Primerica Inc (PRI) 2023 Q4 法說會逐字稿

Greetings. Welcome to Primerica's Fourth Quarter 2023 Earnings Call. (Operator Instructions) Please note this conference is being recorded.

問候。歡迎參加 Primerica 2023 年第四季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。

At this time, I'll now turn the conference over to Nicole Russell, Senior Vice President, Investor Relations. Nicole, you may now begin.

現在，我將把會議交給投資者關係高級副總裁 Nicole Russell。妮可，你現在可以開始了。

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 Williams; and our Chief Financial Officer, Tracy Tan.

謝謝接線員，大家早安。歡迎參加 Primerica 第四季財報電話會議。我們的新聞稿副本以及與今天電話會議相關的其他資料均發佈在我們網站的投資者關係部分。今天加入我們的電話會議的是我們的執行長；格倫威廉斯；以及我們的財務長 Tracy Tan。

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 filed 10-Q -- Form 10-Q, excuse me, for a list of risks and uncertainties that could cause actual results to materially differ from those expressed or implied.

我們今天早上的評論將包含根據《證券訴訟改革法》安全港條款的前瞻性陳述。我們沒有義務更新這些聲明以反映新信息，並請您參閱我們最近提交的10-K 表格，該表格可能會被後續提交的10-Q 表格修改——請原諒，表格10-Q 列出了風險和可能導致實際結果與明示或暗示的結果有重大差異的不確定性。

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.

我們也將參考某些非公認會計原則衡量標準，我們認為這些衡量標準可以提供對公司營運的更多了解。我們的收益新聞稿末尾包含非公認會計原則措施與其各自公認會計原則數據的調節，也可以在我們的投資者關係網站上找到。

I would now like to turn the call over to Glenn.

我現在想把電話轉給格倫。

Thank you, Nicole, and thanks, 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.

謝謝妮可，也謝謝大家今天早上加入我們。 Primerica 在第四季和 2023 年全年的強勁表現反映了我們分銷的力量。對我們提供的金融解決方案的持續需求是顯而易見的，我們的銷售團隊具有獨特的優勢，能夠接觸和服務中等收入家庭。現在，我們的客戶比以往任何時候都更需要我們代表提供的教育和指導，以應對經濟不確定性並管理與較高生活成本相關的財務壓力。

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%.

從我們財務表現的亮點開始。第四季調整後淨營業收入較上年同期成長 4%，調整後每股營業收入成長 9%。全年調整後營業淨收入成長 8%，調整後每股營業收入成長 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.

此外，我們維持了向股東返還資本的承諾，包括完成先前宣布的 3.75 億美元股票回購授權以及支付總計 9,400 萬美元的季度股東股息。考慮到我們的保險和投資業務的互補性以及現金流的可預測性，董事會於2023 年11 月批准了一項新的4.25 億美元的股票回購計劃，該計劃將持續到2024 年12 月31日。

The Board has also declared a 15% increase to our next quarterly dividend, bringing the payment to $0.75 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.

董事會還宣布將下一季股息增加 15%，達到每股 0.75 美元。在過去的幾年裡，我們更加專注於傳達我們創業商業機會的吸引力，並繼續改進我們的流程以保持新員工的參與。對於正在準備執照考試的新員工來說，也有更大的彈性和更多的選擇。我們的業務基礎良好，並且為未來做好了準備。

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-licensed 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.

更仔細地觀察我們的分銷進度，第四季度我們招募了近 9 萬名人員，比去年同期成長了 17%。我們還看到授權數量增加了 17%，有 13,000 名銷售代表獲得了新的終身授權許可證，這有助於推動銷售隊伍規模在年底增長 5%，達到 141,572 名終身授權代表。我們的勢頭持續到新的一年，因為我們看到人們對我們的商業機會高度感興趣。這些動態使我們預期 2024 年銷售隊伍規模將成長 3% 左右。

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.

接下來轉向銷售業績。在 2022 年秋季推出新保險產品後，我們繼續看到定期壽險業務的強勁需求。簡單便捷的申請流程增強了銷售代表的信心，而核保技術的進步使我們能夠更快地簽發保單。費率等級數量的增加通常會吸引更廣泛面額的客戶。

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.

第四季度，我們簽發了近 89,000 份新的定期人壽保單，比 2022 年同一季度調整後的保單數量多出 12%，全年新簽發保單總數近 359,000 份。這比調整後的 2022 年數字增加了 8%。 2023 年，我們為客戶發行了創紀錄的 1,190 億美元新定期人壽保險，比上一年增長 15%，使 Primerica 的有效保險總額達到 9,450 億美元。

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%.

我們相信，2024 年我們將繼續受益於新保險產品的正面回應。根據我們目前的預測，我們預計全年保單簽發數量將增加 3% 至 5% 左右。

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.

接下來談談我們的投資和儲蓄產品業務。在對美國共同基金和可變年金的強勁需求的共同推動下，本季總銷售額為 24 億美元，較 2022 年第四季成長 13%。此外，隨著第三季平台轉換導致的短暫調整後活動恢復，管理帳戶的銷售量增加。第四季客戶淨流入 1.72 億美元，反映了客戶贖回佔客戶資產價值的正常水準。受惠於 2023 年股市強勁升值，客戶資產年末價值達 970 億美元，較 2022 年 12 月 31 日成長 15%。

We've continued 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 are projecting an increase of approximately 5% in ISP sales during 2024.

2024 年初，我們繼續看到 ISP 銷售成長。我們注意到持續的經濟不確定性以及生活成本上升對中等收入家庭的影響。我們預計 2024 年 ISP 銷售額將成長約 5%。

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, up $221 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 and development funds is a result of changes in our carrier contracts.

當我們轉向高級健康業務時，我們在評估其進展的同時，繼續採取審慎的方法來建立該業務。從第四季度的結果來看，每份核准保單的 LTV 為 1,109 美元，年增 221 美元，其中包括每份保單重新分類的 182 美元，用於行銷開發基金，這些基金之前計入其他收入項目。行銷和開發資金的重新分類是我們承運人合約變化的結果。

Our current challenge is sales volume. With fourth quarter total submitted policies down 17% year-over-year due to fewer tenured e-TeleQuote 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 e-TeleQuote 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.

我們當前的挑戰是銷量。由於進入 AEP 的長期 e-TeleQuote 代理商數量減少，第四季度提交的保單總數比去年同期下降 17%。 Primerica 代表的推薦活動約佔提交保單的 25%。由於未任職的 ETQ 代理人的生產力較低，導致 2023 年第四季每份核准保單的 CAC 增加了 22%，達到 878 美元。LTV 與 CAC 的比率為 1.3。 e-TeleQuote 新的領導團隊現已全力以赴，專注於提高終身代理的比例，同時管理成本結構，以提高 LTV 與 CAC 的比率。

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.

最後，讓我對即將舉行的大會提出一些看法。今年夏天，我們回到亞特蘭大梅賽德斯奔馳體育場，我們的團隊已經在努力確保另一場活動成功。疫情過後，我們在 2022 年大會上出席人數眾多，預計今年的大會上將有更多的人參加。活動的規模如此之大，為整個 Primerica 團隊提供了一個完美的平台，讓他們對未來有一個清晰的願景。演講者充當教練，激勵和團結銷售人員實現業務成長的共同目標，這項活動創造了一個獨特的機會來認可和慶祝過去的成就，同時重申對未來成功的承諾。

In the month 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.

在活動前一個月，現場領導者正在推動隊友衝向終點線，並獲得被認可為最佳表現者的機會。活動結束後，我們透過額外的資訊來強化我們的願景，以推動活動並維持會議本身以外的動力。

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 Alison for her tremendous contributions to Primerica. The entire team wishes her the best in retirement, which becomes effective April 1.

在將電話轉給 Tracy 之前，我想祝賀她於 12 月正式接任財務長。我很自豪地說，過渡是無縫的。我還要感謝 Alison 對 Primerica 的巨大貢獻。整個團隊祝福她退休後一切順利，退休政策將於 4 月 1 日生效。

Now I'll hand it over to Tracy to review our financial results.

現在我將把它交給特雷西來審查我們的財務表現。

Thank you, Glenn. Good morning, everyone. In my prepared remarks today, I will review fourth quarter results and provide an outlook on key financial measures for 2024. In the Term Life segment, pretax operating income of $140 million, increased 6% during the quarter on a year-over-year basis, driven by 6% higher adjusted direct premium. Pretax operating margin at 22.6% remained unchanged comparing to the fourth quarter of 2022, reflecting stability and predictability of our results under LDTI reporting.

謝謝你，格倫。大家，早安。在今天準備好的發言中，我將回顧第四季度業績，並對 2024 年主要財務指標進行展望。在定期壽險業務領域，稅前營業收入為 1.4 億美元，本季度同比增長 6% ，受到調整後直接保費上漲6% 的推動。與 2022 年第四季相比，稅前營業利潤率維持在 22.6% 不變，反映了 LDTI 報告中業績的穩定性和可預測性。

Looking more closely at our key financial ratios. The fourth quarter benefit and claims ratio was 58.2% versus 57.8% in the prior year period and largely in line with our expectations of around 58%. The DAC amortization ratio was essentially unchanged year-over-year at 12% versus 11.9% in the same period of the prior year.

更仔細地審視我們的關鍵財務比率。第四季的福利和索賠比率為 58.2%，而去年同期為 57.8%，基本上符合我們 58% 左右的預期。 DAC 攤銷率年比基本不變，為 12%，而去年同期為 11.9%。

Finally, the insurance expense ratio was 7.1%, compared to 7.8% from the prior year period due to additional expenses associated with the launch of our new insurance product in 2022. Mortality remains generally in line with expectations. However, we continue to see higher lapses across multiple durations, which leads us to think that recent economic pressures are putting financial stress on middle income family. The persistency of policies issued last year under the same economic conditions as today are largely in line with historical trends.

最後，由於 2022 年推出新保險產品相關的額外費用，保險費用率為 7.1%，而去年同期為 7.8%。死亡率總體上符合預期。然而，我們繼續看到多個時期的失誤率較高，這使我們認為最近的經濟壓力正在給中等收入家庭帶來財務壓力。去年在與今天相同的經濟條件下出台的政策的持續性基本上符合歷史趨勢。

As we look ahead, we expect ADP to grow around 5% to 6% in 2024, reflecting the compounding of premiums from new sales. Our estimate also take into consideration elevated lapse rates and the fading benefit from the IPO coinsured block.

展望未來，我們預計 2024 年 ADP 將成長 5% 至 6% 左右，反映了新銷售溢價的複合效應。我們的估計也考慮了較高的失敗率和 IPO 共同保險區塊帶來的收益逐漸減弱的情況。

Looking at our key financial ratios. We expect the benefits and claims ratio and the DAC amortization ratio to remain stable in 2024 at around 58% and 12%, respectively. We expect the 2024 pretax operating margin to be around 22%, keeping in mind that there is some seasonality in insurance expenses, which can result in some variability to the pretax margin between quarters.

看看我們的主要財務比率。我們預計 2024 年福利與索賠比率以及 DAC 攤銷比率將分別穩定在 58% 和 12% 左右。我們預計 2024 年稅前營業利潤率約為 22%，請記住，保險費用存在一定的季節性，這可能會導致季度之間的稅前利潤率出現一些變化。

Turning next to the results of our ISP segment. Fourth quarter operating revenue of $222 million and pretax operating income of $63 million, increased 12% and 11%, respectively. Our sales force delivered good revenue growth, while equity market appreciation pushed average client asset values higher. Sales-based revenue increased 15%, while commission expense was up 13%, in line with the revenue generating sales growth. Asset-based revenue grew 12% while average client asset values rose 9%. We continue to see growth in U.S. managed accounts as well as higher asset levels in Canadian mutual funds in the PD model on which we earn asset-based fees in view of upfront sales commission.

接下來看我們 ISP 部分的結果。第四季營業收入為2.22億美元，稅前營業收入為6,300萬美元，分別成長12%及11%。我們的銷售人員實現了良好的收入成長，而股市升值則推高了客戶的平均資產價值。基於銷售的收入成長了 15%，而佣金費用增加了 13%，與創收銷售的成長一致。基於資產的收入成長 12%，而平均客戶資產價值成長 9%。我們繼續看到美國管理帳戶的成長以及加拿大共同基金在 PD 模型中資產水準的提高，在該模型中，我們根據預付銷售佣金賺取基於資產的費用。

Asset-based commission expenses increased in line with related revenue. Based on the 5% sales projection Glenn provided earlier, we estimate sales-based revenue less commissions to increase between $4 million to $5 million in 2024. As a good rule of thumb, on an annual basis, every $1 billion change in average client asset value translates to around $2 million change in asset-based revenue less commission and associated operating expenses.

基於資產的佣金支出隨著相關收入的增加而增加。根據 Glenn 先前提供的 5% 銷售預測，我們估計 2024 年基於銷售的收入減去佣金將增加 400 萬至 500 萬美元。根據經驗，每年平均客戶資產每變化 10 億美元價值轉化為基於資產的收入減去佣金和相關營運費用後約200 萬美元的變化。

Turning next to Senior Health segment. I will focus on the financial results for the quarter since Glenn has already discussed most of the business dynamics. The segment incurred a $2.7 million pretax operating loss, compared to pretax income of $4.3 million in the fourth quarter of the prior year, driven by lower sales volume and higher cost of acquisition due to lower productivity from a higher mix of less tenured agents. Looking ahead to 2024, we anticipate an operating loss out by smaller than prior year, as we continue to work towards improving business fundamentals. Meanwhile, we do not expect the need for capital infusion in 2024.

接下來轉向高級健康部分。我將重點放在本季度的財務業績，因為格倫已經討論了大部分業務動態。該部門產生了270 萬美元的稅前營運虧損，而上年第四季的稅前收入為430 萬美元，這是由於銷量下降和購置成本上升（由於任期較短的代理商數量較多而導致生產力下降）。展望 2024 年，隨著我們持續努力改善業務基本面，我們預期營運虧損將小於上年。同時，我們預計 2024 年不需要注資。

The C&O segment recorded a pretax adjusted operating loss of $5.4 million versus a loss of $8.8 million in the prior year period. The year-over-year improvement is due to $7.5 million of higher adjusted net investment income as we continue to benefit from higher interest rates on both new investments and cash balances, partially offsetting this was higher benefits and claims costs, mainly due to a onetime $3.3 million adjustment to the ceded reserve for a closed block of non-term life insurance business.

C&O 部門的稅前調整後營運虧損為 540 萬美元，而去年同期為虧損 880 萬美元。同比改善是由於調整後的淨投資收入增加了 750 萬美元，因為我們繼續受益於新投資和現金餘額的較高利率，部分抵消了較高的福利和索賠成本，這主要是由於一次性對封閉的非定期人壽保險業務塊的讓出準備金進行330 萬美元的調整。

Our invested asset portfolio ended the year with a net unrealized loss of $216 million versus a net unrealized loss of $343 million at the end of September as interest rates fell and credit spreads tightened with which listed bond market. We continue to believe that remaining unrealized loss is a function of interest rates and not due to underlying credit concerns, and we have intense and ability to hold these investments until maturity. The portfolio continues to be well diversified and high quality with an average rating of 8.

由於利率下降和上市債券市場的信用利差收緊，我們的投資資產組合年底未實現淨虧損為 2.16 億美元，而 9 月底的未實現淨虧損為 3.43 億美元。我們仍然認為，剩餘的未實現損失是利率的函數，而不是由於潛在的信用問題，我們有強烈的能力持有這些投資直至到期。該投資組合繼續保持多元化和高質量，平均評級為 8。

Finally, consolidated insurance and other operating expenses were $139 million during the fourth quarter, up 2% versus the fourth quarter of 2022. The prior year period included elevated costs associated with the launch of the new Term Life insurance product. Looking ahead to 2024, we expect insurance and other operating expenses to increase by around $40 million or 6% to 8% in 2024. This includes $13 million of higher staffing-related costs, $17 million to support growth in the business and $10 million for ongoing technology initiatives. We expect Term Life, ISP and C&O to each incur about 1/3 of the year-over-year increase.

最後，第四季綜合保險和其他營運費用為 1.39 億美元，比 2022 年第四季成長 2%。去年同期包括與推出新定期人壽保險產品相關的成本上升。展望2024 年，我們預計2024 年保險和其他營運費用將增加約4,000 萬美元，即6% 至8%。這包括1,300 萬美元的人員​​相關成本增加、1,700 萬美元用於支持業務成長以及1,000 萬美元用於支援業務成長。持續的技術舉措。我們預計定期壽險、ISP 和 C&O 的年增幅分別約為 1/3。

With that, operator, I open the line for questions.

接線員，我就這樣開通了提問線路。

(Operator Instructions) And our first question comes from the line of Mark Hughes with Truist Securities.

（操作員說明）我們的第一個問題來自 Truist Securities 的 Mark Hughes。

Tracy, the $40 million increase on the base of $142 million. Am I seeing that properly? And if so, how much of that is related to the conference?

特雷西，在 1.42 億美元的基礎上增加了 4000 萬美元。我看得正確嗎？如果是這樣，其中有多少與會議有關？

Can you say that again?

你能再說一次嗎？

Yes. The $40 million increase in expenses, is that on the base of $142 million?

是的。增加的 4000 萬美元費用是在 1.42 億美元的基礎上增加的嗎？

Yes.

是的。

And then how much of that is related to the conference?

那麼其中有多少與會議相關呢？

The conference. Okay. So what I would say is overall, the conference is just one of the sales events and on a year-over-year basis, just to ensure, I give you the overall big picture, the expenses on these activities are -- we strive to keep them pretty even year-over-year, specifically conference. Specifically, conference is one of the 2 events that we hold per year. In terms of dollars, we have about $13 million for the event.

此次會議。好的。所以我想說的是，總體而言，會議只是銷售活動之一，並且在逐年的基礎上，只是為了確保，我向您提供總體情況，這些活動的費用是 - 我們努力讓它們同比保持均勻，特別是會議。具體來說，會議是我們每年舉辦的兩場活動之一。就資金而言，我們為這次活動準備了大約 1300 萬美元。

Mark, I would add to that. We met some of that against the registration fees and so forth. So our convention is designed to cost us after registration fees about the same as one of our leadership events or incentive trips as we call them, so that's why we do 2 incentives in 1 year and then we'll do a convention in 1 incentive the next year. So the convention is designed to roughly equate to the trip that we don't do in a convention year.

馬克，我想補充一點。我們遇到了一些針對註冊費等的問題。因此，我們的大會的註冊費與我們所說的一次領導力活動或獎勵旅行的費用大致相同，這就是為什麼我們在 1 年內進行 2 次獎勵，然後我們將在 1 次獎勵中舉辦一次大會明年。因此，這次大會的設計大致相當於我們在大會年不進行的旅行。

Okay. Does this seem relatively elevated, again, $40 million on $142 million is the meaningful increase?

好的。這看起來是否相對較高，1.42 億美元中的 4,000 萬美元是有意義的成長？

Mark, you're coming through a little garble. Would you mind asking that one more time? I'm sorry.

馬克，你遇到了一些混亂。你介意再問一次嗎？對不起。

Yes. I apologize. I was just remarking that the $40 million on the base of $142 million seems like a meaningful increase. Is that -- were there more growth initiatives or step function and staffing this year that contributes to that?

是的。我道歉。我只是說，在 1.42 億美元的基礎上增加 4000 萬美元似乎是一個有意義的增長。今年是否有更多的成長舉措或階梯職能和人員配置對此做出了貢獻？

Yes, Mark, I would say that the increase year-over-year seems higher on a percentage base compared to 2023 versus 2024. If that's what you're comparing that, you would notice that 2023 comparison to 2022 was actually lower than typical because of 2022 spend being elevated for 2 reasons. One, in 2022, we had 3 sales leadership events compared to typical 2. And then secondly, we had the elevated expense for launch of new products for Term Life, and that also increased the spend. So if you're comparing historical 23% to 24%, it's going to look a little bit higher.

是的，馬克，我想說的是，與2023 年相比，2024 年的同比增幅似乎更高。如果這就是您要比較的內容，您會注意到2023 年與2022 年相比實際上低於典型情況，因為2022 年支出增加的原因有二。第一，2022 年，我們舉辦了 3 場銷售領先活動，而通常為 2 場。其次，我們為定期壽險推出新產品的費用增加，這也增加了支出。因此，如果您比較歷史 23% 和 24%，它看起來會更高一些。

Also in 2024, we're going to continue to invest for business growth, which is why you see that in the breakdown the biggest number increase, $17 million, is supporting the business growth. Some of that will go to continued investment of technology initiatives that we will certainly continue to improve for infrastructure, for productivity to support our sales force and our top line growth.

同樣在 2024 年，我們將繼續為業務成長進行投資，這就是為什麼您會看到細分中最大的數位成長（1700 萬美元）正在支持業務成長。其中一些將用於對技術計劃的持續投資，我們肯定會繼續改善基礎設施和生產力，以支持我們的銷售團隊和收入成長。

Very good. And one more, if I might. The Senior Health profit, I think, or the loss you said would be smaller than the prior year. Could that be consistent through the quarter or quarters, which is to say, consistently lower losses in each quarter? Or will it be -- will it vary?

非常好。如果可以的話，再來一張。我認為，高級健康的利潤，或你所說的損失，會比前一年小。這是否可以在一個或多個季度中保持一致，也就是說每季的損失持續降低？或者會有所不同嗎？

Yes, Mark, that's a great question. There is some seasonality in the Senior Health business. In a typical year, you would see the fourth quarter being the most profitable because of the AEP and the volume, followed by the first quarter. And then second and third quarter would have higher expenses because of the hiring and preparing for the AEP season. That's a typical year.

是的，馬克，這是一個很好的問題。老年健康業務存在一定的季節性。在典型的年份中，由於 AEP 和銷量，您會看到第四季度利潤最高，其次是第一季。然後，由於招募和準備 AEP 季節，第二和第三季的費用將會更高。那是典型的一年。

Now what I would say is coming out of fourth quarter of 2023 with a weaker AEP, the renewal season with the following activity of cash flow coming through, it will take us a little bit of time to analyze gather the information, which we'll share next quarter. But overall, I would say that we expect to have a smaller loss than prior year, and we would have a lot more to share next quarter.

現在我要說的是，2023 年第四季度 AEP 較弱，續訂季節伴隨著以下現金流活動的到來，我們將需要一點時間來分析收集信息，我們將分享下個季度。但總體而言，我想說，我們預計損失將比去年減少，並且下個季度我們將分享更多內容。

Our next question is from the line of Ryan Krueger with KBW.

我們的下一個問題來自 KBW 的 Ryan Krueger。

My first question was on lapses. Could you provide some additional color on how much higher lapses are trending relative to your longer-term expectations or trends? And any more color you can provide, as I think you have in past quarters on how lapses look on policies that had been sold prior to the pandemic versus policies that had been sold during the pandemic?

我的第一個問題是關於失誤。您能否提供一些額外的資訊來說明相對於您的長期預期或趨勢，失誤率的上升趨勢是多少？您可以提供更多的資訊嗎？正如我認為您在過去幾個季度中所做的那樣，關於大流行之前出售的保單與大流行期間出售的保單的失誤如何看待？

Ryan, this is a great question. We noticed higher lapses in 2023, particularly towards the end of it. Because across multiple durations, it leads us to believe that this is really mainly due to the economic pressure and the stress from higher cost of living currently on middle-income family. Nevertheless, we see that the policies written in the last year really had persistency very much in line with historical trends, historical trend by which I mean pre-pandemic, by and large. So we expect that over time, persistency is going to return to normal and pre-pandemic levels.

瑞安，這是一個很好的問題。我們注意到 2023 年的失誤率較高，尤其是接近年底。因為從多個時期來看，它讓我們相信這實際上主要是由於經濟壓力和目前中等收入家庭生活成本上升的壓力。儘管如此，我們看到去年制定的政策確實具有持久性，非常符合歷史趨勢，我指的是疫情前的歷史趨勢。因此，我們預計隨著時間的推移，持久性將恢復到正常和大流行前的水平。

Understood. I guess somewhat related to this, it also seems like the redemption rate in ISP has been increasing in recent quarters. Are you seeing -- is that -- do you believe that's a similar dynamic? And I guess if so, do you think you'll continue to see somewhat higher redemptions in 2024 there?

明白了。我想與此有些相關的是，最近幾季 ISP 的贖回率似乎一直在增加。你是否看到——是——你相信這是類似的動態嗎？我想如果是這樣，您認為 2024 年您會繼續看到更高的贖回量嗎？

Yes, Ryan, I'll take that one, because we have monitored those redemption rates as we come through the pandemic. And you're right, they varied from a fairly stable historical trend over the years. Sometimes during the pandemic, people hold their money a little closer, redemption rates went down and then when money has gotten tight, redemption rates have gone up. However, if we try to sort through the pandemic and get all of that unusual noise out of it, what we're seeing right now are redemption rates that are pretty similar to pre-pandemic rates. They might be just a little bit higher, but certainly within our normal range of fluctuations prior to the pandemic.

是的，瑞安，我會接受這個，因為我們在度過大流行期間監控了這些贖回率。你是對的，它們與多年來相當穩定的歷史趨勢不同。有時在疫情期間，人們會更加謹慎地持有資金，贖回率會下降，然後當資金緊張時，贖回率就會上升。然而，如果我們試圖理清這場流行病並消除所有不尋常的噪音，我們現在看到的贖回率與疫情前的利率非常相似。它們可能會稍微高一點，但肯定在大流行之前的正常波動範圍內。

So you're right, there are probably people that are drawing down on their accounts a little bit more because of the cost of living, but it's still within the range that we would call normal to pre-pandemic levels. It hasn't exceeded that range yet.

所以你是對的，由於生活成本的原因，可能有人會更多地提取他們的帳戶，但它仍然在我們所說的正常到大流行前水平的範圍內。目前還沒有超出這個範圍。

Okay. Great. And then since it's your last call, I just wanted to take best wishes and retirement to Alison.

好的。偉大的。既然這是你最後一次打電話，我只想向艾莉森致以最美好的祝愿和退休之情。

Sure, thank you.

當然可以，謝謝。

Our next question is from the line of Wilma Burdis with Raymond James.

我們的下一個問題來自 Wilma Burdis 和 Raymond James。

Is there a way to quantify the Senior Health loss you expect in the next couple of quarters? I know you mentioned it should improve year-over-year, but if there's any way you could provide a little bit more of a fine point on it?

有沒有辦法量化您預計未來幾季的老年人健康損失？我知道你提到它應該逐年改善，但是你是否可以透過任何方式提供更多一點呢？

Yes. On Senior Health, because of the renewal season and we still have a lot of cash flow coming through, it will take some time to really analyze and for us to have an accurate read on it. So we really would be able to provide more information next quarter.

是的。在高級健康方面，由於續訂季節，我們仍然有大量現金流，需要一些時間來真正分析並準確解讀。因此，我們確實能夠在下個季度提供更多資訊。

Okay. And then with the convention coming up, how should we think about the trajectory of sales and recruiting throughout the year? I know that's usually a boost, but I know that there's a kind of interesting way it can flow through the quarter. So if you can give us an update there?

好的。隨著大會的臨近，我們應該如何看待全年的銷售和招募軌跡？我知道這通常會帶來提振，但我知道它可以透過有趣的方式貫穿整個季度。那您能給我們更新一下嗎？

Certainly, that's a great question and get that on every convention is how does the event that takes place almost right in the middle of the year impact the entire year. And as I said in my remarks, we work hard to try to get benefit from the event for the entire year. And right now, we're working and seeing results from people striving to accomplish great things by the event and be recognized for it there. And then, of course, post event, we want to use the momentum that's created by the event and stretch it as long as we can.

當然，這是一個很好的問題，在每次大會上都要了解幾乎在年中舉行的活動如何影響全年。正如我在發言中所說，我們努力工作，爭取全年都能從這次活動中受益。現在，我們正在努力並看到人們努力透過該活動取得偉大成就並因此獲得認可的成果。當然，在活動結束後，我們希望利用活動所產生的動力，並盡可能地延長它。

So that's the theory is to try to level it out throughout the year. The reality is there's so much excitement that's created. And generally, we have some incentives that we launch at the convention that do create a spike in activity around the event itself as hard as we work to try to make it -- to level it out over the full year.

因此，理論上是要努力在全年中保持平衡。現實是，人們創造瞭如此多的興奮。一般來說，我們在大會上推出了一些激勵措施，這些措施確實會引起圍繞活動本身的活動激增，就像我們努力爭取的那樣——在全年中保持穩定。

So I would expect right now that you would see kind of reasonable growth running up to the event and in the months, maybe September, October and beyond after the event, in the month of the event in July and in August as we have some short-term incentives and the excitement immediately coming out of event, you'll probably see a spike in recruiting. And then, of course, the pull-through of that, of the licensing and impact on the sales force is much long after that, because it is a fairly long process in some states and provinces to get recruits licensed.

因此，我現在預計您會在活動開始前以及活動結束後的幾個月（也許是9 月、10 月及以後）、7 月和8 月的活動月份中看到合理的增長，因為我們有一些短期的成長- 定期激勵和活動立即帶來的興奮感，您可能會看到招募人數激增。當然，許可的實現以及對銷售人員的影響要經過很長一段時間，因為在一些州和省份，獲得新員工許可是一個相當漫長的過程。

So I would say that we would expect an impact throughout the year, but you will see the recruiting activity around the event. And then you would see licensing. And theoretically, at least, of course, if productivity stays the same, you would see some sales impact in the last half of the year and working into 2025. Was that helpful?

所以我想說，我們預計全年都會產生影響，但你會看到圍繞活動的招募活動。然後你會看到許可。當然，至少從理論上講，如果生產力保持不變，您會在今年下半年和 2025 年看到一些銷售影響。這有幫助嗎？

Yes. It sounds great.

是的。聽起來不錯。

Our next question is from the line of Ian Ryave with Jefferies.

我們的下一個問題來自傑弗里斯的伊恩·瑞夫 (Ian Ryave)。

Just firstly, on Senior Health, can you discuss the reason for the methodology change to marketing development revenues that's resulted in higher LTVs?

首先，關於 Senior Health，您能否討論一下行銷開發收入方法改變導致生命週期價值更高的原因？

And then second, can you talk about how you're thinking about increasing penetration of the underserved middle income market where you see the most opportunity? Are there regions, states or cities you're targeting for higher growth?

其次，您能否談談您如何考慮提高您認為機會最多的服務不足的中等收入市場的滲透率？您是否希望在某些地區、州或城市實現更高的成長？

Sure. I'll take a shot at both of those and see if it's helpful. We had a change in our contracts with our product providers that provided a little more clarity and perhaps even slightly more certainty in those marketing dollars, because they now -- the relationship we have around them is in riding now. It's not that it can't be changed. It can be changed, but at least I think it's a little clearer and a little -- slightly more ability to anticipate it. And so with that certainty and awareness, we could pull it into the LTV calculation, so it was primarily money we were already receiving in other lines. But with the certainty we moved it into the LTV, and I think that's a pretty standard procedure. And of course, there are additional increases as there have been some commission increases.

當然。我會嘗試這兩個，看看是否有幫助。我們與產品供應商的合約發生了變化，這為這些行銷資金提供了更多的清晰度，甚至可能更加確定，因為他們現在——我們與他們之間的關係現在正在騎行。並不是說不能改變。它可以改變，但至少我認為它更清晰一點，預測它的能力稍微強一點。因此，有了這種確定性和意識，我們可以將其納入 LTV 計算中，因此這主要是我們已經在其他方面收到的資金。但我們可以確定地將其轉移到 LTV 中，我認為這是一個非常標準的程序。當然，隨著佣金的增加，還會有額外的增加。

So the change is not solely attributed to that of the increase, perhaps a little over 80% was attributed to the reclass and a little less than 20% to other increases. So that's behind that. Just -- and we like it better, because it provides more clarity to the financials of the business doing it this way. So we took it as a positive process change. But clearly, it's not all financial impact, change is not that big since it's just moving from one area to the other.

因此，這種變化不僅僅歸因於增加，也許超過 80% 是由於重新分類，不到 20% 是由於其他增加。這就是背後的原因。只是——我們更喜歡它，因為這樣可以讓企業的財務狀況更加清晰。因此，我們將其視為積極的流程變革。但顯然，這並不全然是財務影響，變化並沒有那麼大，因為它只是從一個領域轉移到另一個領域。

And then secondly, Ian, on the question of where we target it's interesting, our business grows where we have leadership on the ground, and we do move leadership around occasionally, but not that frequently. And so our business generally runs in line with population of the U.S. and Canada and as the middle income market grows, which it continues to do, we grow, but we have not found it worthwhile to specifically target areas. If we don't have leadership on the ground than us trying to artificially grow in an area that is underrepresented in our business, we've just not found success in doing that.

其次，伊恩，關於我們的目標定位的問題，很有趣的是，我們的業務在我們擁有實地領導力的地方發展，我們偶爾會調動領導力，但不是那麼頻繁。因此，我們的業務總體上與美國和加拿大的人口一致，隨著中等收入市場的成長（這種情況仍在持續），我們也在成長，但我們發現沒有必要專門針對目標地區。如果我們沒有當地的領導力，而是試圖在我們業務中代表性不足的領域中人為地發展，那麼我們就不會成功。

Now when people ask us, if they want to move to a place with more opportunity, we can tell them, because we know where we're underrepresented, but we've just not found it profitable to move people who choose not to move to a new location and have them struggle. If they want to move back home, where they came from and that's an underrepresented area, that's great. That works well for all of us, but we don't try to do that artificially from the company level.

現在，當人們問我們，他們是否想搬到一個有更多機會的地方時，我們可以告訴他們，因為我們知道我們在哪裡代表性不足，但我們只是發現將那些選擇不搬到的人搬到有利可圖的做法一個新的地點，讓他們掙扎。如果他們想搬回家鄉，回到他們來自的地方，那是一個代表性不足的地區，那就太好了。這對我們所有人來說都很有效，但我們不會試圖在公司層級人為地這樣做。

Next question is from the line of Mark Hughes with Truist Securities.

下一個問題來自 Truist Securities 的 Mark Hughes。

I did want to clarify. I had framed that question badly about the expenses, the $40 million increase on a base of $570 million or so is a completely different matter. So using the $140 million was mistake on my part. And on that basis, it looks pretty reasonable.

我確實想澄清一下。我對支出問題的陳述很糟糕，在 5.7 億美元左右的基礎上增加 4000 萬美元是完全不同的事情。因此，我使用這 1.4 億美元是個錯誤。在此基礎上，它看起來相當合理。

One question on the Senior Health. You said that 25% of the lead there coming from the Primerica sales force. Is that kind of full strength? Is that what you would expect over time, about 25%? Or should that continue to move up as you maybe do other internal initiatives?

關於老年人健康的一個問題。您說過 25% 的領先優勢來自 Primerica 銷售團隊。這就是全力的實力嗎？隨著時間的推移，大約 25% 是您所期望的嗎？還是應該像您可能開展其他內部計劃一樣繼續提升？

Yes. There's still room for growth in the numbers, Mark, but the percentage is artificially higher right now, because of the low sales levels in the main part of the e-TeleQuote business. I would anticipate that as we grow together as we grow that business, assuming that we -- to determine that it can be grown in a profitable and sustainable way that we could grow the Primerica business or the Primerica portion of those leads that are referred in by our sales force at a similar rate. And our objective is to run in the maybe 20% range, a little either side of 20%, so it's a little artificially high percentage wise, because e-TeleQuote leads were down in the quarter.

是的。馬克，數字仍有成長空間，但由於電子電話報價業務主要部分的銷售水平較低，目前百分比被人為地提高了。我預計，當我們隨著業務的發展而共同成長時，假設我們確定它可以以盈利且可持續的方式增長，我們可以發展 Primerica 業務或其中提到的那些潛在客戶的 Primerica 部分我們的銷售人員以類似的速度。我們的目標是在 20% 左右的範圍內運行，20% 的兩側各有一點，所以百分比有點人為地高，因為 e-TeleQuote 的領先優勢在本季度有所下降。

But we do expect, again, assuming that we can demonstrate the profitability of the business and gain comfort in it that we would grow that. There is more potential on the Primerica side, but we are not expecting that to become 40%, 50% of the total. That's not the model we're running to. It's as we've described it, the Primerica piece is a unique advantage that we can have in this marketplace because we do have access to those leads in a unique way through the relationships of our Primerica representatives and those leads are extraordinarily high quality, as we've all talked about before.

但我們確實再次期望，假設我們能夠展示業務的盈利能力並從中獲得安慰，我們將會發展這項業務。 Primerica 方面還有更多潛力，但我們預計不會佔總量的 40%、50%。這不是我們要採用的模型。正如我們所描述的，Primerica 作品是我們在這個市場上可以擁有的獨特優勢，因為我們確實可以透過我們的 Primerica 代表的關係以獨特的方式獲得這些潛在客戶，並且這些潛在客戶的品質非常高，我們之前都討論過。

So we want a lot of them. But at the same time, we want that business to be successful on its own. So something in the range of 20%, a little higher than that a little lower as we grow would be a target, I would say.

所以我們想要很多。但同時，我們希望該業務能夠自行成功。因此，我想說，隨著我們的成長，20% 的範圍內的目標將是一個略高於略低的目標。

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。