Good day, and welcome to the Primerica, Inc. First Quarter Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kathryn Kieser, Executive Vice President of Investor Relations. Please go ahead.

Thank you, Nicole. Good morning, everyone. Welcome to Primerica's first quarter earnings call. A copy of our earnings release, financial supplement and presentation and webcast of today's call are available on our website at investors.primerica.com. Glenn Williams, our Chief Executive Officer and Alison Rand, our Chief Financial Officer will deliver prepared remarks, then we'll open it up for questions. We reference certain non-GAAP financial measures in our press release and on this call. These non-GAAP measures have limitations, and reconciliations between GAAP and non-GAAP financial measures are attached to our press release. We'll make certain forward-looking statements in accordance with the Safe Harbor provisions of the Securities Litigation Reform Act. The company will not revise or update these statements to reflect new information, subsequent events or changes in strategy. Risks and uncertainties that could cause actual results to differ materially from those expressed or implied are discussed in the company's 2016 annual report on Form 10-K, as updated by our quarterly report on Form 10-Q. Now I'll turn it over to Glenn.

Thank you, Kathryn. Good morning, everyone. We continue to execute our strategy to drive growth in the first quarter. We began the year by meeting with thousands of our representatives across the US and Canada. At these meetings, we talked about the expanding middle-income market and their increasing need for the financial solutions that we provide. We are focusing on our own growth in order to meet those needs. We plan to accomplish these through business enhancements and initiatives to expand distribution. In January, I challenged our field leadership to reach 120,000 life licensed representatives by our convention in June. They accepted the challenge, and we're on track to reach this goal. At the end of the first quarter, our sales force had reached almost 118,000 life insurance licensed representatives, which led to higher Term Life sales year-over-year. Positive market performance drove record Investment and Savings Products sales and client asset values in the first quarter, and we delivered significant growth in adjusted operating EPS of 19% through solid earnings and capital deployment. Beginning on Slide 3, you can see in the first quarter of 2017, adjusted operating revenues increased 11% to $405 million and adjusted net operating income increased 14% to $52 million from the prior year period. Results were driven by a 15% increase in Term Life adjusted direct premiums, partially offset by weaker persistency in claims experience in the first quarter and also driven by 17% higher Investment and Savings Products income year-over-year. Insurance and operating expenses were seasonally higher in the first quarter, primarily reflecting annual employee incentive compensation and merit increases. Our diverse business continues to generate solid earnings and return a significant amount of capital to our stakeholders. In the first quarter, we repurchased approximately $30 million or 380,000 shares of Primerica's common stock.…

Thank you, Glenn. Good morning, everyone. My comments today will cover the earnings results for each of our business segments and then conclude with a company-wide review of insurance and other operating expenses and taxes. Starting on Slide 6. In the first quarter, Term Life income before income taxes grew 6% year-over-year and revenue growth remains strong. Adjusted direct premiums increased 15%, reflecting continued strength in Term Life production as well as growth in the imports business not subject to IPO-related coinsurance agreements. During the quarter, we experienced weaker persistency and higher claims than expected. Insurance expenses, which are typically highest in the first quarter, were also higher year-over-year, but were in line with our expectations and consistent with the prior year as a percentage of adjusted direct premium. The impact of lower persistency is most notable in the DAC amortization ratio, which increased to 16.8% in the quarter versus 15.8% in the prior year period. We estimate that general weakness in persistency impacted DAC by about $2.5 million in the quarter, while there was about another $1.5 million impact from a specific block of Louisiana policies. In August 2016, Louisiana's Insurance Department requested that certain life insurance policies be restricted from lapsing due to severe flooding. When this restriction was removed in the first quarter, many of these policies ultimately lapsed. If persistency returns to normal seasonal trends for the remainder of 2017, we'd expect the DAC amortization ratio to be slightly above 15% on a full year basis. The industry often reports unfavorable claims experienced in the first quarter. While we have not seen this in our book of business in the last few years, we did see it in 2017. The unfavorable experience was due to a combination of higher claims frequency and a higher level of…

[Operator Instructions] Our first question comes from Sean Dargan of Wells Fargo Securities.

I just wanted to ask about the claims experience. Sometimes, investors, when they hear frequency as opposed to severity, get nervous. Can you just go over what was going on with your Canadian YRT business and how that might have impacted the claims experience in the quarter?

-: But there were some claims in Canada that fell in the years where we did not have that YRT coverage, and so it created a little more volatility than what we would see normally. With regard to their frequency versus severity, you are correct. It wasn't a severity issue. It was a slight frequency issue. I think I should highlight that really we saw most of this in January and a lot of it normalized out in February and March. So I really do think it was just a situation that you normally do see in the industry. Like I said, we haven't seen it in the last few years. But if you do go back in time since we've been a public company, there were several years where we did in fact see the spike in the first quarter. So I really do think it's pretty much normal volatility.

Okay. And would you be able to comment on what the experience has been in April?

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Okay, great. And just on the run rate with asset-based revenue. So are you talking about net revenue here, so commissions and fees, less sales commissions?

That is correct. So it's the ratio that we have in our financial supplement, which is what you described.

Our next question comes from Ryan Krueger of KBW.

Alison, how much did the XXX transaction free up in capital and how much will the cost go down based on the renegotiated financing?

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And then on the Term Life margins, is there any change in your go-forward expectation? I think, last quarter, you talked about 19% to 20%. I think you're saying 19% now. Did that just reflect what happened in the first quarter? Or is there any change in the future expectation?

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Our next question comes from Dan Bergman of Citi.

I was just hoping you could provide some more color around the turnaround and Investment and Savings Products sales during the quarter. Really, just any sense of how much of that improvement was due to maybe better equity markets versus other factors. Really, any color on that and whether we should expect that improvement we saw in the first quarter to be sustainable going forward would be much appreciated.

-: So you've got some tailwinds there, some positive direction. And we continue to see that our sales leaders are leading in an incredible way, and we're seeing good returns in the products they're selling. So I think we've got a very strong kind of fundamental situation for us to be able to be positive about the future. The rate of the growth and exactly what amount of that rate because it was an extremely strong growth quarter. How much of that is sustainable quarter-after-quarter is always up for question, but I would say we're pointed in a positive direction. -: So you've got some tailwinds there, some positive direction. And we continue to see that our sales leaders are leading in an incredible way, and we're seeing good returns in the products they're selling. So I think we've got a very strong kind of fundamental situation for us to be able to be positive about the future. The rate of the growth and exactly what amount of that rate because it was an extremely strong growth quarter. How much of that is sustainable quarter-after-quarter is always up for question, but I would say we're pointed in a positive direction.

Great, very helpful. And then maybe just changing gears a little bit. It look like the sales were up, nonrenewal rate increased somewhat during the quarter from where they've been running entire quarters. So I just want to see if there's any additional color you can give on what you've been seeing in terms of nonrenewals and maybe what we should expect there going forward.

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[Operator Instructions] Our next question comes from Adam Klauber of William Blair.

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-: But at the same time, I think you're going to see some continued pressure. It does look like it's easing a little bit the sales or loss of production. It looks to be slowing down some industry-wide to me, but they're still probably a little pressure left out there now. -: But at the same time, I think you're going to see some continued pressure. It does look like it's easing a little bit the sales or loss of production. It looks to be slowing down some industry-wide to me, but they're still probably a little pressure left out there now.

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-: So in and of itself, they don't drive anything. I will say some things that I've highlighted in the past are sort of underlying the trend. So specifically, we did have some reinsurance rate improvement back in 2014. And so as of those blocks of business continue to age, we continue to get the benefit of that. So there are some things moving that can help drive the margin incrementally up. Obviously, when we have a specific bad quarter or good quarter for that matter, it will move it outside the norm. But I'm not sure if I answered it completely, but that would be my feedback. -: So in and of itself, they don't drive anything. I will say some things that I've highlighted in the past are sort of underlying the trend. So specifically, we did have some reinsurance rate improvement back in 2014. And so as of those blocks of business continue to age, we continue to get the benefit of that. So there are some things moving that can help drive the margin incrementally up. Obviously, when we have a specific bad quarter or good quarter for that matter, it will move it outside the norm. But I'm not sure if I answered it completely, but that would be my feedback. -: So in and of itself, they don't drive anything. I will say some things that I've highlighted in the past are sort of underlying the trend. So specifically, we did have some reinsurance rate improvement back in 2014. And so as of those blocks of business continue to age, we continue to get the benefit of that. So there are some things moving that can help drive the margin incrementally up. Obviously, when we have a specific bad quarter or good quarter for that matter, it will move it outside the norm. But I'm not sure if I answered it completely, but that would be my feedback.

This concludes our question-and-answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.