(Image: Shutterstock)
Primerica Inc. managed to squeeze out higher earnings in the fourth quarter of 2020 in spite of the new wave of COVID-19 cases that rolled in.
"The fourth quarter saw a significant rise in COVID-related death claims," Alison Rand, the company's chief financial officer, said during a conference call with securities analysts.
The company had been estimating earlier in the year that it would get a little more than $1 million in death claims for over 10,000 additional pandemic-related deaths in the United States and Canada.
That formula continued to work in the fourth quarter — but the company had been expected the United States and Canada to record just 85,000 deaths. The actual number was about 140,000.
The pandemic also affected sales efforts.
Primerica focuses on using a large network of career agents to sell protection-oriented life insurance and annuities to middle-income households.
Glenn Williams, Primerica's CEO, said pandemic-related training capacity shortages and exam backlogs continued to slow efforts to get new agents through the permanent licensing process.
But "we continue to see strong demand for term life insurance products," Williams said.
Last month's sales were stronger than the pre-pandemic results for January 2020, Williams said.
"A key question for 2021 will be whether we see sustained client sentiment in favor of our products and opportunity," Williams said. "Our view is that the disruption in 2020 clearly reveals client needs in these areas and a record number of clients took action.
"These needs that suddenly became priorities have existed for many years and will continue to exist in 2021 and beyond. However, it remains unknown how they will be prioritized by potential clients in the future," he said.
Primerica's Numbers
Primerica (NYSE:PRI) is reporting $100 million in net income for the fourth quarter on $598 million in revenue, up from $94 million in net income on $532 million in revenue for the fourth quarter of 2019.
Here are how some of the Duluth, Georgia-based company's distribution indicator numbers changed, year-over year:
- Life-Licensed Sales Force: 134,907 (up from 130,522)
- Recruits: 80,599 (up from 60,466)
- Average Number of Policies Sold per Rep per Month: 0.21 (up from 0.18)
The number of life insurance policies sold increased to 87,307 policies, from 71,469 policies.
Spending on sales-based sales commissions increased to $103 million, from $94 million.
Brighthouse Financial (Nasdaq: BHF)
Brighthouse Financial is reporting a $1 billion net loss for the fourth quarter of 2020 on $2.2 billion in revenue before "mark-to-market" adjustments for net investment income and net derivatives values changes, compared with a $1.1 billion net loss on $2.2 billion in revenue before mark-to-market adjustments for the fourth quarter of 2019.
The Charlotte, North Carolina-based life insurer says adjusted earnings less notable items, which exclude fluctuations in the estimated value of investments and derivatives, increased to $272 million, from $265 million.
Sales of individual annuities increased to $3 billion in the latest quarter, from $1.9 billion in the year-earlier quarter.
