Company: PRI
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-029882
Chunk: 103

Company: Primerica, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 103
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loss). 

The LFPB is necessarily based on estimates, assumptions and our analysis of historical experience. Factors that could cause prospective assumptions to be different from historical experience include but are not limited to changes to our term life product series, economic and societal trends, new pharmaceutical drugs, and the impact of regulatory changes. The assumptions and estimates underlying the LFPB require significant judgment, and therefore, are inherently uncertain. The following table provides illustrated net impact of changes in assumptions affecting both the LFPB and reinsurance recoverables that we believe are reasonably possible, before the impact of tax:

52

    Assumption
     
    Sensitivity assumption change
     
    Estimated impact at December 31, 2024

    Lapse
     
    5% decrease / 5% increase
     
    ($34 million) / $34 million(1)

    Mortality
     
    5% increase / 5% decrease
     
    ($44 million) / $44 million(1)

    Disability
     
    5% increase / 5% decrease
     
    ($17 million) / $17 million(1)

    Discount rate
     
    100 bps decrease / 100 bps increase
     
    ($634 million) / $527 million(2)

(1)  Changes in lapse, mortality and disability affect the benefits and claims expense on the consolidated statements of income. Estimated impacts show the (decrease) / increase in income before income taxes. The assumption change sensitivities shown are based on a consistent percentage change across all policy durations. 

(2)  Changes in discount rate affect the effect of change in discount rate assumptions on the liability for future policy benefits on the consolidated statements of comprehensive income (loss). Estimated impacts show the (decrease) / increase in accumulated other comprehensive income (loss) before income taxes. The assumption change is based on a parallel shift in the discount rate curve.

As discussed above, changes in lapse, mortality, and disability assumptions would also affect the net premium ratio used to recognize benefits expenses in future periods. 

For additional information on future policy benefits, reinsurance and the impact to accumulated other comprehensive income (loss) see Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies), Note 7 (Reinsurance), and Note 11 (Future Policy Benefits) to our consolidated financial statements included elsewhere in this report.

Income Taxes. We account for income taxes using the asset and liability