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Primerica (PRI) to Boost Shareholder Value With Buybacks

Primerica, Inc.’s PRI board of directors recently authorized a $50 million increase to its share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $375 million to repurchase its common stock through the year.

Primerica thus looks to buy back $356 million worth of shares in 2022. The insurer bought back shares worth $227 million in the first six months and had $79.3 million remaining under its authorization as of Jun 30, 2022.

Primerica boasts being the second-largest issuer of term life insurance coverage in North America with solid demand for protection products driving sales growth and policy persistency. Riding on the strength of its business model, Primerica is well poised to cater to the middle market's increased demand for financial security. This, in turn, should continue to boost operational performance. The size of PRI’s business as well as prudent use of reinsurance ensures predictable earnings and supports capital deployment strategy. Primerica has also raised dividends 10 times in the last nine years.

CEO Glenn Williams stated, "Our Term Life business remains a consistent source of deployable capital that has enabled us to provide an attractive return to our investors through a combination of quarterly cash dividends and share buybacks." Its total stockholder return has continually outperformed the S&P 500 Index over the last five years. Primerica has also raised dividends 10 times in the last nine years.
A compelling portfolio, strong market presence and a sturdy financial position should continue to drive Primerica.

Other Players

Other key players in the insurance industry include W.R. Berkley Corporation WRB, American Financial Group, Inc. AFG and Arch Capital Group Ltd. ACGL.

W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 29.95%.

W.R. Berkley stands to gain from higher premiums at other liability, professional liability, short-tail lines, benefits derived from market dislocations and high retention. The underwriting profitability is likely to benefit from growth in premium rates and exposure as well as reductions in loss ratio. Continued growth in premiums and expansion in underwriting profits are likely to boost the operations of the insurer.

American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%.

American Financial’s business opportunities, growth in the surplus lines and excess liability businesses, rate increases, and higher retention in renewal business boost premium growth. AFG is actively involved in start-ups, small-to-medium-sized acquisitions, and product launches.

The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%.

Arch Capital remains poised to gain from solid growth within professional liability and travel business units in both North America and internationally. The P&C insurer boasts an impressive solvency level. Cash flow from operations is likely to gain from higher premiums.

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