Primerica, Inc. is a

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

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 protect ...

investment Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

and

financial services Financial services are service (economics), economic services tied to finance provided by financial institutions. Financial services encompass a broad range of tertiary sector of the economy, service sector activities, especially as concerns finan ...

to middle-income families in the United States and Canada. 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. 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 investm ...

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 United States census, 2020 census, Duluth had a population of 31,873, and the United Stat ...

History

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

Boston Boston is the capital and most populous city in the Commonwealth (U.S. state), Commonwealth of Massachusetts in the United States. The city serves as the cultural and Financial centre, financial center of New England, a region of the Northeas ...

-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 liability ...

of life insurance and a subsidiary of

Santa Monica Santa Monica (; Spanish language, Spanish: ''Santa Mónica'') is a city in Los Angeles County, California, Los Angeles County, situated along Santa Monica Bay on California's South Coast (California), South Coast. Santa Monica's 2020 United Sta ...

–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 to the A.L. Williams Corporation, A.L. Williams Life Insurance Company, and PFS Investments, Inc, respectively. In 1982, the A.L. Williams Corporation 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 pres ...

market under the symbol ALWC. In 1983, the company became listed on the

NASDAQ The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

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 amo ...

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 Gerald Tsai Jr. (; March 10, 1929 – July 9, 2008) was an investor and philanthropist who helped build Fidelity Investments into a mutual fund powerhouse. After starting Fidelity Investments' first publicly sold aggressive growth fund in 1958 ...

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, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...

. 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 multinational 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 t ...

the following year. Travelers Group included Primerica Financial Services,

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

, 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 services through Pre-Paid Legal Services, Inc., at the time a

subsidiary A subsidiary, subsidiary company, or daughter company is a company (law), company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidia ...

of Travelers Group, Inc. In 1998, the

US Securities and Exchange Commission The United States 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. Its primary purpose is to enforce laws against market ma ...

(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 Dearborn is a city in Wayne County, Michigan, Wayne County in the U.S. state of Michigan. An inner-ring Metro Detroit, suburb of Detroit, Dearborn borders Detroit to the south and west, roughly west of downtown Detroit. In the 2020 United States ...

. 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 Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services company based in New York City. The company was formed in 1998 by the merger of Citicorp, t ...

(). Primerica and its affiliates continued to operate as subsidiaries of Citigroup, although the Travelers insurance business was spun off in 2002.

attempted to sell Primerica in 2008, having received several bids from life insurance companies and

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

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 and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

, 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 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 founded by B. C. Forbes in 1917. It has been owned by the Hong Kong–based investment group Integrated Whale Media Investments since 2014. Its chairman and editor-in-chief is Steve Forbes. The co ...

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

Products and business model

Primerica uses 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 an investment fund that pools money from many investors to purchase Security (finance), securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in ...

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. Some people working for Primerica and similar multi-level marketing organizations reported that they ended up losing money, due to the fees they had to pay. 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 announced that it was working on a settlement with up to 238 plaintiffs, for $15.4 million.

References

Footnotes

Sources

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

External links

* * {{Authority control Financial services companies established in 1977 Companies listed on the New York Stock Exchange Former components of the Dow Jones Industrial Average Multi-level marketing companies Investment companies of the United States Financial services companies of Canada Financial services companies of the United States 2010 initial public offerings Companies in the S&P 400 Warburg Pincus companies Corporate spin-offs 1980s initial public offerings