Financial services company Primerica (NYSE: PRI) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 7.1% year on year to $793.3 million. Its non-GAAP profit of $5.46 per share was 4.9% above analysts’ consensus estimates.

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StockStory’s Take

Primerica’s second quarter was shaped by diverging trends across its core business lines, with management attributing outperformance in investment and savings products to robust client demand, especially for variable annuities and managed accounts. CEO Glenn Williams noted, “Our investment clients remain committed to their long-term savings goals,” while acknowledging that new term life insurance policy sales declined due to ongoing cost of living pressures and a “wait-and-see attitude” among middle-income families. Despite these headwinds, Primerica expanded its licensed sales force by 5% year-over-year and posted earnings growth. However, the market reacted negatively, reflecting concerns about margin compression and slower life insurance sales.

Looking ahead, management expects continued momentum in the investment and savings segment, driven by demographic tailwinds as more clients approach retirement age and seek guaranteed income products. Williams indicated that, while Term Life sales are likely to remain under pressure, “we’re optimistic about continued growth in ISP sales, with full-year growth expected to exceed 10%.” The company plans to invest in technology and infrastructure to support increased sales volume, but CFO Tracy Tan cautioned that expense growth could accelerate as these projects ramp up. Management remains confident that middle-income families will adapt to economic challenges over time, stabilizing persistency and productivity across the sales force.

Key Insights from Management’s Remarks

Management highlighted that record investment and savings product sales offset softness in life insurance, while recruiting incentives helped maintain sales force growth.

• ISP segment outperformed: Strong client demand for retirement products, particularly variable annuities and managed accounts, drove investment and savings product (ISP) sales up 15%, with net inflows more than doubling year-over-year. Management credited demographic trends—especially Baby Boomers and Gen X nearing retirement—as underlying this momentum.
• Term Life sales declined: New term life insurance policies issued fell 11% year-over-year, which management attributed to cost of living pressures and economic uncertainty impacting middle-income families. Williams explained that these clients are “living on a month-to-month budget,” resulting in delayed insurance decisions.
• Recruiting incentives boosted sales force: The company added over 80,000 new recruits during the quarter and leveraged a discounted licensing fee in July to further accelerate recruiting, resulting in more than 50,000 new additions. This strategy helped Primerica end the quarter with over 152,000 life-licensed representatives, supporting future distribution capacity.
• Expense management and investments: Expenses rose 8% as Primerica increased technology and infrastructure spending to support growth in ISP and Term Life. Tan noted that the timing of technology projects will impact expenses in the second half of the year.
• Favorable mortality trends: The term life segment benefited from continued favorable mortality compared to pre-pandemic assumptions, supporting stable earnings. However, management maintained a cautious outlook on persistency, expecting lapse rates to remain elevated due to ongoing economic headwinds.

Drivers of Future Performance

Primerica’s outlook centers on sustaining investment product momentum while managing ongoing life insurance headwinds and cost pressures.

• Retirement-driven ISP growth: Management anticipates double-digit growth in investment and savings products for the full year, supported by strong demand for retirement solutions as more clients near retirement. Williams highlighted ongoing strength in variable annuities and managed accounts, with expectations for this trend to moderate but remain positive.
• Life insurance sales challenges: The company expects new term life policy sales to decline around 5% for the full year, as cost of living pressures and economic uncertainty persist. However, management believes these headwinds are temporary and that middle-income families’ adaptability will eventually stabilize demand.
• Expense and margin management: Primerica plans to continue investing in technology and infrastructure, which may cause expenses to grow 6-8% this year. Tan emphasized the need to balance these investments with maintaining healthy operating margins, especially as product mix and commission costs evolve.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will focus on (1) whether investment and savings product momentum can be sustained as market volatility and demographic shifts continue, (2) stabilization or recovery in new term life insurance sales as economic conditions evolve, and (3) the impact of technology and infrastructure investments on expense growth and operating margins. Additionally, we will monitor sales force productivity and persistency trends as indicators of long-term earnings quality.

Primerica currently trades at $260.28, down from $266.89 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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