Skip to content
    PRI
    Earnings call· Jun 2026(Q2 FY26)

    Primerica Q2 FY26 earnings call PRI

    Aug 6, 2026 Source

    Executive summary

    Primerica Q2 FY26 — Strong Investment Growth and Capital Returns

    Primerica delivered strong second-quarter results, primarily driven by robust performance in its Investments segment, which saw significant revenue and pretax income growth. Despite ongoing challenges in the Term Life business due to economic uncertainty impacting middle-income families, the company maintained stable earnings and predictable cash flow. Management is focused on sales force growth initiatives and leveraging the upcoming 2027 convention to drive future momentum.

    Highlights

    7

    • Adjusted operating revenues increased by 8% year-over-year.

    • Adjusted net operating income increased by 11% year-over-year.

    • Adjusted operating EPS increased 17% to $6.41, including a $0.15 tax benefit.

    • Investments business revenues grew 21% and pretax income grew 31%.

    • Assets under management reached a record $140 billion, up 16% year-over-year, with $397 million of net inflows.

    • Returned $173 million to stockholders in Q2 FY26 ($135M share repurchases, $37M dividends).

    • Return on adjusted equity increased 90 basis points year-over-year to 33.1%.

    Concerns

    6

    • Estimated annualized issued premiums for life insurance declined 9% year-over-year.

    • Issued life policies declined 12% year-over-year.

    • Productivity was 0.18 policies per life license rep, remaining below historical levels.

    • Full year sales force size projected to be flat to down 2% compared to 2025.

    • Full year 2026 issued policies expected to decline by mid-single digits.

    • Lapse rates were elevated in the Term Life segment.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full year sales force size growth
    Flat to down 2%
    medium materiality
    Medium
    Full year 2026 issued policies growth
    Decline by mid-single digits
    medium materiality
    Medium
    Full year ISP sales growth
    Increase 10% to 15%
    high materiality
    High
    Full year adjusted direct premiums growth
    Around 3.5%
    medium materiality
    High
    Full year benefits and claims ratio
    Around 58%
    medium materiality
    High
    Full year DAC amortization and commissions ratio
    Around 12% to 13%
    medium materiality
    High
    Full year Term Life operating margin
    Approximately 21%
    medium materiality
    High
    Q3 FY26 expense growth
    Around 10% to 12%
    medium materiality
    High
    Q4 FY26 expense growth
    6% to 7%
    medium materiality
    High
    Full year 2026 expense growth
    7% to 8%
    medium materiality
    High
    Q3 FY26 effective tax rate
    Around 23%
    low materiality
    High
    Q4 FY26 effective tax rate
    Around 22%
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Term Life
    Operating revenues were largely unchanged year-over-year, while adjusted direct premiums grew 3.4%. Mortality experience remained favorable, but lapse rates were elevated. The operating margin was in line with annual guidance.
    Adjusted direct premiums growth: 3.4% YoYBenefits and claims ratio: 57.9%DAC amortization and insurance commissions ratio: 12.3%Insurance expense ratio: 8.4%
    		$444 millionlargely unchanged—21.3%
    ISP (Investments and Savings Products)
    The segment continued to deliver strong results, with revenues increasing 21% and pretax operating income increasing 31% year-over-year. It now accounts for 42% of consolidated revenues. Growth was driven by strong client demand, broader product offerings, and favorable equity markets.
    Consolidated revenues contribution: 42% (vs 37% prior year)Sale-based revenues growth: 17% YoYAsset-based revenues growth: 28% YoYAverage client asset values increase: 19%
    		—21%—31%
    Corporate and Other Distributed Products
    Recorded pretax adjusted operating income of $3.8 million, up from $2.7 million in the prior year, primarily due to higher net investment income.
    		———$3.8 million

    Operational metrics

    21
    Adjusted operating revenues growth
    8%YoY
    Q2 FY26

    Driven primarily by investments business.

    Adjusted net operating income growth
    11%YoY
    Q2 FY26

    Driven primarily by investments business.

    Adjusted operating EPS
    $6.41up 17% YoY
    Q2 FY26

    Included income tax benefits from a tax equity investment that reduced income tax expense by $4.6 million.

    Recruiting growth
    2%YoY
    Q2 FY26

    Benefited in part from a reduced licensing fee incentive during April.

    Estimated annualized issued premiums growth
    -9%YoY
    Q2 FY26

    Reflects continuation of trends pressuring middle-income families.

    Issued policies growth
    -12%YoY
    Q2 FY26

    Reflects continuation of trends pressuring middle-income families.

    Policies per life license rep (productivity)
    0.18improved from Q1 FY26
    Q2 FY26

    Remained below historical levels.

    Total securities sales growth
    23%YoY
    Q2 FY26

    Reflecting broad-based demand.

    Managed account sales growth
    43%YoY
    Q2 FY26

    Driven by continued interest in advisory solutions.

    Mutual fund sales growth
    20%YoY
    Q2 FY26

    Supported by strong activity in US and Canada.

    Variable annuity sales growth
    17%YoY
    Q2 FY26

    Reflecting clients' focus on retirement preparedness and guaranteed income solutions.

    Assets under management (AUM)
    $140 billionup 16% YoY
    Q2 FY26

    Supported by favorable equity market performance and positive client inflows.

    Net inflows
    $397 million
    Q2 FY26

    Reflecting continued demand for investment solutions.

    Mortgage loan volume growth
    13%YoY
    Q2 FY26

    Supported by more than 3,600 licensed mortgage representatives.

    Referral activity growth
    11%YoY
    Q2 FY26

    Market conditions remain favorable.

    Remeasurement gain
    $4.9 millionvs $5.7 million in Q2 FY25
    Q2 FY26

    Included in benefits and claims.

    Insurance expense ratio
    8.4%vs 7.6% in Q2 FY25
    Q2 FY26

    Consolidated insurance and other operating expenses were $166 million, up 8% YoY.

    Consolidated operating expenses growth
    8%YoY
    Q2 FY26

    Primarily driven by higher variable growth-related costs, compensation, and technology investments.

    Effective tax rate
    21.7%down from prior year
    Q2 FY26

    Primarily reflects an income tax credit transaction.

    Net unrealized loss (investment portfolio)
    $140 millionvs $154 million at end of March
    Q2 FY26

    Reflects changes in interest rates rather than underlying credit concerns.

    Holding company cash and available-for-sale securities
    $587 million
    Q2 FY26

    Reflects the strength of the capital position.

    Industry KPIs

    6
    MetricValueDetails
    Capital returns$173 millionUSD
    ROE operating ROE33.1%%
    Net investment incomehigher
    Retention persistencyelevated
    Net premiums written earned3.4%%
    Statutory regulatory capital440%%

    Product announcements

    1
    ProductTypeDetails
    New advisory productslaunch

    Risks & headwinds

    4
    Economic uncertainty impacting middle-income familiesQ2 FY26, ongoing

    Estimated annualized issued premiums declined 9% YoY; issued policies declined 12% YoY; productivity 0.18 policies per life license rep (below historical levels).

    Mitigation: Sales force initiatives to enhance productivity, focus on educating families about financial protection, adaptation to the current environment.

    Elevated lapse rates in Term Life segmentQ2 FY26

    lapse rates were elevated

    Mitigation: Not explicitly stated, but implied by overall business stability and reinsurance.

    Slower-than-expected impact of sales force growth initiativesFY26

    Full year sales force size projected to be flat to down 2% compared to 2025.

    Mitigation: Continued focus on growth initiatives, incentives, and leveraging the upcoming convention.

    Timing of convention impact on sales and recruitingLeading up to 2027 convention

    The extended 3-year gap is part of what's driving the current softness in life sales and rep count (analyst's question, management acknowledges timing impact but attributes more to fundamentals).

    Mitigation: Ramping up recognition and special incentives leading up to the convention.

    What to watch in Q3 FY26

    5

    Full year sales force size growth

    Next quarter (Q3 FY26)
    CurrentProjected flat to down 2% for FY26
    TargetImprovement towards flat or positive growth

    Why it matters

    Sales force growth is a leading indicator of distribution growth and future production.

    Based on current trends, we expect more favorable comparative distribution results in the second half of 2026 with full year sales force size projected to be flat to down 2% compared to 2025.

    Q&A highlights

    6

    Asked for color on the mid-single-digit decline guidance for full-year issued policies, implying H2 growth, and what drives this confidence (easier comps vs. other factors). Also asked about drivers for sustained positive inflection.

    Glenn Williams confirmed the math and attributed the optimism to easier comparisons, firming up of sales force growth, and adaptation to the current economic environment by both the company and middle-income families. He noted early signs of positivity from front-end business and extreme focus on life insurance growth.

    “Again, it is a piece of the easier comparisons, but it's also some firming up of the front end of our business, where we're seeing some early signs of positivity as well as results from the extreme focus we have on growing our life insurance business as well.”

    asked by Daniel Bergman · answered by Glenn Williams

    2 min read6 chapters

    Detailed Narrative

    01

    Investment Business Drives Growth

    Primerica's Investments segment was the primary driver of earnings growth in Q2 FY26, with revenues increasing 21% and pretax income up 31% year-over-year. This strong performance was fueled by a 23% rise in total securities sales, including a 43% increase in managed account sales and a 20% increase in mutual fund sales, reflecting robust client demand and favorable market conditions. The segment now accounts for approximately 42% of consolidated revenues, up from 37% in the prior year.

    02

    Term Life Stability Amidst Headwinds

    The Term Life segment provided consistent earnings, with operating revenues largely unchanged and adjusted direct premiums up 3.4%. However, issued policies declined 12% and annualized issued premiums fell 9% year-over-year, reflecting continued pressure on middle-income families. The operating margin remained stable at 21.3%, in line with annual guidance, supported by favorable mortality experience and reinsurance.

    03

    Sales Force Dynamics and Convention Impact

    Recruiting increased 2% year-over-year in Q2 FY26, benefiting from a reduced licensing fee incentive. While new life licenses and total licensed representatives remained below prior year levels due to cumulative lower recruiting, management anticipates improved comparative distribution results in H2 2026. The upcoming 2027 convention, marking the company's 50th anniversary, is expected to be a catalyst for momentum, with special incentives launched to drive growth.

    04

    Capital Strength and Shareholder Returns

    The company demonstrated strong capital generation, returning $173 million to stockholders in Q2 FY26 through $135 million in share repurchases and $37 million in dividends, bringing the year-to-date total to $352 million. The holding company ended the quarter with $587 million in cash and available-for-sale securities, and Primerica Life's estimated RBC ratio stood at a robust 440%.

    05

    Strategic Investments and Product Enhancements

    Primerica continues to invest in technology and sales force productivity initiatives, including enhanced training programs and new product offerings in the investment business. The company rolled out 56-57 new advisory products in recent years, with an additional three launched in Q2 FY26, contributing to stronger asset-based revenues and a more predictable revenue stream. These investments are aimed at long-term organic growth and improved client servicing.

    06

    Mortgage Business Performance

    The mortgage business continued its strong performance, with U.S. mortgage loan volume increasing 13% year-over-year, supported by over 3,600 licensed mortgage representatives. Canadian referral activity also saw an 11% increase, highlighting the business's role in deepening client relationships and addressing middle-income families' financial needs.

    AI-generated summary of the company’s earnings call. Not investment advice.