Primerica Inc., a Duluth, Georgia-based seller of financial services, has reported financial results for the quarter ended December 31, 2017. In the fourth quarter, total revenues increased 12 percent and adjusted operating revenues increased 13 percent to $442.9 million and $441.9 million, respectively.
Net income grew to $168.4 million in the fourth quarter, with EPS and ROE reaching $3.72 and 49.9 percent, respectively. Results reflect a net benefit of $95.5 million to recognize the transition effect of the Tax Cuts and Jobs Act of 2017 (Tax Reform) during the quarter. Given the one-time and unusual nature of this benefit, Primerica has removed its impact from operating results. Adjusted net operating income grew 29 percent to $72.3 million compared with the fourth quarter of 2016 and adjusted operating EPS increased 34 percent to $1.60. ROAE expanded to 22.1 percent in the current period.
For the full year 2017, total revenues and adjusted operating revenues both increased 11 percent to $1.69 billion. Net income, EPS and ROE increased to $350.3 million, $7.61 and 27.4 percent, respectively, inclusive of the transition effect of Tax Reform. Adjusted net operating income grew 17 percent year-over-year to $253.9 million. Earnings growth and share repurchases throughout the year drove a 22 percent increase in adjusted operating EPS to $5.52 and ROAE expanded to 20.6 percent in 2017.
Results reflect solid Term Life and ISP performance, including 14 percent growth in net premiums, 15 percent growth in average ISP client asset values and 11 percent growth in total ISP sales year-over-year. While fluctuations in persistency and claims experience impacted quarterly results in 2017, the full-year Term Life margin remained consistent with 2016. Positive market conditions, growth in the number of fee-generating positions and the launch of the new Lifetime Investments Platform positively impacted ISP results in 2017.
“During 2017, we successfully expanded distribution, grew our sales volumes and substantially increased EPS and ROE,” said CEO Glenn Williams. “Our life licensed sales force grew to over 126,000 representatives at year-end. Life insurance productivity remained at the top of the historical range throughout the year, which drove an increase in life insurance policies issued at a rate that surpassed the life insurance industry’s results. We also delivered solid growth in Investment and Savings Products sales and client asset values in 2017. As we head into a new year, we plan to drive further growth by continuing to expand distribution, execute strategic initiatives and by actively deploying capital, including around $200 million of common stock repurchases expected in 2018. We are well-positioned to deliver long-term value for all of our stakeholders.”
To read the full Primerica Q4 2017 financial report, click here.