Primerica NYSE: PRI reported second-quarter results that reflected continued strength in its investment and savings products business, while life insurance sales remained pressured by financial uncertainty among middle-income households.
Chief Executive Officer Glenn Williams said adjusted operating revenues increased 8% from a year earlier and adjusted net operating income rose 11%. Adjusted operating earnings per share increased 17% to $6.41. The quarterly EPS result included a $4.6 million income-tax benefit from a tax equity investment, adding about $0.15 per diluted share.
The company returned $173 million to stockholders during the quarter, including $135 million in share repurchases and $37 million in dividends. Year-to-date capital returns totaled $352 million.
Investment Business Drives Growth
Primerica’s investment and savings products, or ISP, segment was the principal contributor to earnings growth. Segment revenues rose 21% year over year and pretax operating income increased 31%, according to Williams.
Total securities sales increased 23%, with managed account sales up 43%, mutual fund sales up 20%, and variable annuity sales up 17%. Assets under management reached a record $140 billion at the end of June, up 16% from June 30, 2025. The company generated approximately $397 million of net inflows during the quarter.
Chief Financial Officer Tracy Tan said the ISP segment accounted for about 42% of consolidated revenue, compared with 37% in the prior-year period. Sales-based revenue increased 17%, while asset-based revenue rose 28%, exceeding the 19% increase in average client asset values.
Tan attributed the faster growth in asset-based revenue in part to demand for U.S. managed accounts and Canadian mutual funds distributed under the principal distributor model. She said those offerings generate higher levels of recurring fee revenue. About 75% of client assets are invested for retirement purposes, which Tan said supports the durability of the company’s asset-based revenue.
Primerica expects full-year ISP sales to increase 10% to 15% in 2026, although management said comparisons will become more difficult in the second half of the year.
Life Insurance Sales Remain Under Pressure
Primerica’s Term Life operating revenue was largely unchanged from a year earlier at $444 million, while adjusted direct premiums increased 3.4%. However, estimated annualized issued premiums, including additions to existing policies, declined 9%, and issued policies fell 12% from the prior-year quarter.
Williams said demand for life insurance has been affected by economic uncertainty and pressure on middle-income families’ budgets. Productivity improved sequentially to 0.18 policies per life-licensed representative but remained below historical levels.
The company expects full-year issued life policies to decline by mid-single digits. Williams told analysts that management expects year-over-year comparisons to improve in the second half, supported by easier comparisons, early indications of firmer sales-force growth, and the company’s efforts to increase life insurance production.
“We’re adapting to the current environment,” Williams said, adding that management sees some easing in the financial pressures facing families, aside from volatility in gasoline prices.
For the full year, Primerica expects adjusted direct premiums to grow around 3.5%, a benefits and claims ratio of about 58%, a deferred acquisition cost amortization and insurance commissions ratio of roughly 12% to 13%, and a Term Life operating margin of approximately 21%, excluding potential effects from annual assumption changes.
Distribution and Convention Initiatives
Recruiting increased 2% year over year in the second quarter, aided in part by a reduced licensing fee incentive in April. Still, the number of newly licensed life representatives and the total number of life-licensed representatives remained below prior-year levels, reflecting weaker recruiting in preceding quarters.
Primerica now expects its full-year sales-force size to be flat to down 2% compared with 2025, a reduced outlook that Williams said reflected the later-than-anticipated timing of improvements in recruiting and related initiatives.
The company has launched a 365-day countdown to its 2027 convention, which will coincide with Primerica’s 50th anniversary. Management said the event is expected to be its largest convention and will be supported by discounted licensing fees, promotions, recognition programs, and incentives intended to improve sales-force size and productivity.
Williams said conventions historically have helped create momentum before and after the event, though he described the current softness in life insurance sales and representative counts as driven more fundamentally by middle-income households’ financial conditions than by convention timing.
Expenses, Capital and Outlook
Consolidated insurance and other operating expenses increased 8% year over year to $166 million, driven by variable growth-related costs, compensation, and technology investments. Primerica expects expense growth of about 10% to 12% in the third quarter and 6% to 7% in the fourth quarter, while maintaining its full-year expense-growth expectation of 7% to 8%.
The effective tax rate was 21.7% in the quarter, reflecting the tax credit transaction. Tan said Primerica expects effective tax rates of around 23% in the third quarter and 22% in the fourth quarter, with additional tax benefits anticipated in both periods. The company does not plan to acquire additional income tax credits in 2026.
Primerica ended the quarter with $587 million in holding-company cash and available-for-sale securities. Primerica Life’s estimated risk-based capital ratio was 440%. Return on adjusted equity increased 90 basis points year over year to 33.1%.
Mortgage activity also increased, with U.S. mortgage loan volume rising 13% year over year and Canadian referral activity increasing 11%.
About Primerica (NYSE:PRI)
Primerica, Inc is a financial services company that focuses on delivering term life insurance and investment products to middle-income households in the United States and Canada. The firm operates a network of independent, licensed representatives who provide personalized guidance on coverage needs, retirement planning, and wealth accumulation. Primerica's core mission is to help clients obtain affordable life insurance protection while also offering a suite of savings and investment solutions designed for long-term financial security.
In addition to term life insurance, Primerica offers a range of financial products and services that include mutual funds, annuities, auto and home insurance through partner carriers, and personal lending solutions such as secured and unsecured loans.
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