Presentation Q4 2023

Earnings Results

Quarter Ended December 31, 2023

Forward-Looking Statements and Non-GAAP Financial Measures

Forward-Looking Statements

This presentation may contain forward-looking statements. Information on factors that could cause results to differ materially from those projected in this presentation is available in our Form 10-K for the year ended December 31, 2022, as may be modified by subsequent Forms 10-Q. These documents are available in the Investor Relations section of our website, https://investors.primerica.com. The forward-looking statements speak as of the date on which they were made, and the Company does not undertake any obligation to update or correct any forward- looking statements.

Non-GAAP Financial Measures

This presentation also contains non-GAAP financial measures. A reconciliation of those measures to GAAP financial measures is included in our Financial Supplement, which is posted in the Investor Relations section of our website, https://investors.primerica.com.

Financial Highlights

Net income grew 4%, while diluted EPS grew 9% year-over-year
Results reflect the continued strength and stability of our business model
- Large in-force block and strong term life policy sales
- Growth of investment product sales and client asset values
- Higher net investment income
Capital deployment
- Completed the Board's 2023 stock repurchase authorization of $375 million
- Board approved $425 million share repurchase program through December 2024
- Paid $94 million in stockholder dividends in 2023
- Board declared a 15% increase to next quarterly dividend

GAAP Financial Results

($ in millions, except per share amounts)	Q4 2023	Q4 2022	% Change

Revenues	$726.3	$686.9	6%

Net income	$151.9	$146.7	4%

Stockholders' equity(1)	$2,066.0	$2,031.3	2%
Diluted EPS (2)	$4.30	$3.94	9%
Book value per share(1) (3)	$59.03	$55.16	7%
ROE	27.8%	29.3%

Adjusted Operating Financial Results

($ in millions, except per share amounts)	Q4 2023	Q4 2022	% Change

Adjusted operating revenues	$724.3	$684.5	6%

Adjusted net operating income	$150.4	$144.8	4%

Adjusted stockholders' equity(1)	$2,275.1	$2,141.7	6%
Diluted adjusted operating EPS(2)	$4.25	$3.89	9%
Adjusted book value per share(1) (3)	$65.01	$58.16	12%
Adjusted operating ROAE	26.9%	27.7%

For a reconciliation of GAAP to non-GAAP financial measures, refer to the Financial Supplement

As of period end
35.1 million weighted average common shares outstanding for Q4 2023

(3) 35.0 million common shares outstanding as of December 31, 2023

Distribution Highlights

● Attractiveness of entrepreneurial

business opportunity continues to fuel

recruiting

● Continue to enhance our processes to

keep new recruits engaged as they

prepare for licensing exam

● Solid growth in life-licensed sales force,

up 5% year-over-year

Sales Force

Distribution		Q4 2023	Q4 2022	% Change

Recruits	89,992	77,025	17%


	New life-licensed representatives	13,029	11,117	17%

	Life-licensed sales force(1)	141,572	135,208	5%
	Securities-licensed sales force(1)	25,272	26,186	(3%)
	(1) At period end

Life-Licensed Sales Force

(in thousands)

- Expect full year 2024 growth of 3%

129.5

135.2141.6

YE 2021

YE 2022

YE 2023

Production Highlights

Term Life Insurance

Strong demand for insurance products
- Simple and convenient application process
- Advances in underwriting technology help us issue policies more quickly
Issued a record $119 billion in new face amount during 2023
- Issued polices up 8% versus full year 2022(1)
2024 outlook:
- Project growth of around 3% to 5% in issued policies for full year 2024

Production

	($ in billions)	Q4 2023	Q4 2022	% Change
Life
Issued life insurance policies	88,757	79,282(1)	12%
Productivity(2)		0.20(1)
Term	0.21

Issued face amount(3)	$29.3	$25.3	16%

	Life insurance face amount in-force(4)	$944.6	$916.8	3%

Issued Term Life Policies

(in thousands)

		333.0	358.9

Policies	79.3	88.8			Q4

88.6
81.4			Q3


89.3	97.0			Q2


		83.1	84.6			Q1



		2022(1)	2023

Reflects the estimated number of policies issued after adjusting for a consistent basis of insured lives per policy following the Q4 2022 new product launch
The average monthly rate of new policies issued per life-licensed independent sales representative.
Includes face amount of issued term life insurance policies, additional riders added to existing policies

and face amount increases under increasing benefit riders

(4) At period end

Production Highlights

Investment and Savings Products

Strong demand fueled investment product sales, up 13% year-over-year
- Sales of U.S. mutual funds grew 10% and variable annuities grew 23%
Ending client asset values of $97 billion grew 15% year-over-year
- Results reflect strong equity market appreciation
Net client inflows were $172 million
2024 outlook:
- Project 5% growth in sales for full year 2024

Production

	($ in billions)	Q4 2023	Q4 2022	% Change

	Total product sales	$2.4	$2.1	13%
ISP
Client asset values(1)	$96.7	$83.9	15%

	Average client asset values	$91.0	$83.3	9%
	(1) At period end

ISP Production

($ in billions)		$11.7

		$3.0	$10.0	$9.2

			$2.1
Sales	$7.8	$2.8	$2.4		Q4



$2.1	$2.2	$2.2		Q3

$1.8	$3.0	$2.7	$2.4		Q2



$1.7	$2.9	$3.1		Q1

$2.3
$2.3


2020	2021	2022	2023

Production Highlights

Senior Health

Key statistics on a per policy basis for the fourth quarter of 2023 include:
- LTV of $1,109, including the reclass of $182 in marketing development funds
- CAC of $878, increased 22% year-over-year

- 1. Lower productivity due to fewer tenured ETQ agents
- LTV/CAC ratio of 1.3x
Primerica representatives remain a valuable source of referrals for e-TeleQuote
Do not anticipate a need for capital contribution from the parent company in 2024

Operating Results

Term Life Segment

Operating income before income taxes grew 6%, driven by 6% growth in adjusted direct premiums
Key financial ratios remained largely unchanged
- Benefits and claims ratio was 58.2%
- DAC ratio was 12.0%
- Insurance expense ratio at 7.1%, versus 7.8%, reflecting elevated expenses in 2022 from new product launch
Operating margin was 22.6%
Elevated lapses across multiple durations due to economic pressures on middle-income families
- Persistency of policies issued last year are largely in line with historical trends
2024 outlook:
- ADP growth around 5%-6%
- Benefits and claims ratio around 58%
- DAC ratio around 12%
- Operating margin around 22%

($ in millions)	Q4 2023	Q4 2022	% Change

Direct premiums	$829.9	$807.8	3%

Premium ceded to IPO coinsurers(1)	($210.3)	($224.2)	6%

Adjusted direct premiums (ADP)(2)	$619.6	$583.6	6%

Operating revenues	$431.3	$416.0	4%

Operating income before income taxes	$140.3	$132.0	6%


Key Ratios		Q4 2023	Q4 2022

Benefits and claims, net(3)		58.2%	57.8%
DAC amortization & insurance commissions		12.0%	11.9%

Insurance expenses, net(4)		7.1%	7.8%
Term life income before income taxes		22.6%	22.6%

Premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from IPO coinsurers on previously existing reinsurance agreements
Direct premiums net of premiums ceded to IPO coinsurers
Benefits & claims and remeasurement (gain)/loss net of other ceded premiums which are

largely YRT.

(4) Insurance expenses net of other, net revenues

Operating Results

Investment & Savings Products Segment

● Operating income before income taxes	($ in millions, except as noted)	Q4 2023		Q4 2022	% Change
grew 11%, driven by:	Sales-based revenues	$76.3		$66.5	15%

- Strong demand for mutual funds and	Asset-based revenues	$118.3		$105.4	12%

variable annuities	Account-based revenues	$24.0		$23.3	3%

Other, net	$3.1		$3.1	1%

- A 9% increase in average client asset
Total operating revenues	$221.7		$198.3	12%

values
Benefits and expenses	$158.9		$141.7	12%
● 2024 outlook:
Operating income before income taxes	$62.8		$56.6	11%

- Assuming 5% sales growth, sales-based

Sales-based revenue less commissions as % of	1.22%		1.15%
revenue less commissions projected to
revenue-generating sales(1)

increase $4 to $5 million	Asset-based revenue less commissions and
associated operating expenses as % of average	0.052%		0.050%
- Rule of thumb: $1 billion change in AUM
asset values(2)
= $2 million change in asset-based	Account-based net revenue per average fee	$4.29		$4.37
	generating position(3)
revenues less commissions and related
(1) Commission and fee revenue less commissions paid to the independent sales force based on
operating expenses
product sales activity
	(2) Commission and fee revenue less administration and advisory fees paid to third-party providers
	and commissions paid to the independent sales force earned based on product account values
	including amortization of deferred acquisition costs for segregated funds
	(3) Fee revenue less recordkeeping fees paid to third-party providers based on fee-generating
	positions and certain direct general expenses

Investment Income and Invested Asset Portfolio

Adjusted net investment income of $36 million up 26% compared to prior year period
New money rate of 6.67%
Invested asset portfolio unrealized loss of $216 million
- Reduction of unrealized loss largely driven by higher interest rates
- Able to hold investments to maturity

Key Portfolio Attributes

(based on amortized cost (except for market	Q4 2023
value); excludes cash, period end)


Fixed income / other mix	99% / 1%

Fixed income average book yield	3.8%

Average rating	A

Investment grade / BIG mix	98% /2%

Average duration	4.7 Years

Market value	$2.7 billion

Net unrealized loss	$216 million

Attachments

Disclaimer

Primerica Inc. published this content on 13 February 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 February 2024 15:54:50 UTC.