PRIMERICA, INC. – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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 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 months ended March 31, 2013. As a result, the following discussion should be read in conjunction with MD&A and the consolidated and combined financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2012, ("2012 Annual Report"). 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 under the heading "Risk Factors" in the 2012 Annual Report. Actual results may differ materially from those contained in any forward-looking statements. This MD&A is divided into the following sections: • Business Overview   

• Critical Accounting Estimates

• Factors Affecting Our Results

  • Results of Operations   • Financial Condition  

• Liquidity and Capital Resources

    Business Overview We are a leading distributor of financial products to middle income households in the United States and Canada. We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We have two primary operating segments, Term Life Insurance and Investment and Savings Products, and a third segment, Corporate and Other Distributed Products. Term Life Insurance. We distribute the term life insurance products that we originate through our three issuing life insurance company subsidiaries: Primerica Life Insurance Company ("Primerica Life"); National Benefit Life                                          22

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Insurance Company ("NBLIC"); and Primerica Life Insurance Company of Canada ("Primerica Life Canada"). Our in force term insurance policies have level premiums for the stated term period. As such, the policyholder pays the same amount each year. Initial policy term periods are between 10 and 35 years. While premiums are guaranteed to remain level during the initial term period (up to a maximum of 20 years in the United States), our claim obligations generally increase as our policyholders age. In addition, we incur significant upfront costs in acquiring new insurance business. Our deferral and amortization of policy acquisition costs and reserving methodology are designed to match the recognition of premium revenues with the timing of policy lapses and the payment of expected claims obligations. Our Term Life Insurance segment results are primarily driven by sales and policies in force, accuracy of our pricing assumptions, terms and use of reinsurance, investment income, and expenses. On March 31, 2010, we entered into certain reinsurance transactions with affiliates of Citigroup Inc. ("Citigroup") (collectively, the "Citigroup reinsurers") and ceded between 80% and 90% of the risks and rewards of our term life insurance policies that were in force at year-end 2009 (the "Citigroup reinsurance transactions"). We continue to administer all policies subject to these coinsurance agreements. Subsequent to the Citigroup reinsurance transactions, the revenues and earnings of our Term Life Insurance segment initially declined in proportion to the amount of revenues and earnings historically associated with the book of term life insurance policies that we ceded to the Citigroup reinsurers. As we have added new in force business, our revenues and earnings have grown from these initial levels. With each successive period, we expect revenue and earnings growth to decelerate as the size of our in force book grows and incremental sales have a reduced marginal effect on the size of the then-existing in force book. Investment and Savings Products. We distribute mutual funds, managed accounts, annuities and segregated funds. In the United States, we distribute mutual fund and managed accounts products and variable and fixed annuity products of several third-party companies. In Canada, we offer our own Primerica-branded mutual funds, as well as mutual funds of other companies, and segregated funds, which are underwritten by Primerica Life Canada. Results in our Investment and Savings Products segment are driven by sales of mutual funds and annuities, the value of assets in client accounts for which we earn ongoing service, distribution and advisory fees and the number of fee generating accounts for which we provide administration functions or retirement plan custodial services. While our investment and savings products all have similar long-term earnings characteristics, our results in a given fiscal period are affected by changes in the overall mix of products within these broad categories. Corporate and Other Distributed Products. Our Corporate and Other Distributed Products segment consists primarily of revenues and expenses related to other distributed products, including various insurance products, prepaid legal services as well as credit information and debt referral services. These products are distributed pursuant to distribution arrangements with third parties, except for certain life and disability insurance products underwritten by NBLIC, our New York life insurance subsidiary, that are not distributed through our independent agent sales force. In addition, our Corporate and Other Distributed Products segment includes corporate income (including net investment income) and expenses not allocated to other segments, interest expense on our notes payable and realized gains and losses on our invested asset portfolio.  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 ("FASB"). 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 and combined financial statements included in our 2012 Annual Report. The most significant items on the balance sheet are based on fair value determinations, accounting estimates and actuarial determinations which are susceptible to changes in future periods and which 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 the valuation of investments, deferred policy acquisition costs ("DAC"), future policy benefit reserves and corresponding amounts due from reinsurers, litigation, and income taxes. 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.                                          23

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  Accounting Policy Change. During the three months ended March 31, 2013, there have been no changes in the accounting methodology for items that we have identified as critical accounting estimates. For additional information regarding critical accounting estimates, see the Critical Accounting Estimates section of MD&A included in our 2012 Annual Report.  Factors Affecting Our Results Economic Environment. 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 a Primerica sales representative offers, which can drive or dampen recruiting. Consumer spending and borrowing levels remain under pressure, as consumers take a more conservative financial posture, including reevaluating their savings and debt management plans. However, historically low interest rates and improved equity market returns have led to increased consumer demand for certain types of savings and investment products as compared to deposit-based savings solutions. The effects of these trends and conditions are discussed in the Results of Operations section below. Independent Sales Force. Our ability to increase the size of our sales force is largely based on the success of our recruiting efforts and our ability to train and motivate recruits to obtain licenses to sell life insurance. We believe that recruitment and licensing levels are important advance indicators of sales force trends, and growth in recruiting and licensing is usually indicative of future growth in the overall size of the sales force. Recruiting results do not always result in commensurate changes in the size of our licensed sales force because new recruits may obtain the requisite licenses at rates above or below historical levels. Details on new recruits and life-licensed sales representative activity were as follows:                                              Three months ended March 31,                                                     2013                 2012 New recruits                                   46,348                   58,551 New life-licensed sales representatives         7,165                    

7,650

   Recruiting of new representatives decreased for the three months ended March 31, 2013 compared with the same period a year ago in part due to not having an incentive competition in the first half of 2013 leading up to our biennial convention. The size of our life-licensed insurance sales force was as follows:                                               March 31, 2013December 31, 2012 Life-licensed insurance sales representatives         90,917               

92,373

   The size of our life-licensed insurance sales force at March 31, 2013 decreased since December 31, 2012 primarily as a result of lower seasonal recruiting levels in the fourth quarter that caused less life-licensed insurance sales representatives to enter the sales force during the three months ended March 31, 2013. In addition, licensing extensions mandated by New York and New Jersey in response to Hurricane Sandy in the fourth quarter contributed to the decline in the sales force. Term Life Insurance Segment. Our Term Life Insurance segment results are primarily driven by sales volumes, the accuracy of our pricing assumptions, terms and use of reinsurance, investment income and expenses. Sales and policies in force. Sales of new 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 and eligible acquisition expenses are deferred and amortized ratably with the level premiums of the underlying policies. 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 will have a more immediate effect on our cash flows.                                          24

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  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 our individual sales representatives remains within a relatively narrow range, and, consequently, our sales volume over the longer term generally correlates to the size of our sales force. The average number of life-licensed 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 sales representative, were as follows:                                                         Three months ended 

March 31,

                                                             2013            

2012

Average number of life-licensed sales representatives 91,277

90,027

 Number of new policies issued                                 50,356        

56,145

 Average monthly rate of new policies issued per life-licensed sales representative                              .18x        

.21x

   The average monthly rate of new policies issued per life-licensed sales representative declined during the three months ended March 31, 2013 as the prior year rate includes the effect of sales opportunities associated with the higher recruiting levels during the prior year period. Pricing assumptions. Our pricing methodology is intended to provide us with appropriate profit margins for the risks we assume. We determine pricing classifications based on the coverage sought, such as the size and term of the policy, and certain policyholder attributes, such as age and health. In addition, we utilize unisex rates for our term life insurance policies. The pricing assumptions that underlie our rates are based upon our best estimates of mortality, persistency and investment yields at the time of issuance, sales force commission rates, issue and underwriting expenses, operating expenses and the characteristics of the insureds, including sex, age, underwriting class, product and amount of coverage. Our results will be affected to the extent there is a variance between our pricing assumptions and actual experience. •      Persistency. Persistency is a measure of how long our insurance policies 

stay in force. As a general matter, persistency that is lower than our

pricing assumptions adversely affects our results over the long term

because we lose the recurring revenue stream associated with the policies

that lapse. Determining the near-term effects of changes in persistency is

more complicated. When persistency is lower than our pricing assumptions,

we must accelerate the amortization of DAC. The resultant increase in

amortization expense is offset by a corresponding release of reserves

associated with lapsed policies, which causes a reduction in benefits and

claims expense. The reserves associated with any given policy will change

over the term of such policy. As a general matter, reserves are lowest at

the inception of a policy term and rise steadily to a peak before

declining to zero at the expiration of the policy term. Accordingly,

depending on when the lapse occurs in relation to the overall policy term,

the reduction in benefits and claims expense may be greater or less than

the increase in amortization expense and, consequently, the effects on

earnings for a given period could be positive or negative. Persistency

       levels will impact results to the extent actual experience deviates from        the persistency assumptions used to price our products.  

• Mortality. Our profitability is affected to the extent actual mortality

       rates differ from those used in our pricing assumptions. We mitigate a        significant portion of our mortality exposure through reinsurance.  

• Investment Yields. We use investment yield rates based on yields available

at the time a policy is issued. For policies issued in 2010 and after, we

       have been using an increasing interest rate assumption to reflect the        historically low interest rate environment. Both DAC and the reserve        liability increase with the assumed investment yield rate. Since DAC is

higher than the reserve liability in the early years of a policy, a lower

assumed investment yield generally will result in lower profits. In the

later years, when the reserve liability is higher than DAC, a lower

assumed investment yield generally will result in higher profits. These

assumed investment yields, which like other pricing assumptions are locked

in at issue, impact the timing but not the aggregate amount of DAC and

reserve changes. Actual investment yields will impact net investment

income allocated to the Term Life Insurance segment, but will not impact

DAC or the reserve liability.

   Reinsurance. We use reinsurance extensively, which has a significant effect on our results of operations. Since the mid-1990s, we have reinsured between 60% and 90% of the mortality risk on our U.S. term life insurance policies on a quota share yearly renewable term ("YRT") basis. In Canada, we previously utilized reinsurance arrangements similar to the U.S. in certain years and reinsured only face amounts above $500,000 in other years. However, in the first quarter of 2012, we entered into a YRT reinsurance arrangement in Canada similar to our U.S. program that reinsures 80% of the face amount for every policy sold. YRT reinsurance permits us to set future mortality at contractual rates by policy class. To the extent actual mortality experience is more or less favorable than the                                          25

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  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. The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our statement 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 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. Coinsurance

       also reduces the change in future policy benefit reserves in direct        proportion to the percentage ceded while YRT reinsurance does not        significantly impact benefit reserves.   •      Amortization of DAC. Amortization of DAC is reduced on a pro-rata basis        for the coinsured business, including the business reinsured with        Citigroup. There is no impact on amortization of DAC associated with our        YRT contracts.  

• Insurance expenses. Insurance expenses are reduced by the allowances

       received from coinsurance, including the business reinsured with        Citigroup. 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 presently intend to continue ceding approximately 90% of our U.S. mortality risk on new business and approximately 80% of our Canadian mortality risk on new business. Net investment income. Term Life Insurance segment net investment income is composed of two elements: allocated net investment income and the market return associated with the deposit asset underlying the 10% reinsurance agreement with the Citigroup reinsurers. Net investment income is allocated to the Term Life segment based on the book value of the invested assets necessary to meet statutory reserve requirements and our targeted capital objectives. Net investment income is also impacted by the performance of our invested asset portfolio and the market return on the deposit asset which can be affected by interest rates, credit spreads and the mix of invested assets. Expenses. Results are also affected by variances in client acquisition, maintenance and administration expense levels. Investment and Savings Products Segment. Our Investment and Savings Products segment results are primarily driven by sales, the value of assets in client accounts for which we earn ongoing management, service and distribution fees and the number of fee generating accounts we administer. Sales. We earn commissions and fees, such as dealer re-allowances, and marketing and support fees, based on sales of mutual fund and managed account products and annuities. Sales of investment and savings products are influenced by the overall demand for investment products in the United States and Canada, as well as by the size and productivity of our sales force. We generally experience seasonality in our 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 our 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 fees on assets in the managed accounts program. In Canada, we earn management fees on certain mutual fund assets and on the segregated funds for which we serve as investment manager. Asset values are influenced by new product sales, ongoing contributions to existing accounts,                                          26

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  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. Accounts. We earn recordkeeping fees for administrative functions we perform on behalf of several of our retail and managed mutual fund providers and custodial fees for services as a non-bank custodian for certain of our clients' retirement plan accounts. Sales mix. While our investment and savings products all have similar long-term earnings characteristics, our results in a given fiscal period will be affected by changes in the overall mix of products within these broad categories. Examples of changes in the sales mix that influence our results include the following: •      sales of a higher proportion of mutual fund products of the several mutual 

fund families for which we act as recordkeeper will generally increase our

earnings because we are entitled to recordkeeping fees on these accounts;

• 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 upfront revenues or, in the case of        managed accounts and segregated funds, no upfront revenues;   •      sales and administration of a higher proportion of mutual funds that

enable us to earn marketing and support fees will increase our revenues

and profitability;

• sales of a higher proportion of retirement products of several mutual fund

       families will tend to result in higher revenue generation due to our        ability to earn custodial fees on these accounts; and  

• sales of a higher proportion of managed accounts and segregated funds

products will generally extend the time over which revenues can be earned

because we are entitled to higher revenues based on assets under

management for these accounts in lieu of upfront revenues.

   Corporate and Other Distributed Products Segment. We earn revenues and pay commissions and referral fees for various other insurance products, prepaid legal services and other financial products, all of which are originated by third parties. NBLIC also underwrites a mail-order student life policy and a short-term disability benefit policy, neither of which is distributed by our sales force, and has in force policies from several discontinued lines of insurance. The Corporate and Other Distributed Products segment is affected by corporate income and expenses not allocated to our other segments, net investment income (other than net investment income allocated to our Term Life Insurance segment), general and administrative expenses (other than expenses that are allocated to our Term Life Insurance or Investment and Savings Products segments), equity awards granted to management and our sales force leaders at the time of our initial public offering, interest expense on notes payable and realized gains and losses on our invested asset portfolio. Capital Structure. Our financial results have also been affected by changes in our capital structure, including the issuance of $375.0 million in principal amount of senior unsecured notes issued in 2012 (the "Senior Notes"), repayment of a $300.0 million note payable issued to Citigroup, share repurchases, and other financing arrangements. For additional information regarding factors affecting our results, see Factors Affecting Our Results in our 2012 Annual Report.                                           27

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  Results of Operations Primerica, Inc. and Subsidiaries Results. Our results of operations were as follows:                                          Three months ended March 31,                 Change                                            2013                 2012               $             %                                                           (Dollars in thousands) Revenues: Direct premiums                      $      570,899$      561,037$     9,862          2  % Ceded premiums                             (410,604 )           (418,163 )        (7,559 )       (2 )% Net premiums                                160,295              142,874          17,421         12  % Commissions and fees                        111,988              103,905           8,083          8  % Net investment income                        23,216               26,097          (2,881 )      (11 )% Realized investment gains (losses), including other-than-temporary impairment losses                             2,286                2,131             155          7  % Other, net                                   10,660               11,594            (934 )       (8 )% Total revenues                              308,445              286,601          21,844          8  % Benefits and expenses: Benefits and claims                          74,246               67,933           6,313          9  % Amortization of DAC                          31,252               26,531           4,721         18  % Sales commissions                            55,048               49,717           5,331         11  % Insurance expenses                           27,052               22,444           4,608         21  % Insurance commissions                         6,066                8,496          (2,430 )      (29 )% Interest expense                              8,795                6,910           1,885         27  % Other operating expenses                     45,754               41,105           4,649         11  % Total benefits and expenses                 248,213              223,136          25,077         11  % Income before income taxes                   60,232               63,465          (3,233 )       (5 )% Income taxes                                 21,387               21,709            (322 )       (1 )% Net income                           $       38,845$       41,756$    (2,911 )       (7 )%   Results for the Three Months Ended March 31, 2013 and 2012 Total revenues. The increase in revenues for the three months ended March 31, 2013 compared to the three months ended March 31, 2012 was primarily attributable to performance in our Term Life Insurance and Investment and Savings Product operating segments. The increase in the Term Life Insurance segment largely reflects incremental premiums on new term life insurance policies issued subsequent to the Citigroup reinsurance transactions ("New Term"). We also experienced an increase in commissions and fees revenue largely driven by higher sales and higher client asset values in our Investment and Savings Product segment. The reduced average size of our invested asset portfolio coupled with lower yield on our invested assets contributed to the decrease in net investment income for the first quarter of 2013 compared to the prior year period. Total benefits and expenses. Total benefits and expenses increased year-over-year primarily as a result of the growth in revenue-related costs, which include benefits and claims, sales commissions, amortization of DAC, and insurance expenses. The rise in other operating expenses was mainly attributable to legal fees and other miscellaneous costs. Additionally, higher interest expense was driven mostly by the redundant reserve financing executed in March 2012 and, to a lesser extent, the refinancing of our note payable in July 2012. These higher expenses were partially offset by declines in insurance commissions reflecting a higher portion of commissions being deferred for our agent incentive programs. Income taxes. Our effective income tax rate of 35.5% during the three months ended March 31, 2013 was higher than our effective income tax rate of 34.2% during the three months ended March 31, 2012 primarily driven by tax benefits recorded in 2012 related to Canadian tax reserves, which did not reoccur during the current quarter. For additional information, see the Segment Results discussions below.                                          28

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  Segment Results Term Life Insurance Segment Results. Our results for the Term Life Insurance segment were as follows:                                     Three months ended March 31,              Change                                       2013                 2012             $         %                                                   (Dollars in thousands) Revenues: Direct premiums                 $      552,034$      542,157$ 9,877       2  % Ceded premiums                        (407,854 )           (414,559 )    (6,705 )    (2 )% Net premiums                           144,180              127,598      16,582      13  % Allocated net investment income         17,233               16,660         573       3  % Other, net                               6,984                7,546        (562 )    (7 )% Total revenues                         168,397              151,804      16,593      11  % Benefits and expenses: Benefits and claims                     65,547               57,509       8,038      14  % Amortization of DAC                     27,865               23,933       3,932      16  % Insurance commissions                    1,199                3,577      (2,378 )   (66 )% Insurance expenses                      23,755               19,717       4,038      20  % Interest expense                         4,252                2,785       1,467      53  % Total benefits and expenses            122,618              107,521      15,097      14  % Income before income taxes      $       45,779$       44,283$ 1,496       3  %   Results for the Three Months Ended March 31, 2013 and 2012 Net premiums. The increase in net premiums is primarily due to the continued addition of New Term in force business, partially offset by the run off of business subject to the Citigroup reinsurance transactions. While ceded premiums supporting YRT reinsurance programs for New Term are less than 20% of direct premiums, ceded premiums for the block of business coinsured by Citigroup are more than 80% of direct premiums. As a result, as we continue to build New Term and the block coinsured by Citigroup continues to run off, net premiums will continue to grow faster than direct premiums, albeit at a declining rate of growth. Benefits and claims. Benefits and claims increased primarily due to the growth in net premiums. Amortization of DAC. The increase in amortization of DAC was primarily attributable to growth in New Term business, which was slightly offset by modest improvements in persistency for this block of business. Also, during the first quarter of 2012, amortization of DAC included a reduction of approximately $2.0 million for commission payments previously incurred but not billed on in force business ceded to the Citigroup reinsurers, which did not reoccur in the current quarter. Insurance commissions. The decrease in insurance commissions was driven largely by a higher rate of commission deferrals consistent with agent incentive program changes. Insurance expenses. The increase in insurance expenses is mainly due to higher premium-related taxes, licenses and fees, as well as the run-off of expense allowances received under the Citigroup reinsurance agreements. Also contributing to the increase was higher employee compensation costs, higher costs in support of our independent sales force, and increased spending for information technology contracts. Interest expense. Interest expense increased primarily due to the redundant reserve financing executed in March 2012. Product Sales and Face Amount In Force. We issued 50,356 new policies during the three months ended March 31, 2013, compared to 56,145 new policies for the same period in 2012. Lower sales of our term life insurance products were primarily related to strong recruiting in the comparable prior year period.                                          29

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  The changes in the face amount of our in force book of term life insurance policies were as follows:                                               Three months ended March 31,                 Change                                                 2013                 2012               $             %                                                                 (Dollars in millions) Face amount in force, beginning of period $      670,412$      664,955$     5,457          1  % Issued face amount                                15,709               16,983          (1,274 )       (8 )% Terminations                                     (14,917 )            (16,307 )        (1,390 )       (9 )% Foreign currency                                    (790 )             (1,208 )           418        (35 )%

Face amount in force, end of period $ 670,414$ 664,423$ 5,991 1 %

   For the three months ended March 31, 2013, issued face amount declined consistent with the decline in the number of policies issued. Terminations decreased in the first quarter of 2013 compared to the prior year period as a result of modestly better persistency. Investment and Savings Product Segment Results. Investment and Savings Products segment results were as follows:                                  Three months ended March 31,                Change                                        2013                  2012          $          %                                                (Dollars in thousands) Revenues: Commissions and fees: Sales-based revenues       $        49,433$ 44,467$  4,966      11  % Asset-based revenues                47,428                   43,722       3,706       8  % Account-based revenues               9,454                    9,373          81       1  % Other, net                           2,407                    2,572        (165 )    (6 )% Total revenues                     108,722                  100,134       8,588       9  % Expenses: Amortization of DAC                  2,892                    3,223        (331 )   (10 )% Insurance commissions                2,275                    2,149         126       6  % Sales commissions: Sales-based                         35,403                   31,600       3,803      12  % Asset-based                         16,637                   14,745       1,892      13  % Other operating expenses            25,144                   19,547       5,597      29  % Total expenses                      82,351                   71,264      11,087      16  % Income before income taxes $        26,371$ 28,870$ (2,499 )    (9 )%                                            30

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  Supplemental information on the underlying metrics that drove results follows.                                                 Three months ended March 31,                        Change                                                     2013                       2012              $             %                                                      (Dollars in millions and accounts in thousands) Product sales: Retail mutual funds                  $           712                       $       612$       100         16  % Annuities and other                              480                               429              51         12  % Total sales-based revenue generating product sales                                  1,192                             1,041             151         15  % Managed accounts                                  57                                23              34          * Segregated funds and other                       116                               124              (8 )       (6 )% Total product sales                  $         1,365                       $     1,188$       177         15  % Average client asset values: Retail mutual funds                  $        25,170$    23,694$     1,476          6  % Annuities and other                           10,310                             8,717           1,593         18  % Managed accounts                                 652                               212             440          * Segregated funds                               2,624                             2,499             125          5  % Total average client asset values    $        38,756$    35,122$     3,634         10  % Average number of fee-generating accounts: Recordkeeping accounts                         2,536                             2,584             (48 )       (2 )% Custodial accounts                             1,940                             1,945              (5 )        *   _____________________

* Less than 1% or not meaningful

   Results for the Three Months Ended March 31, 2013 and 2012 Total revenues. The increase in commissions and fees was driven mostly by higher mutual fund and fixed-indexed annuities sales fueled by customer demand for these products. Sales-based revenue generating product sales growth outpaced the related sales-based revenues due to a large group retirement account trade that carried a reduced commission rate. The rise in average client asset values, which was indicative of favorable market performance during the current quarter, also contributed to the increase in commissions and fees in the form of higher asset-based revenues. Sales commissions. Higher sales-based commissions in the three months ended March 31, 2013 were primarily the result of the increase in sales-based revenues discussed above. The increase in asset-based commissions during the three months ended March 31, 2013 was consistent with the increase in asset-based revenues, when excluding segregated funds. The relevant costs associated with asset-based revenue from segregated funds are recorded within insurance commissions and amortization of DAC. Other operating expenses. Other operating expenses increased primarily due to increased legal fees and expenses, as well as higher growth-related costs and employee compensation costs. The increase in legal fees and expenses was primarily due to approximately $3.9 million of expenses recorded in the first quarter of 2013 attributable to defending claims alleged by certain participants in the Florida Retirement System's defined benefit plan. See Note 10 (Commitments and Contingent Liabilities) to our condensed consolidated financial statements for more information.                                          31

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  Asset Values in Client Accounts Changes in asset values in client accounts were as follows:                                          Three months ended March 31,                Change                                             2013               2012               $             %                                                            (Dollars in millions) Asset values, beginning of period     $      37,386$      33,664$     3,722         11  % Inflows                                       1,365               1,188             177         15  % Redemptions                                  (1,305 )            (1,233 )            72          6  % Change in market value, net and other         2,407               2,660            (253 )      (10 )% Asset values, end of period           $      39,853$      36,279$     3,574         10  %   The increase in asset values for three months ended March 31, 2013 was primarily attributable to favorable market performance. The growth in inflows was consistent with the increase in sales volume for the quarter-to-date period. The rate of redemptions relative to average client asset values for the three months ended March 31, 2013 remained consistent with the prior year period. Corporate and Other Distributed Products Segment Results. Corporate and Other Distributed Products segment results were as follows:                                          Three months ended March 31,                Change                                            2013                2012               $             %                                                           (Dollars in thousands) Revenues: Direct premiums                      $       18,865$      18,880$       (15 )        * Ceded premiums                               (2,750 )            (3,604 )          (854 )      (24 )% Net premiums                                 16,115              15,276             839          5  % Commissions and fees                          5,673               6,343            (670 )      (11 )% Allocated net investment income               5,983               9,437          (3,454 )      (37 )% Realized investment gains (losses), including other-than-temporary impairment losses                             2,286               2,131             155          7  % Other, net                                    1,269               1,476            (207 )      (14 )% Total revenues                               31,326              34,663          (3,337 )      (10 )% Benefits and expenses: Benefits and claims                           8,699              10,424          (1,725 )      (17 )% Amortization of DAC                             495                (625 )         1,120          * Insurance commissions                         2,592               2,770            (178 )       (6 )% Insurance expenses                            3,297               2,727             570         21  % Sales commissions                             3,008               3,372            (364 )      (11 )% Interest expense                              4,543               4,125             418         10  % Other operating expenses                     20,610              21,558            (948 )       (4 )% Total benefits and expenses                  43,244              44,351          (1,107 )       (2 )% Loss before income taxes             $      (11,918 )$      (9,688 )$     2,230         23  %    ____________________

* Less than 1% or not meaningful

   Results for the Three Months Ended March 31, 2013 and 2012 Total revenues. Total revenues decreased for three months ended March 31, 2013 primarily due to lower net investment income from a lower average base of invested assets subsequent to share repurchases throughout fiscal year 2012, higher allocation to the Term Life segment, and lower average yield on invested assets. Lower commissions and fees resulting from the termination of our loan business also contributed to the decline. Total benefits and expenses. The decrease in benefits and claims is primarily due to lower claims on non-term life insurance policies underwritten by our New York subsidiary. The decline in other operating expenses is largely attributable to certain prior year period charges, partially offset by higher employee compensation costs. The                                          32

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  increase in DAC amortization was attributable to estimate adjustments for the student life block of insurance products recognized in the prior year period, which resulted in the negative DAC amortization. No such adjustments were recorded in the current year period.  Financial Condition Investments. 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. 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, sector limits, credit quality limits, portfolio duration, limits on the amount of investments in approved countries and permissible security types. 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. 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 are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. A significant increase in interest rates could result in significant losses, realized or unrealized, in the value of our invested asset portfolio. 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 average rating and average approximate duration of our fixed-maturity portfolio were as follows:                                                    March 31,   December 31,                                                      2013          2012 Average rating of our fixed-maturity portfolio         A            A 

Average duration of our fixed-maturity portfolio 3.9 years 3.9 years Average book yield of our fixed-maturity portfolio 5.28% 5.32%

   The distribution of our investments in fixed-maturity securities by rating follows:                             March 31, 2013           December 31, 2012                         Amortized cost      %      Amortized cost     %                                      (Dollars in thousands) AAA                    $        297,215    18%    $       317,104    18% AA                              129,270     8%            132,021     8% A                               396,816    23%            403,029    24% BBB                             768,496    46%            777,719    45% Below investment grade           88,890     5%             88,422     5% Not rated                           430     *               1,049     * Total                  $      1,681,117    100%   $     1,719,344    100%   ____________________ * Less than 1%                                            33

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  The ten largest holdings within our invested asset portfolio were as follows:                                                               March 31, 2013                                       Cost or amortized        Fair          Unrealized       Credit Issuer                                      cost               value            gain          rating                                                           (Dollars in thousands) Government of Canada                 $          30,617     $    32,771$      2,154        AAA General Electric Co                             22,882          26,880            3,998         A International Business Machines Corp            12,582          13,608            1,026        AA- Bank of America Corp                            11,131          12,063              932        BBB Province of Ontario Canada                       9,661          11,732            2,071        AA- Iberdrola SA                                     9,451          10,514            1,063        BBB+ National Rural Utilities Cooperative             7,189          10,442            3,253         A+ Prologis Inc                                     9,415          10,364              949        BBB- Verizon Communications Inc                       8,537           9,339              802         A- Province of Quebec Canada                        7,270           8,808            1,538         A+ Total - ten largest holdings         $         128,735     $   146,521$     17,786 Total - fixed-maturity and equity securities                           $       1,712,160$ 1,887,623 Percent of total fixed-maturity and equity securities                                    8 %             8 %   

For additional information on our invested asset portfolio, see Note 3 (Investments) to our condensed consolidated financial statements.

  Liquidity and Capital Resources Dividends and other payments to us from our subsidiaries are our principal sources of cash. The amount of dividends paid by our 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 payment of general operating expenses, the payment of dividends, and the payment of interest on outstanding debt. At March 31, 2013, the Parent Company had cash and invested assets of approximately $50.2 million. On April 18, 2013, Primerica Life declared an ordinary dividend of $150.0 million to the Parent Company, which was paid in cash on May 7, 2013. Following the dividend payment, Primerica Life had ordinary dividend capacity of approximately $81.3 million for the remainder of 2013. The liquidity requirements of our subsidiaries principally relate to the liabilities associated with their distribution and underwriting of insurance products (including the payment of claims), distribution of investment and savings products, operating expenses, income taxes and the payment of dividends. Historically, our insurance subsidiaries have used cash flow from operations associated with our in force book of term life insurance to fund their liquidity requirements. Our insurance subsidiaries' principal cash inflows from operating activities are derived from policyholder premiums, ceded claim recoveries and allowances, and investment income earned on invested assets that support our statutory capital and reserves. We also derive cash inflows from the distribution of investment and savings products and other products. Our principal outflows relate to payments for claims and ceded premiums. The principal cash inflows from investment activities result from repayments of principal and investment income, while the principal outflows relate to purchases of fixed-maturity securities. We typically hold cash sufficient to fund operating flows, and invest any excess cash. Our distribution and underwriting of term life insurance place significant demands on our liquidity, particularly when we experience growth. We pay a substantial majority of the sales commission during the first year following the sale of a policy. Our underwriting activities also require significant cash outflows at the inception of a policy's term. However, we anticipate that cash flows from our businesses, including our existing block of term life policies and our investment and savings products, will continue to provide us with sufficient liquidity to meet our operating requirements over the next 12 months. We may seek to enhance our liquidity position or capital structure through borrowings from third-party sources, sales of debt or equity securities, reserve financings or some combination of these sources. Additionally, we believe                                          34

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  that cash flows from our businesses and potential sources of funding, as described above, will sufficiently support the long-term liquidity needs of the Company. Cash Flows. Cash flows from operating activities are affected primarily by the timing of premiums received, commissions and fees received, benefits paid, commissions paid to sales representatives, administrative and selling expenses, investment income, and cash taxes. We typically generate positive cash flows from operating activities, as premiums, net investment income, commissions and fees collected from our insurance and investment and savings products exceed benefits, commissions and operating expenses paid, and we invest the excess. The components of the change in cash and cash equivalents were as follows:                                                 Three months ended March 31,          Change                                                    2013               2012               $                                                                (In thousands) Net cash provided by (used in) operating activities                                   $      64,372$      (4,770 )$    69,142 Net cash provided by (used in) investing activities                                          34,901              31,958           2,943 Net cash provided by (used in) financing activities                                          (8,562 )            (7,934 )           628 Effect of foreign exchange rate changes on cash                                                  (415 )               204            (619 ) 

Change in cash and cash equivalents $ 90,296$ 19,458$ 70,838

   Operating Activities. The change in operating cash flows compared with the prior year period was primarily driven by the timing of payments with reinsurers in our Term Life business in 2012. Investing Activities. The increase in investing cash inflows as compared to the same period a year ago was primarily driven by lower purchases of fixed-maturity securities transactions in anticipation of the ordinary dividend paid from Primerica Life to the Parent Company. The increase was partially offset by purchases of property and equipment related to the move of our corporate headquarters in 2013. Financing Activities. Net cash used in financing activities in 2013 was primarily due to higher quarterly shareholder dividends and shares withheld and retired to cover employee income tax obligations on vested shares. The increase was largely offset by payments for deferred financing costs related to the redundant reserve financing executed during the first quarter of 2012. Notes Payable. On July 16, 2012, we publicly issued $375.0 million in principal amount of Senior Notes and used a portion of the net cash proceeds to repay a $300.0 million note to Citigroup in whole at a redemption price equal to 100% of the outstanding principal amount. We issued the Senior Notes at a price of 99.843% and an annual rate of 4.75%, payable semi-annually in arrears on January 15 and July 15. The Senior Notes mature July 15, 2022. We were in compliance with the covenants of the Senior Notes at March 31, 2013. No events of default occurred during the three months ended March 31, 2013. We calculate our debt-to-capital ratio by dividing total long-term debt by the sum of stockholders' equity and total long-term debt. As of March 31, 2013, our debt-to-capital ratio was 22.3%. Rating Agencies. There have been no changes to Primerica, Inc.'s senior debt ratings or Primerica Life's financial strength ratings since December 31, 2012. Risk-Based Capital. The NAIC has established risk-based capital ("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 reserve items. The formula is an early warning tool to identify possible weakly capitalized companies for purposes of initiating further regulatory action. As of March 31, 2013, our U.S. life insurance subsidiaries had statutory capital substantially in excess of the applicable statutory requirements to support existing operations and to fund future growth. Following the $150.0 million ordinary dividend payment from Primerica Life to the Parent Company on May 7, 2013, Primerica Life still exceeded the minimum statutory capital and surplus required to trigger a regulatory action event.                                          35

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  In Canada, an insurer's minimum capital requirement is overseen by the Office of the Superintendent of Financial Institutions Canada ("OSFI") and determined as the sum of the capital requirements for five categories of risk: asset default risk; mortality/morbidity/lapse risks; changes in interest rate environment risk; segregated funds risk and foreign exchange risk. Primerica Life Canada is in compliance with Canada's minimum capital requirements as of March 31, 2013, as determined by OSFI. Short-term Borrowings. We had no short-term borrowings as of or during the three months ended March 31, 2013. Off-Balance Sheet Arrangements. See Note 10 (Commitments and Contingent Liabilities) to our condensed consolidated financial statements for information regarding our letter of credit. Contractual Obligations Update. There have been no material changes in contractual obligations from those disclosed in the 2012 Annual Report.             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. These forward-looking statements involve external risks and uncertainties, including, but not limited to, those described under the section entitled "Risk Factors" included herein. 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 include, among others: •      our failure to continue to attract and license new recruits, retain sales 

representatives, or license or maintain the licensing of our sales

representatives;

• changes to the independent contractor status of our sales representatives;

  •      our or our sales representatives' violation of, or non-compliance with,        laws and regulations;  

• our or our sales representatives' failure to protect the confidentiality

of client information;

• differences between our actual experience and our expectations regarding

mortality, persistency, expenses and investment yields as reflected in the

       pricing for our insurance policies;   •      the occurrence of a catastrophic event that causes a large number of        premature deaths of our insureds;  

• changes in federal and state legislation and regulation, including other

legislation or regulation that affects our insurance, investment product

businesses;

• our failure to meet risk-based capital standards or other minimum capital

       or surplus requirements;   •      a downgrade or potential downgrade in our insurance subsidiaries'        financial strength ratings or in the investment grade credit ratings for        our senior unsecured debt;  

• the effects of credit deterioration and interest rate fluctuations on our

invested asset portfolio;

• incorrectly valuing our investments;

• inadequate or unaffordable reinsurance or the failure of our reinsurers to

perform their obligations;

• the failure of, or legal challenges to, the support tools we provide to

our sales force;

• heightened standards of conduct or more stringent licensing requirements

for our sales representatives;

• inadequate policies and procedures regarding suitability review of client

transactions;

• the inability of our subsidiaries to pay dividends or make distributions;

• our ability to generate and maintain a sufficient amount of working capital;

• our non-compliance with the covenants of our senior unsecured debt;

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• legal and regulatory investigations and actions concerning us or our sales

representatives;

• the loss of key personnel;

  •      the failure of our information technology systems, breach of our        information security or failure of our business continuity plan; and  

• fluctuations in Canadian currency exchange rates.

   Developments in any of these areas 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 and debt securities. The foregoing list of risks and uncertainties may not contain 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 document 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. 

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