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Primerica's (PRI) Q2 Earnings Surpass Mark, Improve Y/Y

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Primerica, Inc. PRI delivered a second-quarter 2021 operating income of $3.25 per share, which beat the Zacks Consensus Estimate by 12.8%. The bottom line improved 33.2%.

The company witnessed solid sales in its core business during the quarter under review. Clients’ constant demand for investment products and term life protection, solid equity markets, and persistency in all durations of its in-force Term Life insurance business also contributed to the upside.

Primerica, Inc. Price, Consensus and EPS Surprise

Primerica, Inc. Price, Consensus and EPS Surprise
Primerica, Inc. Price, Consensus and EPS Surprise

Primerica, Inc. price-consensus-eps-surprise-chart | Primerica, Inc. Quote

Operational Update

Operating revenues grew 25% year over year to $654.2 million on higher contribution from Investment and Savings Products, and Term Life Insurance segments. Revenues beat the Zacks Consensus Estimate by 5.8%.

While Term Life Insurance revenues increased 17% to $383.5 million year over year, Investment and Savings Products revenues rose 45% to $238 million. Corporate and Other Distributed Products revenues rose 11% to $3.2 million.

Life Insurance policies issued in the quarter declined 4%. Investment and Savings Products sales jumped 45% to $2.4 billion in the second quarter.

Total benefits and expenses of $485 million were up 23.9% year over year due to higher benefits and claims, sales commissions, insurance expenses and other operating expenses.

Adjusted operating income before taxes increased 32% year over year as Term Life Insurance operating income rose 23% and Investment and Savings Products income improved 52%.

Financial Update

Cash and cash equivalents were $774.5 million as of Jun 30, 2021, up 41.5% from the level on Dec 31, 2020.

Total investments were $4 billion, up 3.3% from the figure as of Dec 31, 2020.

Notes payable were $374.6 million, up 0.1% from the 2020-end level.

Stockholders’ equity totaled $2 billion, up 10% from the level on Dec 31, 2020.

Primerica Life Insurance Company’s statutory risk-based capital ratio was about 410% as of Jun 30, 2021.

Return on equity was 26.3% in the second quarter.

Dividend Update

During the second quarter, the company approved a dividend of 47 cents per share to be paid out on Sep 14, 2021 to its shareholders of record as of Aug 20.

Zacks Rank

Primerica currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom line results of The Progressive Corporation PGR, RLI Corp. RLI and The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate.


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