Equibles

8-K

Primerica, Inc. (PRI)

8-K 2020-04-29 For: 2020-04-29
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported):      April 29, 2020

Primerica, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware 001-34680 27-1204330
(State or Other Jurisdiction of<br>Incorporation) (Commission File Number) (I.R.S. Employer<br>Identification Number)
1 Primerica Parkway<br><br><br>Duluth, Georgia 30099
(Address of Principal Executive Offices, and Zip Code)

(770) 381-1000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock PRI New York Stock Exchange

Item 2.02Results of Operations and Financial Condition.

On April 29, 2020, Primerica, Inc. (the “Company”) announced its results of operations for the quarter ended March 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1.

The information provided pursuant to this Item 2.02, including Exhibit 99.1 in Item 9.01, is “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, and shall not be incorporated by reference in any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except to the extent expressly set forth by specific reference in any such filings.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company presents certain non-GAAP financial measures.  Specifically, the Company presents adjusted direct premiums, other ceded premiums, adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income, adjusted stockholders’ equity and diluted adjusted operating earnings per share.  Adjusted direct premiums and other ceded premiums are net of amounts ceded under coinsurance transactions that were executed concurrent with our initial public offering (the “IPO coinsurance transactions”) for all periods presented. We exclude amounts ceded under the IPO coinsurance transactions in measuring adjusted direct premiums and other ceded premiums to present meaningful comparisons of the actual premiums economically maintained by the Company. Amounts ceded under the IPO coinsurance transactions will continue to decline over time as policies terminate within this block of business. Adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income and diluted adjusted operating earnings per share exclude the impact of realized investment gains (losses) and fair value mark-to-market (“MTM”) investment adjustments, including credit impairments, for all periods presented. We exclude realized investment gains (losses), including credit impairments, and MTM investment adjustments in measuring these non-GAAP financial measures to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains (losses) and market pricing variations prior to an invested asset’s maturity or sale that are not directly associated with the Company’s insurance operations. Adjusted stockholders’ equity excludes the impact of net unrealized investment gains (losses) recorded in accumulated other comprehensive income (loss) for all periods presented. We exclude unrealized investment gains (losses) in measuring adjusted stockholders’ equity as unrealized gains (losses) from the Company’s available-for-sale securities are largely caused by market movements in interest rates and credit spreads that do not necessarily correlate with the cash flows we will ultimately realize when an available-for-sale security matures or is sold.

Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies.  Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.  Furthermore, management believes that these non-GAAP financial measures may provide users with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business.  These measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.

Reconciliations of GAAP to non-GAAP financial measures are included as attachments to the press release which has been posted in the “Investor Relations” section of our website at http://investors.primerica.com.

Item 7.01Regulation FD Disclosure.

On April 29, 2020, the Company posted to the “Investor Relations” section of its website certain supplemental financial information relating to the quarter ended March 31, 2020.  A copy of the supplemental financial information is attached hereto as Exhibit 99.2.

The information provided pursuant to this Item 7.01, including Exhibit 99.2 in Item 9.01, is “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section, and shall not be incorporated by reference in any filing made by the Company under the Exchange Act or the Securities Act, except to the extent expressly set forth by specific reference in any such filings.

Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press Release dated April 29, 2020 – Primerica Reports First Quarter 2020 Results
99.2 Primerica, Inc. Supplemental Financial Information – First Quarter 2020
104 Cover Page from this Current Report on Form 8-K, formatted in Inline XBRL

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  April 29, 2020 PRIMERICA, INC.
/s/ Alison S. Rand
Alison S. Rand
Executive Vice President and Chief Financial Officer

4

pri-ex991_6.htm

Exhibit 99.1

PRIMERICA REPORTS FIRST QUARTER 2020 RESULTS

Investment and Savings Products sales increase 28% to $2.2 billion

Issued Term Life policies grow 11%

Term Life Insurance net premiums grow 10%; adjusted direct premiums grow 11%

Strong momentum in recruiting leads to 5% growth in new life-licensed representatives

Net earnings per diluted share (EPS) of $1.75, down 5%; return on stockholders’ equity (ROE) of 18.2%

Diluted adjusted operating EPS of $2.05, up 18%; adjusted net operating income return on adjusted stockholders’ equity (ROAE) of 21.8%

Declared dividend of $0.40 per share, payable on June 15, 2020

Duluth, GA, April 29, 2020 – Primerica, Inc. (NYSE: PRI) today announced financial results for the quarter ended March 31, 2020. Total revenues of $524.9 million increased 6% compared to the first quarter of 2019.  Net income of $72.5 million decreased 8%, while earnings per diluted share (EPS) of $1.75 decreased 5% compared to the same quarter last year.  The decline in both net income and EPS were driven by pre-tax realized losses on the invested asset portfolio of $10.0 million and mark-to-market adjustments on the reinsurance deposit asset of $6.4 million in the current quarter.

Adjusted operating revenues, adjusted net operating income and diluted adjusted operating earnings per share, which are non-GAAP financial measures, continue to exclude the impact of realized gains/losses and the mark-to-market adjustment on the reinsurance deposit asset.  A reconciliation of non-GAAP to GAAP financial measures is included at the end of this release.

Adjusted operating revenues were $541.3 million, increasing 10% compared to the first quarter of 2019. Adjusted net operating income of $85.0 million increased 13%, while

diluted adjusted operating earnings per share of $2.05 increased 18% compared to the same quarter last year.

First quarter results reflect strong sales and financial performance in both the Term Life and Investment and Savings Products (ISP) segments.  Term Life operating revenues increased 10% year-over-year due principally to an 11% increase in adjusted direct premiums, while pre-tax income increased 18%, reflecting favorable year-over-year trends in persistency.  ISP revenues increased 14% and pre-tax income grew 12% year-over-year, led by robust sales and growth in average client asset values.  The significant market downturn at the end of the quarter led to an increase in Canadian Segregated Fund DAC amortization in the period.  During the quarter, the Company repurchased $90 million of common stock toward its $250 million goal for the year.

“Our quarterly results reflect the strength of our financial position and the sales momentum that has been building for some time,” said Glenn Williams, Chief Executive Officer.  “While the COVID-19 pandemic may adversely impact our financial results in the near-term, our strong momentum at its onset and the flexibility of our sales force and distribution model give us confidence that we will be able to navigate through this major health crisis and any economic downturn.”

First Quarter Distribution & Segment Results

Distribution Results
1Q 2020 1Q 2019 % Change
Life-Licensed Sales Force ^(1)^ 130,095 129,821 *
Recruits 84,762 63,223 34 %
New Life-Licensed Representatives 10,599 10,065 5 %
Life Insurance Policies Issued 71,318 64,242 11 %
Life Productivity^(2)^ 0.18 0.16 *
ISP Product Sales ($ billions) $ 2.25 $ 1.76 28 %
Average Client Asset Values ($ billions) $ 66.59 $ 61.45 8 %
^(1)^ End of period
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^(2)^ Life productivity equals policies issued divided by the average number of life insurance licensed representatives per month
--- ---

*     Not calculated or less than 1%

Segment Results
Q1 2020 Q1 2019 % Change
( in thousands)
Adjusted Operating Revenues:
Term Life Insurance $ 296,843 10 %
Investment and Savings Products 162,672 14 %
Corporate and Other Distributed Products ^(1)^ 30,478 (6 )%
Total adjusted operating revenues ^(1)^ $ 489,993 10 %
Adjusted Operating Income (Loss) before<br><br><br>income taxes:
Term Life Insurance $ 70,339 18 %
Investment and Savings Products 42,684 12 %
Corporate and Other Distributed Products ^(1)^ ) (15,649 ) 25 %
Total adjusted operating income before<br><br><br>income taxes ^(1)^ $ 97,374 14 %

All values are in US Dollars.

^(1)^ See the Non-GAAP Financial Measures section and the Adjusted Operating Results reconciliation tables at the end of this release for additional information.

Life Insurance Licensed Sales Force

During the first quarter, we ran two incentives that offered discounted independent business application fees to new recruits. The first was held in early January to generate excitement at the start of the new year and the second in late March as COVID-19 concerns began to emerge.  These incentives, combined with strong recruiting momentum during the non-promotion period, led to a 34% increase in the number of new recruits year-over-year.  New life licensed representatives increased 5% year-over-year, facing some headwinds in March as testing sites began to close due to the pandemic.   As of March 31, 2020, the Company had 130,095 independent life-licensed representatives, largely unchanged year-over-year.

Term Life Insurance

Life insurance policies issued during the first quarter increased 11% to 71,318, reflecting the momentum that began late last year and reversing a quarterly deceleration of productivity experienced over the last few years.  Productivity for the quarter was 0.18 policies per life insurance licensed representative, up from 0.16 policies per life insurance licensed representative in the prior year.

Revenues of $327.7 million increased 10% compared to the first quarter of 2019 and pre-tax income of $82.9 million increased 18% year-over-year.  Performance was driven by 11% growth in adjusted direct premiums and strong, favorable trends in persistency. Benefits and claims were in line with historical experience.  Insurance expenses increased 13% from growth in the business and enhanced technology-related capabilities.

Given the timing of the onset of the COVID-19 pandemic in the U.S. and Canada, the Term Life Insurance segment’s production and financial results were not notably impacted by the pandemic in the first quarter.

Investment and Savings Products

Total product sales during the current quarter were a record $2.2 billion, a 28% increase compared to the same quarter last year.  The increase in sales was due to a combination of strong demand for mutual funds and variable annuity products and, to a lesser degree, higher sales of managed accounts.  Average client asset values were $66.6 billion, increasing 8% year-over-year.  The impact of market disruption during the quarter reduced quarter-end client asset values to $59.0 billion.  Net client inflows were $543 million, compared to $227 million in the first quarter of 2019, reflecting strong year-over-year sales growth and redemptions that were in line with the growth in client asset values.

Revenues of $185.0 million during the quarter increased 14% compared to the same quarter in 2019 and pre-tax income of $47.7 million increased 12% year-over-year.  Sales-based revenues grew 21% in-line with growth in revenue-generating product sales, while asset-based revenues grew 11% due to growth in average client asset values.  Sales and asset-based commission expenses generally grew in-line with the associated revenues.  The market disruption at the end of March adversely impacted Canadian segregated fund DAC amortization by $1.8 million in contrast to favorable market conditions in the first quarter of 2019 that lowered amortization by $1.9 million in the prior year period.

Corporate and Other Distributed Products

During the quarter, the Company recorded an adjusted operating loss before taxes of $19.6 million compared to an adjusted operating loss before taxes of $15.6 million during the first quarter of 2019.  The year-over-year increase in pre-tax loss includes a $1.6 million charge to recognize an allowance for reinsured benefits and claims on a discontinued line of business ceded in 1995 to a reinsurance counterparty that was ordered into receivership this year. Additionally, allocated net investment income was $2.0 million lower as a higher proportion of investment income was allocated to the Term Life Insurance segment to support growth in the business.

Taxes

The first quarter effective income tax rate was 23.4% which is higher than last year’s first quarter rate of 22.7%.  The difference is largely driven by a lower tax benefit being recognized on vested equity awards as the difference between the grant and vest prices was smaller on awards vesting this year than on those vesting in the prior year period.

Capital

During the first quarter, the Company repurchased 880,222 shares of common stock for $90 million.  The Company expects to repurchase $250 million of its common stock during 2020.  The Board of Directors has approved a dividend of $0.40 per share, payable on June 15, 2020, to stockholders of record on May 22, 2020.

Primerica has a strong balance sheet and continues to be well-capitalized to meet future needs.  Primerica Life Insurance Company’s statutory risk-based capital (RBC)

ratio was estimated to be about 430% and holding company liquidity of $272 million as of March 31, 2020.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company presents certain non-GAAP financial measures.  Specifically, the Company presents adjusted direct premiums, other ceded premiums, adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income, adjusted stockholders’ equity and diluted adjusted operating earnings per share.  Adjusted direct premiums and other ceded premiums are net of amounts ceded under coinsurance transactions that were executed concurrent with our initial public offering (the “IPO coinsurance transactions”) for all periods presented. We exclude amounts ceded under the IPO coinsurance transactions in measuring adjusted direct premiums and other ceded premiums to present meaningful comparisons of the actual premiums economically maintained by the Company. Amounts ceded under the IPO coinsurance transactions will continue to decline over time as policies terminate within this block of business. Adjusted operating revenues, adjusted operating income before income taxes, adjusted net operating income and diluted adjusted operating earnings per share exclude the impact of realized investment gains (losses) and fair value mark-to-market (“MTM”) investment adjustments, including credit impairments, for all periods presented. We exclude realized investment gains (losses), including credit impairments, and MTM investment adjustments in measuring these non-GAAP financial measures to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains (losses) and market pricing variations prior to an invested asset’s maturity or sale that are not directly associated with the Company’s insurance operations. Adjusted stockholders’ equity excludes the impact of net unrealized investment gains (losses) recorded in accumulated other comprehensive income (loss) for all periods presented. We exclude unrealized investment gains (losses) in measuring adjusted stockholders’ equity as unrealized gains (losses) from the Company’s available-for-sale securities are largely caused by market movements in interest rates and credit spreads that do not necessarily correlate with the cash flows we will ultimately realize when an available-for-sale security matures or is sold.

Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies.  Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance.  Furthermore, management believes that these non-GAAP financial measures may provide users with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of the core ongoing business.  These measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.  Reconciliations of GAAP to non-GAAP financial measures are attached to this release.

Earnings Webcast Information

Primerica will hold a webcast on Thursday, April 30, 2020 at 10:00 am EST, to discuss the quarter’s results.  To access the webcast, go to http://investors.primerica.com at least 15 minutes prior to the event to register, download and install any necessary software.  A replay of the call will be available for approximately 30 days on Primerica’s website, http://investors.primerica.com.  This release and a detailed financial supplement will be posted on Primerica’s website.

Forward-Looking Statements

Except for historical information contained in this press release, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from anticipated or projected results. Those risks and uncertainties include, among others, major public health pandemics, epidemics or outbreaks, specifically the novel COVID-19 pandemic; our failure to continue to attract and license new recruits, retain sales representatives or license or maintain the licensing of  sales representatives; new laws or regulations that could apply to  our distribution model, which could require us to modify our distribution structure; changes to the independent contractor status of sales representatives; our or sales representatives’ violation of or non-compliance with laws and regulations; any failure to protect the confidentiality of client information; differences between our actual experience and our expectations regarding mortality or persistency as reflected in the pricing for our insurance policies; the occurrence of a catastrophic event; changes in federal,  state and provincial legislation or regulation that affects our insurance,  investment product, and mortgage businesses; our failure to meet regulatory capital ratios  or other minimum capital and surplus requirements; a downgrade or potential downgrade in our insurance subsidiaries’ financial strength ratings or our senior debt ratings; inadequate or unaffordable reinsurance or the failure of our reinsurers to perform their obligations; the failure of our investment products to remain competitive with other investment options or the change to investment and savings products offered by key providers in a way that is not beneficial to our business or a significant change in the competitive environment in which we operate; fluctuations in the performance of client assets under management; litigation and regulatory investigations and actions concerning us or sales representatives; heightened standards of conduct or more stringent licensing requirements for sales representatives; inadequate policies and procedures regarding suitability review of client transactions; the failure of, or legal challenges to, the support tools we provide to the sales force; the failure of our information technology systems, breach of our information security, failure of our business continuity plan or the loss of the Internet; the effects of credit deterioration and interest rate fluctuations on our invested asset portfolio; incorrectly valuing our investments; changes in accounting standards may impact how we record and report our financial condition and results of operations; economic down cycles that impact our business, financial condition and results of operations; the inability of our subsidiaries to pay dividends or make distributions; our inability to generate and maintain a sufficient

amount of working capital; our non-compliance with the covenants of our senior unsecured debt; the loss of key personnel or sales force leaders; and fluctuations in the market price of our common stock or  Canadian currency exchange rates. These and other risks and uncertainties affecting us are more fully described in our filings with the Securities and Exchange Commission, which are available in the "Investor Relations" section of our website at http://investors.primerica.com. Primerica assumes no duty to update its forward-looking statements as of any future date.

About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured over 5 million lives and had approximately 2.5 million client investment accounts at December 31, 2019. Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in North America in 2018. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

Investor Contact:

Nicole Russell

470-564-6663 Email: investorrelations@primerica.com

Media Contact:

Keith Hancock

470-564-6328

Email: Keith.Hancock@Primerica.com

PRIMERICA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, 2020 December 31, 2019
(In thousands)
Assets
Investments:
Fixed-maturity securities available-for-sale, at fair value $ 2,242,037 $ 2,356,996
Fixed-maturity security held-to-maturity, at amortized cost 1,237,270 1,184,370
Equity securities, at fair value 34,125 40,684
Trading securities, at fair value 44,997 43,233
Policy loans 31,799 32,927
Total investments 3,590,228 3,658,210
Cash and cash equivalents 273,085 256,876
Accrued investment income 18,582 17,361
Reinsurance recoverables 4,132,897 4,169,823
Deferred policy acquisition costs, net 2,346,656 2,325,750
Agent balances, due premiums and other receivables 226,830 227,100
Intangible assets, net 45,275 45,275
Income taxes 66,744 70,492
Operating lease right-of-use assets 49,192 47,265
Other assets 392,498 384,634
Separate account assets 2,128,924 2,485,745
Total assets $ 13,270,911 $ 13,688,531
Liabilities and Stockholders' Equity
Liabilities:
Future policy benefits $ 6,472,397 $ 6,446,569
Unearned and advance premiums 16,905 15,470
Policy claims and other benefits payable 330,489 339,954
Other policyholders' funds 390,040 388,663
Notes payable 374,131 374,037
Surplus note 1,236,644 1,183,728
Income taxes 208,357 209,221
Operating lease liabilities 55,315 53,487
Other liabilities 498,699 510,443
Payable under securities lending 28,896 28,723
Separate account liabilities 2,128,924 2,485,745
Total liabilities 11,740,797 12,036,040
Stockholders' equity:
Common stock 405 412
Paid-in capital - -
Retained earnings 1,565,803 1,593,281
Accumulated other comprehensive income (loss),<br><br><br>net of income tax (36,094 ) 58,798
Total stockholders' equity 1,530,114 1,652,491
Total liabilities and stockholders' equity $ 13,270,911 $ 13,688,531
PRIMERICA, INC. AND SUBSIDIARIES
--- --- --- --- --- --- ---
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended March 31,
2020 2019
(In thousands, except per-share amounts)
Revenues:
Direct premiums $ 702,637 $ 677,286
Ceded premiums (386,825 ) (389,795 )
Net premiums 315,812 287,491
Commissions and fees 190,069 167,315
Net investment income 15,420 24,111
Realized investment gains (losses) (10,030 ) 2,847
Other, net 13,665 13,223
Total revenues 524,936 494,987
Benefits and expenses:
Benefits and claims 134,813 122,284
Amortization of deferred policy acquisition costs 70,311 64,628
Sales commissions 96,607 83,799
Insurance expenses 48,709 43,402
Insurance commissions 6,844 5,619
Interest expense 7,192 7,180
Other operating expenses 65,914 65,707
Total benefits and expenses 430,390 392,619
Income before income taxes 94,546 102,368
Income taxes 22,077 23,203
Net income $ 72,469 $ 79,165
Earnings per share:
Basic earnings per share $ 1.75 $ 1.84
Diluted earnings per share $ 1.75 $ 1.83
Weighted-average shares used in computing<br><br><br>earnings per share:
Basic 41,131 42,824
Diluted 41,239 42,942
PRIMERICA, INC. AND SUBSIDIARIES
--- --- --- --- --- --- --- --- --- ---
Consolidated Adjusted Operating Results Reconciliation
(Unaudited – in thousands, except per share amounts)
Three months ended March 31,
2020 2019 % Change
Total revenues $ 524,936 $ 494,987 6 %
Less: Realized investment gains (losses) (10,030 ) 2,847
Less: 10% deposit asset MTM included in NII (6,379 ) 2,147
Adjusted operating revenues $ 541,345 $ 489,993 10 %
Income before income taxes $ 94,546 $ 102,368 (8 )%
Less: Realized investment gains (losses) (10,030 ) 2,847
Less: 10% deposit asset MTM included in NII (6,379 ) 2,147
Adjusted operating income before income taxes $ 110,955 $ 97,374 14 %
Net income $ 72,469 $ 79,165 (8 )%
Less: Realized investment gains (losses) (10,030 ) 2,847
Less: 10% deposit asset MTM included in NII (6,379 ) 2,147
Less: Tax impact of preceding items 3,832 (1,132 )
Adjusted net operating income $ 85,046 $ 75,303 13 %
Diluted earnings per share ^(1)^ $ 1.75 $ 1.83 (5 )%
Less: Net after-tax impact of operating adjustments (0.30 ) 0.09
Diluted adjusted operating earnings per share ^(1)^ $ 2.05 $ 1.74 18 %
^(1)^ Percentage change in earnings per share is calculated prior to rounding per share amounts.
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TERM LIFE INSURANCE SEGMENT
--- --- --- --- --- --- --- --- --- ---
Adjusted Premiums Reconciliation
(Unaudited – in thousands)
Three months ended March 31,
2020 2019 % Change
Direct premiums $ 696,564 $ 670,755 4 %
Less: Premiums ceded to IPO coinsurers 260,076 276,150
Adjusted direct premiums $ 436,488 $ 394,605 11 %
Ceded premiums $ (385,232 ) $ (388,100 )
Less: Premiums ceded to IPO coinsurers (260,076 ) (276,150 )
Other ceded premiums $ (125,156 ) $ (111,950 )
Net premiums $ 311,332 $ 282,655 10 %
CORPORATE AND OTHER DISTRIBUTED PRODUCTS SEGMENT
--- --- --- --- --- --- --- --- --- ---
Adjusted Operating Results Reconciliation
(Unaudited – in thousands)
Three months ended March 31,
2020 2019 % Change
Total revenues $ 12,158 $ 35,472 (66 )%
Less: Realized investment gains (losses) (10,030 ) 2,847
Less: 10% deposit asset MTM included in NII (6,379 ) 2,147
Adjusted operating revenues $ 28,567 $ 30,478 (6 )%
Loss before income taxes $ (36,046 ) $ (10,655 ) 238 %
Less: Realized investment gains (losses) (10,030 ) 2,847
Less: 10% deposit asset MTM included in NII (6,379 ) 2,147
Adjusted operating loss before income taxes $ (19,637 ) $ (15,649 ) 25 %
PRIMERICA, INC. AND SUBSIDIARIES
--- --- --- --- --- --- --- --- ---
Adjusted Stockholders' Equity Reconciliation
(Unaudited – in thousands)
March 31, 2020 December 31, 2019 % Change
Stockholders' equity $ 1,530,114 $ 1,652,491 (7 )%
Less: Unrealized net investment gains (losses) recorded<br><br><br>in stockholders' equity, net of income tax (1,318 ) 64,563
Adjusted stockholders' equity $ 1,531,432 $ 1,587,928 (4 )%

11

pri-ex992_7.htm

Exhibit 99.2

Supplemental Financial Information

First Quarter 2020

Table of Contents PRIMERICA, INC.<br><br><br>Financial Supplement
Page
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Preface, definition of Non-GAAP financial measures 3
Condensed balance sheets and reconciliation of balance sheet non-GAAP to GAAP financial measures 4
Financial results and other statistical data 5
Statements of income 6
Reconciliation of statement of income GAAP to non-GAAP financial measures 7
Segment operating results 8
Term Life Insurance segment - financial results, key statistics, and financial analysis 9-10
Investment and Savings Products segment - financial results, financial analysis, and key statistics 11-12
Investment portfolio 13-15
Five-year historical key statistics 16

This document may contain forward-looking statements and information.  Additional information and factors that could cause actual results to differ materially from any forward-looking statements or information in this document is available in our Form 10-K for the year ended December 31, 2019.

2 of 16

Preface PRIMERICA, INC.<br><br><br>Financial Supplement

First Quarter 2020

This document is a financial supplement to our first quarter 2020 earnings release.  It is designed to enable comprehensive analysis of our ongoing business using the same core metrics that our management utilizes in assessing our business and making strategic and operational decisions.  Throughout this document we provide financial information that is derived from our U.S. GAAP financial statements and adjusted for three different purposes, as follows:

• Operating adjustments exclude the impact of realized investment gains/losses, including credit impairments, and mark-to-market (MTM) investment adjustments.  We exclude realized investment gains/losses, including credit impairments, and MTM investment adjustments in measuring adjusted operating revenues to eliminate period-over-period fluctuations that may obscure comparisons of operating results due to items such as the timing of recognizing gains and losses and other factors prior to an invested asset's maturity or sale that are not directly associated with the Company's insurance operations.
• Adjusted stockholders’ equity refers to the removal of the impact of net unrealized gains and losses on invested assets.  We exclude unrealized investment gains and losses in measuring adjusted stockholders' equity as unrealized gains and losses from the Company's invested assets are largely caused by market movements in interest rates and credit spreads that do not necessarily correlate with the cash flows we will ultimately realize when an invested asset matures or is sold.
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• IPO coinsurance transactions adjustments relate to transactions in the first quarter of 2010, where we coinsured between 80% and 90% of our business that was in-force at year-end 2009 to entities then affiliated with Citigroup Inc. that were executed concurrent with our initial public offering (IPO).  We exclude amounts ceded under the IPO coinsurance transactions in measuring adjusted direct premiums and other ceded premiums to present meaningful comparisons of the actual premiums economically maintained by the Company. Amounts ceded under the IPO coinsurance transactions will continue to decline over time as policies terminate within this block of business.
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Management utilizes these non-GAAP financial measures in managing the business and believes they present relevant and meaningful analytical metrics for evaluating the ongoing business.  Reconciliations of non-GAAP to GAAP financial measures are included in this financial supplement.

In the first quarter of 2020, the calculation for estimated annualized issued term life premium was revised, based on additional data, to provide a more accurate estimation.  All prior periods have been adjusted to consistently reflect this revision and the change does not impact our financial statements.

Estimated annualized issued term life premium (1)
( in millions)
Revised Calculation
Q2 '15 Q3 '15 Q4 '15 FY 2015 Q1 '16 Q2 '16 Q3 '16 Q4 '16 FY 2016 Q1 '17 Q2 '17 Q3 '17 Q4 '17 FY 2017 Q1 '18 Q2 '18 Q3 '18 Q4 '18 FY 2018 Q1 '19 Q2 '19 Q3 '19 Q4 '19 FY 2019
New $53.9 $52.9 $55.7 $206.5 $52.2 $61.4 $60.2 $64.0 $237.9 $57.6 $68.0 $64.0 $65.8 $255.4 $58.7 $69.2 $62.5 $60.4 $250.8 $54.1 $65.8 $63.1 $61.8 $244.8
Additions 10.8 10.6 11.0 42.3 10.7 11.9 11.6 12.2 46.4 11.5 12.5 12.4 13.1 49.5 12.9 14.2 13.8 14.3 55.2 13.8 15.8 15.1 15.4 60.2
Total $64.7 $63.6 $66.7 $248.8 $62.9 $73.3 $71.8 $76.2 $284.3 $69.2 $80.6 $76.3 $78.9 $304.9 $71.7 $83.4 $76.3 $74.7 $306.0 $68.0 $81.6 $78.2 $77.2 $305.0
Prior Calculation
Q2 '15 Q3 '15 Q4 '15 FY 2015 Q1 '16 Q2 '16 Q3 '16 Q4 '16 FY 2016 Q1 '17 Q2 '17 Q3 '17 Q4 '17 FY 2017 Q1 '18 Q2 '18 Q3 '18 Q4 '18 FY 2018 Q1 '19 Q2 '19 Q3 '19 Q4 '19 FY 2019
New $55.3 $54.5 $57.4 $212.4 $54.0 $63.1 $61.9 $66.2 $245.2 $59.4 $70.2 $65.8 $67.6 $263.1 $60.4 $71.1 $64.6 $62.4 $258.5 $56.1 $68.2 $65.2 $64.0 $253.5
Additions 14.0 13.7 14.4 54.9 14.0 15.4 15.2 15.9 60.4 15.1 16.5 16.4 17.5 65.5 16.9 18.7 18.4 19.1 73.0 18.4 20.8 20.1 20.5 79.7
Total $69.3 $68.2 $71.8 $267.3 $68.0 $78.6 $77.1 $82.0 $305.7 $74.5 $86.7 $82.2 $85.1 $328.6 $77.3 $89.8 $82.9 $81.4 $331.5 $74.5 $89.0 $85.3 $84.5 $333.2
(1) Estimated annualized issued term life premium - estimated as average premium per 1,000 of face amounts issued on new policies and additions (before free look returns) multiplied by actual face amount issued on new policies, rider additions and face amount increases.

All values are in US Dollars.

Certain items throughout this supplement may not add due to rounding and as such, may not agree to other public reporting of the respective item.  Certain items throughout this supplement are noted as ‘na’ to indicate not applicable.  Certain variances are noted as ‘nm’ to indicate not meaningful.  Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. These reclassifications had no impact on net income or total stockholders’ equity.

3 of 16

Condensed Balance Sheets and Reconciliation of Balance Sheet Non-GAAP to GAAP Financial Measures PRIMERICA, INC.<br><br><br>Financial Supplement
(Dollars in thousands) Dec 31,<br><br><br>2018 Mar 31,<br><br><br>2019 Jun 30,<br><br><br>2019 Sep 30,<br><br><br>2019 Dec 31,<br><br><br>2019 Mar 31,<br><br><br>2020
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Condensed Balance Sheets
Assets:
Investments and cash excluding securities held to maturity $ 2,422,734 $ 2,471,745 $ 2,557,033 $ 2,617,685 $ 2,730,715 $ 2,626,043
Securities held to maturity 970,390 1,036,110 1,087,790 1,140,250 1,184,370 1,237,270
Total investments and cash 3,393,124 3,507,855 3,644,823 3,757,935 3,915,085 3,863,313
Due from reinsurers 4,141,569 4,202,903 4,185,850 4,166,362 4,169,823 4,132,897
Deferred policy acquisition costs 2,133,920 2,181,741 2,238,315 2,281,560 2,325,750 2,346,656
Other assets 730,933 814,854 811,426 818,029 792,128 799,122
Separate account assets 2,195,501 2,368,760 2,437,291 2,427,852 2,485,745 2,128,924
Total assets $ 12,595,047 $ 13,076,112 $ 13,317,706 $ 13,451,737 $ 13,688,531 $ 13,270,911
Liabilities:
Future policy benefits $ 6,168,157 $ 6,240,864 $ 6,314,403 $ 6,374,327 $ 6,446,569 $ 6,472,397
Other policy liabilities 700,094 703,123 717,265 714,930 744,087 737,435
Income taxes 187,104 206,180 206,301 207,453 209,221 208,357
Other liabilities 486,772 561,709 551,689 565,894 563,931 554,014
Notes payable 373,661 373,755 373,848 373,942 374,037 374,131
Surplus note 969,685 1,035,421 1,087,117 1,139,592 1,183,728 1,236,644
Payable under securities lending 52,562 64,914 43,867 39,933 28,723 28,896
Separate account liabilities 2,195,501 2,368,760 2,437,291 2,427,852 2,485,745 2,128,924
Total liabilities 11,133,535 11,554,726 11,731,781 11,843,924 12,036,040 11,740,797
Stockholders’ equity:
Common stock (0.01 par value) (1) 427 424 420 415 412 405
Paid-in capital (0 ) (0 ) (0 ) (0 ) (0 ) (0 )
Retained earnings 1,489,520 1,506,944 1,537,537 1,553,286 1,593,281 1,565,803
Treasury stock — — — — — —
Accumulated other comprehensive income (loss), net:
(7,370 ) 28,916 56,227 66,377 64,564 (1,318 )
(21,064 ) (14,897 ) (8,258 ) (12,265 ) (5,765 ) (34,776 )
Total stockholders’ equity 1,461,513 1,521,387 1,585,926 1,607,813 1,652,492 1,530,114
Total liabilities and stockholders' equity $ 12,595,047 $ 13,076,112 $ 13,317,706 $ 13,451,737 $ 13,688,531 $ 13,270,911
Reconciliation of Total Stockholders' Equity to Adjusted Stockholders' Equity
Total stockholders' equity $ 1,461,513 $ 1,521,387 $ 1,585,926 $ 1,607,813 $ 1,652,492 $ 1,530,114
Less: Net unrealized gains (losses) (7,370 ) 28,916 56,227 66,377 64,564 (1,318 )
Adjusted stockholders’ equity $ 1,468,882 $ 1,492,471 $ 1,529,699 $ 1,541,436 $ 1,587,928 $ 1,531,431
Adjusted Stockholders' Equity Rollforward
Balance, beginning of period $ 1,447,972 $ 1,468,882 $ 1,492,471 $ 1,529,699 $ 1,541,436 $ 1,587,928
Net Income 86,541 79,166 97,446 96,223 93,557 72,469
Shareholder dividends (10,856 ) (14,628 ) (14,517 ) (14,324 ) (14,162 ) (16,530 )
Retirement of shares and warrants (43,338 ) (60,288 ) (57,117 ) (70,679 ) (44,137 ) (95,676 )
Net foreign currency translation adjustment (15,765 ) 6,167 6,639 (4,007 ) 6,500 (29,011 )
Other, net 4,328 13,171 4,778 4,524 4,734 12,252
Balance, end of period $ 1,468,882 $ 1,492,471 $ 1,529,699 $ 1,541,436 $ 1,587,928 $ 1,531,431
Deferred Policy Acquisition Costs Rollforward
Balance, beginning of period $ 2,107,814 $ 2,133,920 $ 2,181,741 $ 2,238,315 $ 2,281,560 $ 2,325,750
General expenses deferred 8,497 9,163 9,384 9,468 8,608 9,726
Commission costs deferred 96,697 98,196 100,498 100,913 97,538 104,793
Amortization of deferred policy acquisition costs (66,184 ) (64,628 ) (58,762 ) (63,883 ) (67,279 ) (70,311 )
Foreign currency impact and other, net (12,904 ) 5,091 5,455 (3,254 ) 5,322 (23,302 )
Balance, end of period $ 2,133,920 $ 2,181,741 $ 2,238,315 $ 2,281,560 $ 2,325,750 $ 2,346,656

All values are in US Dollars.

(1) Outstanding common shares exclude restricted stock units.

4 of 16

Financial Results and Other Statistical Data PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except per-share data) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 /#<br>Change %<br><br><br>Change
Earnings per Share
Basic earnings per share:
Weighted-average common shares and fully vested equity awards 42,824,471 42,482,631 41,963,672 41,470,805 41,131,200 ) -4.0 %
Net income $ 79,166 $ 97,446 $ 96,223 $ 93,557 $ 72,469 ) -8.5 %
Less income attributable to unvested participating securities (401 ) (428 ) (415 ) (402 ) (310 ) 22.6 %
Net income used in computing basic EPS $ 78,765 $ 97,018 $ 95,808 $ 93,155 $ 72,159 ) -8.4 %
Basic earnings per share $ 1.84 $ 2.28 $ 2.28 $ 2.25 $ 1.75 ) -4.6 %
Adjusted net operating income $ 75,303 $ 94,759 $ 95,592 $ 92,776 $ 85,047 12.9 %
Less operating income attributable to unvested participating securities (381 ) (416 ) (412 ) (399 ) (364 ) 4.5 %
Adjusted net operating income used in computing basic operating EPS $ 74,922 $ 94,343 $ 95,181 $ 92,377 $ 84,682 13.0 %
Basic adjusted operating income per share $ 1.75 $ 2.22 $ 2.27 $ 2.23 $ 2.06 17.7 %
Diluted earnings per share:
Weighted-average common shares and fully vested equity awards 42,824,471 42,482,631 41,963,672 41,470,805 41,131,200 ) -4.0 %
Dilutive impact of contingently issuable shares 118,014 135,719 135,887 143,224 107,361 ) -9.0 %
Shares used to calculate diluted EPS 42,942,485 42,618,350 42,099,559 41,614,029 41,238,561 ) -4.0 %
Net income $ 79,166 $ 97,446 $ 96,223 $ 93,557 $ 72,469 ) -8.5 %
Less income attributable to unvested participating securities (400 ) (427 ) (413 ) (401 ) (310 ) 22.5 %
Net income used in computing diluted EPS $ 78,766 $ 97,019 $ 95,809 $ 93,156 $ 72,159 ) -8.4 %
Diluted earnings per share $ 1.83 $ 2.28 $ 2.28 $ 2.24 $ 1.75 ) -4.6 %
Adjusted net operating income $ 75,303 $ 94,759 $ 95,592 $ 92,776 $ 85,047 12.9 %
Less operating income attributable to unvested participating securities (381 ) (415 ) (411 ) (398 ) (364 ) 4.4 %
Adjusted net operating income used in computing diluted operating EPS $ 74,923 $ 94,344 $ 95,182 $ 92,379 $ 84,683 13.0 %
Diluted adjusted operating income per share $ 1.74 $ 2.21 $ 2.26 $ 2.22 $ 2.05 17.7 %

All values are in US Dollars.

YOY Q1
Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 /#<br>Change %<br><br><br>Change
Annualized Return on Equity
Average stockholders' equity $ 1,491,450 $ 1,553,656 $ 1,596,869 $ 1,630,152 $ 1,591,303 6.7 %
Average adjusted stockholders' equity $ 1,480,676 $ 1,511,085 $ 1,535,567 $ 1,564,682 $ 1,559,680 5.3 %
Net income return on stockholders' equity 21.2 % 25.1 % 24.1 % 23.0 % 18.2 % % nm
Net income return on adjusted stockholders' equity 21.4 % 25.8 % 25.1 % 23.9 % 18.6 % % nm
Adjusted net operating income return on adjusted stockholders' equity 20.3 % 25.1 % 24.9 % 23.7 % 21.8 % % nm
Capital Structure
Debt-to-capital (1) 19.7 % 19.1 % 18.9 % 18.5 % 19.6 % % nm
Cash and invested assets to stockholders' equity 2.3 x 2.3 x 2.3 x 2.4 x 2.5 x x nm
Cash and invested assets to adjusted stockholders' equity 2.4 x 2.4 x 2.4 x 2.5 x 2.5 x x nm
Share count, end of period (2) 42,398,643 42,008,450 41,491,998 41,206,504 40,459,767 ) -4.6 %
Adjusted stockholders' equity per share $ 35.20 $ 36.41 $ 37.15 $ 38.54 $ 37.85 7.5 %
Financial Strength Ratings - Primerica Life Insurance Co
Moody's A1 A1 A1 A1 A1 nm nm
S&P AA- AA- AA- AA- AA- nm nm
A.M. Best A+ A+ A+ A+ A+ nm nm
Holding Company Senior Debt Ratings
Moody's Baa1 Baa1 Baa1 Baa1 Baa1 nm nm
S&P A- A- A- A- A- nm nm
A.M. Best a- a- a- a- a- nm nm

All values are in US Dollars.

(1) Debt-to-capital is that of the parent company only.  Capital in the debt-to-capital ratio includes stockholders' equity and the note payable.
(2) Share count reflects outstanding common shares, but excludes restricted stock units (RSUs).
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5 of 16

Statements of Income PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 Change %<br><br><br>Change
Statement of Income
Revenues:
Direct premiums $ 677,286 $ 687,262 $ 692,258 $ 697,060 $ 702,637 3.7 %
Ceded premiums (389,795 ) (400,588 ) (388,982 ) (390,364 ) (386,825 ) 0.8 %
Net premiums 287,491 286,675 303,276 306,696 315,813 9.9 %
Net investment income 24,111 24,868 22,675 22,418 15,420 ) -36.0 %
Commissions and fees:
Sales-based (1) 66,997 71,438 69,034 75,418 80,891 20.7 %
Asset-based (2) 73,639 79,317 81,009 84,184 81,395 10.5 %
Account-based (3) 19,613 19,897 20,449 20,598 20,204 3.0 %
Other commissions and fees 7,066 7,817 9,227 8,103 7,579 7.3 %
Realized investment (losses) gains 2,847 1,067 285 766 (10,030 ) ) nm
Other, net 13,223 13,825 14,698 13,778 13,665 3.3 %
Total revenues 494,988 504,903 520,654 531,959 524,936 6.1 %
Benefits and expenses:
Benefits and claims 122,284 115,068 128,684 127,784 134,813 10.2 %
Amortization of DAC 64,628 58,762 63,883 67,279 70,311 8.8 %
Insurance commissions 5,619 5,829 6,980 6,624 6,844 21.8 %
Insurance expenses 43,402 44,569 44,854 45,991 48,709 12.2 %
Sales commissions:
Sales-based (1) 47,831 50,679 48,652 52,529 56,561 18.3 %
Asset-based (2) 32,343 35,665 35,875 37,772 36,323 12.3 %
Other sales commissions 3,626 3,755 4,535 3,937 3,723 2.7 %
Interest expense 7,180 7,201 7,209 7,222 7,192 0.2 %
Other operating expenses 65,706 55,917 54,844 60,676 65,914 0.3 %
Total benefits and expenses 392,619 377,444 395,515 409,815 430,391 9.6 %
Income before income taxes 102,368 127,459 125,138 122,145 94,546 ) -7.6 %
Income taxes 23,203 30,014 28,916 28,588 22,077 ) -4.9 %
Net income $ 79,166 $ 97,446 $ 96,223 $ 93,557 $ 72,469 ) -8.5 %
Income Before Income Taxes by Segment
Term Life $ 70,339 $ 83,999 $ 83,761 $ 81,995 $ 82,892 17.8 %
Investment & Savings Products 42,684 47,343 48,794 52,991 47,700 11.8 %
Corporate & Other Distributed Products (10,654 ) (3,882 ) (7,416 ) (12,841 ) (36,046 ) ) nm
Income before income taxes $ 102,368 $ 127,459 $ 125,138 $ 122,145 $ 94,546 ) -7.6 %

All values are in US Dollars.

(1) Sales-based - revenues or commission expenses relating to the sales of mutual funds and variable annuities.
(2) Asset-based - revenues or commission expenses relating to the value of assets in client accounts for which we earn ongoing service, distribution, and other fees.
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(3) Account-based - revenues relating to the fee generating client accounts we administer.
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6 of 16

Reconciliation of Statement of Income GAAP to Non-GAAP Financial Measures PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 Change %<br><br><br>Change
Reconciliation from Term Life Direct Premiums to Term Life Adjusted Direct Premiums
Term Life direct premiums $ 670,755 $ 681,004 $ 685,539 $ 691,546 $ 696,564 3.8 %
Less: Premiums ceded to IPO Coinsurers 276,150 272,596 267,856 264,786 260,076 ) -5.8 %
Term Life adjusted direct premiums $ 394,605 $ 408,408 $ 417,683 $ 426,761 $ 436,488 10.6 %
Reconciliation from Term Life Ceded Premiums to Term Life Other Ceded Premiums
Term Life ceded premiums $ (388,100 ) $ (398,927 ) $ (387,120 ) $ (388,237 ) $ (385,232 ) 0.7 %
Less: Premiums ceded to IPO Coinsurers (276,150 ) (272,596 ) (267,856 ) (264,786 ) (260,076 ) 5.8 %
Term Life other ceded premiums $ (111,950 ) $ (126,330 ) $ (119,264 ) $ (123,451 ) $ (125,156 ) ) -11.8 %
Reconciliation from Net Investment Income to Adjusted Net Investment Income
Net Investment Income $ 24,111 $ 24,868 $ 22,675 $ 22,418 $ 15,420 ) -36.0 %
Less: MTM investment adjustments 2,147 2,447 534 254 (6,379 ) nm nm
Adjusted net investment income $ 21,964 $ 22,421 $ 22,141 $ 22,165 $ 21,799 ) -0.8 %
Reconciliation from Total Revenues to Adjusted Operating Revenues
Total revenues $ 494,988 $ 504,903 $ 520,654 $ 531,959 $ 524,936 6.1 %
Less: Realized investment gains/(losses) 2,847 1,067 285 766 (10,030 ) nm nm
Less: MTM investment adjustments 2,147 2,447 534 254 (6,379 ) nm nm
Adjusted operating revenues $ 489,993 $ 501,389 $ 519,834 $ 530,940 $ 541,346 10.5 %
Reconciliation from Income Before Income Taxes to Adjusted Operating Income Before Income Taxes
Income before income taxes $ 102,368 $ 127,459 $ 125,138 $ 122,145 $ 94,546 ) -7.6 %
Less: Realized investment gains/(losses) 2,847 1,067 285 766 (10,030 ) nm nm
Less: MTM investment adjustments 2,147 2,447 534 254 (6,379 ) nm nm
Adjusted operating income before income taxes $ 97,374 $ 123,945 $ 124,319 $ 121,125 $ 110,955 13.9 %
Reconciliation from Net Income to Adjusted Net Operating Income
Net income $ 79,166 $ 97,446 $ 96,223 $ 93,557 $ 72,469 ) -8.5 %
Less: Income before income taxes reconciling items 4,994 3,514 819 1,019 (16,409 ) nm nm
Less: Tax impact of income before income taxes reconciling items (1,132 ) (828 ) (189 ) (239 ) 3,832 nm nm
Adjusted net operating income $ 75,303 $ 94,759 $ 95,592 $ 92,776 $ 85,047 12.9 %

All values are in US Dollars.

7 of 16

Segment Operating Results PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 Change %<br><br><br>Change
Term Life Insurance
Revenues:
Direct Premiums $ 670,755 $ 681,004 $ 685,539 $ 691,546 $ 696,564 3.8 %
Premiums ceded to IPO coinsurers (1) (276,150 ) (272,596 ) (267,856 ) (264,786 ) (260,076 ) 5.8 %
Adjusted direct premiums (2) 394,605 408,408 417,683 426,761 436,488 10.6 %
Other ceded premiums (3) (111,950 ) (126,330 ) (119,264 ) (123,451 ) (125,156 ) ) -11.8 %
Net premiums 282,655 282,077 298,419 303,310 311,332 10.1 %
Allocated net investment income 4,444 4,736 5,123 5,619 6,246 40.6 %
Other, net 9,744 10,055 10,985 10,063 10,168 4.4 %
Revenues 296,843 296,869 314,527 318,992 327,747 10.4 %
Benefits and expenses:
Benefits and claims 118,443 111,480 122,751 122,657 128,563 8.5 %
Amortization of DAC 64,066 56,179 61,548 66,918 65,840 2.8 %
Insurance commissions 2,163 2,298 3,311 3,009 3,286 51.9 %
Insurance expenses 41,832 42,914 43,157 44,413 47,165 12.7 %
Benefits and expenses 226,504 212,870 230,766 236,997 244,855 8.1 %
Income before income taxes $ 70,339 $ 83,999 $ 83,761 $ 81,995 $ 82,892 17.8 %
Investment & Savings Products
Revenues:
Commissions and fees:
Sales-based $ 66,997 $ 71,438 $ 69,034 $ 75,418 $ 80,891 20.7 %
Asset-based 73,639 79,317 81,009 84,184 81,395 10.5 %
Account-based 19,613 19,897 20,449 20,598 20,204 3.0 %
Other, net 2,423 2,434 2,661 2,500 2,542 4.9 %
Revenues 162,671 173,085 173,153 182,699 185,033 13.7 %
Benefits and expenses:
Amortization of DAC 477 2,101 2,044 (74 ) 4,305 nm
Insurance commissions 3,025 3,155 3,257 3,297 3,201 5.8 %
Sales commissions:
Sales-based 47,831 50,679 48,652 52,529 56,561 18.3 %
Asset-based 32,343 35,665 35,875 37,772 36,323 12.3 %
Other operating expenses 36,312 34,143 34,530 36,182 36,942 1.7 %
Benefits and expenses 119,988 125,742 124,359 129,707 137,332 14.5 %
Income before income taxes $ 42,684 $ 47,343 $ 48,794 $ 52,991 $ 47,700 11.8 %
Corporate & Other Distributed Products
Revenues:
Direct premiums $ 6,531 $ 6,258 $ 6,719 $ 5,514 $ 6,074 ) -7.0 %
Ceded premiums (1,695 ) (1,661 ) (1,862 ) (2,128 ) (1,593 ) 6.0 %
Net premiums 4,836 4,597 4,858 3,386 4,480 ) -7.3 %
Allocated net investment income 17,521 17,684 17,018 16,545 15,553 ) -11.2 %
Commissions and fees:
Prepaid Legal Services 3,737 4,159 4,776 3,905 3,829 2.5 %
Auto and Homeowners Insurance 1,500 1,877 2,165 1,766 1,672 11.5 %
Other sales commissions 1,829 1,781 2,286 2,432 2,077 13.6 %
Other, net 1,056 1,336 1,052 1,215 954 ) -9.6 %
Adjusted operating revenues 30,479 31,435 32,154 29,250 28,566 ) -6.3 %
Benefits and expenses:
Benefits and claims 3,842 3,588 5,933 5,127 6,249 62.7 %
Amortization of DAC 85 482 291 434 166 95.1 %
Insurance commissions 431 376 411 318 357 ) -17.0 %
Insurance expenses 1,570 1,656 1,697 1,578 1,544 ) -1.7 %
Sales commissions 3,626 3,755 4,535 3,937 3,723 2.7 %
Interest expense 7,180 7,201 7,209 7,222 7,192 0.2 %
Other operating expenses 29,394 21,774 20,314 24,494 28,972 ) -1.4 %
Benefits and expenses 46,127 38,831 40,390 43,110 48,203 4.5 %
Adjusted operating income before income taxes $ (15,648 ) $ (7,396 ) $ (8,236 ) $ (13,861 ) $ (19,637 ) ) -25.5 %

All values are in US Dollars.

(1) Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements.
(2) Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers.
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(3) Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers.
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8 of 16

Term Life Insurance - Financial Results and Analysis PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 Change %<br><br><br>Change
Term Life Insurance Income Before Income Taxes
Revenues:
Direct Premiums $ 670,755 $ 681,004 $ 685,539 $ 691,546 $ 696,564 3.8 %
Premiums ceded to IPO coinsurers (1) (276,150 ) (272,596 ) (267,856 ) (264,786 ) (260,076 ) 5.8 %
Adjusted direct premiums (2) 394,605 408,408 417,683 426,761 436,488 10.6 %
Other ceded premiums (3) (111,950 ) (126,330 ) (119,264 ) (123,451 ) (125,156 ) ) -11.8 %
Net premiums 282,655 282,077 298,419 303,310 311,332 10.1 %
Allocated net investment income 4,444 4,736 5,123 5,619 6,246 40.6 %
Other, net 9,744 10,055 10,985 10,063 10,168 4.4 %
Revenues 296,843 296,869 314,527 318,992 327,747 10.4 %
Benefits and expenses:
Benefits and claims 118,443 111,480 122,751 122,657 128,563 8.5 %
Amortization of DAC 64,066 56,179 61,548 66,918 65,840 2.8 %
Insurance commissions 2,163 2,298 3,311 3,009 3,286 51.9 %
Insurance expenses 41,832 42,914 43,157 44,413 47,165 12.7 %
Benefits and expenses 226,504 212,870 230,766 236,997 244,855 8.1 %
Income before income taxes $ 70,339 $ 83,999 $ 83,761 $ 81,995 $ 82,892 17.8 %
Total Term Life Insurance - Financial Analysis
Post-IPO direct premiums (4) $ 300,708 $ 312,436 $ 320,424 $ 327,939 $ 336,921 12.0 %
Pre-IPO direct premiums (5) 370,047 368,568 365,115 363,607 359,643 ) -2.8 %
Total direct premiums $ 670,755 $ 681,004 $ 685,539 $ 691,546 $ 696,564 3.8 %
Premiums ceded to IPO coinsurers $ 276,150 $ 272,596 $ 267,856 $ 264,786 $ 260,076 ) -5.8 %
% of Pre-IPO direct premiums 74.6 % 74.0 % 73.4 % 72.8 % 72.3 % nm nm
Benefits and claims, net (6) $ 230,392 $ 237,810 $ 242,016 $ 246,108 $ 253,719 10.1 %
% of adjusted direct premiums 58.4 % 58.2 % 57.9 % 57.7 % 58.1 % nm nm
DAC amortization & insurance commissions $ 66,229 $ 58,477 $ 64,858 $ 69,927 $ 69,126 4.4 %
% of adjusted direct premiums 16.8 % 14.3 % 15.5 % 16.4 % 15.8 % nm nm
Insurance expenses, net (7) $ 32,088 $ 32,858 $ 32,171 $ 34,351 $ 36,997 15.3 %
% of adjusted direct premiums 8.1 % 8.0 % 7.7 % 8.0 % 8.5 % nm nm
Total Term Life income before income taxes $ 70,339 $ 83,999 $ 83,761 $ 81,995 $ 82,892 17.8 %
Term Life operating margin (8) 17.8 % 20.6 % 20.1 % 19.2 % 19.0 % nm nm

All values are in US Dollars.

(1) Premiums ceded to IPO coinsurers - premiums ceded to IPO coinsurers under the IPO coinsurance transactions excluding any reimbursements from the IPO coinsurers on previously existing reinsurance agreements.
(2) Adjusted direct premiums - direct premiums net of premiums ceded to IPO coinsurers.
--- ---
(3) Other ceded premiums - premiums ceded to non-IPO coinsurers net of any applicable reimbursements from the IPO coinsurers.
--- ---
(4) Post-IPO direct premiums - direct premiums not subject to the 2010 IPO coinsurance transactions.
--- ---
(5) Pre-IPO direct premiums - direct premiums subject to the 2010 IPO coinsurance transactions.
--- ---
(6) Benefits and claims, net - benefits & claims net of other ceded premiums which are largely YRT.
--- ---
(7) Insurance expenses, net - insurance expenses net of other, net revenues.
--- ---
(8) Term Life operating margin - Term Life operating income before income taxes as a percentage of adjusted direct premiums.
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9 of 16

Term Life Insurance - Key Statistics PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except as noted) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 /#<br>Change %<br><br><br>Change
Key Statistics
Life-insurance licensed sales force, beginning of period 130,736 129,821 129,550 130,871 130,522 ) -0.2 %
10,065 10,919 12,682 11,073 10,599 5.3 %
(10,980 ) (11,190 ) (11,361 ) (11,422 ) (11,026 ) ) -0.4 %
Life-insurance licensed sales force, end of period 129,821 129,550 130,871 130,522 130,095 0.2 %
Estimated annualized issued term life premium (mills) (1):
$ 54.1 $ 65.8 $ 63.1 $ 61.8 $ 61.5 13.6 %
13.8 15.8 15.1 15.4 15.0 8.3 %
Total estimated annualized issued term life premium $ 68.0 $ 81.6 $ 78.2 $ 77.2 $ 76.5 12.5 %
Issued term life policies 64,242 78,664 73,434 71,469 71,318 11.0 %
Estimated average annualized issued term life premium per policy (1)(2) $ 843 $ 837 $ 859 $ 864 $ 863 2.4 %
Term life face amount in-force, beginning of period (mills) $ 781,041 $ 785,552 $ 796,376 $ 801,494 $ 808,262 3.5 %
20,925 25,300 24,087 23,682 23,221 11.0 %
(18,383 ) (16,512 ) (17,740 ) (18,884 ) (18,294 ) 0.5 %
1,969 2,036 (1,228 ) 1,970 (8,676 ) ) nm
Term life face amount in-force, end of period $ 785,552 $ 796,376 $ 801,494 $ 808,262 $ 804,512 2.4 %

All values are in US Dollars.

(1)     Estimated annualized issued term life premium - estimated as average premium per $1,000 of face amounts issued on new policies and additions (before free look returns) multiplied by actual face amount issued on new policies, rider additions and face amount increases.

(2)     In whole dollars.

(3)     Issued term life face amount - includes face amount on issued term life policies, additional riders added to existing policies, and face increases under increasing benefit riders.

10 of 16

Investment and Savings Products - Financial Results and Financial Analysis PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except as noted) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 Change %<br><br><br>Change
Investment & Savings Products Income Before Income Taxes
Revenues:
Commissions and fees:
Sales-based $ 66,997 $ 71,438 $ 69,034 $ 75,418 $ 80,891 20.7 %
Asset-based 73,639 79,317 81,009 84,184 81,395 10.5 %
Account-based 19,613 19,897 20,449 20,598 20,204 3.0 %
Other, net 2,423 2,434 2,661 2,500 2,542 4.9 %
Revenues 162,671 173,085 173,153 182,699 185,033 13.7 %
Benefits and expenses:
Amortization of DAC 477 2,101 2,044 (74 ) 4,305 nm
Insurance commissions 3,025 3,155 3,257 3,297 3,201 5.8 %
Sales commissions:
Sales-based 47,831 50,679 48,652 52,529 56,561 18.3 %
Asset-based 32,343 35,665 35,875 37,772 36,323 12.3 %
Other operating expenses 36,312 34,143 34,530 36,182 36,942 1.7 %
Benefits and expenses 119,988 125,742 124,359 129,707 137,332 14.5 %
Income before income taxes $ 42,684 $ 47,343 $ 48,794 $ 52,991 $ 47,700 11.8 %
Financial Analysis
Fees paid based on client asset values (1) $ 5,898 $ 5,705 $ 6,225 $ 6,169 $ 5,990 1.6 %
Fees paid based on fee-generating positions (2) 11,159 9,658 9,354 9,648 10,248 ) -8.2 %
Other operating expenses 19,254 18,780 18,951 20,365 20,704 7.5 %
Total other operating expenses $ 36,312 $ 34,143 $ 34,530 $ 36,182 $ 36,942 1.7 %
Sales-based net revenue as % of revenue-generating sales (3)
U.S. 1.33 % 1.29 % 1.31 % 1.41 % 1.34 % nm nm
Canada 1.00 % 0.97 % 0.96 % 0.94 % 1.06 % nm nm
Total 1.28 % 1.25 % 1.27 % 1.35 % 1.30 % nm nm
Asset-based net revenue as % of average asset values (4)
U.S. 0.036 % 0.038 % 0.038 % 0.039 % 0.038 % nm nm
Canada 0.136 % 0.120 % 0.121 % 0.138 % 0.098 % nm nm
Total 0.052 % 0.051 % 0.051 % 0.054 % 0.047 % nm nm
Account-based net revenue per average fee generating position (5)(6) $ 3.20 $ 3.88 $ 4.18 $ 4.10 $ 3.70 nm nm

All values are in US Dollars.

(1) Fees paid based on client asset values - administration fees on Canadian Segregated Funds and advisory fees on Managed Accounts that vary directly with client asset values.
(2) Fees paid based on fee-generating positions - recordkeeping fees that vary with the number of fee-generating positions.
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(3) Sales-based net revenue - commission and fee revenue less commissions paid to the sales force based on product sales activity.
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(4) Asset-based net revenue - commission and fee revenue less administration and advisory fees paid to third-party providers and commissions paid to the sales force earned based on product account values including amortization of deferred acquisition costs for segregated funds.
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(5) Account-based net revenue - fee revenue less recordkeeping fees paid to third-party providers based on fee-generating positions and certain direct general expenses.
--- ---
(6) In whole dollars.
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11 of 16

Investment and Savings Products - Key Statistics PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands, except as noted) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 /#<br>Change %<br><br><br>Change
Key Statistics
Product sales (mills)
$ 710.2 $ 855.9 $ 829.7 $ 831.9 $ 921.0 29.7 %
244.1 199.7 184.9 199.0 280.9 15.1 %
81.0 88.2 75.0 76.3 72.2 ) -10.8 %
465.8 514.2 512.8 583.7 600.6 28.9 %
Total sales-based revenue generating product sales 1,501.1 1,658.0 1,602.4 1,691.0 1,874.7 24.9 %
161.6 203.5 176.9 197.4 246.2 52.3 %
94.3 76.0 76.4 94.6 124.8 32.3 %
Total product sales $ 1,757.0 $ 1,937.4 $ 1,855.7 $ 1,983.0 $ 2,245.7 27.8 %
$ 244.1 $ 199.7 $ 184.9 $ 199.0 $ 280.9 15.1 %
94.3 76.0 76.4 94.6 124.8 32.3 %
Total Canada product sales 338.4 275.6 261.3 293.6 405.7 19.9 %
Total U.S. product sales 1,418.6 1,661.8 1,594.4 1,689.4 1,840.0 29.7 %
Total product sales $ 1,757.0 $ 1,937.4 $ 1,855.7 $ 1,983.0 $ 2,245.7 27.8 %
Client asset values, beginning of period (mills) $ 57,704 $ 63,602 $ 65,878 $ 66,222 $ 70,537 22.2 %
1,757 1,937 1,856 1,983 2,246 27.8 %
(1,530 ) (1,633 ) (1,669 ) (1,596 ) (1,703 ) ) -11.3 %
Net flows 227 305 186 387 543 139.1 %
201 225 (136 ) 217 (978 ) ) nm
5,470 1,746 294 3,710 (11,065 ) ) nm
Client asset values, end of period $ 63,602 $ 65,878 $ 66,222 $ 70,537 $ 59,036 ) -7.2 %
1.6 % 1.9 % 1.1 % 2.3 % 3.1 % % nm
Average client asset values (mills)
$ 30,266 $ 31,744 $ 32,521 $ 33,658 $ 32,693 8.0 %
7,390 7,795 7,991 8,218 7,950 7.6 %
3,241 3,455 3,652 3,901 3,905 20.5 %
2,182 2,247 2,296 2,342 2,389 9.5 %
16,057 16,807 17,114 17,661 17,292 7.7 %
2,314 2,378 2,428 2,455 2,366 2.2 %
Total $ 61,451 $ 64,426 $ 66,002 $ 68,236 $ 66,595 8.4 %
$ 7,390 $ 7,795 $ 7,991 $ 8,218 $ 7,950 7.6 %
2,314 2,378 2,428 2,455 2,366 2.2 %
Total Canada average client assets 9,704 10,173 10,418 10,674 10,316 6.3 %
Total U.S. average client assets 51,747 54,253 55,583 57,563 56,279 8.8 %
Total average client assets $ 61,451 $ 64,426 $ 66,002 $ 68,236 $ 66,595 8.4 %
Average number of fee-generating positions (thous) (3)
1,998 1,996 2,007 2,020 2,031 1.6 %
641 641 646 650 658 2.7 %
Total 2,639 2,637 2,653 2,670 2,689 1.9 %

All values are in US Dollars.

(1) Asset value outflows - include (a) redemptions of assets, (b) sales charges on the inflow sales figures, and (c) the net flow of money market funds sold and redeemed on the company's recordkeeping platform.  The redemptions of assets must be estimated for approximately 4% of account values as these figures are not readily available.  Actual redemptions as a percentage of account values for similar known account values are used to estimate the unknown redemption values.
(2) Change in market value, net - market value fluctuations net of fees and expenses.
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(3) Fee generating positions - mutual fund positions for which we receive recordkeeping fees. An individual client account may include multiple mutual fund positions. We may also receive fees earned for custodial services that we provide to clients with retirement plan accounts that hold positions in these mutual funds.
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12 of 16

Investment Portfolio - Summary of Holdings PRIMERICA, INC.<br><br><br>Financial Supplement
As of or for the period ended March 31, 2020
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
% of Total Avg
Market Amortized Unrealized Market Amortized Book Avg
(Dollars in thousands) Value Cost G/(L) Value Cost Yield Rating
Investment Portfolio by Asset Class
Cash, Cash Equivalents, and Short Term $ 273,085 $ 273,085 $ - 10.5 % 10.5 %
Fixed Income:
Treasury 26,976 25,912 1,064 1.0 % 1.0 % 2.36 % AAA
Government 234,375 226,410 7,965 9.0 % 8.7 % 3.04 % AA-
Tax-Exempt Municipal 30,335 28,813 1,522 1.2 % 1.1 % 3.39 % AA
Public Corporate 1,310,684 1,315,311 (4,627 ) 50.5 % 50.7 % 3.74 % BBB+
Mortgage Backed 331,005 325,219 5,785 12.8 % 12.5 % 3.02 % AAA
Asset Backed 95,884 99,408 (3,523 ) 3.7 % 3.8 % 3.07 % AA+
CMBS 120,223 120,505 (282 ) 4.6 % 4.6 % 3.18 % AA+
Private 132,675 141,260 (8,585 ) 5.1 % 5.4 % 4.60 % BBB
Redeemable Preferred 4,877 5,447 (571 ) 0.2 % 0.2 % 5.47 % BBB
Total Fixed Income 2,287,034 2,288,286 (1,251 ) 88.2 % 88.2 % 3.55 % A
Equities:
Perpetual Preferred 12,185 12,185 - 0.5 % 0.5 %
Common Stock 15,801 15,801 - 0.6 % 0.6 %
Mutual Fund 6,087 6,087 - 0.2 % 0.2 %
Other 52 52 - 0.0 % 0.0 %
Total Equities 34,125 34,125 - 1.3 % 1.3 %
Total Invested Assets $ 2,594,245 $ 2,595,496 $ (1,251 ) 100.0 % 100.0 %
Public Corporate Portfolio by Sector
Consumer Non Cyclical $ 177,410 $ 172,383 $ 5,027 13.5 % 13.1 %
Banking 164,675 164,748 (72 ) 12.6 % 12.5 %
Energy 122,878 137,644 (14,766 ) 9.4 % 10.5 %
Reits 117,186 117,233 (47 ) 8.9 % 8.9 %
Insurance 108,388 106,065 2,323 8.3 % 8.1 %
Technology 107,080 105,094 1,986 8.2 % 8.0 %
Consumer Cyclical 89,278 88,896 382 6.8 % 6.8 %
Capital Goods 82,280 81,894 386 6.3 % 6.2 %
Communications 73,660 71,253 2,406 5.6 % 5.4 %
Electric 66,754 65,472 1,281 5.1 % 5.0 %
Transportation 66,379 68,966 (2,587 ) 5.1 % 5.2 %
Basic Industry 62,657 64,187 (1,530 ) 4.8 % 4.9 %
Brokerage 33,556 32,709 847 2.6 % 2.5 %
Finance Companies 18,960 19,601 (641 ) 1.5 % 1.5 %
Industrial Other 10,729 10,508 221 0.8 % 0.8 %
Natural Gas 4,373 4,209 164 0.3 % 0.3 %
Financial Other 3,440 3,451 (10 ) 0.3 % 0.3 %
Utility Other 1,002 998 4 0.1 % 0.1 %
Total Corporate portfolio $ 1,310,684 $ 1,315,311 $ (4,627 ) 100.0 % 100.0 %
Fixed-Maturity Securities - Effective Maturity
Effective maturity
1-2 Yrs. $ 303,478 $ 303,781 $ (303 ) 13.3 % 13.3 % 3.22 %
2-5 Yrs. 961,521 953,753 7,768 42.0 % 41.7 % 3.67 %
5-10 Yrs. 575,936 583,976 (8,041 ) 25.2 % 25.5 % 3.73 %
> 10 Yrs. 160,280 159,044 1,236 7.0 % 7.0 % 3.75 %
Total Fixed Income $ 2,287,034 $ 2,288,286 $ (1,251 ) 100.0 % 100.0 % 3.55 %
Duration
Fixed Income portfolio duration 3.6 years

Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

13 of 16

Investment Portfolio - Quality Ratings As of March 31, 2020 PRIMERICA, INC.<br><br><br>Financial Supplement
(Dollars in thousands)
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Investment Portfolio Quality Ratings (1)
Amortized  Cost % of Total
Total Fixed Income portfolio:
Rating
AAA $ 524,942 22.9 %
AA 277,247 12.1 %
A 523,598 22.9 %
BBB 889,352 38.9 %
Below Investment Grade 70,045 3.1 %
NA 3,101 0.1 %
Total Fixed Income $ 2,288,286 100.0 %
Amortized  Cost % of Total Amortized  Cost % of Total
Public Corporate asset class: Private Placement asset class:
Rating Rating
AAA $ 13,634 1.0 % AAA $ - —
AA 90,900 6.9 % AA 851 0.6 %
A 399,587 30.4 % A 11,940 8.5 %
BBB 750,388 57.1 % BBB 119,541 84.6 %
Below Investment Grade 59,852 4.6 % Below Investment Grade 8,928 6.3 %
NA 948 0.1 % NA - —
Total Corporate $ 1,315,311 100.0 % Total Private $ 141,260 100.0 %
CMBS asset class: Mortgage-Backed asset class:
Rating Rating
AAA $ 95,955 79.6 % AAA $ 283,999 87.3 %
AA - — AA 29,506 9.1 %
A 24,245 20.1 % A 11,405 3.5 %
BBB - — BBB 218 0.1 %
Below Investment Grade 305 0.3 % Below Investment Grade 50 0.0 %
NA - — NA 41 0.0 %
Total CMBS $ 120,505 100.0 % Total Mortgage-Backed $ 325,219 100.0 %
Asset-Backed asset class: Treasury & Government asset classes:
Rating Rating
AAA $ 66,441 66.8 % AAA $ 61,073 24.2 %
AA 4,065 4.1 % AA 132,383 52.5 %
A 25,969 26.1 % A 48,500 19.2 %
BBB 710 0.7 % BBB 9,568 3.8 %
Below Investment Grade 111 0.1 % Below Investment Grade 798 0.3 %
NA 2,112 2.1 % NA 0 0.0 %
Total Asset-Backed $ 99,408 100.0 % Total Treasury & Government $ 252,321 100.0 %
NAIC Designations
1 $ 993,233 54.2 %
2 782,835 42.7 %
3 45,115 2.5 %
4 10,324 0.6 %
5 150 0.0 %
6 0 0.0 % `
U.S. Insurer Fixed Income (2) 1,831,657 100.0 %
Other (3) 490,754
Cash and cash equivalents 273,085
Total Invested Assets $ 2,595,496
(1) Ratings method for split ratings: If by 2 NRSROs, use lower of the two; if by 3 or more NRSROs, use second lowest.
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(2) NAIC ratings for our U.S. insurance companies' fixed income portfolios.
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(3) Other consists of assets held by our non-life companies, Canadian insurance company, and unrated equities.
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Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

14 of 16

Investment Portfolio - Supplemental Data and Trends PRIMERICA, INC.<br><br><br>Financial Supplement
YOY Q1
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(Dollars in thousands) Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 Change %<br><br><br>Change
Net Investment Income by Source
Fixed-maturity securities (available-for-sale) $ 20,333 $ 20,345 $ 20,380 $ 20,772 $ 20,784 2.2%
Fixed-maturity securities (held-to-maturity) 10,674 11,769 12,769 13,113 13,472 26.2%
Equity Securities 487 446 448 464 451 ) -7.4%
Deposit asset underlying 10% reinsurance treaty 1,755 2,141 2,105 2,046 1,830 4.3%
Deposit asset - Mark to Market 2,147 2,447 534 254 (6,379 ) ) nm
Policy loans and other invested assets 467 299 234 215 189 ) -59.5%
Cash & cash equivalents 1,056 1,414 1,191 950 843 ) -20.2%
Total investment income 36,919 38,862 37,661 37,814 31,190 ) -15.5%
Investment expenses 2,134 2,225 2,217 2,283 2,298 7.7%
Interest Expense on Surplus Note 10,674 11,769 12,769 13,113 13,472 26.2%
Net investment income $ 24,111 $ 24,868 $ 22,675 $ 22,418 $ 15,420 ) -36.0%
Fixed income book yield, end of period 3.85 % 3.74 % 3.65 % 3.54 % 3.55 %
New money yield 3.56 % 3.10 % 2.73 % 2.73 % 3.25 %
YOY Q1
Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020 % Pt<br>Change
Fixed Income Portfolio Quality Ratings
Rating
AAA 21.4 % 20.9 % 23.0 % 24.0 % 22.9 % %
AA 10.9 % 11.3 % 11.0 % 11.7 % 12.1 % %
A 22.9 % 22.9 % 22.1 % 23.4 % 22.9 % %
BBB 41.8 % 41.8 % 41.0 % 38.2 % 38.9 % %
Below Investment Grade 2.9 % 3.0 % 2.8 % 2.6 % 3.1 % %
NA 0.1 % 0.1 % 0.1 % 0.1 % 0.1 % %
Total Fixed Income 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % -
Average rating by amortized cost A A A A A

All values are in US Dollars.

As of March 31, 2020 As of March 31, 2020 As of March 31, 2020
Market<br><br><br>Value Amortized<br><br><br>Cost Credit<br><br><br>Rating Market<br><br><br>Value Amortized<br><br><br>Cost Market<br><br><br>Value Amortized<br><br><br>Cost
Top 25 Exposures Foreign Exposure (1) Government Investments (1)
1 Canada $ 19,286 $ 18,625 AAA Canada $ 58,513 $ 59,775 AAA $ 3,325 $ 3,251
2 Province of Ontario Canada 13,191 12,552 A+ United Kingdom 47,152 47,102 AA 15,107 14,715
3 Province of Quebec Canada 12,913 11,787 AA- Australia 38,948 39,145 A 6,996 6,819
4 Wells Fargo & Co 11,376 11,702 A- France 19,128 19,001 BBB 8,094 8,127
5 Enbridge Inc 10,681 10,876 A+ Germany 16,387 16,611 Below Investment Grade 777 798
6 Cigna Corp 10,414 10,192 A- Switzerland 15,999 16,043 NA — —
7 Bank of America Corp 10,095 9,822 A- Bermuda 13,008 13,015 Total $ 34,298 $ 33,710
8 Province of British Columbia Canada 10,093 9,729 AAA Netherlands 12,654 12,423
9 Province of Alberta Canada 9,984 9,538 A+ Ireland 12,342 13,549
10 Province of New Brunswick Canada 9,180 8,790 A+ Cayman Islands 8,708 9,468 Non-Government Investments (1)
11 Province of Manitoba Canada 8,626 8,263 A+ Japan 5,588 5,450
12 Honda Motor Co Ltd 8,618 8,492 A Israel 5,298 5,020 AAA $ 3,994 $ 4,184
13 AbbVie Inc 8,570 8,507 A- Korea Republic Of 5,139 5,119 AA 28,259 28,354
14 City of Toronto Canada 8,467 8,099 AA Norway 4,556 4,964 A 76,643 75,896
15 Municipal Finance Authority of British Columbia 8,215 7,940 AAA Mexico 4,465 4,531 BBB 150,634 155,111
16 Williams Cos Inc/The 8,115 8,452 BBB Emerging Markets  (2) 9,654 10,364 Below Investment Grade 11,931 12,946
17 Comcast Corp 7,654 7,280 A- All Other 28,221 28,622 NA — —
18 Truist Financial Corp 7,608 7,496 A- Total $ 305,758 $ 310,201 Total $ 271,460 $ 276,491
19 General Mills Inc 7,512 7,337 BBB
20 Morgan Stanley 7,462 7,243 A+
21 PNC Financial Services Group Inc 7,441 7,429 A-
22 Gilead Sciences Inc 7,233 7,133 A
23 US Bancorp 7,073 7,090 A+
24 Deere & Co 7,073 6,994 A
25 Booking Holdings Inc 7,060 7,044 A-
Total $ 233,942 $ 228,411
% of total fixed income portfolio 9.0 % 8.8 %
(1) US$ denominated investments in issuers outside of the United States based on country of risk.
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(2) Emerging markets is as defined by MSCI, Inc. which include Chile, India, Peru, Poland and South Africa.
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Note:  Investment Portfolio pages in this Financial Supplement exclude the Held to Maturity asset on our balance sheet.

15 of 16

Five-Year Historical Key Statistics PRIMERICA, INC.<br><br><br>Financial Supplement
(Dollars in millions) 2015 2016 2017 2018 2019 Q1<br><br><br>2019 Q2<br><br><br>2019 Q3<br><br><br>2019 Q4<br><br><br>2019 Q1<br><br><br>2020
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Recruits 228,115 262,732 303,867 290,886 282,207 63,223 86,173 72,345 60,466 84,762
Life-insurance licensed sales force, beginning of period 98,358 106,710 116,827 126,121 130,736 130,736 129,821 129,550 130,871 130,522
New life-licensed representatives 39,632 44,724 48,535 48,041 44,739 10,065 10,919 12,682 11,073 10,599
Non-renewal and terminated representatives (31,280 ) (34,607 ) (39,241 ) (43,426 ) (44,953 ) (10,980 ) (11,190 ) (11,361 ) (11,422 ) (11,026 )
Life-insurance licensed sales force, end of period 106,710 116,827 126,121 130,736 130,522 129,821 129,550 130,871 130,522 130,095
Issued term life policies 260,059 298,244 312,799 301,589 287,809 64,242 78,664 73,434 71,469 71,318
Issued term life face amount $ 79,111 $ 89,869 $ 95,635 $ 95,209 $ 93,994 $ 20,925 $ 25,300 $ 24,087 $ 23,682 $ 23,221
Term life face amount in force, beginning of period $ 681,927 $ 693,194 $ 728,385 $ 763,831 $ 781,041 $ 781,041 $ 785,552 $ 796,376 $ 801,494 $ 808,262
Issued term life face amount 79,111 89,869 95,635 95,209 93,994 20,925 25,300 24,087 23,682 23,221
Terminated term life face amount (53,580 ) (57,238 ) (65,958 ) (70,291 ) (71,519 ) (18,383 ) (16,512 ) (17,740 ) (18,884 ) (18,294 )
Foreign currency impact, net (14,263 ) 2,560 5,769 (7,708 ) 4,746 1,969 2,036 (1,228 ) 1,970 (8,676 )
Term life face amount in force, end of period $ 693,194 $ 728,385 $ 763,831 $ 781,041 $ 808,262 $ 785,552 $ 796,376 $ 801,494 $ 808,262 $ 804,512
Estimated annualized issued term life premium
Premium from new policies $ 206.5 $ 237.9 $ 255.4 $ 250.8 $ 244.8 $ 54.1 $ 65.8 $ 63.1 $ 61.8 $ 61.5
Additions and increases in premium 42.3 46.4 49.5 55.2 60.2 13.8 15.8 15.1 15.4 15.0
Total estimated annualized issued term life premium $ 248.8 $ 284.3 $ 304.9 $ 306.0 $ 305.0 $ 68.0 $ 81.6 $ 78.2 $ 77.2 $ 76.5
Investment & Savings product sales $ 5,856.8 $ 5,594.3 $ 6,192.2 $ 7,040.1 $ 7,533.2 $ 1,757.0 $ 1,937.4 $ 1,855.7 $ 1,983.0 $ 2,245.7
Investment & Savings average client asset values $ 48,477 $ 49,427 $ 56,791 $ 61,842 $ 65,029 $ 61,451 $ 64,426 $ 66,002 $ 68,236 $ 66,595

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