registered public accounting firm, has issued an
attestation report on the effectiveness of our internal control over financial reporting. This attestation
report appears below.
174
ITEM 9A. CONTROLS AND PROCEDURES
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Primerica, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Primerica, Inc. and subsidiaries’ (the Company) internal control over financial reporting
as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024
and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders’
equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the
related notes and financial statement schedules I, II, III and IV (collectively, the consolidated financial
statements), and our report dated February 28, 2025 expressed an unqualified opinion on those
consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on
our audit. We are a public accounting firm registered with the PCAOB and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles,
Primerica 2024 Annual Report
175
ITEM 9A. CONTROLS AND PROCEDURES
and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ KPMG LLP
Atlanta, Georgia
February 28, 2025
176
ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION.
Trading Plans
During the quarter ended December 31, 2024, none of our directors or executive officers adopted or
terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as
those terms are defined in Item 408 of Regulation S-K, except on November 19, 2024, Peter Schneider, the
Company’s President, adopted a Rule 10b5-1 trading arrangement that provides for the sale of an
aggregate of up to 8,000 shares of the Company’s common stock between March 5, 2025 and November
24, 2025.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS.
Not applicable.
Primerica 2024 Annual Report
177
PART III
Pursuant to General Instruction G to Form 10-K and as described below, portions of Items 10 through 14
of this report are incorporated by reference from the Company’s definitive Proxy Statement relating to the
Company’s 2025 Annual Meeting of Stockholders to be held on May 14, 2025 (the “Proxy Statement”),
which will be filed with the SEC within 120 days of December 31, 2024, pursuant to Regulation 14A under
the Exchange Act. The Report of the Audit Committee of our Board of Directors and the Report of the
Compensation Committee of our Board of Directors to be included in the Proxy Statement shall be
deemed to be furnished in this report and shall not be incorporated by reference into any filing under the
Securities Act of 1933, as amended, as a result of such furnishing.
Our website address is www.primerica.com. You may obtain free electronic copies of our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those
reports from the investors section of our website. These reports are available on our website as soon as
reasonably practicable after we electronically file them with the SEC. These reports should also be
available through the SEC’s website at www.sec.gov.
We have adopted Corporate Governance Guidelines. The Corporate Governance Guidelines and the
charters of our Board committees are available in the corporate governance subsection of the investor
relations section of our website, www.primerica.com, and are also available in print upon written request
to the Corporate Secretary, Primerica, Inc., 1 Primerica Parkway, Duluth, GA 30099.
Item 10. Directors, Executive Officers and Corporate Governance.
For a list of executive officers, see “Part I, Item X. Information About Our Executive Officers and Certain
Significant Employees”, included elsewhere in this report.
We have adopted a written Code of Conduct that applies to directors, officers and employees, including a
separate code that applies to only our principal executive officers and senior financial officers in
accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC promulgated
thereunder. Our Code of Conduct is available in the corporate governance subsection of the investor
relations section of our website, www.primerica.com, and is available in print upon written request to the
Corporate Secretary, Primerica, Inc., 1 Primerica Parkway, Duluth, GA 30099. In the event that we make
changes in, or provide waivers from, the provisions of the Code of Conduct that the SEC requires us to
disclose, we will disclose these events in the corporate governance section of our website.
We have also adopted an Insider Trading Policy that governs the purchase, sale and/or other dispositions
of our securities by our directors, officers and employees, and the Company itself, and that is reasonably
designed to promote compliance with insider trading laws, rules and regulations, as well as the exchange
listing standards applicable to us. In addition, the Company's Insider Trading Policy expressly bans
ownership by all employees and directors of financial instruments or participation in investment strategies
that hedge the economic risk of owning our common stock. We also prohibit officers and directors from
pledging the Company's securities as collateral for loans. A copy of our Insider Trading Policy is filed as
Exhibit 19.1 to this Annual Report on Form 10-K.
178
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE
Except for the information above and the information set forth in “Part I, Item X. Information About Our
Executive Officers and Certain Significant Employees”, the information required by this item will be
contained under the following headings in the Proxy Statement and is incorporated herein by reference:
•
Matters to be Voted on — Proposal 1: Election of Directors;
•
Governance — Director Independence;
•
Governance — Sustainability Matters – Our Corporate Culture;
•
Board of Directors — Board Members;
•
Board of Directors — Directors Qualifications;
•
Board of Directors — Board Committees;
•
Stock Ownership — Delinquent Section 16(a) Reports;
•
Executive Compensation — Employment Agreements;
•
Audit Matters — Audit Committee Report; and
•
Related Party Transactions.
Item 11. Executive Compensation.
The information required by this item will be contained under the following headings in the Proxy
Statement and is incorporated herein by reference:
•
Board of Directors — Board Committees — Compensation Committee;
•
Board of Directors — Director Compensation; and
•
Executive Compensation (excluding the information under the subheading Pay Versus Performance
(PVP)).
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
Securities Authorized for Issuance Under Equity Compensation Plans
We have two compensation plans under which our equity securities are authorized for issuance. The
Primerica, Inc. 2020 Omnibus Incentive Plan was approved by our stockholders in May 2020. The
Primerica, Inc. Stock Purchase Plan for Agents and Employees was approved by our sole stockholder in
Primerica 2024 Annual Report
179
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
March 2010. The following table sets forth certain information relating to these equity compensation
plans at December 31, 2024.
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
Weighted average
exercise price of
outstanding options,
warrants and rights
Number of securities
remaining available
for future issuance
Equity compensation plans approved by
stockholders:
Primerica, Inc. Second Amended and Restated
2020 Omnibus Incentive Plan
184,561
(1)
$
—
(2)
1,117,745
(3)
Primerica, Inc. Stock Purchase Plan for Agents
and Employees
—
—
1,612,719
(4)
Total
184,561
$
—
2,730,464
Equity compensation plans not approved by
stockholders
n/a
n/a
n/a
(1)
Consists of 125,942 shares of our common stock to be issued in connection with unvested RSUs. Also includes 58,619 shares of
our common stock to be issued to certain executive officers in connection with outstanding PSUs if the Company achieves the
targeted level of performance specified in the award agreement over a three-year period. Based on the actual ROAE and EPS
growth (if applicable) achieved within the three-year performance period ended December 31, 2024, recipients of the 2022 PSU
awards will receive 28,884 shares of our common stock compared with the targeted 26,475 shares on the vesting date of March
1, 2025. See Note 14 (Stockholders’ Equity) and Note 16 (Share-Based Transactions) to our consolidated financial statements
included elsewhere in this report for more information on the equity awards outstanding.
(2)
At December 31, 2024, there were no outstanding stock options under our equity compensation plans.
(3)
The number of shares of our common stock available for future issuance is 2,442,102 less the cumulative number of awards
granted under the plan plus the cumulative number of awards canceled under the plan.
(4)
Represents shares of our common stock, which have already been issued and are outstanding, available to be purchased by
employees and agents under the plan. The number of outstanding shares of our common stock available to be purchased is
2,500,000 less the cumulative number of outstanding shares purchased to date under the plan.
Other information required by this item will be contained under the following headings in the Proxy
Statement and is incorporated herein by reference:
•
Stock Ownership — Directors and Executive Officers; and
•
Stock Ownership — Principal Stockholders.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be contained under the following headings in the Proxy
Statement and is incorporated herein by reference:
•
Introductory paragraph to Governance;
•
Governance — Director Independence;
•
Board of Directors — Board Committees; and
•
Related Party Transactions.
180
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Item 14. Principal Accountant Fees and Services.
The information required by this item will be contained under the following headings in the Proxy
Statement and is incorporated herein by reference:
•
Matters to be Voted on — Proposal 3: Ratification of the Appointment of KPMG LLP as Our
Independent Registered Public Accounting Firm;
•
Board of Directors — Board Committees — Audit Committee; and
•
Audit Matters — Fees and Services of KPMG.
Primerica 2024 Annual Report
181
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) 1. FINANCIAL STATEMENTS
Included in Part II, Item 8, of this report:
Primerica, Inc.:
Report of Independent Registered Public Accounting Firm (KPMG LLP, Atlanta, GA, Auditor Firm
ID: 185)
101
Consolidated Balance Sheets as of December 31, 2024 and 2023
103
Consolidated Statements of Income for each of the years in the three-year period ended
December 31, 2024
104
Consolidated Statements of Comprehensive Income (Loss) for each of the years in the three-year
period ended December 31, 2024
105
Consolidated Statements of Stockholders’ Equity for each of the years in the three-year period
ended December 31, 2024
106
Consolidated Statements of Cash Flows for each of the years in the three-year period ended
December 31, 2024
107
Notes to Consolidated Financial Statements
108
2. FINANCIAL STATEMENT SCHEDULES
Included in Part IV of this report:
Schedule I — Consolidated Summary of Investments — Other than Investments in Related Parties
as of December 31, 2024
188
Schedule II — Condensed Financial Information of Registrant as of December 31, 2024 and 2023,
and for each of the years in the three-year period ended December 31, 2024
189
Schedule III — Supplementary Insurance Information as of December 31, 2024 and 2023 and for
each of the years in the three-year period ended December 31, 2024
196
Schedule IV — Reinsurance for each of the years in the three-year period ended December 31,
2024
198
3. EXHIBIT INDEX –
An “Exhibit Index” has been filed as part of this report beginning on the following page and is
incorporated herein by reference.
Schedules other than those listed above are omitted because they are not required, are not material, are
not applicable, or the required information is shown in the financial statements or notes thereto.
(b) Exhibit Index.
182
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The agreements included as exhibits to this report are included to provide information regarding the
terms of these agreements and are not intended to provide any other factual or disclosure information
about the Company or its subsidiaries, our business or the other parties to these agreements. These
agreements may contain representations and warranties by each of the parties to the applicable
agreement. These representations and warranties have been made solely for the benefit of the other
parties to the applicable agreement and:
•
should not in all instances be treated as categorical statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be inaccurate;
•
may have been qualified by disclosures that were made to the other party in connection with the
negotiation of the applicable agreement, which disclosures are not necessarily reflected in the
agreement;
•
may apply standards of materiality in a way that is different from what may be viewed as material to
our investors; and
•
were made only as of the date of the applicable agreement or such other date or dates as may be
specified in the agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the
date they were made or at any other time, and should not be relied upon by investors.
Exhibit
Number
Description
Reference
3.1
Amended and Restated Certificate of
Incorporation of the Registrant.
Incorporated by reference to Exhibit 3.1 to
Primerica's Current Report on Form 8-K filed
May 24, 2013 (Commission File No. 001-34680).
3.2
Third Amended and Restated By-laws of
Primerica, Inc.
Incorporated by reference to Exhibit 3.1 to
Primerica’s Current Report on Form 8-K filed
March 3, 2023 (Commission File No. 001-
34680).
4.1
Indenture, dated July 16, 2012, between the
Registrant and Computershare Trust Company
N.A., as successor to Wells Fargo Bank,
National Association, as trustee.
Incorporated by reference to Exhibit 4.1 to
Primerica's Current Report on Form 8-K filed
July 16, 2012 (Commission File No. 001-34680).
4.2
First Supplemental Indenture, dated July 16,
2012, between the Registrant and
Computershare Trust Company N.A., as
successor to Wells Fargo Bank, National
Association, as trustee.
Incorporated by reference to Exhibit 4.2 to
Primerica’s Current Report on Form 8-K filed
November 19, 2021 (Commission File No. 001-
34680).
4.3
Second Supplemental Indenture, dated as of
November 19, 2021, between the Registrant
and Computershare Trust Company N.A., as
successor to Wells Fargo Bank, National
Association, as trustee.
Incorporated by reference to Exhibit 4.2 to
Primerica’s Current Report on Form 8-K filed
November 19, 2021 (Commission File No. 001-
34680).
4.4
Form of 2.800% Senior Notes due 2031 (No. R-
1)
Incorporated by reference to Exhibit 4.3 to
Primerica’s Current Report on Form 8-K filed
November 19, 2021 (Commission File No. 001-
34680).
Primerica 2024 Annual Report
183
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number
Description
Reference
4.5
Form of 2.800% Senior Notes due 2031 (No. R-
2)
Incorporated by reference to Exhibit 4.4 to
Primerica’s Current Report on Form 8-K filed
November 19, 2021 (Commission File No. 001-
34680).
4.6
Description of Registrant's Securities
Incorporated by reference to Exhibit 4.4 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2020 filed March 1,
2021 (Commission File No. 001-34680).
10.1
Amended and Restated Credit Agreement,
dated as of June 22, 2021 between the
Registrant, the Lenders referred to therein, and
Wells Fargo Bank, National Association
Incorporated by reference to Exhibit 10.1 to
Primerica’s Current Report on Form 8-K filed
June 24, 2021 (Commission File No. 001-34680).
10.2
Tax Separation Agreement dated as of March
30, 2010 by and between the Registrant and
Citigroup Inc.
Incorporated by reference to Exhibit 10.3 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
10.3
10% Coinsurance Agreement dated March 31,
2010 between Primerica Life Insurance
Company and Prime Reinsurance Company,
Inc.
Incorporated by reference to Exhibit 10.6 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
10.4
Amendment No. 1 dated as of October 5, 2015
to the 10% Coinsurance Agreement dated
March 31, 2010 by and between Primerica Life
Insurance Company and Prime Reinsurance
Company, Inc.
Incorporated by reference to Exhibit 10.29 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2015
(Commission File No. 001-34680).
10.5
Amendment No. 2 dated as of January 25,
2016 to the 10% Coinsurance Agreement
dated March 31, 2010 by and between
Primerica Life Insurance Company and Prime
Reinsurance Company, Inc.
Incorporated by reference to Exhibit 10.1 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2016 (Commission
File No. 001-34680).
10.6
Amendment No. 3 dated as of March 31, 2016
to the 10% Coinsurance Agreement dated
March 31, 2010 by and between Primerica Life
Insurance Company and Prime Reinsurance
Company, Inc.
Incorporated by reference to Exhibit 10.2 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2016 (Commission
File No. 001-34680).
10.7
Assignment, Transfer and Novation Agreement
dated as of June 23, 2022 between Primerica
Life Insurance Company, Pecan Re and Swiss
Re Life and Health America Inc.
Incorporated by reference to Exhibit 10.1 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2022 (Commission
File No. 001-34680).
10.8
Second Amended and Restated 80%
Coinsurance Agreement dated as of June 23,
2022 between Primerica Life Insurance
Company and Swiss Re Life and Health
America Inc.
Incorporated by reference to Exhibit 10.2 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2022 (Commission
File No. 001-34680).
184
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number
Description
Reference
10.9
Reinsurance Trust Agreement dated as of June
23, 2022 between Swiss Re Life and Health
America Inc., as Grantor, and Primerica Life
Insurance Company, as Beneficiary, and The
Bank of New York Mellon, as Trustee
Incorporated by reference to Exhibit 10.3 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2022 (Commission
File No. 001-34680).
10.10
10% Coinsurance Economic Trust Agreement
dated March 29, 2010 among Primerica Life
Insurance Company, Prime Reinsurance
Company, Inc. and The Bank of New York
Mellon.
Incorporated by reference to Exhibit 10.8 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
10.11
Amendment No. 1 dated as of March 31, 2016
to the 10% Coinsurance Economic Trust
Agreement dated March 29, 2010 among
Prime Reinsurance Company, Inc. Primerica
Life Insurance Company, and The Bank of New
York Mellon.
Incorporated by reference to Exhibit 10.5 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2016 (Commission
File No. 001-34680).
10.12
10% Coinsurance Excess Trust Agreement
dated March 29, 2010 among Primerica Life
Insurance Company, Prime Reinsurance
Company, Inc. and The Bank of New York
Mellon.
Incorporated by reference to Exhibit 10.9 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
10.13
Amendment No. 1 dated as of March 31, 2016
to the 10% Coinsurance Excess Trust
Agreement dated March 29, 2010 among
Prime Reinsurance Company, Inc. Primerica
Life Insurance Company, and The Bank of New
York Mellon.
Incorporated by reference to Exhibit 10.6 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2016 (Commission
File No. 001-34680).
10.14
Amended and Restated Capital Maintenance
Agreement dated as of March 31, 2016 by and
between Citigroup Inc. and Prime Reinsurance
Company, Inc.
Incorporated by reference to Exhibit 10.7 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2016 (Commission
File No. 001-34680).
10.15
90% Coinsurance Agreement dated March 31,
2010 by and between National Benefit Life
Insurance Company and American Health and
Life Insurance Company.
Incorporated by reference to Exhibit 10.11 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
10.16
Reinsurance Trust Agreement dated
November 23, 2020 among National Benefit
Life Insurance Company, American Health and
Life Insurance Company, and JP Morgan Chase
Bank, N.A.
Incorporated by reference to Exhibit 10.15 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2020 (Commission
File No. 001-34680).
10.17
Coinsurance Agreement dated March 31, 2010
by and between Primerica Life Insurance
Company of Canada and Financial
Reassurance Company 2010, Ltd. (currently
known as Munich Re Life Insurance Company
of Vermont).
Incorporated by reference to Exhibit 10.13 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
Primerica 2024 Annual Report
185
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number
Description
Reference
10.18
Coinsurance Amending Agreement dated as of
December 31, 2011 among Primerica Life
Insurance Company of Canada and Financial
Reassurance Company 2010, Ltd. (currently
known as Munich Re Life Insurance Company
of Vermont).
Incorporated by reference to Exhibit 10.19 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2016 (Commission
File No. 001-34680).
10.19
Coinsurance Amending Agreement dated as of
October 20, 2016 among Primerica Life
Insurance Company of Canada, Munich Re Life
Insurance Company of Vermont (formerly
known as Financial Reassurance Company
2010, Ltd.) and Munich-American Holding
Corporation.
Incorporated by reference to Exhibit 10.20 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2016 (Commission
File No. 001-34680).
10.20
Coinsurance Agreement Novation Amendment
dated as of December 15, 2016 among
Primerica Life Insurance Company of Canada,
Munich Re Life Insurance Company of
Vermont and Munich Re of Malta P.L.C.
Incorporated by reference to Exhibit 10.19 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2019 (Commission
File No. 001-34680).
10.21
Coinsurance Amending Agreement dated as of
January 1, 2018 among Primerica Life
Insurance Company of Canada and Munich Re
of Malta P.L.C.
Incorporated by reference to Exhibit 10.20 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2019 (Commission
File No. 001-34680).
10.22
Monitoring and Reporting Agreement dated
as of March 31, 2016 by and among Primerica
Life Insurance Company and Pecan Re Inc.
Incorporated by reference to Exhibit 10.21 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2016 (Commission
File No. 001-34680).
10.23*
Primerica, Inc. Stock Purchase Plan for Agents
and Employees.
Incorporated by reference to Exhibit 10.45 to
Primerica’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2010 (Commission
File No. 001-34680).
10.24*
Primerica, Inc. 2020 Omnibus Incentive Plan
Incorporated by reference to Exhibit 10.1 to
Primerica’s Registration Statement on Form S-8
filed (Commission File No. 333-238268)
10.25*
Form of Primerica, Inc. Performance Stock Unit
Award Agreement under the Primerica, Inc.
2020 Omnibus Incentive Plan (2022 awards).
Incorporated by reference to Exhibit 10.27 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2022 filed on
February 28, 2023 (Commission File No. 001-
34680).
10.26*
Form of Primerica, Inc. Performance Stock Unit
Award Agreement under the Primerica, Inc.
2020 Omnibus Incentive Plan (2023 awards).
Incorporated by reference to Exhibit 10.27 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2023 filed on
February 28, 2024 (Commission File No. 001-
34680).
10.27
Form of Primerica, Inc. Performance Stock
Award Agreement under the Primerica, Inc.
2020 Omnibus Incentive Plan (2024 awards).
Filed with the Securities and Exchange
Commission as part of this Annual Report.
186
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number
Description
Reference
10.28*
Form of U.S. Employee Restricted Stock Unit
Award Agreement under the Primerica, Inc.
2020 Omnibus Incentive Plan (2022 awards).
Incorporated by reference to Exhibit 10.30 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2022 filed on
February 28, 2023 (Commission File No. 001-
34680).
10.29*
Form of Executive Officer Restricted Stock Unit
Award Agreement under the Primerica, Inc.
2020 Omnibus Incentive Plan (2023 Executive
Officer awards).
Incorporated by reference to Exhibit 10.30 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2023 filed on
February 28, 2024 (Commission File No. 001-
34680).
10.30
Form of Executive Officer Restricted Stock Unit
Award Agreement under the Primerica, Inc.
2020 Omnibus Incentive Plan (2024 Executive
Officer awards).
Filed with the Securities and Exchange
Commission as part of this Annual Report.
10.31*
Restricted Stock Unit Award Agreement, dated
as of October 16, 2023, between Primerica, Inc.
and Ms. Tracy X. Tan.
Incorporated by reference to Exhibit 10.2 to
Primerica’s Current Report on Form 8-K filed on
September 14, 2023 (Commission File No. 001-
34680).
10.32*
Restricted Stock Unit Award Agreement, dated
as of December 12, 2024, between Primerica,
Inc. and Mr. Glenn J. Williams.
Filed with the Securities and Exchange
Commission as part of this Annual Report.
10.33*
Form of Director Restricted Stock Unit Award
Agreement under the Primerica, Inc. 2020
Omnibus Incentive Plan (2024 awards).
Filed with the Securities and Exchange
Commission as part of this Annual Report.
10.34*
Form of Indemnification Agreement for
Directors and Officers.
Incorporated by reference to Exhibit 10.48 to
Primerica’s Registration Statement on Form S-1
(File No. 333-162918).
10.35*
Amended and Restated Employment
Agreement, dated as of January 2, 2015,
between the Registrant and Mr. Glenn J.
Williams.
Incorporated by reference to Exhibit 99.4 to
Primerica’s Current Report on Form 8-K filed
January 5, 2015 (Commission File No. 001-
34680).
10.36*
Amended and Restated Employment
Agreement, dated as of January 2, 2015,
between the Registrant and Mr. Peter W.
Schneider.
Incorporated by reference to Exhibit 99.5 to
Primerica’s Current Report on Form 8-K filed
January 5, 2015 (Commission File No. 001-
34680).
10.37*
Amendment dated as of November 17, 2015
to the Amended and Restated Employment
Agreement, dated as of January 2, 2015,
between the Registrant and Mr. Peter W.
Schneider.
Incorporated by reference to Exhibit 10.30 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2015 (Commission
File No. 001-34680).
10.38*
Amended and Restated Employment
Agreement, dated as of January 2, 2015,
between the Registrant and Mr. Gregory C.
Pitts.
Incorporated by reference to Exhibit 99.7 to
Primerica’s Current Report on Form 8-K filed
January 5, 2015 (Commission File No. 001-
34680).
10.39*
Amendment dated as of November 17, 2015
to the Amended and Restated Employment
Agreement, dated as of January 2, 2015,
Incorporated by reference to Exhibit 10.34 to
Primerica’s Annual Report on Form 10-K for the
Primerica 2024 Annual Report
187
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit
Number
Description
Reference
between the Registrant and Mr. Gregory C.
Pitts.
year ended December 31, 2015 (Commission
File No. 001-34680).
10.40*
Employment Agreement, dated as of
September 13, 2023, between Primerica, Inc.
and Ms. Tracy X. Tan.
Incorporated by reference to Exhibit 10.1 to
Primerica’s Current Report on Form 8-K filed on
September 14, 2023 (Commission File No. 001-
34680).
10.41*
Nonemployee Directors’ Deferred
Compensation Plan, effective as of January 1,
2011, adopted on November 10, 2010.
Incorporated by reference to Exhibit 10.31 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2010 (Commission
File No. 001-34680).
19.1
Primerica, Inc. Insider Trading Policy
Filed with the Securities and Exchange
Commission as part of this Annual Report.
21.1
Subsidiaries of the Registrant.
Filed with the Securities and Exchange
Commission as part of this Annual Report.
23.1
Consent of KPMG LLP.
Filed with the Securities and Exchange
Commission as part of this Annual Report.
31.1
Rule 13a-14(a)/15d-14(a) Certification,
executed by Glenn J. Williams, Chief Executive
Officer.
Filed with the Securities and Exchange
Commission as part of this Annual Report.
31.2
Rule 13a-14(a)/15d-14(a) Certification,
executed by Tracy X. Tan, Executive Vice
President and Chief Financial Officer.
Filed with the Securities and Exchange
Commission as part of this Annual Report.
32.1
Certifications required by Rule 13a-14(b) or
Rule 15d-14(b) and Section 1350 of Chapter
63 of Title 18 of the United States Code (18
U.S.C. 1350), executed by Glenn J. Williams,
Chief Executive Officer, and Tracy X. Tan,
Executive Vice President and Chief Financial
Officer.
Filed with the Securities and Exchange
Commission as part of this Annual Report.
97.1
Primerica, Inc. Incentive Compensation
Recovery Policy
Incorporated by reference to Exhibit 97.1 to
Primerica’s Annual Report on Form 10-K for the
year ended December 31, 2023 (Commission
File No. 001-34680).
101.INS
Inline XBRL Instance Document
The instance document does not appear in the
Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema With
Embedded Linkbase Documents
104
Cover Page Interactive Data File (formatted as
Inline XBRL with applicable taxonomy
extension information contained in Exhibits
101).
* Identifies a management contract or compensatory plan or arrangement.
188
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(c) Financial Statement Schedules.
Schedule I
Consolidated Summary of Investments — Other Than Investments in Related Parties
PRIMERICA, INC.
December 31, 2024
Type of Investment
Cost
Fair value
Amount at
which
shown in the
balance sheet
(In thousands)
Fixed maturities:
Bonds(1):
United States government and government agencies
and authorities
$
117,822
$
112,093
$
112,093
States, municipalities, and political subdivisions
128,359
113,569
113,569
Foreign governments
171,033
166,424
166,424
All other corporate bonds(1)
4,038,287
3,780,516
3,856,968
Certificates of deposit
176
176
176
Redeemable preferred stocks
4,248
3,787
3,787
Total fixed maturities
4,459,925
4,176,565
4,253,017
Equity securities:
Common stocks:
Public utilities
6,469
9,023
9,023
Banks, trusts and insurance companies
6,439
7,322
7,322
Industrial, miscellaneous and all other
4,673
6,276
6,276
Nonredeemable preferred stocks
5,354
4,523
4,523
Total equity securities
22,935
27,144
27,144
Policy loans and other invested assets
50,881
50,881
50,881
Total investments
$
4,533,741
$
4,254,590
$
4,331,042
(1)
The amount shown on the consolidated balance sheet does not match the amortized cost or cost or fair value for “All other
corporate bonds” due to our held-to-maturity security, which is carried at cost on the consolidated balance sheet and all other
fixed maturities are carried at fair value.
See the report of independent registered public accounting firm.
Primerica 2024 Annual Report
189
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule II
Condensed Financial Information of Registrant
PRIMERICA, INC. (Parent Only)
Condensed Balance Sheets
December 31,
2024
2023
(In thousands)
Assets
Investments:
Fixed-maturity securities available-for-sale, at fair value (amortized cost: $142,939 in 2024 and $154,983
in 2023)
$
140,336
$
152,000
Other investments
191
725
Total investments
140,527
152,725
Cash and cash equivalents
356,257
229,143
Due from affiliates*
5,224
4,590
Other receivables
1,706
1,345
Income tax receivable*
—
8,334
Deferred income taxes
36,350
5,168
Investment in subsidiaries*
2,343,805
1,915,585
Other assets
807
945
Investment in discontinued operations entities*
—
352,996
Total assets
$
2,884,676
$
2,670,831
Liabilities and Stockholders’ Equity
Liabilities:
Note payable
$
594,512
$
593,709
Income tax payable
21,361
—
Deferred income taxes
—
4,694
Interest payable
1,913
1,913
Other liabilities
7,849
4,548
Commitments and contingent liabilities (see Note G)
Total liabilities
625,635
604,864
Stockholders’ Equity
Equity attributable to Primerica, Inc.:
Common stock ($0.01 par value; authorized 500,000 in 2024 and 2023; issued and outstanding 33,368
shares in 2024 and 34,996 shares in 2023)
334
350
Paid-in capital
—
—
Retained earnings
2,231,483
2,276,946
Accumulated other comprehensive income (loss), net of income tax
27,224
(211,329)
Total stockholders’ equity
2,259,041
2,065,967
Total liabilities and stockholders’ equity
$
2,884,676
$
2,670,831
* Eliminated in consolidation.
See the accompanying notes to condensed financial statements.
See the report of independent registered public accounting firm.
190
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule II
Condensed Financial Information of Registrant
PRIMERICA, INC. (Parent Only)
Condensed Statements of Income
Year ended December 31,
2024
2023
2022
(In thousands)
Revenues:
Dividends from subsidiaries*
$ 520,168
$ 555,578
$ 450,929
Net investment income
15,440
12,730
3,916
Realized investment gains (losses)
85
84
872
Other investment gains (losses)
19
235
(519)
Investment gains (losses), including credit losses
104
319
353
Other
50,000
—
—
Total revenues
585,712
568,627
455,198
Expenses:
Interest expense, net
18,043
18,041
18,044
Other operating expenses
21,322
14,858
15,713
Total expenses
39,365
32,899
33,757
Income from continuing operations before income
taxes and before equity in undistributed
earnings of subsidiaries
546,347
535,728
421,441
Income taxes from continuing operations before equity
in undistributed earnings of subsidiaries
(1,539)
(2,818)
(3,464)
Income from continuing operations before equity in
undistributed earnings of subsidiaries
547,886
538,546
424,905
Equity in undistributed earnings of subsidiaries*
172,243
52,636
134,847
Income from continuing operations
720,129
591,182
559,752
Loss from discontinued operations, net of income taxes
(249,611)
(14,581)
(87,684)
Net income
$ 470,518
$ 576,601
$ 472,068
* Eliminated in consolidation.
See the accompanying notes to condensed financial statements.
See the report of independent registered public accounting firm.
Primerica 2024 Annual Report
191
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule II
Condensed Financial Information of Registrant
PRIMERICA, INC. (Parent Only)
Condensed Statements of Comprehensive Income (Loss)
Year ended December 31,
2024
2023
2022
(In thousands)
Net income
$ 470,518
$ 576,601
$
472,068
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses):
Equity in unrealized holding gains (losses) on investment
securities held by subsidiaries
6,866
69,663
(299,847)
Change in unrealized holding gains (losses) on
investment securities
465
1,600
(5,201)
Reclassification adjustment for realized
investment (gains) losses included in
net income
(85)
(84)
(872)
Equity in effect of change in discount rate assumptions on
the liability for future policy benefit of subsidiaries
263,919
(169,502)
1,368,596
Foreign currency translation adjustments:
Equity in unrealized foreign currency translation gains
(losses) of subsidiaries
(32,532)
10,044
(20,826)
Total other comprehensive income (loss) before income
taxes
238,633
(88,279)
1,041,850
Income tax expense (benefit) related to items of other
comprehensive income (loss)
80
319
(1,275)
Other comprehensive income (loss), net of
income taxes
238,553
(88,598)
1,043,125
Total comprehensive income (loss)
$ 709,071
$ 488,003
$ 1,515,193
See the accompanying notes to condensed financial statements.
See the report of independent registered public accounting firm.
192
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule II
Condensed Financial Information of Registrant
PRIMERICA, INC. (Parent Only)
Condensed Statements of Cash Flows
Year ended December 31,
2024
2023
2022
(In thousands)
Cash flows from operating activities:
Net income
$
470,518
$
576,601
$
472,068
Adjustments to reconcile net income to cash provided by (used in) operating
activities:
Equity in undistributed earnings of subsidiaries* (1)
110,303
(108,798)
(69,096)
Deferred tax provision
(35,209)
5,496
2,800
Change in income taxes
38,081
5,840
3,837
Investment (gains) losses
(104)
(319)
(353)
Accretion and amortization of investments
(2,185)
(2,201)
205
Share-based compensation
2,636
1,195
1,592
Change in due to/from affiliates* (2)
(634)
5,235
4,458
Gain on insurance proceeds received from acquisition representation
and warranty policy
(50,000)
—
—
Change in other operating assets and liabilities, net
3,938
1,334
1,967
Net cash provided by (used in) operating activities
537,344
484,383
417,478
Cash flows from investing activities:
Available-for-sale investments sold, matured or called:
Fixed maturity securities — sold
—
—
409
Fixed-maturity securities — matured or called
176,483
93,092
94,960
Short-term investments — matured or called
—
60,008
85,302
Equity securities — sold
—
3,051
16
Available-for-sale investments acquired:
Fixed-maturity securities(1)
(77,249)
(53,539)
(57,762)
Short-term investments
—
(19,496)
(39,090)
Equity securities acquired
—
(236)
(7)
Purchase of business, net of cash acquired
—
—
3,867
Insurance proceeds received from acquisition representation and warranty policy
50,000
—
—
Disposal of cash in discontinued operations
(2,768)
—
—
Other investing activities
(5,811)
(16,226)
—
Net cash provided by (used in) investing activities
140,655
66,654
87,695
Cash flows from financing activities:
Dividends paid
(112,814)
(93,715)
(83,783)
Common stock repurchased
(428,425)
(375,062)
(356,306)
Tax withholdings on share-based compensation
(9,646)
(10,579)
(5,135)
Net cash provided by (used in) financing activities
(550,885)
(479,356)
(445,224)
Change in cash and cash equivalents
127,114
71,681
59,949
Cash and cash equivalents, beginning of period
229,143
157,462
97,513
Cash and cash equivalents, end of period
$
356,257
$
229,143
$
157,462
Supplement disclosures:
Interest paid
$
17,054
$
17,053
$
17,053
* Eliminated in consolidation.
(1)
Does not include $84.9 million, $81.4 million, and $41.3 of fixed-maturity securities transferred from subsidiaries in the form of
noncash dividend for the years ended December 31, 2024, 2023 and 2022, respectively.
(2)
Does not include $170.5 million reduction in due from affiliates for the conversion of a subsidiary note to an equity contribution
in that subsidiary during the year ended December 31, 2022.
See the accompanying notes to condensed financial statements.
See the report of independent registered public accounting firm.
Primerica 2024 Annual Report
193
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule II
Condensed Financial Information of Registrant
PRIMERICA, INC. (Parent Only)
Notes to Condensed Financial Statements
(A) Description of Business
Primerica, Inc. (“we”, “us” or the “Company”) is a holding company with our primary asset being the capital
stock of our wholly owned operating subsidiaries, and our primary liability being $600.0 million in
principal amount of senior unsecured notes issued in a public offering in 2021 (the “Senior Notes”). Our
subsidiaries assist clients in meeting their needs for term life insurance, which our insurance subsidiaries
underwrite, and mutual funds, annuities, managed investments and other financial products, which our
subsidiaries distribute primarily on behalf of third parties. Our primary subsidiaries include the following
entities: Primerica Financial Services, LLC, a general agency and marketing company; Primerica Life
Insurance Company (“Primerica Life”), our principal life insurance company; PFS Investments Inc., an
investment products company and broker-dealer; and Primerica Financial Services (Canada) Ltd., a holding
company for our Canadian operations, which includes Primerica Life Insurance Company of Canada and
PFSL Investments Canada Ltd. Primerica Life, domiciled in Tennessee, owns National Benefit Life Insurance
Company, a New York insurance company. In addition, we established Vidalia Re, Inc. (“Vidalia Re”) as a
special purpose financial captive insurance company domiciled in Vermont and a wholly owned subsidiary
of Primerica Life.
On September 30, 2024, the Company's wholly owned subsidiary, Primerica Health, Inc. abandoned its
ownership in e-TeleQuote Insurance, Inc. and subsidiaries (collectively, “e-TeleQuote”), a marketer of
Medicare-related insurance products underwritten by third-party health insurance carriers to eligible
Medicare beneficiaries (the “Senior Health business”). The Company determined that the disposal
represented a strategic shift that will have a major impact on the Company's operations and financial
results. Accordingly, the results of operations for the Senior Health business and related assets and
liabilities have been reported in discontinued operations for all periods presented in our condensed
statements of income and our condensed balance sheets, respectively.
(B) Basis of Presentation
These condensed financial statements reflect the results of operations, financial position and cash flows
for the Company. We prepare our financial statements in accordance with U.S. generally accepted
accounting principles (“U.S. GAAP”). These principles are established primarily by the Financial Accounting
Standards Board. The preparation of financial statements in conformity with U.S. GAAP requires us to
make estimates and assumptions that affect financial statement balances, revenues and expenses and
cash flows, as well as the disclosure of contingent assets and liabilities. Management considers available
facts and knowledge of existing circumstances when establishing the estimates included in our financial
statements.
The most significant item that involves a greater degree of accounting estimates subject to change in the
future is the determination of our investments in subsidiaries. Estimates for this and other items are
subject to change and are reassessed by management in accordance with U.S. GAAP. Actual results could
differ from those estimates.
194
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The accompanying condensed financial statements should be read in conjunction with the consolidated
financial statements and notes thereto of Primerica, Inc. and subsidiaries included in Part II, Item 8 of this
report.
(C) Notes Payable
Notes Payable. As of December 31, 2024, we had $600.0 million in principal amount of publicly-traded,
senior unsecured notes (the “Senior Notes”). The Senior Notes were issued in November 2021 at a price of
99.55% of the principal amount with an annual interest rate of 2.80%, payable semi-annually in arrears on
May 19 and November 19, and are scheduled to mature on November 19, 2031. As of December 31, 2024,
we were in compliance with the covenants of the Senior Notes. No events of default occurred on the
Senior Notes during the year ended December 31, 2024.
As unsecured senior obligations, the Senior Notes rank equally in right of payment with all existing and
future unsubordinated indebtedness and senior to all existing and future subordinated indebtedness of
the Company. The Senior Notes are structurally subordinated in right of payment to all existing and future
liabilities of our subsidiaries. In addition, the Senior Notes contain covenants that restrict our ability to,
among other things, create or incur any indebtedness that is secured by a lien on the capital stock of
certain of our subsidiaries, and merge, consolidate or sell all or substantially all of our properties and
assets.
(D) Revolving Credit Facility
On June 22, 2021, we amended and restated our unsecured $200.0 million revolving credit facility
(“Revolving Credit Facility”) with a syndicate of commercial banks. The Revolving Credit Facility has a
scheduled termination date of June 22, 2026. Amounts outstanding under the Revolving Credit Facility are
borrowed, at our discretion, on the basis of either a Secured Overnight Financing Rate (“SOFR”) rate loan,
or a base rate loan. SOFR rate loans bear interest at a periodic rate equal to one-, three-, or six-month
Adjusted Term SOFR, plus an applicable margin. Base rate loans bear interest at the highest of (a) the
Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) one-month Adjusted Term SOFR plus 1.00%,
plus an applicable margin. The Revolving Credit Facility contains language providing for a benchmark
replacement in the event that SOFR is no longer available. The Revolving Credit Facility also permits the
issuance of letters of credit. The applicable margins are based on our debt rating with such margins for
SOFR rate loans and letters of credit ranging from 1.00% to 1.625% per annum and for base rate loans
ranging from 0.00% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee
that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges
from 0.10% to 0.225% per annum of the aggregate amount of the $200.0 million commitment of the
lenders under the Revolving Credit Facility that remains undrawn. During the year ended December 31,
2023, no amounts were drawn under the Revolving Credit Facility. As of December 31, 2024, we were in
compliance with the covenants of the Revolving Credit Facility. Furthermore, no events of default occurred
under the Revolving Credit Facility during the year ended December 31, 2024.
(E) Dividends
For the years ended December 31, 2024, 2023, and 2022, the Company received dividends from our non-
life insurance subsidiaries of $208.4 million, $203.2 million, and $173.0 million, respectively. For the years
ended December 31, 2024, 2023, and 2022, the Company received dividends from our life insurance
subsidiaries of $311.8 million, $352.3 million, and $277.9 million, respectively.
Primerica 2024 Annual Report
195
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(F) Commitments and Contingent Liabilities
Vidalia Re has entered into a coinsurance agreement with Primerica Life whereby Primerica Life has ceded
certain level-premium term life insurance policies to Vidalia Re. In conjunction with the coinsurance
agreement, we have a capital maintenance agreement with Vidalia Re. The capital maintenance
agreement may require us at times to make capital contributions to Vidalia Re to ensure that its
regulatory account, as defined in the coinsurance agreement with Primerica Life, will not be less than
$20.0 million for the financial captive insurance company. The regulatory account will only be used to
satisfy obligations under its coinsurance agreement after all other available assets have been used,
including its held-to-maturity security ultimately guaranteed by Hannover Life Reassurance Company of
America.
The Company is involved from time-to-time in legal disputes, regulatory inquiries and arbitration
proceedings in the normal course of business. These disputes are subject to uncertainties, including large
and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of
litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result
from these matters.
196
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule III
Supplementary Insurance Information
PRIMERICA, INC.
Deferred
policy
acquisition
costs
Future policy
benefits
Unearned and
advance
premiums
Policy claims
and
other benefits
payable
Separate
account
liabilities
(In thousands)
December 31, 2024
Term Life Insurance
$
3,608,599
$ 6,300,693
$
15,277
$
478,857
$
—
Investment and Savings Products
55,303
—
—
—
2,209,266
Corporate and Other Distributed
Products
16,528
202,371
329
9,493
21
Total
$
3,680,430
$ 6,503,064
$
15,606
$
488,350
$
2,209,287
December 31, 2023
Term Life Insurance
$
3,366,280
$ 6,531,082
$
14,533
$
503,788
$
—
Investment and Savings Products
63,029
—
—
—
2,395,819
Corporate and Other Distributed
Products
17,925
210,943
343
10,015
23
Total
$
3,447,234
$ 6,742,025
$
14,876
$
513,803
$
2,395,842
Primerica 2024 Annual Report
197
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
See the report of independent registered public accounting firm.
Premium
revenue
Net
investment
income
Benefits and
claims
Amortization
of
deferred
policy
acquisition
costs
Other
operating
expenses
Premiums
written
(In thousands)
Year ended December 31, 2024
Term Life Insurance
$
1,715,934
$
—
$
635,354
$
291,488
$
237,356
$
—
Investment and Savings Products
—
—
—
5,443
749,054
—
Corporate and Other Distributed
Products
13,237
155,501
12,809
1,205
217,187
526
Total
$
1,729,171
$
155,501
$
648,163
$
298,136
$
1,203,597
$
526
Year ended December 31, 2023
Term Life Insurance
$
1,644,756
$
—
$
622,084
$
268,803
$
249,991
$
—
Investment and Savings Products
—
—
—
5,479
616,960
—
Corporate and Other Distributed
Products
15,558
135,837
20,895
1,534
191,023
557
Total
$
1,660,314
$
135,837
$
642,979
$
275,816
$
1,057,974
$
557
Year ended December 31, 2022
Term Life Insurance
$
1,585,646
$
—
$
619,997
$
254,875
$
246,685
$
—
Investment and Savings Products
—
—
—
5,581
611,961
—
Corporate and Other Distributed
Products
14,582
93,065
12,406
1,173
186,117
602
Total
$
1,600,228
$
93,065
$
632,403
$
261,629
$
1,044,763
$
602
See the report of independent registered public accounting firm.
198
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule IV
Reinsurance
PRIMERICA, INC.
Year ended December 31, 2024
Gross amount
Ceded to other
companies
Assumed from
other companies
Net amount
Percentage of
amount
assumed to
net
(Dollars in thousands)
Life insurance in force
$
955,610,523
$
817,825,296
$
—
$
137,785,227
—%
Premiums:
Life insurance
$
3,393,055
$
1,664,433
$
—
$
1,728,622
—%
Accident and health
insurance
549
—
—
549
—%
Total premiums
$
3,393,604
$
1,664,433
$
—
$
1,729,171
—%
Year ended December 31, 2023
Gross amount
Ceded to other
companies
Assumed from
other companies
Net amount
Percentage of
amount
assumed to
net
(Dollars in thousands)
Life insurance in force
$
946,756,416
$
810,145,801
$
—
$
136,610,615
—%
Premiums:
Life insurance
$
3,311,541
$
1,651,811
$
—
$
1,659,730
—%
Accident and health
insurance
584
—
—
584
—%
Total premiums
$
3,312,125
$
1,651,811
$
—
$
1,660,314
—%
Year ended December 31, 2022
Gross amount
Ceded to other
companies
Assumed from
other companies
Net amount
Percentage of
amount
assumed to
net
(Dollars in thousands)
Life insurance in force
$
919,081,738
$
787,907,229
$
-
$
131,174,509
—%
Premiums:
Life insurance
$
3,229,229
$
1,629,634
$
-
$
1,599,595
—%
Accident and health
insurance
891
258
-
633
—%
Total premiums
$
3,230,120
$
1,629,892
$
-
$
1,600,228
—%
See the report of independent registered public accounting firm.
ITEM 16. FORM 10-K SUMMARY.
Not applicable.
Primerica 2024 Annual Report
199
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Primerica, Inc.
By:
/s/ Tracy X. Tan
February 28, 2025
Tracy X. Tan
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ D. Richard Williams
Chairman of the Board
February 28, 2025
D. Richard Williams
/s/ Glenn J. Williams
Chief Executive Officer (Principal Executive Officer) and
Director
February 28, 2025
Glenn J. Williams
/s/ Tracy X. Tan
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
February 28, 2025
Tracy X. Tan
/s/ Nicholas A. Jendusa
Executive Vice President and Chief Accounting Officer
(Principal Accounting Officer)
February 28, 2025
Nicholas A. Jendusa
/s/ John A. Addison, Jr.
Director
February 28, 2025
John A. Addison, Jr.
/s/ Joel M. Babbit
Director
February 28, 2025
Joel M. Babbit
/s/ Amber L. Cottle
Director
February 28, 2025
Amber L. Cottle
/s/ Gary L. Crittenden
Director
February 28, 2025
Gary L. Crittenden
/s/ Cynthia N. Day
Director
February 28, 2025
Cynthia N. Day
/s/ Sanjeev Dheer
Director
February 28, 2025
Sanjeev Dheer
/s/ Beatriz R. Perez
Director
February 28, 2025
Beatriz R. Perez
/s/ Darryl L. Wilson
Director
February 28, 2025
Darryl L. Wilson
/s/ Barbara A. Yastine
Director
February 28, 2025
Barbara A. Yastine
SIGNATURES
Annual Meeting
The annual meeting of
stockholders of Primerica, Inc.
will be held on Wednesday,
May 14, 2025 at 8:30 a.m. in our
Corporate Office.
Corporate Office
Primerica, Inc.
1 Primerica Parkway
Duluth, GA 30099
(770) 381-1000
www.primerica.com
Investor Contact
Nicole Russell
(470) 564-6663
nicole.russell@primerica.com
Media Contact
Susan Chana
(404) 229-8302
susan.chana@primerica.com
Form 10-K
Copies of the Company’s
Annual Report on Form 10-K
for the fiscal year ended
December 31, 2024, including
financial statements, are
available on the Company’s
Investor Relations website at
http://investors.primerica.com
or by written request to Investor
Relations.
Common Stock
Trading Symbol: PRI
New York Stock Exchange
Transfer Agent and Registrar
Computershare Inc.
c/o Shareholder Services
150 Royall Street, Suite 101
Canton, MA 02021
Written Requests by First Class,
Registered, Certified Mail:
Computershare Inc.
c/o Shareholder Services
P.O. Box 43006
Providence, RI 02940-3006
Written Requests by Overnight
Delivery, Courier Mail:
Computershare Inc.
c/o Shareholder Services
150 Royall Street, Suite 101
Canton, MA 02021
Toll Free Number:
1-866-517-2488
(US, Canada, Puerto Rico)
Phone Number:
1-781-575-4305
(non-US)
Stockholder Website:
www.computershare.com/
investor
Board of Directors
John A. Addison, Jr.
CEO, Addison Leadership Group
Joel M. Babbit
Co-Founder and CEO,
Narrative Content Group, LLC
Amber L. Cottle
Vice President of Global
Public Policy, Social Impact,
Compliance and Safety,
Dropbox, Inc.
Gary L. Crittenden
Private Investor
Cynthia N. Day
President and CEO,
Citizens Bancshares Corporation
and Citizens Trust Bank
Sanjeev Dheer
Founder and CEO, CENTRL Inc.
Beatriz R. Perez
EVP and Chief Communications,
Sustainability and Strategic
Partnerships Officer,
The Coca-Cola Company
D. Richard Williams
Chairman of the Board
Glenn J. Williams
CEO, Primerica, Inc.
Darryl L. Wilson
Founder, Chairman and
President, The Wilson Collective
Barbara A. Yastine
Former Chairman, President and
CEO, Ally Bank
Stockholder Information
© 2025 Primerica / 63954 / 3.25 / 4304014