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Primerica Continues to Face Agent Licensing Friction

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What You Need to Know

  • The number of agents recruited climbed 12%.
  • The number of agents who were fully licensed increased just 2%.
  • The CEO says COVID-19 awareness has helped both life sales and investment sales.

The COVID-19 pandemic helped Primerica Inc. increase sales of both life insurance and investment products in the first quarter, but it continued to hurt the company’s ability to get new agents fully licensed.

The Duluth, Georgia-based life insurer talked about its agent force Wednesday, when it released its latest quarterly earnings.

“The impact of COVID has heightened consumer awareness concerning their finances, helping to drive record production results,” Glenn Williams, the company’s CEO, said in a comment included in the earnings announcement.

The number of term life policies sold increased 16%, to about 83,000, and investment and savings product sales increased 27%, to $2.9 billion.

Net earnings and agent counts were up.

But ”the licensing process remained challenged as social-distancing measures limited pre-licensing class access and states continued to work through COVID-related backlogs,” Primerica said. “As a result, the company saw only a 2% increase in licensing.”

Primerica has been reporting pandemic-related agent licensing concerns for the past year.

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Mortality

Primerica’s term life business “incurred an estimated $21 million in COVID-related death claims, net of reinsurance, in line with expectations,” Primerica said.

Primerica said in its Form 10-K for 2020 that it generally reinsures 80% to 90% of mortality risk for all term life policies, excluding certain riders. More than half of its reinsurance came from affiliates of Swiss Re.

Earnings

Primerica (PRI) is reporting $97 million in net income for the latest quarter on $638 million in revenue, up from $72 million in net income on $525 million in revenue for the first quarter of 2020.

Here’s how some of the company’s distribution indicator numbers changed, year-over-year:

  • Life-licensed sales force: 132,030 (up from 130,095).
  • Recruits: 94,633 (up from 84,762).
  • Average number of policies sold per rep per month: 0.21 (up from 0.18).

The sales force count includes about 2,400 agents who are using temporary licenses due to COVID-19, who are unlikely to convert to permanent licenses, or who are using licenses that have been extended due to the pandemic and are unlikely to renew their licenses, Primerica estimated.

The number of life insurance policies sold increased to 82,667 policies, from 71,318 policies.

Spending on sales-based sales commissions increased to $122 million, from $97 million.

(Image: alphaspirit/Shutterstock.com)