Joining us from the firm will be CEO Jon Stenberg, as well as CFO Jim Kunkel . And before I hand it over, a quick reminder: the Q&A tab is located at the bottom of your screen. Feel free to type in any questions throughout the presentation, and we can save time for Q&A at the end. But with that said, I'll pass it over to Jon.
Great. Thanks so much, Brendan. Thank you for everyone for joining us. I thought we'd start off by explaining a little bit about the unique company that we are. Normally, when you think about the United States life insurance company, you think safety, predictability, but also agonizingly slow growth. Their sales grow by about the rate of inflation and nothing more. We're a little bit of a different animal. We're trying to. Our goal is to provide the safety, security, predictability of a U.S.-based life insurance company, but we want to bring the growth along with it, and so we're growing in the United States, we're growing internationally, and we have a lot more growth horizon out there also, so we'll talk a little bit about that when we get past this first slide, which will be our introduction slide, so who are we here at CIA?
We're the other CIA, the friendly CIA that everyone loves. We do a lot of business in South America. You can see the global map there. We have a dot in South America, we have a dot in Puerto Rico, and a dot in Austin. We're talking to you today from the beautiful state of Texas here in the great city of Austin. It's nice not to have to shovel snow where I used to up until two years ago. We also have a dot in Taiwan, and we do a lot of business there. We've got about 250 employees. We have policyholders in 75 countries, and we now have over 3,000 producing agents. That number is up from just a few hundred two short years ago. I'll talk about that, and why that's grown so much.
but $1.7 billion in assets, and we, our face amount, if you add up all the face amount of the policies we have, it's over $5 billion. That's a big milestone we crossed last year, and you can see the revenue, about $173 million. Now, let's take a look at where this premium is coming from. About two-thirds of our premium, our in-force premium, comes from overseas, and the main countries are Colombia, Argentina, Ecuador, Venezuela, and Taiwan, so that's a really eclectic mix, like I said, most of our international premium comes from South America. Now, why is that? well, we offer something pretty unique, and we'll go to the next slide.
What we do is we offer something that might seem slow and boring here to somebody in the United States, but it is really exciting to somebody that is in a country that has a history of political, back and forth between far right and far left, or a history of hyperinflation or confiscating property. So if you're, for example, the example I like to use is a successful owner of three Subaru dealerships in Colombia or something like that. Well, you may be worried about a hard shift one way or the other, and you'd be coming out of politically out of favor. And so maybe, or hyperinflation or something like that. So maybe in the one thing where you want safety and security might be your family's life insurance. And what we can offer that family is a U.S.
Dollar-denominated whole life policy that they'll have, and their benefit will be paid to the beneficiaries no matter what happens to their local currency, no matter what happens politically, locally, they will have this as a safe and secure policy. And that's very exciting to a lot of people that are worried about a number of different things in some of these countries. You have Taiwan, they're worried, they got China looking down, breathing down their neck, and they have different worries over there. And so that's. It's a really good business that we've served successfully for decades. We did business profitably in the Escobar years in Colombia, and we do business profitably today in Bolivia and Venezuela. We have a real, I say, sustainable competitive advantage in doing business profitably in difficult-to-do business places. Now, domestic.
Now, long term, we'd like roughly 50% of our revenue to come from the United States. And so we need to do some growing in the United States to make that come true. Because as you saw in the prior slide, about two-thirds of our revenue comes from overseas. So to make that come true, we've entered new markets. And last year, I'm proud to say that we were the fastest-growing life insurance company in the United States. And we far exceeded our growth plans, our sales goals. And so how do we do that? Well, we did it from going from roughly five states to 43 states, and a few hundred agents to a few thousand agents.
We took our home service business, which you see on the bottom of this page, and we said, "Hey, there's a need for this kind of insurance around the country." We entered that business, which is small face-amount policies for people that may have worked in a factory and got their life insurance in the factory for their whole life, and now they're on fixed income and retirement, and they have no life insurance. We offer them an affordable policy that they can buy. We took the policy, that kind of policy we had in Louisiana, Mississippi, Arkansas, and we made it a national offering to independent agents. That's how we went from a few hundred to a few thousand agents. We are now in 40—we have products approved in 43 states, and that'll eventually be 49.
We probably won't enter New York. There's issues, there's reasons why that is. So why were we so successful in gaining traction in this market? Well, a key part of the success is we did something I'm not aware of any other company doing. And that's white-label our products for large life insurance agencies. What that would be is if you were the head of a large agency, let's say you had three or four thousand agents underneath you, or you have a recruiting machine, a training machine, a compensation machine, a motivation machine, you're running this business great. Well, what we can offer that agency head is their own product. So they get their name that they choose, and their agents can market that product. It creates a unique name in the industry. And if their agent leaves for another agency, they have no longer access to that product.
And two-thirds are, I should say, 60% of our premium now in the United States in this market comes through our white-label strategy. It's very unique, and it creates very sticky and loyal agencies. And it's been a real key to our success. Our other key to success is just being easier to work with. This market, this final expense market, these smaller policies for older people, is a market that does not get a lot of innovation, kind of old-fashioned in a lot of ways. A lot of mom-and-pop life insurance companies serve this. And so bringing some innovation and product expertise to this market is really paying off dividends, listening to agents and what they need, and asking, "How can we help you sell four policies a day if you currently sell three policies a day? How can we be easier to do business?
How can we make your clients' life easier in owning this policy?" And so we're on a real journey here to be the best life domestic final expense business in the company in the business. And it's created very loyal agents. And I think it's going to be just a great business for us. Now, you may ask, "How can we grow in the future?" Well, we can grow in the future internationally by going into new countries, going into Brazil and Chile, Central America, going into new countries in Asia. The way we do business is we don't have brick-and-mortar in these countries. So it really lends itself to growth for a small company like ours without a lot of expenditure.
And so we're looking at new markets, and we're currently already doing business in new countries that we didn't do business in even just a couple of years ago. And so there's near infinite growth opportunities internationally. Domestically, well, there's two ways we can grow. We can grow, we can get this other six states that we're not in yet, to get to a 40, a 49-state company. And we can also go upmarket. So in other words, go into the markets where the face amounts are larger, the premiums are larger, and do that in a smart way that isn't real expensive and doesn't provide a lot of risk. So there's a lot of growth in front of us, and there's a lot of growth that we're experiencing right now in addition to the growth we have in the future.
I want to give Jim a turn here, give my voice a break.
So just want to touch on some roadmap priorities we have. Maybe just hit a couple in 2024. We really did set some company-wide records. We're very proud of all the work and the journey to get to this point to set these records, which includes, you know, annual insurance, you know, $1.1 billion in one year. It's the first time we've ever sold a billion dollars of insurance in one year. Record number of agents, highest direct in-force. Jon said this earlier, we hit over $5 billion for the first time. Our 2025 priorities continue to be focused on our first-year premium revenues, you know, to continue to expand the penetration of new and existing, you know, distributors and agencies to sell our products, as well as overall trying to grow or growing our book value per share.
That excludes AOCI, so we call it adjusted operating income, or sorry, adjusted book value. This is a reading slide, but I really want to touch on a couple of things on this slide. That is, you know, we have increased first-year sales for, you know, over our 12 straight quarters. That's a leading indicator for continued future revenue growth as the first-year sales become renewal year and leads to, you know, compounded growth over time. One of the things Jon did not hit, which I think is a company accomplishment for our benefits, is we can do end-to-end business in Spanish, Mandarin, and English. And so we believe that'll be helpful in the U.S. market as we.
In Portuguese now.
In Portuguese now to help expand the business within the U.S. If you walk around our building, we've said this on calls before, you know, 70% of the company is probably Spanish speakers, and probably 40% of that is their native language. We have a really good diverse culture within the organization. We have a share repurchase program. We've not executed that in a few years, but we did execute it a couple of years ago. The company has no debt. We have access to about a $20 million line of credit. We don't intend to touch it. It's there if we need it for some opportunities. Kind of executing on the success, you can see that our direct first-year premiums have increased year over year. They continue to grow.
And you can clearly see that we've beat last year by 23%, and we will exceed 2024 sales in 2025. Jon already hit kind of the growth up to 43 states. I think what I want to add there is not only did we, you know, add more states, we actually didn't have products licensed in those states. And so not only did we penetrate more states, we actually have a product that helped us with our growth strategy. Touched on that. You know, kind of the shareholder returns, our book value per share has continued to grow from, you know, 2021 through 2025 as we focus on that as a key metric for the organization. Our financial strength, we have a low-risk model. We really sell traditional whole life products, primarily whole life products. We have a conservative investment approach. We're very prudent with our money.
We want to make sure that the funds are available when the customer needs their benefit paid. We actually use very large global reinsurers, you know, Swiss Re, Munich Re, and RGA. RGA is our partner in the U.S. as we co-insure some of the business with them. We have a high-quality investment portfolio. It's diversified. It's in, you know, the fixed assets, 99% are investment-grade securities. We are diversifying. We are looking to expand yield, enhance our yield through new purchases in the private placement space and looking at other asset-backed securities to improve overall yield and increase our operating income. This will probably be the last slide I touch on for today so we can get to the Q&A part of this discussion. This is our capital adequacy. This is the capital that is set aside for state regulatory purposes.
And you can see our RBC in the domestic space is over 600%. We have generally a minimum that we do not want to go below 350. And so we adequately capitalize domestically. In Puerto Rico, we have a different metric, and the goal is to stay below the seven. We're at 6.6 through this reporting period, which is within the required capital position. In addition, I think it's important to know that, you know, we're a holding company system. Our holding company, which is Citizens, Inc., does have cash and resources to deploy in the need that, you know, we need to put capital into our life insurers for growth opportunities. Brendan, I think you can go ahead and take it over from here.
Great. Thank you, Jon and Jim, for the overview and the information there. We can now open the floor for Q&A here. We have some time for Q&A, and feel free to enter your questions in the Q&A tab at the bottom of your screen. We've had a couple of questions come in. Our first one here is about the agent count. Can you talk about the onboarding process, maybe how long it takes to or for an agent to ultimately become productive and maybe, you know, how or I guess how much further you expect the agent count to grow from here?
I'll give you an overview. And Jim actually used to run that process as part of his past portfolio. So you might want to add some details. But a lot of the agents that we work with, this growth is coming from agents that are already experienced, agents that have that are in the market currently selling life insurance to clients. They. We enter as a new entrant into their portfolio of companies that they can sell. They request to be appointed in the states they do business. So let's say they do business in Nevada, Arizona, New Mexico. They'll send in an application to be appointed in those states. It'll be through their agency that recruited them. And we will likely approve that and appoint them in those three agents, those three states.
And then hopefully they'll become a producing agent as they work with their clients in those states. There's an expense for us to add those appointments in those three states. We want to make sure they translate to producing agents. So they're not agents that we're bearing the expense of appointment, but we're not getting the benefit of their production. And so we monitor that and sometimes have to terminate agents for lack of production. That's a normal part of the business. It doesn't take that long. It's pretty quick for an agent who's experienced. Now, if they don't currently sell life insurance, they have to be recruited into the profession. They have to get their state license, which can be, you know, a bit arduous for some.
And then they have to get appointed by the carrier and approved by the state for that carrier.
Got it. That's helpful. And let's turn to the insurance in force. Can you talk about the, you know, recent policy lapses and surrender trends maybe by, you know, segment and geography? And how can investors really think about that maturing endowment policy trend?
Yeah, this is life. You've been living this year. I'll let you go.
So let me, I'll focus on the kind of the matured endowments. The matured endowments, you know, this year is a peak year. It's the peak year that we expected, by the way, for since, you know, 2000. And as a way to be prepared for that, we put out a new product called Endura. That's a focused product to capture some of those matured endowments. We know we won't capture them all, but it's a way of capturing some of that through a new product, a single premium type product. In addition, as Jon mentioned, you know, in the last segment is our focus on growth. Our focus on growth is to compensate for those expected matured endowments to offset the benefits that we're paying out. We're actually expected to pay those benefits out.
We want to be a company that makes our pays our benefits. It's kind of a persistency for the domestic business. We're always working to improve our persistency metrics. You know, generally, the industry, it is, you know, 70%-80% of first-year lapse rates, and we work on various initiatives to improve on those statistics.
Great. That's a very helpful insight. And maybe looking beyond that elevated endowment maturity profile for this year, 2025, what's the growth outlook look like beyond that time frame? You know, obviously, you've had really strong first-year sales. How can investors think about the story as it moves beyond that headwind?
Today's sales headlines will turn into tomorrow's revenue. Our expenses of customer acquisition is actually we pay out more in the first year than we get in premium. While you celebrate sales, certainly, they don't translate that year into profits and earnings per share. They translate in the future. It is a leading indicator of future revenue and future earnings, not an immediate indicator of revenue and earnings. You're getting the front end of a, if you will, a subscription of premiums going forward in the future. Maybe life insurance is one of the first subscription models that so many companies are moving to in the tech world. That's what's really important is to recognize the value in current sales is not necessarily reflected in a share price because people don't immediately see the earnings.
You don't get, you know, the immediate sugar high from this year's sales in that year's earnings. They will come as those premiums renew. So we have a high focus on quality to make sure that these policies meet our requirements from a mortality assumption standpoint, and also, very importantly, persistency. So we want to minimize the lapses, keep these folks happy, and make sure they keep their insurance so that those premium renewal premiums occur in the future that we'll be counting on.
Got it. That makes sense. And looking at the international business, can you talk about the competitive dynamics there for U.S. dollar-denominated policies? And maybe talk about the growth outlook for further market penetration?
Yeah, sure. So when a client is presented with this concept, let's say in Ecuador, "Hey, here's a U.S. dollar-denominated whole life policy," the agents that present that opportunity to that client are generally technically independent, but they generally only sell one company's products. And so our agents that do business in Argentina and Colombia and Ecuador, Venezuela, Bolivia, Uruguay, they don't sell other companies' products for life insurance. They sell ours. They may offer an annuity or investment. Some of them do from another company. But for life insurance, we're really the only offering. So in the United States, that's generally not the dynamic. At the larger face amounts, you're spreadsheeted. So, you know, "Here, Brendan, here's your policy quote. Here's seven companies.
Pick which one you want." Really, what's cool about the South American market in particular is that they're offered the concept of dollar-denominated whole life, which is somewhat novel to the person hearing it because it's not obviously advertised on TV down there and radio. It's kind of a, "I have to sit down with you at your kitchen table, your office, and explain this." So it changes the competitive dynamics and makes the business a really great business to be in. And it makes us sure that we want to make sure we service those agents very, very well so they stay with the organization and stay loyal to us.
Got it. And turning to the balance sheet, you obviously have a strong balance sheet, strong capital, debt-free balance sheet. How can investors think about your capital allocation framework as it relates to, you know, further investing in the business? I know you mentioned there's a share buyback plan in place. How can we think about capital allocation?
So we're back to kind of the last slide I hit on, our capital position is good and supports our current business model and its growth pattern. We do have the ability at Citizens, Inc. to provide capital relief if need be. Remember, our business is long-term. They're long-term contracts. So we really have to be smart about how we invest prudently and try to get the best, you know, the best yield we can to support the, you know, operating earnings growth. We have to focus on the sector we're investing in, the quality, the duration of the fixed asset to support and basically model those assets and liabilities, you know, match over the, you know, the next 30, 40, 50 years of a contract.
And so, back to. We'll continue to look for opportunities, though, to expand yield, to offer up more earnings, to help with other growth, to help support growth that we might need for expanding into Chile, as Jon mentioned earlier, as an option.
That's great, and looking at the investment portfolio, what are your thoughts on where the current, you know, weighted average yield is at now? Do you have any initiatives in place to boost that yield, or how can investors think about that?
So yes, we are working on improving, staying prudent. We do have a lot of regulations to follow with the state insurance departments. So we have to stay within their allocations. But we have and are looking to expand into the private placements, fixed-maturity space, the investment-grade section of that to increase our yields quite a bit above, we'll just say, you know, Treasury plus, you know, the current spread in the market, which, as you guys all know, is very tight. In addition, we will look for other options, asset-backed investments to help us with yield.
Keeping in mind that anything we buy, we have to be thinking about the risk associated with that when it comes to the capital allocation, you know, and the capital charges that we may take for some of the ratios we have to work through with the state insurance departments as well as the kind of the investor rating agency.
That makes sense. And back to the domestic business, I know that you've, you know, been utilizing reinsurance really just to manage the strong growth there. Are you comfortable with the level of reinsurance you have in that business, or do you think that could, you know, change in the future?
We are. And we have a great relationship with our primary domestic reinsurer, RGA. And what's really cool about the contract there is we can dial the reinsurance up or down. If growth slows a little bit and we want to keep a little bit more of the insurance, we can dial the reinsurance down from 50% to 20%. Or if we start growing fast again and we want to dial it up so that we can continue that growth or that capital strain, we can dial it up to 80%. Very unique contract in that regard and gives us a tremendous flexibility in terms of managing growth and capital strain.
Got it, and one last question here is, you know, looking at Citizens stock, what are investors missing here with the story and why is now a great time to look at the stock?
I think that people like things that fit in neat boxes. A fast-growing domestic life insurance company doesn't fit neatly in a box because it's rare. A company that does two-thirds of the revenue from overseas doesn't fit neatly in a box. You're getting. I'll invent a new term, the out-of-the-box discount benefit there. That's just humans like things that they can easily categorize. If you can't easily categorize it, they'll move on to other things. For the people like on this call that take the time to look at us and understand there's tremendous growth here that hasn't come to fruition in terms of the revenue quite yet because we have to wait for the renewal premiums and our ability to grow in new countries and new states that we're not in yet.
That's why I think right now is a great time to buy the stock.
Absolutely. That's great. Well, we'll conclude there. Jim and Jon, really appreciate the overview and the detail.
Great. Thank you.
Thanks, everybody. Thanks, Brendan.
Thanks for joining us. Take care.