Q2 2026 Primerica Inc Earnings Call

August 6, 2026

Speaker #1: And welcome to the Primarica second quarter 2026 earnings webcast. At this time, all participants are in a listen-only mode; a question-and-answer session will follow the formal presentation.

Speaker #1: If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded.

Speaker #1: I would now like to turn the conference over to your host, Nicole Russell, Senior Vice President, Investor Relations, thank you. You may begin.

Speaker #2: Thank you, operator, and good morning, everyone. Welcome to Primarica's second quarter earnings call. A copy of our earnings press release issued last night, along with other materials relevant to today's call, are posted on the Investor Relations section of our website.

Speaker #2: Joining our call today are our Chief Executive Officer, Glenn Williams, and our Chief Financial Officer, Tracy Tan. Our comments this morning may contain forward-looking statements.

Operator: Greetings, welcome to the Primerica Q2 2026 earnings webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Nicole Russell, Senior Vice President, Investor Relations. Thank you. You may begin.

Speaker #1: Greetings, and welcome to the Primerica second quarter 2026 earnings webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Speaker #2: In accordance with the Safe Harbor Provisions of the Securities Litigation Reform Act, we assume no obligation to update these statements to reflect new information, and refer you to our most recent Form 10-K filing as may be modified by subsequent Form 10-Q for a list of risk and uncertainties that could cause actual results to materially differ from those expressed or implied.

Speaker #1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker #1: I would now like to turn the conference over to your host, Nicole Russell, senior vice president, investor relations, thank you. You may begin.

Speaker #2: We also reference certain non-GAAP measures, which we believe provide additional insight into the company's financial results. Reconciliation of non-GAAP measures, to their respective GAAP numbers, are included in our earnings press release.

Speaker #2: Thank you, operator, and good morning, everyone. Welcome to call. A copy of our earnings press release issued last night, along with other materials relevant to today's call, are posted on the investor relations section of our website.

Nicole Russell: Thank you, operator, good morning, everyone. Welcome to Primerica's Q2 earnings call. A copy of our earnings press release issued last night, along with other materials relevant to today's call, are posted on the Investor Relations section of our website. Joining our call today are our Chief Executive Officer, Glenn Williams, and our Chief Financial Officer, Tracy Tan. Our comments this morning may contain forward-looking statements in accordance with the safe harbor provisions of the Securities Litigation Reform Act. We assume no obligation to update these statements to reflect new information and refer you to our most recent Form 10-K filing, as may be modified by subsequent Form 10-Q, for a list of risks and uncertainties that could cause actual results to materially differ from those expressed or implied. We also reference certain non-GAAP measures, which we believe provide additional insight into the company's financial results.

Speaker #2: I would now like to turn the call over to Glenn.

Speaker #3: Thank you, Nicole, and thanks, everyone, for joining us this morning. Our second quarter results, again, demonstrate the strength and resilience of Primarica's business model.

Speaker #2: Joining our call today are our chief executive officer, Glenn Williams, and our chief financial officer, Tracy Tan. Our comments this morning may contain forward-looking statements.

Speaker #3: The balanced and complementary nature of our two key business lines continues to serve us well. With our insurance segment providing stability and consistent earnings, while our investments business generated exceptional growth.

Speaker #3: Each business is an important contributor to cash flow, and because they often respond differently to changing economic and market conditions, the combination provides an important source of stability across a variety of operating environments.

Speaker #3: Slides that address our second quarter results in more detail can be found beginning on page 7 of our Investor Deck. Year over year, we increased adjusted operating revenues by 8% and adjusted net operating income by 11%.

Speaker #3: The growth was driven primarily by our investments business, where revenues grew 21% and pre-tax income grew 31%. Adjusted operating EPS increased 17% to $6.41, which included income tax benefits from a tax equity investment made during the second quarter, that reduced income tax expense by 4.6 million dollars and added roughly $15 per diluted share during the quarter.

Nicole Russell: Reconciliation of non-GAAP measures to their respective GAAP numbers are included in the earnings press release. I would now like to turn the call over to Glenn.

Speaker #2: I would now like to turn the call over to Glenn.

Speaker #3: Thank you, Nicole, and thanks, everyone, for joining us this morning. Our second quarter results again demonstrate the strength and resilience of Primerica's business model.

Glenn Williams: Thank you, Nicole, thanks, everyone, for joining us this morning. Our Q2 results again demonstrate the strength and resilience of Primerica's business model. The balanced and complementary nature of our two key business lines continues to serve us well, with our Insurance segment providing stability and consistent earnings while our Investments business generated exceptional growth. Each business is an important contributor to cash flow, because they often respond differently to changing economic and market conditions, the combination provides an important source of stability across a variety of operating environments. Slides that address our Q2 results in more detail can be found beginning on page seven of our investor deck. Year-over-year, we increased adjusted operating revenues by 8% and adjusted net operating income by 11%. The growth was driven primarily by our Investments business, where revenues grew 21% and pre-tax income grew 31%.

Speaker #3: The balanced and complementary nature of our two key business lines continues to serve us well, with our insurance segment providing stability and consistent earnings while our investments business generated exceptional growth.

Speaker #3: Our business continues to generate significant cash flow, allowing us to support our sales force with initiatives designed to enhance productivity and help them grow their businesses, while also providing attractive returns to stockholders.

Speaker #3: During the second quarter, we returned $173 million to stockholders through a combination of $135 million of share repurchases and $37 million in dividends. This brings our total return to stockholders year to date to $352 million.

Speaker #3: Slides that address our second quarter results in more detail can be found beginning on page 7 of our investor deck. Year over year, we increased adjusted operating revenues by 8% and adjusted net operating income by 11%.

Speaker #3: Turning to distribution, our entrepreneurial business opportunity remains very attractive to individual seeking supplemental income or those looking for an alternative career path. Middle-income families have been largely ignored by the financial services industry, creating substantial opportunities for our sales force.

Speaker #3: The growth was driven primarily by our investments business, where revenues grew 21% and pre-tax income grew 31%. Adjusted operating EPS increased 17% to $6.41, which included income tax benefits from a tax equity investment made during the second quarter, that reduced income tax expense by 4.6 million, and added roughly $15 per diluted share during the quarter.

Glenn Williams: Adjusted operating EPS increased 17% to $6.41, which included income tax benefits from a tax equity investment made during the Q2 that reduced income tax expense by $4.6 million and added roughly $0.15 per diluted share during the quarter. Our business continues to generate significant cash flow, allowing us to support our sales force with initiatives designed to enhance productivity and help them grow their businesses, while also providing attractive returns to stockholders. During the Q2, we returned $173 million to stockholders through a combination of $135 million of share repurchases and $37 million in dividends. This brings our total return to stockholders year to date to $352 million. Turning to distribution, our entrepreneurial business opportunity remains very attractive to individuals seeking supplemental income or those looking for an alternative career path.

Speaker #3: Our powerful distribution model uniquely positions Primarica to address those needs and drive sustainable long-term growth. During the second quarter, recruiting increased 2% on a year-over-year basis, benefiting in part from a reduced licensing fee incentive during the month of April.

Speaker #3: Recruiting is the starting point for distribution growth and an important leading indicator of momentum. Success in our business depends on new recruits engaging early in the process and committing themselves to becoming licensed representatives.

Speaker #3: This drives licensing and, over time, growth in the size of our sales force and future production. Supported by licensing coaches and enhanced training programs, our field leadership is focused on helping new recruits navigate the field training and licensing process.

Speaker #3: Turning to distribution, our entrepreneurial business opportunity remains very attractive to individuals seeking supplemental income or those looking for an alternative career path. Middle-income families have been largely ignored by the financial services industry, creating substantial opportunities for our sales force.

Speaker #3: The number of individuals obtaining a new life license during the second quarter and the total number of life license representatives at quarter-end remain below prior-year levels, reflecting the cumulative impact of lower recruiting over the last few quarters.

Glenn Williams: Middle-income families have been largely ignored by the financial services industry, creating substantial opportunities for our sales force. Our powerful distribution model uniquely positions Primerica to address those needs and drive sustainable long-term growth. During the Q2, recruiting increased 2% on a year-over-year basis, benefiting in part from a reduced licensing fee incentive during the month of April. Recruiting is the starting point for distribution growth and an important leading indicator of momentum. Success in our business depends on new recruits engaging early in the process and committing themselves to becoming licensed representatives. This drives licensing and, over time, growth in the size of our sales force and future production. Supported by licensing coaches and enhanced training programs, our field leadership is focused on helping new recruits navigate the field training and licensing process.

Speaker #3: While we're encouraged by the second quarter's improvement in recruiting, its impact has not yet been reflected in licensing results due to the natural lag between recruiting and licensing.

Speaker #3: Our powerful distribution model uniquely positions Primerica to address those needs and drive sustainable long-term growth. During the second quarter, recruiting increased 2% on a year-over-year basis, benefiting in part from a reduced licensing fee incentive during the month of April.

Speaker #3: Excitement is building as we move closer to our 2027 convention. The convention has historically served as a catalyst for momentum and growth, and on July 6 of this year, we officially launched the $365-day countdown to this important event, celebrating the milestone of our 50th anniversary.

Speaker #3: During this launch, our announcements included a month of discounted licensing fees, targeted promotions, and other incentives designed to focus on growth in both sales force size and productivity.

Speaker #3: These initiatives are intended to reinforce activities that have historically generated strong results. Based on current trends, we expect more favorable comparative distribution results in the second half of 2026, with full-year sales force size projected to be flat to down 2% compared to 2025.

Speaker #3: The number of individuals obtaining a new life license during the second quarter and the total number of life license representatives at quarter end remain below prior year levels, reflecting the cumulative impact of lower recruiting over the last few quarters.

Glenn Williams: The number of individuals obtaining a new life license during the Q2 and the total number of life license representatives at quarter end remain below prior year levels, reflecting the cumulative impact of lower recruiting over the last few quarters. While we're encouraged by the Q2's improvement in recruiting, its impact has not yet been reflected in licensing results due to the natural lag between recruiting and licensing. Excitement is building as we move closer to our 2027 convention. The convention has historically served as a catalyst for momentum and growth, and on July 6 of this year, we officially launched the 365-day countdown to this important event, celebrating the milestone of our 50th anniversary. During this launch, our announcements included a month of discounted licensing fees, targeted promotions, and other incentives designed to focus on growth in both sales force size and productivity.

Speaker #3: Focusing on production, second-quarter results continue to reflect differing dynamics across our two major product lines. Demand for investment products remains very strong, while life sales continue to be affected by economic uncertainty.

Speaker #3: Excitement is building, as we move closer to our 2027 convention. The convention has historically served as a catalyst for momentum and growth, and on July 6 of this year, we officially launched the $365-day countdown to this important event, celebrating the milestone of our 50th anniversary.

Speaker #3: Starting with our insurance business, estimated annualized issued premiums, which include additions to existing policies declined 9%, while issued policies declined 12% compared to the prior-year period, reflecting a continuation of recent trends that have pressured middle-income families.

Speaker #3: Productivity during the quarter was 0.18 policies per life license rep, which remained below historical levels but improved from the first quarter of 2026. While the sales environment remains challenging, the need for life insurance protection is unchanged.

Glenn Williams: These initiatives are intended to reinforce activities that have historically generated strong results. Based on current trends, we expect more favorable comparative distribution results in the H2 of 2026, with full-year sales force size projected to be flat to down 2% compared to 2025. Focusing on production, Q2 results continue to reflect differing dynamics across our two major product lines. Demand for investment products remain very strong, while life sales continue to be affected by economic uncertainty. Starting with our insurance business, estimated annualized issued premiums, which include additions to existing policies, declined 9%, while issued policies declined 12% compared to the prior year period, reflecting a continuation of recent trends that have pressured middle-income families. Productivity during the quarter was 0.18 policies per life license rep, which remained below historical levels but improved from the Q1 of 2026.

Speaker #3: Making our role in educating families about protecting their financial futures more important than ever. While we believe the year-over-year comparisons and the number of term policies issued during the second half of 2026 will improve, we expect full-year 2026 issued policies to decline by mid-single digits.

Speaker #3: Focusing on production, second quarter results continue to reflect differing dynamics across our two major product lines. Demand for investment products remains very strong, while life sales continue to be affected by economic uncertainty.

Speaker #3: Turning to our investments business, we delivered another outstanding quarter and continue to benefit from favorable industry trends and strong client engagement. Total security sales increased 23% year over year, reflecting broad-based demand for retirement and investment solutions across our portfolio.

Speaker #3: Starting with our insurance business, estimated annualized issued premiums—which include additions to existing policies—declined 9%, while issued policies declined 12% compared to the prior year period, reflecting a continuation of recent trends that have pressured middle-income families.

Speaker #3: Managed account sales increased 43%, driven by continued interest in advisory solutions and professional portfolio management. Mutual fund sales increased 20%, supported by strong activity in both the United States and Canada.

Speaker #3: Productivity during the quarter was 0.18 policies per life license rep, which remained below historical levels, but improved from the first quarter of 2026. While the sales environment remains challenging, the need for life insurance protection is unchanged.

Speaker #3: Variable annuity sales grew 17%, reflecting clients' focus on retirement preparedness and guaranteed income solutions. Assets under management reached a record $140 billion at quarter-end, representing a 16% increase compared to June 30, 2025.

Glenn Williams: While the sales environment remains challenging, the need for life insurance protection is unchanged, making our role in educating families about protecting their financial futures more important than ever. While we believe the year-over-year comparisons and the number of term policies issued during H2 2026 will improve, we expect full-year 2026 issued policies to decline by mid-single digits. Turning to our investments business, we delivered another outstanding quarter and continued to benefit from favorable industry trends and strong client engagement. Total security sales increased 23% year-over-year, reflecting broad-based demand for retirement and investment solutions across our portfolio. Managed Accounts sales increased 43%, driven by continued interest in advisory solutions and professional portfolio management. Mutual Funds sales increased 20%, supported by strong activity in both the United States and Canada. Variable Annuities sales grew 17%, reflecting clients' focus on retirement preparedness and guaranteed income solutions.

Speaker #3: This makes our role in educating families about protecting their financial futures more important than ever. While we believe the year-over-year comparisons and the number of term policies issued during the second half of 2026 will improve, we expect full-year 2026 issued policies to decline by mid-single digits.

Speaker #3: Growth was supported by favorable equity market performance, and continued positive client inflows. Importantly, our growth continues to be driven by more than market appreciation alone.

Speaker #3: During the quarter, we generated approximately $397 million of net inflows, reflecting continued demand for our investment solutions and the ongoing strength of our distribution model.

Speaker #3: Turning to our investments business, we deliver another outstanding quarter and continue to benefit from favorable industry trends and strong client engagement. Total security sales increased 23% year over year, reflecting broad-based demand for retirement and investment solutions across our portfolio.

Speaker #3: The long-term drivers supporting our investment business remain firmly in place. Clients continue to prioritize retirement savings, wealth accumulation, and access to personalized financial guidance.

Speaker #3: Our educational approach and powerful distribution model position us to meet those needs. While market conditions will inevitably fluctuate, the underlying demand for retirement planning and long-term investment solutions remains constant.

Speaker #3: Variable annuity sales grew 17%, reflecting clients' focus on retirement preparedness and guaranteed income solutions. Assets under management reached a record $140 billion at quarter end, representing a 16% increase compared to June 30, 2025.

Speaker #3: We believe our ability to serve clients' protection and investment needs through a single distribution platform remains a significant competitive advantage. Based on current projections, we expect full-year ISP sales to increase 10% to 15% in 2026, reflecting growth compared to the prior year despite more challenging comparisons in the second half.

Glenn Williams: Assets under management reached a record $140 billion at quarter end, representing a 16% increase compared to 30 June 2025. Growth was supported by favorable equity market performance and continued positive client inflows. Importantly, our growth continues to be driven by more than market appreciation alone. During the quarter, we generated approximately $397 million of net inflows, reflecting continued demand for our investment solutions and the ongoing strength of our distribution model. The long-term drivers supporting our investment business remain firmly in place. Clients continue to prioritize retirement savings, wealth accumulation, and access to personalized financial guidance. Our educational approach and powerful distribution model position us to meet those needs. While market conditions will inevitably fluctuate, the underlying demand for retirement planning and long-term investment solutions remains constant. We believe our ability to serve clients' protection and investment needs through a single distribution platform remains a significant competitive advantage.

Speaker #3: Our mortgage business also continued to perform well during the quarter. In the United States, mortgage loan volume increased 13% year over year, supported by more than 3,600 licensed mortgage representatives.

Speaker #3: In Canada, we saw an 11% increase in referral activity as market conditions remained favorable. Our mortgage business remains an important way for our representatives to deepen client relationships and address another key financial need for middle-income families.

Speaker #3: The opportunity to serve middle-income families remains as attractive as ever. These families continue to face a significant need for financial guidance, life insurance protection, debt reduction, and retirement preparedness.

Speaker #3: We believe our ability to serve clients' protection and investment needs through a single distribution platform remains a significant competitive advantage. Based on current projections, we expect full-year ISP sales to increase 10% to 15% in 2026, reflecting growth compared to the prior year, despite more challenging comparisons in the second half.

Speaker #3: Their needs remain largely unmet by the broader financial services industry, creating a substantial long-term growth opportunity for Prime Erica. Through our unique distribution model, our representatives are well-positioned to meet these needs while creating long-term value for our stockholders.

Glenn Williams: Based on current projections, we expect full-year ISP sales to increase 10% to 15% in 2026, reflecting growth compared to the prior year, despite more challenging comparisons in H2. Our mortgage business also continued to perform well during the quarter. In the United States, mortgage loan volume increased 13% year-over-year, supported by more than 3,600 licensed mortgage representatives. In Canada, we saw an 11% increase in referral activity as market conditions remained favorable. Our mortgage business remains an important way for our representatives to deepen client relationships and address another key financial need for middle-income families. The opportunity to serve middle-income families remains as attractive as ever. These families continue to face a significant need for financial guidance, life insurance protection, debt reduction, and retirement preparedness. Their needs remain largely unmet by the broader financial services industry, creating a substantial long-term growth opportunity for Primerica.

Speaker #3: Now, I'll turn it over to Tracy for the financial results.

Speaker #4: Thank you, Glenn, and good morning, everyone. Our second quarter results reflected another quarter of strong growth in our investment business and stable results in our term life insurance business.

Speaker #4: Our investment business remains the primary driver of earnings growth, while our insurance business continued to provide consistent earnings and predictable cash flow. Combined, these businesses drove return on adjusted equity up 90 basis points year over year to 33.1%.

Speaker #3: In Canada, we saw an 11% increase in referral activity, as market conditions remained favorable. Our mortgage business remains an important way for our representatives to deepen client relationships and address another key financial need for middle-income families.

Speaker #4: Starting with the term life segment, operating revenues were largely unchanged year over year at $444 million while adjusted direct premiums were up 3.4%. Turning to benefits and claims, mortality experience during the quarter remained favorable relative to our long-term actuarial assumptions.

Speaker #3: Their needs remain largely unmet by the broader financial services industry, creating a substantial long-term growth opportunity for Primerica. Through our unique distribution model, our representatives are well-positioned to meet these needs while creating long-term value for our stockholders.

Glenn Williams: Through our unique distribution model, our representatives are well-positioned to meet these needs while creating long-term value for our stockholders. Now I'll turn it over to Tracy for the financial results.

Speaker #4: Consistent with the trend, we have seen over the recent past, while lapse rates were elevated but generally stable. Benefits and claims included a 4.9 million dollars remeasurement gain in the second quarter of 2026 compared to a 5.7 million remeasurement gain during the second quarter of 2025.

Speaker #3: Now I'll turn it over to Tracy for the financial results.

Speaker #2: Thank you, Glenn, and good morning, everyone. Our second quarter results reflected another quarter of strong growth in our investment business and stable results in our term life insurance business.

Tracy Tan: Thank you, Glenn, and good morning, everyone. Our Q2 results reflected another quarter of strong growth in our investment business and stable results in our Term Life insurance business. Our investment business remains the primary driver of earnings growth, while our insurance business continued to provide consistent earnings and predictable cash flow. Combined, these businesses drove return on adjusted equity up 90 basis points year over year to 33.1%. Starting with the Term Life segment, operating revenues were largely unchanged year over year at $444 million, while Adjusted Direct Premiums were up 3.4%. Turning to benefits and claims, mortality experience during the quarter remained favorable relative to our long-term actuarial assumptions, consistent with the trend we have seen over the recent past, while lapse rates were elevated but generally stable.

Speaker #2: Our investment business remains the primary driver of earnings growth, while our insurance business continued to provide consistent earnings and predictable cash flow. Combined, these businesses drove return on adjusted equity up 90 basis points year over year, to 33.1%.

Speaker #4: The benefits and claims ratio was 57.9% compared to 57.5% in the second quarter of 2025. As a reminder, we're able to meaningfully reduce earnings volatility by seeding a substantial portion of our mortality risks through reinsurance.

Speaker #2: Starting with the term life segment, operating revenues were largely unchanged year over year, at $444 million while adjusted direct premiums were up 3.4%. Turning to benefits and claims, mortality experienced during the quarter remained favorable relative to our long-term actuarial assumptions, consistent with a trend we have seen over the recent past, while lapse rates were elevated but generally stable.

Speaker #4: As a result, the term life business continues to exhibit financial characteristics of a fee-based business model. Looking at other key financial ratios, the DAC amortization and insurance commissions ratio remains stable at 12.3%, while the insurance expense ratio was 8.4% compared to 7.6% in the prior year period.

Speaker #2: Benefits and claims included a 4.9 million dollars remeasurement gain in the second quarter of 2026, compared to a 5.7 million remeasurement gain during the second quarter of 2025.

Tracy Tan: Benefits and claims included a $4.9 million remeasurement gain in Q2 2026, compared to a $5.7 million remeasurement gain during Q2 2025. The benefits and claims ratio was 57.9%, compared to 57.5% in Q2 2025. As a reminder, we are able to meaningfully reduce earnings volatility by ceding a substantial portion of our mortality risk through reinsurance. As a result, the Term Life business continues to exhibit financial characteristics of a fee-based business model. Looking at other key financial ratios, the DAC amortization and insurance commissions ratio remained stable at 12.3%, while the insurance expense ratio was 8.4%, compared to 7.6% in the prior year period. I will provide additional commentary on expenses on a consolidated basis later in my prepared remarks.

Speaker #4: I will provide additional commentary on expenses on a consolidated basis later in my prepared remarks. The operating margin was 21.3% in line with the annual guidance we provided during our first quarter 2026 earnings call.

Speaker #2: The benefits and claims ratio was 57.9%, compared to 57.5% in the second quarter of 2025. As a reminder, we're able to meaningfully reduce earnings volatility by seeding a substantial portion of our mortality risk through reinsurance.

Speaker #4: Looking ahead, we continue to expect adjusted direct premiums to grow around 3.5% on a full-year basis, we also expect the benefits and claims ratio to be around 58%, the DAC amortization and commissions ratio to be around 12 to 13%, and the full-year operating margin to be approximately 21%, excluding any impact from assumption changes associated with our annual assumption review.

Speaker #2: As a result, the term life business continues to exhibit financial characteristics of a fee-based business model. Looking at other key financial ratios, the DAC amortization and insurance commissions ratio remained stable at 12.3%, while the insurance expense ratio was 8.4%, compared to 7.6% in the prior year period.

Speaker #4: Turning to ISP segment, the business continued to deliver strong results during the quarter driven by the same favorable trends that have driven our investment business in recent years, including strong client demand, broader product offering from recent years, and favorable equity market conditions.

Speaker #2: I will provide additional commentary on expenses on a consolidated basis later in my prepared remarks. The operating margin was 21.3%, in line with the annual guidance we provided during our first quarter 2026 earnings call.

Tracy Tan: The operating margin was 21.3%, in line with the annual guidance we provided during our Q1 2026 earnings call. Looking ahead, we continue to expect Adjusted Direct Premiums to grow around 3.5% on a full year basis. We also expect the benefits and claims ratio to be around 58%, the DAC amortization and commissions ratio to be around 12% to 13%, and the full year operating margin to be approximately 21%, excluding any impact from assumption changes associated with our annual assumption review. Turning to ISP segment. The business continued to deliver strong results during the quarter, driven by the same favorable trends that have driven our investment business in recent years, including strong client demand, broader product offering from recent years, and favorable equity market conditions.

Speaker #4: As our investment business continues to grow, the segment now accounts for approximately 42% of consolidated revenues, compared to 37% in the prior year period.

Speaker #2: Looking ahead, we continue to expect adjusted direct premiums to grow around 3.5% on a full-year basis, we also expect the benefits and claims ratio to be around 58%, the DAC amortization and commissions ratio to be around 12 to 13%, and the full-year operating margin to be approximately 21%, excluding any impact from assumption changes associated with our annual assumption review.

Speaker #4: This growth translated into strong financial performance and segment revenues increasing 21% and pre-tax operating income increasing 31% compared to the second quarter of 2025.

Speaker #4: On a year-over-year basis, sales-based revenues increased 17%, largely in line with commissionable sales growth, while asset-based revenues increased 28% compared to a 19% increase in the average client asset values.

Speaker #2: Turning to ISP segment, the business continued to deliver strong results during the quarter driven by the same favorable trends that have driven our investment business in recent years, including strong client demand, broader product offering from recent years, and favorable equity market conditions.

Speaker #4: We continued to see strong demand for US-managed accounts as well as Canadian mutual funds, distributed under the principal distributor model both of which generate higher levels of recurring fee-based revenues.

Speaker #2: As our investment business continues to grow, the segment now accounts for approximately 42% of consolidated revenues, compared to 37% in the prior year period.

Tracy Tan: As our investment business continues to grow, the segment now accounts for approximately 42% of consolidated revenues, compared to 37% in the prior year period. This growth translated into strong financial performance and segment revenues increasing 21% and pre-tax operating income increasing 31%, compared to Q2 2025. On a year-over-year basis, sale-based revenues increased 17%, largely in line with commissionable sales growth, while asset-based revenues increased 28%, compared to a 19% increase in the average client asset values. We continue to see strong demand for US Managed Accounts as well as Canadian Mutual Funds distributed under the Principal Distributor model, both of which generate higher levels of recurring fee-based revenues. The continued growth of these products contributed to stronger increase in asset-based revenues relative to average client asset values.

Speaker #4: The continued growth of these products contributed to stronger increase in asset-based revenues, relative to asset average client asset values. As our advisory solutions continue to scale, an increase in share of our earnings is being delivered from recurring fees, enhancing the quality and predictability of our revenue stream.

Speaker #2: This growth translated into strong financial performance, with segment revenues increasing 21% and pre-tax operating income increasing 31%, compared to the second quarter of 2025.

Speaker #2: On a year-over-year basis, sales-based revenues increased 17%, largely in line with commissionable sales growth, while asset-based revenues increased 28%, compared to a 19% increase in the average client asset values.

Speaker #4: Additionally, with approximately 75% of client assets invested for retirement purposes, our asset-based revenue tends to be highly sticky, further supporting the durability of the business.

Speaker #2: We continued to see strong demand for U.S.-managed accounts, as well as Canadian mutual funds, distributed under the principal distributor model both of which generate higher levels of recurring fee-based revenues.

Speaker #4: In the corporate and other distributed products segment, we recorded pre-tax adjusted operating income of 3.8 million dollars for the quarter compared to a 2.7 million dollars in the prior year period.

Speaker #4: The improvement was primarily driven by higher net investment income reflecting continued growth in the invested asset portfolio. Finally, consolidated insurance and other operating expenses were 166 million dollars in the quarter, up 8% year over year.

Speaker #2: The continued growth of these products contributed to stronger increase in asset-based revenues, relative to asset average client asset values. As our advisory solutions continue to scale, an increasing share of our earnings is being delivered from recurring fees, enhancing the quality and predictability of our revenue stream.

Tracy Tan: As our advisory solutions continue to scale, an increasing share of our earnings is being delivered from recurring fees, enhancing the quality and predictability of our revenue stream. Additionally, with approximately 75% of client assets invested for retirement purposes, our asset-based revenue tends to be highly sticky, further supporting the durability of the business. In the Corporate and Other Distributed Products segment, we recorded pre-tax adjusted operating income of $3.8 million for the quarter, compared to a $2.7 million in the prior year period. The improvement was primarily driven by higher net investment income, reflecting continued growth in the invested asset portfolio. Finally, consolidated insurance and other operating expenses were $166 million in the quarter, up 8% year over year. This increase was primarily driven by higher variable growth-related costs, compensation, and continued investments in technology.

Speaker #4: This increase was primarily driven by higher variable growth-related costs compensation and continued investments in technology. Looking ahead, as technology projects ramp up, we expect expense growth to be around 10 to 12% in the third quarter, and 6 to 7% in the fourth quarter, the increase in spending reflects the timing of project execution and does not change expected full-year expense growth of 7 to 8% in 2026.

Speaker #2: Additionally, with approximately 75% of client assets invested for retirement purposes, our asset-based revenue tends to be highly sticky, further supporting the durability of the business.

Speaker #2: In the corporate and other distributed products segment, we recorded pre-tax adjusted operating income of 3.8 million dollars for the quarter, compared to a 2.7 million dollars in the prior year period.

Speaker #2: The improvement was primarily driven by higher net investment income reflecting continued growth in the invested asset portfolio. Finally, consolidated insurance and other operating expenses were 166 million dollars in the quarter, up 8% year over year.

Speaker #4: The effective tax rate during the second quarter was 21.7% and down from prior year which primarily credit transaction that allows us to recognize a tax benefit.

Speaker #4: We expect an additional tax benefit in both the third and fourth quarters, resulting in effective tax rates of around 23% and 22% remained well diversified with an average credit rating of A.

Speaker #2: This increase was primarily driven by higher variable growth-related costs compensation and continued investments in technology. Looking ahead, as technology projects ramp up, we expect expense growth to be around 10 to 12% in the third quarter, and 6 to 7% in the fourth quarter, the increase in spending reflects the timing of project execution, and does not change expected full-year expense growth of 7 to 8% in 2026.

Tracy Tan: Looking ahead, as technology projects ramp up, we expect expense growth to be around 10% to 12% in Q3 and 6% to 7% in Q4. The increase in spending reflects the timing of project execution and does not change expected full year expense growth of 7% to 8% in 2026. The effective tax rate during Q2 was 21.7% and down from prior year, which primarily reflects an income tax credit transaction that allowed us to recognize a tax benefit. We expect an additional tax benefit in both Q3 and Q4, resulting in effective tax rates of around 23% and 22%, respectively. Our investment portfolio remained well-diversified with an average credit rating of A. The average rate on new investment purchases was 4.9% for the quarter, with an average credit rating of A minus.

Speaker #4: The average rate on new investment purchases was 4.9% for the quarter, with an average credit rating of A minus. The portfolio had a net unrealized loss of 140 million dollars at the end of June compared to 154 million dollars at the end of March.

Speaker #4: We believe this continues to reflect changes in interest rates rather than underlying credit concerns. And we have both the intent and ability to hold these investments to maturity.

Speaker #2: The effective tax rate during the second quarter was 21.7%, and down from prior year which primarily reflects an income tax credit transaction that allowed us to recognize a tax benefit.

Speaker #4: The growth of our investment business, combined with the stability of our insurance business, continues to support predictable earnings and strong cash flow generation. These attributes allow us to operate with relatively low capital requirements while generating attractive return on equity, helping to position primarica differently than traditional insurance companies.

Speaker #2: We expect an additional tax benefit in both the third and fourth quarters, resulting in effective tax rates of around 23% and 22%, respectively. Our investment portfolio remained well diversified with an average credit rating of A.

Speaker #2: The average rate on new investment purchases was 4.9% for the quarter, with an average credit rating of A-. The portfolio had a net unrealized loss of 140 million dollars at the end of June, compared to 154 million dollars at the end of March.

Speaker #4: Our holding company ended the quarter with 587 million dollars in cash and available for sale securities, and primarica lives estimated RBC ratio was 440%, reflecting the strength of our capital position.

Tracy Tan: The portfolio had a net unrealized loss of $140 million at the end of June, compared to $154 million at the end of March. We believe this continues to reflect changes in interest rates rather than underlying credit concerns, and we have both the intent and ability to hold these investments to maturity. The growth of our investment business, combined with the stability of our insurance business, continues to support predictable earnings. We ended the quarter with $587 million in cash and available for sale securities and Primerica Life's estimated RBC ratio was 440%, reflecting the strength of our capital position. With a revenue mix that is largely fee-like in its economic characteristics, we can generate more consistent financial results. Our returns and capital generation are similar to or better than distribution-focused peers such as investment and insurance brokerage firms, and stronger than traditional life insurance companies.

Speaker #4: With a revenue mix that is largely fee-like in its economic characteristics, we can generate more consistent financial results. Our returns and capital generation are similar to or better than distribution-focused peers such as investment and insurance brokerage firms.

Speaker #2: We believe this continues to reflect changes in interest rates, rather than underlying credit concerns. We have both the intent and ability to hold these investments to maturity.

Speaker #2: The growth of our investment business, combined with the stability of our insurance business, continues to support predictable earnings quarter with 587 million dollars in cash and available for sale securities, and primarily estimated RPC ratio was 440%, reflecting the strength of our capital position.

Speaker #4: And stronger than traditional life insurance companies. We believe this differentiated profile will continue to be a significant long-term strength of the business. With that operator, please open the line for questions.

Speaker #5: Thank you. If you'd like to ask a question, please press star one on your telephone keypad, or confirmation tone will indicate your line is in the question queue.

Speaker #5: You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #5: To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Dan Bergman, with Judy Kellen.

Speaker #2: With a revenue mix that is largely fee-like in its economic characteristics, we can generate more consistent financial results. Our returns and capital generation are similar to or better than distribution-focused peers such as investment and insurance brokerage firms.

Speaker #5: Please proceed with your question.

Speaker #3: Morning, Dan.

Speaker #6: Hey, good morning. I believe in the prepared emergency guided for term life policies issued to fall mid-single digits this year, which would imply some growth in the remainder of the year after the weaker first half results.

Speaker #2: And stronger than traditional life insurance companies. We believe this differentiated profile will continue to be a significant long-term strength of the business. With that operator, please open the line for questions.

Speaker #6: So I was just hoping you could give us some more color on that guidance and what gives you confidence in the positive inflection. I mean, is it mainly easier year-over-year comps or other drivers?

Tracy Tan: We believe this differentiated profile will continue to be a significant long-term strength of the business. With that, operator, please open the line for questions.

Speaker #6: And bigger picture, any thoughts on what it will take and the likely drivers to see a sustained positive inflection in those term sales?

Speaker #3: Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #3: Yeah, you've interpreted that math correctly. We do expect some strengthening in our comparisons to previous years. Some of that is because the comparisons are becoming a little easier, but also we believe we're finding some firmer footing in the growth of our sales force as well as life insurance sales.

Operator: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the questions queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Dan Bergman with TD Cowen. Please proceed with your question.

Speaker #3: You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #3: To allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Dan Bergman, with Judy Kellen.

Speaker #3: We're adapting to the current environment. We mentioned practically every quarter the difficulties that are out there in middle-income families finances, that everybody's aware of.

Speaker #3: But I think we are adapting to those, and I believe that middle-income families are adapting to those. And perhaps with the exception of gasoline prices, some of that is easing some.

Speaker #3: Please proceed with your question.

Speaker #1: Morning, Dan.

Glenn Williams: Morning, Dan.

Speaker #4: Hey, good morning. I believe in the prepared emergency guided for term life policies issued to fall mid-single digits this year, which would imply some growth in the remainder of the year after the weaker first half results.

Dan Bergman: Hey, good morning. I believe in the prepared remarks you guided for Term Life policies issued to fall mid-single digits this year, which would imply some growth in the remainder of the year after the weaker H1 results. I was just hoping you could give some more color on that guidance and what gives you confidence in the positive inflection. Is it mainly easier year-over-year comps or other drivers? Bigger picture, any thoughts on what it will take and the likely drivers to see a sustained positive inflection in those Term Life sales?

Speaker #3: So I think all of that is reflected in a little more optimism in what happens the next two quarters. Again, it is a piece of the easier comparisons, but it's also some firming up of the front end of our business where we're seeing some early signs of positivity as well as results from the extreme focus we have on growing our life insurance business as well.

Speaker #4: So I was just hoping you could give us some more color on that guidance and what gives you confidence in the positive inflection. I mean, is it mainly easier year-over-year comps or other drivers?

Speaker #4: And bigger picture, any thoughts on what it will take and the likely drivers to see a sustained positive inflection in those term sales?

Speaker #3: So I think it's a combination of all of that, Dan.

Speaker #1: Yeah, you've interpreted that math correctly. We do expect some strengthening in our comparisons to previous years. Some of that is because the comparisons are becoming a little easier, but also we believe we're finding some firmer footing in the growth of our sales force, as well as life insurance sales, we're adapting to the current environment.

Speaker #6: Got it. Thanks. And then your ratio of capital return to earnings has been around 80%, maybe a little bit below that in recent years.

Glenn Williams: Yeah, you've interpreted that math correctly. We do expect some strengthening in our comparisons to previous years. Some of that is because the comparisons are becoming a little easier, also we believe we're finding some firmer footing in the growth of our sales force as well as life insurance sales. We're adapting to the current environment. We've mentioned practically every quarter the difficulties that are out there in middle-income families' finances that everybody's aware of. I think we are adapting to those, and I believe that middle-income families are adapting to those. Perhaps with the exception of gasoline prices, some of that is easing some. I think all of that is reflected in a little more optimism in what happens the next two quarters.

Speaker #6: Obviously, a very strong level, but just thinking as the earnings mix has been shifting from term life towards ISP of late, is there any potential to see that ratio rise incrementally?

Speaker #1: We mentioned practically every quarter the difficulties that are out there in middle-income families finances, that everybody's aware of. But I think we are adapting to those, and I believe that middle-income families are adapting to those.

Speaker #6: If this trend continues and you don't know, I guess in other words, could free cash flow growth exceed earnings growth over the near medium term?

Speaker #4: Good morning, Dan. The ratio of capital return around 80% is a very, very nice performance when we compare to either traditional life insurance or even compared to the income from mostly fee-based type of businesses like distribution type of businesses such as insurance brokers or the wealth managers.

Speaker #1: And perhaps with the exception of gasoline prices, some of that is easing some. So I think all of that is reflected in a little more optimism in what happens the next two quarters.

Speaker #1: Again, it is a piece of the easier comparisons, but it's also some firming up of the front end of our business where we're seeing some early signs of positivity as well as results from the extreme focus we have on growing our life insurance business as well.

Glenn Williams: Again, it is a piece of the easier comparisons, it is also some firming up of the front end of our business, where we are seeing some early signs of positivity, as well as results from the extreme focus we have on growing our life insurance business as well. I think it is a combination of all of that, Dan.

Speaker #4: So we really, really like to continue to provide a very strong performance as we have seen. That being said, we also value the consistency and predictability of the profile that we have.

Speaker #1: So I think it's a combination of all of that, Dan.

Speaker #4: Got it. Thanks. And then your ratio of capital return to earnings has been around 80%, maybe a little bit below that in recent years.

Dan Bergman: Got it. Thanks. Your ratio of capital return to earnings has been around 80%, maybe a little bit below that in recent years. Obviously, a very strong level. Just thinking as the earnings mix has been shifting from Term Life towards ISP of late, is there any potential to see that ratio rise incrementally, if this trend continues? I guess, in other words, could free cash flow growth exceed earnings growth over the near medium term?

Speaker #4: It is definitely a favorable potential trend as the investment business continue to scale up because as we all know, that business is typically even more capitalized compared to insurance business.

Speaker #4: Obviously, a very strong level, but just thinking as the earnings mix has been shifting from term life towards ISP of late, is there any potential to see that ratio rise incrementally?

Speaker #4: If this trend continues, I guess in other words, could free cash flow growth exceed earnings growth over the near medium term?

Speaker #4: That being said, our insurance business is a very strong foundation and provide a very, very solid predictable cash performance. So those combined, we believe that will give us a strong future potential of not only keeping the 80%, but we will see how the performance continue to provide potential upside.

Speaker #2: Good morning, Dan. The ratio of capital return around 80% is a very, very nice performance when we compare to either traditional life insurance or even compared to the income from mostly fee-based type of businesses like distribution type of businesses such as insurance brokers or the wealth managers.

Tracy Tan: Good morning, Dan. The ratio of capital return around 80% is a very nice performance when we compare to either traditional life insurance or even compared to the income from mostly fee-based type of businesses, like distribution type of businesses such as insurance brokers or the wealth managers. We really like to continue to provide a very strong performance as we have seen. That being said, we also value the consistency and predictability of the profile that we have. It is definitely a favorable potential trend as the investment business continue to scale up, because as we all know, that business is typically even more capital light compared to insurance business. That being said, our insurance business is a very strong foundation and provide a very solid, predictable cash performance.

Speaker #4: But that being said, the opportunity to keep a good portion for organic growth for our business is another show of confidence because we believe that our strong performance and investment into the business organically whether it's technology investment or investment as Glenn mentioned in our growth from the sales force and our marketing and all the training activities, licensing, opportunity to enhance our ability to improve our client servicing and attract more clients is another important piece.

Speaker #2: So we really, really like to continue to provide a very strong performance as we have seen. That being said, we also value the consistency and predictability of the profile that we have.

Speaker #2: It is definitely a favorable potential trend as the investment business continue to scale up because as we all know, that business is typically even more capitalized compared to insurance business.

Speaker #4: Therefore, the consistent ratio reflects not only our desire to give our investor a predictable and consistent performance, but also the confidence in ourselves to invest for long-term organic strong growth.

Speaker #2: That being said, our insurance business is a very strong foundation and provide a very, very solid predictable cash performance. So those combined, we believe that will give us a strong future potential of not only keeping the 80%, but we will see how the performance continue to provide potential upside.

Tracy Tan: Those combined, we believe that will give us a strong future potential of not only keeping the 80%, we will see how the performance continue to provide potential upside. That being said, the opportunity to keep a good portion for organic growth of our business is another show of confidence because we believe that our strong performance and investment into the business organically, whether it is technology investment or investment, as Glenn mentioned, in our growth from the sales force in our marketing, and all the training activities, licensing opportunity to enhance our ability to improve our client servicing and attract more clients is another important piece. Therefore, the consistent ratio reflects not only our desire to give our investor a predictable and consistent performance, also the confidence in ourselves to invest for long-term organic strong growth.

Speaker #6: Got it. Thank you so much.

Speaker #5: Thank you. Our next question comes from the line of Joel Hurwitz with Dowling & Partners. Please proceed with your question.

Speaker #2: But that being said, the opportunity to keep a good portion for organic growth for our business is another show of confidence because we believe that our strong performance and investment into the business for organically whether it's technology investment or investment as Glenn mentioned in our growth from the sales force and our marketing and all the training activities, licensing, opportunity to enhance our ability to improve our client servicing and attract more clients is another important piece.

Speaker #3: Welcome, Joel.

Speaker #6: Hey, good morning. Tracy, just one on capital. Cash at the holding company continues to build. I think you need a prepared remarks, you said.

Speaker #6: 587 million. I guess, any color on where you want hold co-cash to be? It seems well above your needs. And any color on potential drawdown in use of that capital?

Speaker #4: Yeah, good morning, Joel. Certainly, our capital is in a very strong position. There are several reasons that we want our capital to be extremely strong.

Speaker #2: Therefore, the consistent ratio reflects not only our desire to give our investor a predictable and consistent performance, but also the confidence in ourselves to invest for long-term organic strong growth.

Speaker #4: As we all know, that in the long run, economic situation, the macroeconomic, there's always uncertainty. So one of the things that we want our capital at the hold co to be strong is to provide resilience and even stronger capital positions to absorb any potential downturn.

Speaker #4: Got it. Thank you so much.

Dan Bergman: Got it. Thank you so much.

Speaker #3: Thank you. Our next question comes from the line of Joel Hurwitz with Dowling & Partners. Please proceed with your question.

Speaker #4: Our capital return program is determined after multi-year stress test. So the number one part of the holding company cash is to be able to withstand any sort of downturn to absorb that while we can provide organic growth.

Operator: Thank you. Our next question comes from the line of Joel Hurwitz with Dowling & Partners. Please proceed with your question.

Speaker #1: Joel.

Glenn Williams: Welcome, Joel.

Speaker #5: Hey, good morning. Tracy, just one on capital. Cash at the holding company continues to build. I think you need a prepared remarks, you said.

Joel Hurwitz: Hey, good morning. Tracy, just one on capital. Cash at the holding company continues to build. I think in your prepared remarks, you said $587 million. I guess any color on where you want Holdco cash to be? It seems well above your needs, and any color on potential drawdown and use of that capital?

Speaker #4: So that's a big part of consideration. The second part is our ability to really continue to build our fee-based distribution model and deliver strong solid earnings.

Speaker #5: 587 million. I guess, any color on where you want Holdco Cash to be? It seems well above your needs. And any color on potential drawdown in use of that capital?

Speaker #4: And that requires investment into technology, into our marketing programs, into how clients can better access our products as we have rolled out a broader-based products as an example for our investment at the hold co so it would be for multiple purposes.

Speaker #2: Yeah, good morning, Joel. Certainly, our capital is in a very strong position. There are several reasons that we want our capital to be extremely strong.

Tracy Tan: Yeah. Good morning, Joel. Certainly, our capital is in a very strong position. There are several reasons that we want our capital to be extremely strong. As we all know that in the long run economic situation or macroeconomic, there's always uncertainty. One of the things that we want our capital as a Holdco to be strong is to provide resilience and even stronger capital position to absorb any potential downturn. Our capital return program is determined after multi-year stress test. The number one part of the holding company cash is to be able to withstand any sort of downturn to absorb that while we can provide organic growth. That's a big part of consideration. The second part is our ability to really continue to build our fee-based distribution model and deliver strong, solid earnings.

Speaker #2: As we all know, that in the long run, economic situation, the macroeconomic, there's always uncertainty. So one of the things that we want our capital at the Holdco to be strong is to provide resilience and even stronger capital position to absorb any potential downturn.

Speaker #4: For absorbing downturn, for organic growth, for investment in technology. So from that perspective, we also continuously discuss with the board ways to generate strong return.

Speaker #2: Our capital return program is determined after multi-year stress test. So the number one part of the holding company cash is to be able to withstand any sort of downturn to absorb that while we can provide organic growth.

Speaker #4: As you can see from the 33% return on our equity, we believe we have a very good program and good process to make those decisions.

Speaker #2: So that's a big part of consideration. The second part is our ability to really continue to build our fee-based distribution model and deliver strong solid earnings.

Speaker #6: Okay. That's helpful. And then Glenn, can you just provide some more color on what you're seeing in the environment that's driving your outlook for the aging count for the full year to be lowered again?

Speaker #2: And that requires investment into technology, into our marketing programs, into how clients can better access our products as we have rolled out a broader-based products as an example for our investment business.

Tracy Tan: That requires investment into technology, into our marketing programs, into how clients can better access our products as we have rolled out a broader base product, as an example, for our investment business. That cash that we have at the Holdco, so it would be for multiple purposes, for absorbing downturns, for organic growth, for investment in technology. From that perspective, we also continuously discuss with the board other meaningful ways to generate strong return. As you can see from the 33% return on our equity, we believe we have a very good program and good process to make those decisions.

Speaker #6: Just trying to understand what's changed since the last call.

Speaker #3: Yeah. I think, Joel, it's simply that the impact of what we're doing came a little slower than we had hoped to create we are seeing positive impact as we discussed earlier, but it came a little slower in the year than we had hoped.

Speaker #2: So that cash that we have at the Holdco so it would be for multiple purposes. For absorbing downturn, for organic growth, for investment in technology.

Speaker #3: And so it's just not having an impact before year-end quite as much as we had hoped. Still expect it to have an impact. We're still working hard.

Speaker #2: So from that perspective, we also continuously discuss with the board on other meaningful ways to generate strong return. As you can see from the 33% return on our equity, we believe we have a very good program and good process to make those decisions.

Speaker #3: We believe on the right things. And beginning to see some results from that, it's just that the timing was a little later than we had anticipated.

Speaker #3: So we notched down our full-year projections as a result of that.

Speaker #6: Gotcha. That makes sense. Thank you.

Speaker #3: Certainly.

Speaker #5: Thank you. Our next question comes from the line of Wilma Bertis with Raymond James. Please proceed with your question.

Speaker #3: Morning, Wilma.

Speaker #5: Okay. That's helpful. And then Glenn, can you just provide some more color on what you're seeing in the environment that's driving your outlook for the aging count for the full year to be lowered again?

Speaker #5: Hey, good morning. We analyze sales and rep count growth around prior conventions, and we noticed that the only other times where life failed and rep count have trended down similar to where we're at right now is when there's a larger than two-year gap between events.

Joel Hurwitz: Okay. That's helpful. Glenn, can you just provide some more color on what you're seeing in the environment that's driving your

Joel Hurwitz: Okay. That's helpful. Glenn, can you just provide some more color on what you're seeing in the environment that's driving your your outlook for the agent count for the full year to be lowered again. Just trying to understand what's changed since the last call.

Joel Hurwitz: Your outlook for the agent count for the full year to be lowered again. Just trying to understand what's changed since the last call.

Speaker #5: Just trying to understand what's changed since the last call.

Speaker #1: Yeah. I think, Joel, it's simply that the impact of what we're doing came a little slower than we had hoped to create we are seeing positive impact as we discussed earlier, but it came a little slower in the year than we had hoped.

Glenn Williams: Yeah, I think, Joel, it's simply that the impact of what we're doing came a little slower than we had hoped to create. We are seeing positive impact, as we discussed earlier, but it came a little slower in the year than we had hoped. It's just not having an impact before year-end quite as much as we had hoped. Still expect it to have an impact. We're still working hard, we believe, on the right things and beginning to see some results from that. It's just that the timing was a little later than we'd anticipated, so we notched down our full-year projections as a result of that.

Speaker #5: So do you think the extended three-year gap is part of what's driving the current softness in life sales and rep count? And if so, maybe give a little color.

Speaker #1: And so it's just not having an impact before year-end quite as much as we had hoped. Still expect it to have an impact. We're still working hard.

Speaker #5: Thanks.

Speaker #3: I think Wilma has a timing impact on it. Certainly, our conventions are important event, and we try to maximize the impact on our business, the positive impact both before and after the event itself.

Speaker #1: We believe on the right things and beginning to see some results from that. It's just that the timing was a little later than we had anticipated.

Speaker #1: So we notched down our full-year projections as a result of that.

Speaker #3: So if you spread the events out, you spread the window out a little bit. But I think what we're dealing with is more fundamentally different than just the timing of the conventions.

Speaker #5: Gotcha. That makes sense. Thank you.

Joel Hurwitz: Got you. That makes sense. Thank you.

Speaker #1: Certainly.

Glenn Williams: Certainly.

Speaker #3: Thank you. Our next question comes from the line of Wilma Bertis with Raymond James. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Wilma Burdis with Raymond James. Please proceed with your question.

Speaker #3: Because the middle market went through a number of years of very difficult cost of living issues. With falling incomes as prices went up, now it others that we monitor that, again, other than the gasoline price gyrations, we're experiencing it looks like incomes for most families are outstripping the other cost of living increases right now.

Speaker #1: Good morning, Wilma.

Glenn Williams: Morning, Wilma.

Speaker #6: Hey, good morning. We analyze sales and rep count growth around prior conventions, and we noticed that the only other times where life sales and rep count have trended down similar to where we're at right now is when there's a larger-than-two-year gap between events.

Wilma Burdis: Hey, good morning. We analyzed sales and rep count growth around Primerica's prior conventions, we noticed that the only other times where life sales and rep count have trended down, similar to where we're at right now, is when there's a larger than 2-year gap between events. Do you think the extended 3-year gap is part of what's driving the current softness in life sales and rep count? If so, maybe give a little color. Thanks.

Speaker #6: So, do you think the extended three-year gap is part of what's driving the current softness in life sales and rep count? And if so, could you give a little color?

Speaker #3: But it's been a long time and there's a big hole to fill. So I would say the fundamentals of the middle-income financial budgets in families is the key issue that we're dealing with.

Speaker #6: Thanks.

Speaker #1: I think Wilma has a timing impact on it. Certainly, our conventions are important events, and we try to maximize the impact on our business.

Glenn Williams: I think, Wilma, it has a timing impact on it. Certainly, our conventions are an important event, and we try to maximize the impact on our business, the positive impact, both before and after the event itself. If you spread the events out, you spread the window out a little bit. I think what we're dealing with is more fundamentally different than just the timing of the conventions, because the middle market went through a number of years of very difficult cost of living issues with falling incomes as prices went up. Now it appears, based on our own survey as well as others that we monitor, that again, other than the gasoline price gyrations we're experiencing, it looks like incomes for most families are outstripping the other cost of living increases right now. It's been a long time, and there's a big hole to fill.

Speaker #3: And then the fact that we spread because of the World Cup not allowing us to be able to rent a stadium and also us wanting to have the event during our year of our 50th celebration, pushed it out a year.

Speaker #1: The positive impact both before and after the event itself. So if you spread the events out, you spread the window out a little bit.

Speaker #3: Those two things were convenient coincidences, I would say. It probably has delayed our ability to use that to help in the turnaround. So I would say the issue is more fundamental and the timing of the convention is more coincidental perhaps than described.

Speaker #1: But I think what we're dealing with is more fundamentally different than just the timing of the conventions. Because the middle market went through a number of years of very difficult cost of living issues.

Speaker #1: With falling incomes as prices went up, now it appears based on our own survey as well as others that we monitor that, again, other than the gasoline price gyrations, we're experiencing it looks like incomes for most families are outstripping the other cost of living increases right now.

Speaker #5: Okay. Thank you. The same analysis that showed that the activity around life sales and rep count seemed to actually slow as we approached the convention.

Speaker #5: I don't know if there's some distraction there or something else that was just what we kind of saw in the numbers. Although it was loose, a little bit loose, but we saw that that's usually followed by strong growth after the convention.

Speaker #1: But it's been a long time, and there's a big hole to fill. So I would say the fundamentals of the middle-income financial budgets in families is the key issue that we're dealing with.

Speaker #5: Does that sound reasonable given what you know and monitor on the Salesforce and how they respond to the convention? Thanks.

Glenn Williams: I would say the fundamentals of the middle-income financial budgets in families is the key issue that we're dealing with. The fact that we spread, because of the World Cup not allowing us to be able to rent a stadium and also us wanting to have the event during our year of our 50th celebration, pushed it out a year. Those two things were convenient coincidences, I would say. It probably has delayed our ability to use that to help in the turnaround. I would say the issue is more fundamental and the timing of the convention is more coincidental perhaps than described.

Speaker #3: Yeah. Absolutely. It does sound reasonable. I mean, we always take advantage of the excitement and anticipation leading up to the event. And in my prepared remarks, we marked the exact one-year countdown.

Speaker #1: And then the fact that we spread because of the World Cup not allowing us to be able to rent a stadium and also us wanting to have the event during our year of our 50th celebration pushed it out a year.

Speaker #3: We have a huge countdown clock in the lobby of our headquarters here. As well as doing a special broadcast, we announced some special incentives to kick off that final 365 days.

Speaker #1: Those two things were convenient coincidences, I would say. It probably has delayed our ability to use that to help in the turnaround. So I would say the issue is more fundamental and the timing of the convention is more coincidental perhaps than described.

Speaker #3: What that does is it creates a sense of urgency as the clock ticks down and a sense of urgency tends to make us as humans take action.

Speaker #3: So we don't want to miss that opportunity. Also, we ramped up our recognition of people accomplishing what we need them to accomplish during that period.

Speaker #3: Okay. Thank you.

Wilma Burdis: Okay. Thank you. The same analysis that shows that the activity around life sales and rep count seemed to actually slow as we approached the convention. I don't know if there's some distraction there or something else. That was just what we kind of saw in the numbers, although it was a little bit loose. We saw that that's usually followed by strong growth after the convention. Does that sound reasonable given what you know and monitor on the sales force and how they respond to the convention? Thanks.

Speaker #6: The same analysis that showed that the activity around life sales and rep count seemed to actually slow as we approached the convention. I don't know if there's some distraction there or something else that was just what we kind of saw in the numbers, although it was loose, a little bit loose, but we saw that that's usually followed by strong growth after the convention.

Speaker #3: So you're absolutely right. There is a unique window that we can take advantage of. And we are doing that. And that's a piece of the discussion about the results.

Speaker #3: And this convention is expected to be our largest ever as we celebrate 50 years of success. Of course, it's also a platform for us to do more fundamental things than just generate excitement as we roll out improvements in products and technology and support.

Speaker #6: Does that sound reasonable given what you know and monitor on the Salesforce and how they respond to the convention? Thanks.

Speaker #1: Yeah. Absolutely. It does sound reasonable. I mean, we always take advantage of the excitement and anticipation leading up to the event. And in my prepared remarks, we marked the exact one-year countdown.

Speaker #3: And so that's some of the impact after the convention that you were speaking of. So absolutely, if you look at the history of our numbers, you'll see a convention impact before and after.

Glenn Williams: Yeah, absolutely it does sound reasonable. We always take advantage of the excitement and anticipation leading up to the event. In my prepared remarks, we marked the exact one-year countdown, and we have a huge countdown clock in the lobby of our headquarters here. As well as doing a special broadcast, we announced some special incentives to kick off that final 365 days. What that does is it creates a sense of urgency as the clock ticks down, and a sense of urgency tends to make us as humans take action. We don't want to miss that opportunity. Also we ramped up our recognition of people accomplishing what we need them to accomplish during that period. You're absolutely right. There is a unique window that we can take advantage of, and we are doing that. That's a piece of the discussion about the results.

Speaker #3: But it's a piece of the total dynamics and you have to take the environment and the fundamentals into consideration as well.

Speaker #1: We have a huge countdown clock in the lobby of our headquarters here. As well as doing a special broadcast, we announced some special incentives to kick off that final 365 days.

Speaker #5: Okay. Thank you.

Speaker #3: Thank you.

Speaker #5: Thank you. Our next question comes from the line of Mark Hughes with Truist Security. Please proceed with your question.

Speaker #1: What that does is it creates a sense of urgency as the clock ticks down, and a sense of urgency tends to make us as humans take action.

Speaker #3: Good morning, Mark.

Speaker #1: So we don't want to miss that opportunity. Also, we ramped up our recognition of people accomplishing what we need them to accomplish during that period.

Speaker #6: Morning, Glenn. How are you? Morning, Tracy.

Speaker #3: Doing great, thanks.

Speaker #6: Nicole?

Speaker #7: Good morning.

Speaker #6: On the term life business, you've laid out kind of your expense expectations and I appreciate that detail with a little bit slower growth. Is there anything you can do on the expense side to kind of match the top-line trends until things perk back up a little bit?

Speaker #1: So you're absolutely right. There is a unique window that we can take advantage of, and we are doing that. And that's part of the discussion about the results.

Speaker #1: And this convention is expected to be our largest ever as we celebrate 50 years of success. Of course, it's also a platform for us to do more fundamental things than just generate excitement as we roll out improvements in products and technology and support.

Glenn Williams: This convention is expected to be our largest ever as we celebrate 50 years of success. Of course, it's also a platform for us to do more fundamental things than just generate excitement as we roll out improvements in products and technology and support. That's some of the impact after the convention that you were speaking of. Absolutely, if you look at the history of our numbers, you'll see a convention impact before and after. It's a piece of the total dynamics, and you have to take the environment and the fundamentals into consideration as well.

Speaker #7: Morning, Mark. That's a good question. So I'm the term live expenses. I think there are several things to unpack here. First, we would say that the top-line growth that you've seen in recent policy issuance is on the lower end.

Speaker #1: And so that's some of the impact after the convention that you were speaking of. So absolutely, if you look at the history of our numbers, you'll see a convention impact before and after.

Speaker #1: But it's a piece of the total dynamics, and you have to take the environment and the fundamentals into consideration as well.

Speaker #7: Nevertheless, our overall premium growth is really the larger impact of the enforced block. So it's very fairly consistent from that perspective. So that's why the ADP growth, the ranges, is not a typical huge swing.

Speaker #3: Okay. Thank you.

Wilma Burdis: Okay. Thank you.

Speaker #1: Thank you.

Glenn Williams: Thank you.

Speaker #3: Thank you. Our next question comes from the line of Mark Hughes with Truist Security. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Mark Hughes with Truist Securities. Please proceed with your question.

Speaker #1: Good morning, Mark.

Glenn Williams: Good morning, Mark.

Speaker #5: Morning, Glenn. How are you? Morning, Tracy.

Speaker #7: And it's a consistent block. Now, the investment that we make on the expenses piece, and that needs to be called out also, is to consider the long-term growth potential that we have in the business.

Mark Hughes: Morning, Glenn. How are you? Morning, Tracy.

Speaker #1: Doing great, thanks.

Speaker #5: Nicole, on the term life business: You've laid out your expense expectations, and I appreciate that detail, especially with a little bit slower growth.

Glenn Williams: Good morning.

Mark Hughes: Nicole.

Nicole Russell: Morning.

Tracy Tan: Morning.

Nicole Russell: On the Term Life business, you've laid out kind of your expense expectations, and appreciate that detail. With a little bit slower growth, is there anything you can do on the expense side to kind of match the top-line trends until things perk back up a little bit?

Mark Hughes: On the Term Life business, you've laid out kind of your expense expectations, and appreciate that detail. With a little bit slower growth, is there anything you can do on the expense side to kind of match the top-line trends until things perk back up a little bit?

Speaker #5: Is there anything you can do on the expense side to kind of match the top-line trends until things perk back up a little bit?

Speaker #7: The expense impact have several elements to it. First part is, as our co-insurance runoff, there is a piece of reimbursement that we get. As the co-insurance block becoming smaller, so there's some natural reduction of that favorability.

Speaker #7: Morning, Mark. That's a good question. So, on the term "live expenses," I think there are several things to unpack here. First, we would say that the top line of growth that you've seen in recent policy issuance is on the lower end.

Nicole Russell: Morning, Mark. That's a good question. On the Term Life expenses, I think there are several things to unpack here. First, we would say that the top line of growth that you've seen in recent policy issuance is on the lower end. Nevertheless, our overall premium growth is really the larger impact

Tracy Tan: Morning, Mark. That's a good question. On the Term Life expenses, I think there are several things to unpack here. First, we would say that the top line of growth that you've seen in recent policy issuance is on the lower end. Nevertheless, our overall premium growth is really the larger impact

Speaker #7: That's one piece. It's not a decisively largest amount, but that's an impact that is not something that we can really change. The other part is we also want to continuously, that's the most important piece, invest in the business, as Glenn has talked about.

Tracy Tan: off the in-force block. It's very fairly consistent from that perspective. That's why the ADP growth, the ranges, is not a typical huge swing, and it's a consistent block. The investment that we make on the expenses piece, and that needs to be called out also, is to consider the long-term growth potential that we have in the business. The expense impact have several elements to it. First part is, as our coinsurance run off, there is a piece of reimbursement that we get as the coinsurance block becoming smaller. There's some natural reduction of that favorability. That's one piece. It's not decisively a largest amount, but that's an impact. That is not something that we can really change. The other part is, we also want to continuously, that's the most important piece, invest in the business.

Speaker #7: We are certainly investing in our Salesforce technology, as well as our ability to underwrite better, smarter and also product improvement. And we've rolled out even enhancements to our next-generation of product in recent earlier in the year.

Speaker #7: And it's a consistent block. Now, the investment that we make on the expensive piece, and that needs to be called out also, is to consider the long-term growth potential that we have in the business.

Speaker #7: So all of those investment is in line with the long-term trend of these demand from the client that continues to be 14 trillion out there that our outlook in the expenses is really continue to gear up for serving our clients better and supporting the long-term growth.

Speaker #3: Yeah. Mark, I would also add to that that we're always sensitive about our expenses and looking for opportunities to control and reduce them. At the same time, we don't want to manage that so tightly by quarter that we miss the opportunities that we were looking at that we were talking about in the previous question.

Tracy Tan: As Glenn has talked about, we are certainly investing in our sales force, technology, as well as our ability to underwrite better, smarter, and also product improvement. We've rolled out even enhancements to our next generation of products earlier in the year. All of those investment is in line with a long-term trend of these demands from the client that continues to be $14 trillion out there, that our outlook in the expenses is really continue to gear up for serving our clients better and supporting the long-term growth.

Speaker #3: There's some significant opportunities in the timing where we are right now, whether it's the middle-income families beginning to come out of this time of stress or it's our convention, whatever else might be happening.

Speaker #3: So while we're always sensitive to expenses, we don't want to slash expenses at the opportunity when we can make an investment that could really impact our momentum in a positive way.

Speaker #6: Yeah. Understood. On the term life productivity, it sounds like things are on the upswing. As you reflect on this period, Glenn, where you've seen kind of this unusual drop in productivity, anything that was different this time around or the set of factors that put pressure on that productivity in a way that I think was unusual in the recent experience that if you reflect back on the last 10, 15 years, this was it struck me as an unusual period.

Speaker #7: So all of those investments are in line with a long-term trend of these demands from clients. There continues to be $14 trillion out there, and our outlook on expenses is really to continue gearing up to serve our clients better and support long-term growth.

Speaker #1: Yeah, Mark, I would also add to that that we're always sensitive about our expenses and looking for opportunities to control and reduce them. At the same time, we don't want to manage that so tightly by quarter that we miss the opportunities that we were looking at, that we were talking about in the previous question.

Glenn Williams: Yeah, Mark, I would also add to that we're always sensitive about our expenses and looking for opportunities to control and reduce them. At the same time, we don't want to manage that so tightly by quarter that we miss the opportunities that we were talking about in the previous question. There's some significant opportunities in the timing where we are right now, whether it's the middle income families beginning to come out of this time of stress, or it's our convention, whatever else might be happening. While we're always sensitive to expenses, we don't want to slash expenses at the opportunity when we could make an investment that could really impact our momentum in a positive way.

Speaker #6: Correct me if I'm wrong, but any reflections on that? And again, as you seem to be coming out of it now.

Speaker #1: There's some significant opportunities in the timing where we are right now, whether it's the middle-income families beginning to come out of this time of stress or it's our convention, whatever else might be happening.

Speaker #3: Certainly. Always looking for lessons we can learn. And I do think this has been in some ways a fairly unique time period over the last few years.

Speaker #3: The first thing when we remember the simplicity of the calculation is just a simple division calculation. We ramped up the size of our Salesforce probably at a record rate from 2021 maybe to or 2022 through 2024.

Speaker #1: So, while we're always sensitive to expenses, we don't want to slash expenses at a time when we can make an investment that could really impact our momentum in a positive way.

Speaker #5: Yeah. Understood. On the term life productivity, it sounds like things are on the upswing. As you reflect on this period, Glenn, where you've seen kind of this unusual drop in productivity, anything that was different this time around or the set of factors that put pressure on that productivity in a way that I think was unusual in the recent experience that if you reflect back on the last 10, 15 years, this was it struck me as an unusual period.

Mark Hughes: Yeah, understood. On the Term Life productivity, sounds like things are on the upswing. As you reflect on this period, Glenn, where you've seen kind of this unusual drop in productivity, anything that was different this time around or the set of factors that put pressure on that productivity in a way that I think was unusual in the recent experiences? If you reflect back on the last 10, 15 years, this struck me as an unusual period. Correct me if I'm wrong, but any reflections on that? Again, as you seem to be coming out of it now.

Speaker #3: And that bloated the denominator of the fraction, but that was as a result of our success. I wouldn't change any of that. I'd always like to have that pressure on productivity calculation because our Salesforce grew extraordinarily fast to a record size.

Speaker #3: So that's a piece of it that quite frankly, I'd like to keep. I'd like to see that growth return at record levels. I think you add to that then the pressure on the top part of the fraction, which is the unique cost of living, the economic and government policy uncertainty that went beyond the cost of living.

Speaker #5: Correct me if I'm wrong, but any reflections on that? And again, as you seem to be coming out of it now.

Speaker #3: I think we had an extreme dynamic on both sides of the calculation that led to the place where we are. Again, the good news is, and we think some of that is easing on the top part of the fraction.

Speaker #1: Certainly. Always looking for lessons we can learn. And I do think this has been in some ways a fairly unique time period over the last few years.

Glenn Williams: Certainly. Always looking for lessons we can learn. I do think this has been, in some ways, a fairly unique time period over the last few years. The first thing, when we remember the simplicity of the calculation, it's just a simple division calculation. We ramped up the size of our sales force probably at a record rate, from 2021 maybe to or 2022 through 2024. That bloated the denominator of the fraction, but that was as a result of our success. I wouldn't change any of that. I'd always like to have that pressure on productivity calculation because our sales force. I think you add to that then the pressure on the top part of the fraction, which is the unique cost of living, the economic and government policy uncertainty that went beyond the cost of living.

Speaker #1: The first thing when we remember the simplicity of the calculation is just a simple division calculation. We ramped up the size of our Salesforce probably at a record rate from 2021 maybe to or 2022 through 2024.

Speaker #3: I'd certainly like to keep applying stress to the bottom part by growing the Salesforce. But we have learned from that and we don't want to try to manage a number and lose the benefits of fast growth in our Salesforce.

Speaker #3: So we're going to balance that. We're always looking for balance. And so I do think we'll return to a more normal dynamic over time.

Speaker #1: And that bloated the denominator of the fraction, but that was as a result of our success. I wouldn't change any of that. I'd always like to have that pressure on the productivity calculation because of our Salesforce.

Speaker #3: But we did take some valuable lessons away from the unique period we've been through.

Speaker #6: Yeah. Yeah. And then Tracey, I think you already touched on this and maybe answered the question, but when I look at the asset-based revenue as a percentage of asset value, that's continued to kind of move up, progressively.

Speaker #1: I think you add to that then the pressure on the top part of the fraction, which is the unique cost of living, the economic and government policy uncertainty that went beyond the cost of living.

Speaker #6: I think you talked about more of a fee-based model and my takeaway from that is that that ratio probably steady to up from here.

Speaker #1: I think we had an extreme dynamic on both sides of the calculation that led to the place where we are. Again, the good news is we think some of that is easing.

Glenn Williams: I think we had an extreme dynamic on both sides of the calculation that led to the place where we are. Again, the good news is we think some of that is easing on the top part of the fraction. I'd certainly like to keep applying stress to the bottom part by growing the sales force. We have learned from that, and we don't want to kind of manage a number and lose the benefits of fast growth in our sales force. We're going to balance that. We're always looking for balance. I do think we'll return to a more normal dynamic over time, but we did take some valuable lessons away from the unique period we've been through.

Speaker #6: And again, this is just looking at the simplistic asset-based revenue as a percentage of average asset values should keep moving up. Is that a good way to think about it?

Speaker #1: On the top part of the fraction, I'd certainly like to keep applying stress to the bottom part by growing the Salesforce. But we have learned from that, and we don't want to try to manage a number and lose the benefits of fast growth in our Salesforce.

Speaker #7: Yeah. That's a very observing question. I do think that the mix of our business growth on the asset-based is part of the impact is because the faster growth of our asset-based business advisory business as an example, it's providing stickier revenue composition.

Speaker #1: So we're going to balance that. We're always looking for balance. And so I do think we'll return to a more normal dynamic over time.

Speaker #1: But we did take some valuable lessons away from the unique period we've been through.

Speaker #5: Yeah. Yeah. And then Tracy, I think you already touched on this maybe answered the question, but when I look at the asset-based revenue as a percentage of asset value, that's continued to kind of move up, progressively.

Mark Hughes: Yeah. Tracy, I think you already touched on this, maybe answered the question, when I look at the asset-based revenue as a percentage of asset value, that's continued to kind of move up progressively. I think you talked about more of a fee-based model, my takeaway from that is that that ratio probably steadied up from here. This is just looking at the simplistic asset-based revenue as a percentage of average asset values should keep moving up. Is that a good way to think about it?

Speaker #7: There's the fee-based feature in the advisory business. And then also the faster growth of it at a faster pace, then average investment business provides a positive percentages in terms of the mix and the performance.

Speaker #5: I think you talked about more of a fee-based model and my takeaway from that is that that ratio probably steady to up from here.

Speaker #7: And we see the also the Canadian PD model is in the same boat, whereas the faster growth and then it also provides a favorable comparative compared to the asset average client asset growth rates.

Speaker #5: And again, this is just looking at the simplistic asset-based revenue as a percentage of average asset values should keep going up. Is that a good way to think about it?

Speaker #7: So that mix is very positive. And also the driver of it is something that we have really invested in our business, not just because of the strong equity market performance in recent years.

Tracy Tan: Yeah, that's a very observing question. I do think that the mix of our business growth on the asset base is part of the impact, is because the faster growth of our asset base business, advisory business, as an example is providing stickier revenue composition. There's the fee-based feature in the advisory business, also the faster growth of it at a faster pace than average investment business provides a positive percentages in terms of the mix and the performance. We see also the Canadian PD model is in the same boat, where it's a faster growth, it also provides a favorable comparative compared to the asset average client asset growth rates. That mix is very positive and also the driver of it is something that we have really invested in our business, not just because of the strong equity market performance.

Speaker #7: We've rolled out 56, 57 new products on our advisory business in the US. Even just this year, end of second quarter, we rolled out another three additional new products in PD model continued to also generate a lot of interest in Canada.

Speaker #7: There's the fee-based feature in the advisory business. And then also the faster growth of it at a faster pace than average investment business provides a positive percentages in terms of the mix and the performance.

Speaker #7: So all of those impact and the result of our fruit over recent years is providing that performance that you're observing, Mark.

Speaker #7: And we see that also the Canadian PD model is in the same boat, with faster growth. And then it also provides a favorable comparison compared to the average client asset growth rates.

Speaker #6: Thank you very much.

Speaker #1: Thank you. Our next question comes from the line of Sneak Kamal with Jeffrey. Please proceed with your question.

Speaker #3: Good morning, Sneak.

Speaker #7: So that mix is very positive and also the driver of it is something that we have really invested in our business, not just because of the strong equity market performance in recent years.

Speaker #8: Hey, Glenn. Hey, Tracey. Good morning. It was good to see the increase in productivity sequentially. I guess for Glenn, what are you incentivizing your sales managers to focus on for the second half?

Speaker #8: Is it recruiting? Is it productivity? Is it sales? That seems to be a pretty big lever that you have. So what's the focus for the second half?

Tracy Tan: In recent years, we've rolled out 56, 57 new products on our advisory business in the US. Even just this year, end of Q2, we rolled out another three additional new products. PD model continued to also generate a lot of interest in Canada. All of those impact into the result of our fruit over recent years is providing that performance that you're observing, Mark.

Speaker #3: Yeah. We are focused we're adding a significant recognition of growth between now and convention. So that would last both the second half of this year and the first half of next year.

Speaker #3: And our Salesforce is multifaceted. We have different parts of the Salesforce that focus on different product sets. And so some lead with investments and then do insurance, some lead with insurance and then do investments.

Speaker #7: So all of those impact and the result of our fruit over recent years is providing that performance that you're observing, Mark.

Speaker #3: Some lead with building distribution and building a team and those are generally more insurance leaning organizations. And so that means we have to put a variety of incentives out there to minister to the needs of each of those groups.

Speaker #5: Thank you very much.

Glenn Williams: Thank you very much.

Mark Hughes: Thank you very much.

Speaker #2: Thank you. Our next question comes from the line of Sneak Kamal with Jeffrey. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Suneet Kamath with Jefferies. Please proceed with your question.

Speaker #1: Good morning, Sneak.

Speaker #3: And that's a little tricky because it can get very noisy when you have multiple messages in the communication pipeline. But right now, we're focusing on growth of our insurance business.

Speaker #8: Hey, Glenn. Hey, Tracy. Good morning. It was good to see the increase in productivity sequentially. I guess for Glenn, what are you incentivizing your sales managers to focus on for the second half?

Glenn Williams: Good morning, Suneet.

Suneet Kamath: Hey, Glenn. Hey, Tracy. Good morning. It's good to see the increase in productivity sequentially. I guess for Glenn, what are you incentivizing your sales managers to focus on for H2? Is it recruiting? Is it productivity? Is it sales? That seems to be a pretty big lever that you have. What's the focus for H2?

Speaker #8: Is it recruiting? Is it productivity? Is it sales? That seems to be a pretty big lever that you have. So what's the focus for the second half?

Speaker #3: We're approaching a trillion dollars in face amount in force, which is a unique milestone. We're not aware of another company that's done that in the middle market in the time that we've done it.

Speaker #1: Yeah. We are focused we're adding a significant recognition of growth between now and convention. So that would last both the second half of this year and first half of next year.

Speaker #3: Using 100% term insurance, 100% of the time to do it. So there's a matter of pride as well as quite an accomplishment. And so we're using that lever on the insurance side of our business.

Glenn Williams: Yeah, we are focused. We're adding a significant recognition of growth between now and convention, so that would last both H2 of this year and H1 of next year. Our sales force is multifaceted. We have different parts of the sales force that focus on different product sets. Some lead with investments and then do insurance. Some lead with insurance and then do investments. Some lead with building distribution, building a team, and those are generally more insurance-leaning organizations. That means we have to put a variety of incentives out there to minister to the needs of each of those groups. That's a little tricky because it can get very noisy when you have multiple messages in the communication pipeline. Right now we're focusing on growth of our insurance business.

Speaker #1: And our Salesforce is multifaceted. We have different parts of the Salesforce that focus on different product sets. Some lead with investments and then do insurance, while others lead with insurance and then do investments.

Speaker #3: We're continuing to see record results and we recognize those record results on the investment side. So we're moving from one record to another. Today's record becomes tomorrow's averages in a growing business.

Speaker #3: And so we have that message in play. And then we have the importance of distribution, which I believe is our most significant competitive advantage that's a broad message goes out across all of those different styles of businesses.

Speaker #1: Some lead with building distribution and building a team and those are generally more insurance-leaning organizations. And so that means we have to put a variety of incentives out there to minister to the needs of each of those groups.

Speaker #1: And that's a little tricky because it can get very noisy when you have multiple messages in the communication pipeline. But right now, we're focusing on growth of our insurance business.

Speaker #3: So we're using all of that, trying to do it in a way that's fairly surgical so we don't create confusion with too many messages.

Speaker #3: But we're putting the challenges out there. We use a combination of recognition, which the biggest stage ever to be recognized on it primarily is at our convention.

Speaker #1: We're approaching a trillion dollars in face amount in force, which is a unique milestone. We're not aware of another company that's done that in the middle market in the time that we've done it.

Glenn Williams: We're approaching a $1 trillion in face amount in force, which is a unique milestone. We're not aware of another company that's done that in the middle market in the time that we've done it, using 100% term insurance 100% of the time to do it. There's a matter of pride, as well as quite an accomplishment. We're using that lever on the insurance side of our business. We're continuing to see record results, and we recognize those record results on the investment side, we're moving from one record to another. Today's record becomes tomorrow's averages in a growing business, we have that message in play. We have the importance of distribution, which I believe is our most significant competitive advantage. That's a broad message, goes out across all of those different styles of businesses.

Speaker #3: And this will be our biggest convention ever. That's quite attractive. As well as on our product sales, compensation. And making sure that we have unique compensation opportunities for those leaders that are generating the results that we need.

Speaker #1: Using 100% term insurance, 100% of the time to do it. So there's a matter of pride as well as quite an accomplishment. And so we're using that lever on the insurance side of our business.

Speaker #3: So it's a variety of areas that we focus on trying to hit the bullseye in several of them. And we're beginning to see some results.

Speaker #1: We're continuing to see record results and we recognize those record results on the investment side. So we're moving from one record to another. Today's record becomes tomorrow's averages in a growing business.

Speaker #3: We've got very positive reaction from our Salesforce on the introduction of the unique incentives back on July 6th broadcast that we did to start the countdown of the final year of convention.

Speaker #1: And so we have that message in play. And then we have the importance of distribution, which I believe is our most significant competitive advantage that's a broad message goes out across all of those different styles of businesses.

Speaker #8: Got it. Okay. And then I just wanted to come back to the new life licenses. So that number, I think, was down 15% year over year.

Speaker #8: And I thought that in the past, you talked about maybe having some technology that could help new recruits obtain their licenses. So just want to see if I'm remembering that right and where we are.

Speaker #1: So we're using all of that, trying to do it in a way that's fairly surgical so we don't create confusion with too many messages.

Glenn Williams: We're using all of that, trying to do it in a way that's fairly surgical so we don't create confusion with too many messages. We're putting the challenges out there. We use a combination of recognition, which the biggest stage ever to be recognized on at Primerica is in our convention, and this will be our biggest convention ever. That's quite attractive. As well as on our product sales compensation and making sure that we have unique compensation

Speaker #1: But we're putting the challenges out there we use a combination of recognition, which the biggest stage ever to be recognized on it primarily is at our convention.

Speaker #8: But have you seen any change in sort of the success rate of recruits becoming licensed?

Speaker #3: We have seen some improvement. And again, that's a fraction. So you have to be careful managing to a fraction. We have seen the pull-through rate increase.

Speaker #1: And this will be our biggest convention ever. That's quite attractive. As well as on our product sales, compensation. And making sure that we have unique compensation.

Speaker #3: We continuous we have a team working on it every day to look for those points of opportunity where we can improve the process and increase the pull-through rate.

Speaker #3: And of course, it's very complicated because 50 states, 10 provinces, and several territories all have different licensing processes. That we have to be able to lead those people through in their home locations.

Speaker #3: So it's something we're working on all the time. We have seen some slight improvement, but really the driver of the numbers is coming out of the previous quarter's recruiting.

Speaker #3: So as we see recruiting pick up, while we'll continue to work on the pull-through rate, we'll see more people being pulled through because there are more people in the pipeline.

Speaker #3: We need both of those really to move the licensing numbers. And that's what we're working on on both fronts.

Speaker #8: Okay. And then maybe last one for Tracey. Just on the tax rate, I think 23 and 22 for the next two quarters, should we expect that level to sort of persist as we get into 2027, or is this really just a sort of a one-time benefit that you're getting there?

Speaker #8: Thanks.

Speaker #4: Yes. Good morning, Sneak. We do not plan to purchase any additional income tax credits in 2026. And right now, I also cannot predict any activities for 2027.

Speaker #4: As we plan to, always observe and consider high-quality investment opportunities that may result in us acquiring income tax credits in future years. We make these decisions very carefully.

Speaker #4: We look at the quality, the investments, and we also look at the suitability that does not create any dramatic volatility. Now, the third and fourth quarter, we do expect to see combined similar size of benefit that was recognized in second quarter.

Speaker #4: So that is certainly a result of evaluation of the suitable and very strong opportunity that we were willing to take advantage of.

Speaker #8: Okay. Thanks.

Speaker #1: Thank you. Ladies and gentlemen, this concludes our question and answer session. And we'll conclude our call today. We thank you for your interest in participation.

Q2 2026 Primerica Inc Earnings Call

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