PRI
#At least through 2017, yes.
There are some things that will emerge over time, so we want to continue to keep a close watch on that, but we believe for the next, let's say, three, four, five quarters, that's a good rate to look at.
And again, there is some seasonality with it, as you saw, this particular quarter, second quarter is usually a little bit stronger than the others.
Hello, <UNK>.
It's <UNK>.
Those details are emerging a little more slowly than our expense details are, obviously, as it is an industry moving, not just Primerica moving.
A lot of discussions, as we've said before, we anticipate there will be some standardization of products and to a certain extent, even compensation of those products.
Early on, I think the good news is the industry's being very thoughtful about this process.
I know it's frustrating that, that means it's somewhat slow, but the industry's being thoughtful and that means there's no knee-jerk reactions or jumping to conclusions.
So we are not seeing radical proposals of changes that would cause us a great deal of concern.
And I think we are traveling in the pack with most of the rest of the industry that shares characteristics of our business model, so while we don't have the details yet that I know everyone would like to hear, I think the standardization concept is something we keep in mind and we see kind of a slow methodical movement as it goes and we are encouraged by both of those.
Yes, we do, <UNK>.
There's been a lot of discussion about that and, quite frankly, some misinformation that I've seen in the media discussion of that.
Class A shares are an important part of the brokerage platform and will continue to be and, based on my understanding, will continue to be for the entire industry not just for Primerica.
Where we see other companies and where we are no longer using Class A shares is in the managed account platforms going forward.
So make sure that everyone focuses on the difference between those two pieces of the business.
I think Class A shares are being replaced by institutional shares throughout the industry on managed account platforms, but will continue to be sold on brokerage platforms including ours going forward and we believe that is accommodated under BICE.
Yes, <UNK>.
Good morning.
Most of the time at Primerica, it's never one or two factors, it is a host of factors.
So we are continuing to see a high-level of confidence in the middle market on Main Street, so we're getting great response to our recruiting messages, so we are seeing our recruiting numbers continue to be strong.
We've also focused our sales force and a tremendous amount of the credit for what we see on the distribution side of our business, obviously, goes to our field leadership.
We have strong alignment with them at this point.
We are communicating with them effectively, they are communicating with us effectively and that's how we come to the best answers and best conclusions on what we need to do.
So if there was a standout characteristic, as you've asked for, I think it is that alignment with our field leadership and the fact that we are on the same page like we've never been before.
And, of course, they're leading that process, they're also focused, like we are, on growth of the size of the licensed sales force.
That, with improvements to how we get people licensed, which is something we've worked on a lot over the last couple of years and continue to work on, all of that kind of adds up to the kind of success that you are seeing.
So it's several different factors, the strongest ones I think are the field leadership and alignment at this point, but we are getting some tailwinds from continued confidence in the middle market, we are very effective in our messaging to prospective recruits and clients right now.
I think we've improved that, and so those are some of the secondary characteristics I would add to the list.
Yes, as I mentioned in my prepared comments, we've, over our history of almost 40 years now, we see our business swing back and forth between focus on insurance, focus on investments appropriately, and that's part of one of the strengths of our franchise.
So we have generated a tremendous amount of excitement around our term insurance business in the last few quarters.
We believe that can continue.
There's a lot of strength there, there's a lot of focus, and so we would expect to continue to see that strength going forward.
And, of course, the uncertainty that we continue to discuss about the investment business, whether it be uncertainty in the market or uncertainty in regulations, is a bit of a headwind there, but we are continuing to see good performance in that area at the same time.
And the 10% was really when we were using that pie chart we've used in the past just to say what pieces could be subject to the change.
As I mentioned earlier, I think that, so that was really looking at which components of our business, and at this point, we now have to peel the onion down a little further and say, step one is we said we're going to use BICE.
So theoretically, there's a construct for us to retain all of that business.
The question then becomes the things that <UNK> was talking about earlier is what industry-wide changes might there be to product sets or compensation structures and the like and fortunately, unfortunately, that's a very slow process.
We want to make sure we've in step with what we're hearing throughout the industry, throughout product providers, et cetera.
So a little bit more detail on that will hopefully be able to be provided towards the end of the year.
But we continue to work toward minimizing that as much is possible.
Sure.
Be happy to do that.
There has been a lot of media coverage of the Herbalife settlement and, quite frankly, as is often the case, a lot of poor media coverage.
The Herbalife settlement was particular and specific to Herbalife and their dynamics.
There's been no rule change at the FTC since that settlement.
However, it's obviously wise of us to monitor what's going on in that part of the world and make sure we are seeing the changes in wind direction and so forth, so we are very close to that, we keep our finger on the pulse.
Specifically to your question, on differentiation points, Primerica, we are a financial services company that is a model based on the traditional insurance agency model.
That's what we grew up from over the last 40 years.
We began as an insurance agency and an insurance agency model has different levels of competition between branch managers and area managers and representatives, and so there's some similarities in the compensation structures of the traditional agency model and some of direct selling and, quite frankly, some with refranchising.
Over time we've evolved to adopt different characteristics of several business models, but one is our history.
We come from a different history than that company does.
The second thing, obviously, is we operate in highly regulated set of industries, insurance and securities being the two biggest ones, so we've got a set of regulations dictating how we do business that's unique to the financial services industry.
Our sales are to end consumer, by the nature of our products.
We don't have an inventory, there's no ---+ a lot of the Herbalife controversy was around inventory loading and representatives buying inventory and, of course, we have no inventory in our products.
We have intangible services and so there's no way to load anyone with inventory in our model and of course our reps are not required to purchase our products.
The vast majority of our sales are to clients with absolutely no affiliation to Primerica in any way other than being clients.
70% of our life insurance sales are to end clients that have no affiliation with Primerica at all.
They are not our reps, they not our recruits.
And so, and then other things, we don't pay to recruit.
Our recruiting mechanism is something that's not a profit center for the Company or for a representative, there's no money made on that.
So we think that we've got a very strong case of how we differ from Herbalife and stand apart from the kinds of issues that were dressed in their settlement.
Glad to help.
Revenue sharing is clearly contemplated under BICE.
I do think, however, that you will see a standardization.
Revenue-sharing agreements, I think, are very unique to each distributor.
In today's world, my guess is, over time you will see standardization of those agreements, but we do anticipate that they will continue going forward on our brokerage business under the BICE agreement.
Thank you, everyone, for joining us.
If there are other questions we can help with, just let us know.
Everybody, have a great day.
