Moody’s Affirms Primerica’s Ratings Upon Announced Acquisition of e-TeleQuote; Outlook Stable

Moody’s Investors Service – April 20, 2021

(New York) – Moody’s Investors Service (“Moody’s”) has affirmed the Baa1 senior debt rating of Primerica, Inc. and the A1 insurance financial strength (IFS) rating of its primary life insurance operating subsidiary, Primerica Life Insurance Company (PLIC). The affirmation follows the announcement of a transaction by which Primerica will acquire the operating subsidiaries of Etelequote Limited (e-TeleQuote), a fast growing broker focused on selling health products to seniors, especially Medicare Advantage. The outlook on the ratings is stable.


On April 19, 2021, Primerica announced its intention to acquire e-TeleQuote, with an 80% stake purchased upfront and the remaining to be acquired over a period of up to four years. Primerica will fund the transaction with $370 million in cash, a $125 million draw on its revolving facility, and a $15 million seller’s note. Primerica has suspended stock buybacks through the end of the year, and we do not expect the transaction to cause a reduction in PLIC’s capitalization level. The transaction is expected to close on July 1, subject to regulatory and other customary closing conditions.

Primerica’s ratings are based on the company’s strong financial profile, including conservative asset quality, sound risk adjusted capital under stress scenarios, and substantial free cash flow generated by unregulated entities that provide the company with solid cash flow coverage of its interest expense. Primerica also benefits from consistent profitability, driven in part by its ample technology and operating scale, and uncomplicated asset liability management, given its predictable and non-interest sensitive liability cash flows.

These strengths are offset by a relatively weak business profile for its rating level. To maintain new business revenues, Primerica’s large distribution system is dependent on significant and constant agent recruiting, which may be constrained in economic downturns. In addition, PLIC relies on a narrowly focused product portfolio of term life business that had produced sizeable regulatory “XXX” reserves, which are supported by third-party financing arrangements.

The acquisition of e-TeleQuote will bring execution risk and temporarily elevated leverage but should be another source of cash flows for Primerica and should create recruitment and referral opportunities for its sales force.


The following factors could lead to an upgrade of Primerica’s ratings:
1) financial and total leverage of less than 15%;
2) increased market share, without increasing the risk profile of the liabilities; and
3) increased diversification beyond term life and third-party mutual fund and annuity distribution.

Conversely, the following factors could lead to a downgrade of Primerica’s ratings:
1) adjusted financial leverage of greater than 25%;
2) earnings coverage below 6 times;
3) cash flow coverage less than 4 times;
4) NAIC RBC ratio (company action level) below 350%; or 5) return on capital of less than 5%.


The following ratings were affirmed:

Primerica, Inc. — senior unsecured debt at Baa1;
Primerica Life Insurance Company — insurance financial strength at A1.
The rating outlook on all entities is stable. 

The principal methodology used in these ratings was Life Insurers Methodology published in November 2019 and available at . Alternatively, please see the Rating Methodologies page on for a copy of this methodology.

Primerica is headquartered in Duluth, Georgia. As of December 31, 2020, Primerica reported total assets of $14.9 billion and total shareholders’ equity of $1.8 billion.


For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: .

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