Primerica, Inc. (NYSE: PRI) is a company that provides

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, investment and financial services to middle income families in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

and

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

. Primerica is the parent company of National Benefit Life Insurance Company, Primerica Life, Peach Re, and Vidalia Re. Primerica acquired e-Telequote in July 2021. Primerica has been described as a

multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling th ...

company. The company that would become Primerica was founded in 1981. Primerica had its

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...

in 2010. Primerica's headquarters are located in

Duluth, Georgia Duluth is a city in Gwinnett County, Georgia, United States. Located north of Interstate 85, it is approximately northeast of Atlanta. As of the 2020 census, Duluth had a population of 31,873, and the United States Census Bureau estimated the ...

History

In 1980, A.L. Williams (founded in 1977) entered into a contract with

Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...

-based Massachusetts Indemnity and Life Insurance Company (MILICO), an

underwriter Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ...

of life insurance and a subsidiary of

Santa Monica Santa Monica (; Spanish: ''Santa Mónica'') is a city in Los Angeles County, situated along Santa Monica Bay on California's South Coast. Santa Monica's 2020 U.S. Census population was 93,076. Santa Monica is a popular resort town, owing to i ...

-based PennCorp Financial Services. In 1981, the company established First American National Corporation as a holding company for First American Life Insurance and First American National Securities. These companies were later renamed The A.L. Williams Corporation, A.L. Williams Life Insurance Company, and PFS Investments, Inc, respectively. In 1982, The A.L. Williams Corporation (ALWC) was listed on the

Over the Counter Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...

(OTC) market under the symbol ALWC. In 1983, the company became listed on the NASDAQ exchange under the same symbol. PennCorp finalized a merger agreement with

American Can Company The American Can Company was a manufacturer of tin cans. It was a member of the Tin Can Trust, that controlled a "large percentage of business in the United States in tin cans, containers, and packages of tin." American Can Company ranked 97th amon ...

in 1983, and became its subsidiary along with MILICO. In 1986 Triangle Industries bought American Can's packaging division and the rights to the company's name. In 1987 American Can changed its name to Primerica Corporation, with Gerald Tsai as CEO, the first Chinese American to lead a member of the Dow Jones Industrials. In December 1988, Sanford Weill's Commercial Credit acquired Primerica Corporation for $1.54 billion, retaining the Primerica name. On February 6, 1989, Primerica Corporation began trading on the

New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...

. Throughout the next ten years, Primerica Corporation's affiliated companies A.L Williams, MILICO, and FANS changed their names to Primerica Financial Services, Primerica Life Insurance Company, and Primerica Financial Services Investments, respectively. In December 1993, Primerica fully acquired Travelers Insurance Corporation and adopted the name Travelers Inc., which was changed to

Travelers Group The Travelers Companies, Inc., commonly known as Travelers, is an American insurance company. It is the second-largest writer of U.S. commercial property casualty insurance, and the sixth-largest writer of U.S. personal insurance through indepen ...

the following year. Travelers Group included Primerica Financial Services,

Smith Barney Morgan Stanley Wealth Management is an American multinational financial services corporation specializing in retail brokerage. It is the wealth & asset management division of Morgan Stanley. On January 13, 2009, Morgan Stanley and Citigroup an ...

, and other financial businesses. Joe Plumeri was Chairman and CEO of Primerica Financial Services from 1995 to 1999. In 1998, Primerica had net income of $398 million on net sales of $1.65 billion. In December 1997, Primerica announced it was going to begin offering pre-paid legal through Pre-Paid Legal Services, Inc., at the time a subsidiary of Travelers Group, Inc. In 1998, the

U.S. Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

(SEC) censured and fined PFS Investments Inc., the securities arm for Primerica, for failure to properly supervise a group of registered representatives in Dearborn, Michigan. The SEC found that PFS Investments Inc. had failed to have in place effective policies and procedures to follow up adequately on three complaints received about the Dearborn registered representatives, "selling away" activities. By the date of the ruling, PFS Investments reported it had complied with the final recommendations made by the independent consultant. In 1998, Travelers Group and Citicorp merged creating Citigroup (). Primerica and its affiliates continued to operate as subsidiaries of Citigroup, although the Travelers insurance business was spun off in 2002. Citigroup attempted to sell Primerica in 2008, having received several bids from life insurance companies and

private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...

firms interested in buying. At the time the market value of the company was estimated to be $7 billion. JC Flowers & Co. LLC and Protective Life Corp began to purchase the company but the deal was canceled for undisclosed reasons. During the

COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...

, in 2020, Primerica paid out $1.7 billion in death claims. This was a 15.8% increase over 2019. The financial services company ended 2021 with $900 billion in active term life insurance.

Initial public offering

On November 5, 2009 Citi announced that it intended to spin off Primerica through an

. The first trading occurred on April 1, 2010, priced at $15 a share the day before trading. Citi raised $320 million through the IPO. In a separate offering, private equity firm

Warburg Pincus Warburg Pincus LLC is a global private equity firm, headquartered in New York, with offices in the United States, Europe, Brazil, China, Southeast Asia and India. Warburg has been a private equity investor since 1966. The firm currently has over ...

bought a 23 percent stake in Primerica, and had the option to purchase an additional 10 percent stake from Citi. On December 19, 2011, Citigroup sold its remaining equity stake in Primerica. Primerica was listed by ''

Forbes ''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...

'' as one of "Americas 50 Most Trustworthy Financial Companies" in 2015. In July 2021, Primerica acquired e-Telequote, a health insurance marketer.

Products and business model

Primerica uses what has been described as a

strategy, with eleven tiers of representatives and recruiters selling financial products and services for commission. The company primarily sells term life insurance, as well as other financial services including auto and home insurance,

mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV ...

s, and credit monitoring. In 2010, Primerica was reported to have over 100,000 representatives selling the company's financial products, with individual earnings averaging $5,156 per year. In 2012, Primerica was the target of multiple lawsuits alleging that the company's representatives sought to profit by earning commissions after convincing Florida firefighters, teachers, and other public workers to divest from safe government-secured retirement investments to high-risk retirement products offered by Primerica. In January 2014, the company settled the case for $15.4 million.

References

Sources

Primerica
Primerica, viewed July 7, 2012
New Georgia Encyclopedia
NGE, viewed November 7, 2006

External links