Primerica, Inc.

Welcome to Primerica's fourth quarter 2023 earnings call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. At this time, I'll now turn the conference over to Nicole Russell, Senior Vice President, Investor Relations. Nicole, you may now begin.

Thank you, operator, and good morning, everyone. Welcome to Primerica's fourth quarter earnings call. A copy of our press release, 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 William, and our Chief Financial Officer, Tracy Tam. Our comments this morning will 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 will also reference certain non-GAAP measures, which we believe provide additional insight into the company's operations. Reconciliation to non-GAAP measures to their respective GAAP numbers are included at the end of our earnings press release and are also available on our investor relations website. I would now like to turn the call over to Glenn.

Thank you, Nicole, and thank you everyone for joining us this morning. Primerica's strong performance during the fourth quarter and full year 2023 reflects the power of our distribution. The ongoing need for the financial solutions we provide is clear. and our sales force is uniquely positioned to reach and serve middle-income families. Now more than ever, our clients need the education and guidance provided by our representatives to navigate economic uncertainty and manage the financial pressures associated with a higher cost of living. Starting with the highlights of our financial results, fourth quarter adjusted net operating income increased 4% compared to the prior year period, while adjusted operating income per share increased 9%. On a full year basis, adjusted net operating income increased 8% and adjusted operating income per share rose 15%. In addition, we maintained our commitment to returning capital to stockholders, including the completion of our previously announced $375 million stock repurchase authorization and payment of a total of $94 million in quarterly stockholder dividends. Taking into consideration the complementary nature of our insurance and investment businesses and the predictability of cash flows, the Board approved a new $425 million share repurchase program in November 2023 to occur through December 31, 2024. The Board has also declared a 15% increase to our next quarterly dividend, bringing the payment to 75 cents per share. Over the last few years, we've become more focused on communicating the attractiveness of our entrepreneurial business opportunity and we continue to enhance our processes to keep new recruits engaged. There's also greater flexibility and more options for new recruits who are preparing for their licensing exams. The fundamentals of our business are sound and we are well positioned for the future. Looking more closely at our distribution progress, During the fourth quarter, we recruited nearly 90,000 individuals, a 17% increase compared to the prior year period. We also saw a 17% increase in licensing, with 13,000 reps obtaining a new life license, helping fuel 5% growth in the size of the sales force to end the year with a total of 141,572 life license representatives. Our momentum has continued into the new year as we see a high degree of interest in our business opportunity. These dynamics are leading us to project around 3% growth in the size of the sales force during 2024. Turning next to sales results, we continue to see strong demand in our term life business following the launch of our new insurance products in the fall of 2022. The simple and convenient application process has increased rep confidence, while advancements in underwriting technology allow us to issue policies more rapidly. The increase in the number of rate classes often appeals to clients across a broader spectrum of face amount. During the fourth quarter, we issued almost 89,000 new term life policies or 12% more than the adjusted policy count in the same quarter in 2022 for an annual total of nearly 359,000 new policies issued. This represents an 8% increase over adjusted 2022 figures. In 2023, we issued a record $119 billion in new term life protection for our clients, a 15% increase compared to the prior year, bringing Primerica's total amount of coverage in force to $945 billion. We believe we will continue to benefit from the positive response to our new insurance products during 2024. Based on our current projections, we anticipate full year growth in the number of policies issued to be around 3% to 5%. Turning next to our investment and savings products business, total sales of $2.4 billion during the quarter increased 13% compared to the fourth quarter of 2022, driven by a combination of strong demand for U.S. mutual funds and variable annuities. In addition, sales volume increased in managed accounts, as activity resumed following a brief period of adjustment due to a platform conversion in the third quarter. Net client inflows in the fourth quarter of $172 million reflected normal levels of client redemptions as a percentage of client asset values. Ending client asset values benefited from strong equity market appreciation in 2023, ending the year at $97 billion, up 15% versus December 31, 2022. We continue to see ISP sales growth during the start of 2024. We're mindful of the continued economic uncertainty and the impact that a higher cost of living has on middle income families. We're projecting an increase of approximately 5% in ISP sales during 2024. As we turn to our senior health business, we continue to take a deliberate approach to building the business as we evaluate its progress. Looking at the results for the fourth quarter, LTVs were $1,109 per approved policy of $221 a year over year, which includes the reclass of $182 per policy for marketing development funds that were previously captured in the other revenues line. The reclass of marketing development funds is a result of changes in our carrier contracts. Our current challenge is sales volume. With fourth quarter total submitted policies down 17% year over year, due to fewer tenured eTelequote agents entering AEP. Referral activity from Primerica representatives accounted for approximately 25% of submitted policies. Lower productivity by untenured ETQ agents led to a 22% increase in CAC to $878 per approved policy during the fourth quarter of 2023. The LTV to CAC ratio was 1.3. The new leadership team at eTeleQuote is now at full strength and focused on increasing the percentage of tenured agents while managing the cost structure to improve the LTV to CAC ratio. In closing, let me provide a few observations about our upcoming convention. This summer, we returned to the Mercedes-Benz Stadium in Atlanta and our team is already working hard to ensure another successful event. We had a solid turnout coming out of the pandemic at our 2022 convention and we expect to see an even larger group at this year's event. The magnitude of this event provides the perfect platform to cast a clear vision for the future to the entire Primerica team. The speakers serve as coaches, motivating and unifying the sales force toward a common goal of growing the business. And the event creates a unique opportunity to recognize and celebrate past accomplishments while renewing commitments for future success. In the months leading up to the event, field leaders are pushing teammates to stretch for the finish line, and earn an opportunity to be recognized as a top performer. Following the event, we reinforce our vision with additional messaging to drive activity and sustain momentum well beyond the convention itself. Before turning the call over to Tracy, I want to congratulate her on officially taking over as CFO in December. I'm proud to say that the transition has been seamless. I also want to thank Allison for her tremendous contributions to Primerica. The entire team wishes her the best in retirement, which becomes effective April the 1st. Now I'll hand it over to Tracy to review our financial results.