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Primerica (PRI) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 7, 2026

Source: earnings call transcript

Executive summary

Primerica Q1 FY26 — Strong ISP Growth Offsets Term Life Softness

Primerica delivered a balanced Q1 FY26, with robust growth in Investment and Savings Products (ISP) driven by record sales and strong client asset values. This performance largely offset softer results in the Term Life segment, where policy issuance declined. The company is adapting its distribution strategy and product offerings to navigate environmental headwinds and capitalize on the long-term growth potential in the middle-income market.

Highlights

5

  • Adjusted operating revenues increased 9% year-over-year.

  • Adjusted net operating income increased 13% year-over-year.

  • Adjusted operating EPS increased 19% to $5.96.

  • ISP segment earnings grew 24%, with sales increasing 22% to a record $4.3 billion.

  • Client asset values reached $127 billion, up 15% year-over-year, with net inflows of $362 million.

Concerns

4

  • Term Life policies issued declined 14% to 74,054, with estimated annualized issued premiums down 10%.

  • Full year 2026 Term Life policies issued are projected to be flat to down approximately 2%.

  • Net unrealized loss on the investment portfolio increased to $154 million at quarter-end from $113 million at year-end 2025.

  • Lapse rates remain elevated relative to long-term reserve assumptions, reflecting ongoing financial impact on middle-income families.

Guidance & targets

CategoryTargetConfidence
Life licensed sales force growth
flat to up approximately 1%
medium materiality
Medium
Term Life policies issued
flat to down approximately 2%
medium materiality
Medium
ISP sales growth
upper single-digit range
high materiality
High
Term Life adjusted direct premiums growth
approximately 4%
medium materiality
High
Term Life benefits and claims ratio
around 58%
medium materiality
High
Term Life DAC amortization and insurance commissions ratio
around 12% to 13%
medium materiality
High
Term Life operating margin
around 21%
medium materiality
High
Consolidated insurance and other operating expenses growth
7% to 8%
medium materiality
High
Consolidated insurance and other operating expenses growth
around 10% to 12%
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Term Life
Operating revenues increased due to 4% growth in adjusted direct premiums. Pretax operating income benefited from favorable claims experience, including a $7.6 million remeasurement gain. Lapse rates remain elevated, impacting direct premiums but favorably impacting claims costs.
Pretax operating income growth: 6% YoYPretax margin: 22.5%Benefits and claims ratio: 57.3%DAC amortization and insurance commissions ratio: 12.3%Insurance expense ratio: 7.9%Policies issued: 74,054Policies issued growth: -14% YoYEstimated annualized issued premiums growth: -10% YoY
$465 million1%—$155 million (Pretax operating income)
Investment and Savings Products (ISP)
Strong performance driven by robust sales activity and favorable equity market conditions. Sales growth was broad-based across mutual funds, variable annuities, and managed accounts. The segment's scaling contributes significantly to improved return on adjusted equity.
Pretax operating income growth: 24% YoYSales-based revenues growth: 23% YoYAsset-based revenues growth: 23% YoYClient asset values: $127 billionClient asset values growth: 15% YoYNet inflows: $362 millionVariable annuity sales growth: 35% YoYContribution to consolidated revenues: 40%
—21% (Operating revenues)——
Corporate and Other Distributed Products
The pretax adjusted operating loss improved compared to a loss of $8 million in the prior year period, primarily due to higher net investment income from portfolio growth.
———-$6.7 million (Pretax adjusted operating loss)

PRI operating KPIs by quarter

PRI operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Assets under management (AUM)
$127B Client asset values ended the quarter at $127 billion, an increase of 15% compared to March 31, 2025. Source: earnings call transcript
$140B Assets under management reached a record $140 billion at quarter end, representing a 16% increase compared to June 30, 2025. Source: earnings call transcript
+10.2%
Net new assets
$362M We also continue to see positive flows with new net inflows of $362 million in the first quarter of 2026. Source: earnings call transcript
~$397M During the quarter, we generated approximately $397 million of net inflows, reflecting continued demand for our investment solutions and the ongoing strength of our distribution model. Source: earnings call transcript
—
Benefits and claims ratio Term Life
57.3% The benefits and claims ratio was 57.3% compared to 58.2% in the prior year period. Source: earnings call transcript
57.9% The benefits and claims ratio was 57.9% compared to 57.5% in the second quarter of 2025. Source: earnings call transcript
+0.6 pt
DAC amortization and insurance commissions ratio Term Life
12.3% The DAC amortization and insurance commissions ratio at 12.3% along with the insurance expense ratio at 7.9% were consistent with the prior period. Source: earnings call transcript
12.3% The DAC amortization and insurance commissions ratio remained stable at 12.3%, while the insurance expense ratio was 8.4% compared to 7.6% in the prior year period. Source: earnings call transcript
0 pt
Risk-based capital (RBC) ratio Primerica Life
430% Primerica Life's estimated RBC ratio was 430%. Source: earnings call transcript
440% Our holding company ended the quarter with $587 million in cash and available-for-sale securities and Primerica Life's estimated RBC ratio was 440%, reflecting the strength of our capital position. Source: earnings call transcript
+10 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Next-Gen 2.0update

Risks & headwinds

Higher gas prices near-term

not quantified

Mitigation:Monitoring; offset by other gains in household budgets so far.

Elevated uncertainty ongoing

not quantified

Mitigation:Adapting business model, focusing on complementary product lines.

Market volatility ongoing

potential for broader market volatility

Mitigation:Considering potential impact in ISP sales projections; client base increasingly focused on long-term savings and retirement planning needs.

Higher interest rates going forward

not quantified

Mitigation:Recognized as a headwind for the mortgage business.

Elevated lapse rates ongoing

not quantified, but noted as 'elevated'

Mitigation:Analyzing underlying trends and contributing factors; favorable impact on benefits and claims costs.

Net unrealized loss on investment portfolio current

$154 million at March 31, 2026 (vs $113 million at YE25)

Mitigation:Loss is a function of interest rates, not credit concerns; intent and ability to hold investments to maturity.

What to watch in Q2 FY26

Life licensed sales force growth

FY26
Target flat to up approximately 1% by December 31, 2025

Why it matters

Growth in the sales force is a key driver for future policy issuance and investment product sales.

We believe the actions underway will support improved recruiting and licensing and position us to end the year with life license sales force flat to up approximately 1% compared to December 31, 2025.

Find out whether PRI delivers this. Inve re-checks your case every morning.

Q&A highlights

Has the recent rise in gas prices impacted consumer behavior or the willingness of producers to travel and sell policies, or is it a continuation of existing trends?

Management has not observed any noticeable change in direction. The household budget index shows income growth outpacing cost-of-living increases for 9 months, offsetting gas price impacts so far. They will monitor if the situation worsens.

“But so far, we're not seeing any noticeable change in activity or behavior of either our clients or our reps based on that. I'm sure if it continued or got worse for a long period of time, that's something we keep an eye on, but so far, it's been offset by other gains up to this point, and we actually believe things are moving in a positive direction for most middle-income families.”

asked by Francis Matten · answered by Glenn Williams

2 min read 5 chapters

Detailed narrative

Middle-Income Market & Economic Conditions

Primerica's core middle-income market is showing early signs of recovery, with the household budget index indicating 9 consecutive months of income growth outpacing cost-of-living increases. While higher gas prices pose a potential temporary disruption, management remains optimistic about the longer-term trajectory. The company's complementary business model is designed to provide balance, with Term Life and Investment products responding differently to economic shifts, ensuring resilience.

Distribution Strategy & Field Events

In response to higher travel costs, Primerica adjusted its field event schedule, replacing larger regional events with a series of smaller, local events across the U.S. and Canada. This localized approach is expected to increase total attendance and serve as a platform for launching incentives and promotions, which historically drive distribution growth. The company anticipates this strategy will support improved recruiting and licensing, aiming for a flat to 1% increase in the life licensed sales force by year-end 2026.

Investment & Savings Products Momentum

The ISP segment delivered a strong quarter, with sales increasing 22% to a record $4.3 billion, driven by broad-based growth across mutual funds, variable annuities, and managed accounts. Client asset values grew 15% year-over-year to $127 billion, with $362 million in net inflows. Favorable industry trends, such as younger generations saving earlier and older generations focusing on retirement planning, are creating tailwinds. The segment's fee-based model now represents 40% of consolidated revenues and contributes significantly to improved return on adjusted equity.

Term Life Performance & Outlook

Term Life experienced softer results, with 74,054 new policies issued, a 14% decline year-over-year, and estimated annualized issued premiums down 10%. The benefits and claims ratio remained favorable at 57.3%, aided by a $7.6 million remeasurement gain. Lapse rates remain elevated, reflecting ongoing financial pressures on middle-income families. For the full year 2026, Term Life policies issued are projected to be flat to down approximately 2%, with adjusted direct premiums expected to grow around 4%.

Capital Management & Financial Strength

Primerica generated solid cash flows, returning $179 million to stockholders in Q1 through $141 million in share repurchases and $38 million in dividends. The holding company ended the quarter with $556 million in cash and invested assets, and Primerica Life's estimated RBC ratio was 430%. The investment portfolio has an average quality of A, though it recorded a net unrealized loss of $154 million at quarter-end, primarily due to interest rates rather than credit concerns.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.