Photo above: Primerica’s new headquarters in Duluth, Ga.
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Company Profile
- Founded: 1977
- Headquarters: Duluth, Ga.
- Top Executives: Co-CEOs John Addison and Rick Williams
- Products: Financial Services
At 37 years old, financial services distributor Primerica can be proud of its past, but its leaders are more focused on its future. They’re building the company to last.
For example, at the grand opening of its new 365,000-square-foot headquarters building in May, Primerica recognized its history and also looked to its future. With Founder Art Williams in attendance, executives buried a time capsule. They plan to open it in 2077, Primerica’s 100th anniversary.
The building underscores the company’s strength and size. It houses 1,600 employees and consolidates all of Primerica’s operations into a single, three-story building with connecting wings that support streamlined business operations and enhanced logistical efficiencies. The building boasts 58 conference rooms; a state-of-the-art theater named the Art and Angela Williams Theater and an adjoining TV studio for broadcasting to the company’s salesforce; a 248-seat café; and an interactive tour dubbed “Imagine,” designed to showcase the new global headquarters to current and prospective representatives and employees. Thousands are expected to take the “Imagine” tour every year. Primerica is the fourth-largest private employer in Gwinnett County, Ga., near Atlanta. The company’s headquarters have been located there since 1985.
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John Addison, Primerica’s Co-CEO and Chairman of Primerica Distribution, says it’s one building dedicated to one thing: building Primerica’s independent salesforce to become financially independent by building their businesses—all for the long haul.
“We want to make sure that what we do is deliverable, viable and long term,” Addison says. “The way we’re going to grow earnings per share is to grow earnings per chair of our salesforce. We’re focused on the next century and on building this to last.”
Size and Strength
The company’s 90,000-plus life-insurance-licensed sales representatives are at the company’s heart. They educate what the company calls their Main Street clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which Primerica underwrites; and mutual funds, annuities and other financial products, which it distributes primarily on behalf of third parties. The company insures more than 4 million lives and has more than 2 million client investment accounts. Last year it paid more than $1 billion in death benefits.
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Primerica is one of the world’s largest direct sellers, coming in at No. 11 on the Direct Selling News Global 100. It also has one of the largest, exclusive financial services salesforces in North America, so Primerica is accustomed to drawing big crowds at its sales conventions—this year’s had an estimated $25 million economic impact on the Atlanta area. But when the 35,000 attendees poured into the Georgia Dome, the same location where the NFL’s Falcons play football, for the biennial convention, they got a special treat. Company Founder Art Williams took the stage and tapped into his coaching background for almost an hour, recounting how he built the company and why he still believes so strongly in it.
Williams founded the company in 1977 with 85 other people, based on the concept of “buy term and invest the difference.” That idea was the antithesis of what the life insurance industry sold in the 1960s and ’70s, but Williams thought it was right for middle-income Americans. Williams later sold the company, and it eventually became part of Citigroup.
In 2010, Citigroup sold Primerica in an IPO that Addison describes as the company’s second birthday. The event celebrated the company, especially its salesforce. Recognizing that its licensed representatives make the company great, Primerica set aside 1.9 million shares to put directly into their hands. It made the IPO a once-in-a-lifetime special event, holding a contest that let representatives earn their way to New York City for a day of celebration. Winners got to see the 30-foot high, 80-foot long Primerica sign on the front of the New York Stock Exchange. About 60 couples and individual representatives—the company’s Million-Dollar Earners—were at the Exchange for presentations and to share the excitement as Addison and Co-CEO Rick Williams hit the gavel for the closing bell. Then 1,000 representatives and their partners attended the evening’s dinner and subsequent celebration.
Primerica simulcast the event to agents’ offices across the country so they could join the celebration and participate in the emotional high of the whole day and all it meant for the company’s future. Stock exchange officials said no other company had ever done an event of that magnitude. The IPO price was set at $15 per share. Some three years later, it hit a high price of more than $40. Primerica executives still modestly, but sincerely, recognize their salesforce as the real key to the company’s success.
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 Co-CEOs Rick Williams and John Addison
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The average client for whom the company performs a “financial needs analysis” has a household annual income of about $65,000.
Knowledge Foundation
 John Addison |
 Founder Art Williams |
To become a Primerica representative, new recruits take a different route than at most direct selling companies. The first step is to begin the licensing and training process to sell life insurance. On average, that requires 20 to 40 hours of pre-licensing education. Then they must pass the state licensing exam. The process varies by state, but once it’s complete, sales representatives earn significant income from each term life insurance sale.
If the representative also wants to sell mutual funds to help their clients “invest the difference,” additional education and licensing are required. Primerica supports the representative’s efforts through its Primerica Online web system, an intranet that delivers not just company information but also an international field-production leaderboard that is updated daily. It is also rich in the subjects that help Primerica representatives serve their clients.
At the same time new representatives are pursuing their licenses they begin field training with someone who shows them how to sell, how the process works and how to build a team.
Representatives use the company’s proprietary Financial Needs Analysis (FNA) tool and an educational approach to demonstrate how Primerica products can assist clients in providing financial protection for their families, saving for retirement and managing debt.
Company clients are generally middle-income consumers, which Primerica defines as households with $30,000 to $100,000 in annual income. According to the 2011 U.S. Census Bureau Current Population Survey, the latest period for which data is available, approximately half of U.S. households fall in this range. Addison says the average client for whom the company performs a “financial needs analysis” has a household annual income of about $65,000. After serving them for almost four decades, Primerica knows its target audience well: They have inadequate or no life insurance coverage, they need help saving for retirement and other personal goals, they need to reduce their consumer debt, and they prefer to meet face-to-face when considering financial products.
“The traditional financial services industry has abandoned that market,” Addison notes. “We are one of the only financial services companies that have representatives go to the home of a middle-income person and show them how to better manage their money by buying term life insurance and beginning to invest in high-quality mutual funds. The market is wide open, and we are well-positioned to serve Main Street with our large salesforce.”
Work the Process
During a “kitchen table” discussion, Primerica representatives collect information that helps prospective clients document how they spend their money, identify their goals, and then develop a plan for how much life insurance they need, plus how much they need to save for retirement and debt reduction. Since most clients’ financial goals outpace their income, the discussion then turns to Primerica’s business opportunity and how they can earn money part time to help achieve their goals. Then they are invited to a business opportunity meeting. Through the process, sales lead to recruiting, and then recruiting leads to sales.
“Our best client and best recruit is someone in their 30s who’s married, such as a schoolteacher who needs extra income,” Addison reports. “They’re smart and can pass their licensing tests, but they’re unfortunately in a job that doesn’t pay them enough. That’s Primerica’s sweet spot.”
A new recruit needs to become licensed to actually sell, and the first year is tough.
“Once we get people past their first year, we have higher retention rates than most companies in years two and forward,” Addison says. “Of our approximately 90,000 licensed representatives, 24,000 have been with us more than 10 years and another 8,000 have been with us for more than 20 years. Once we get somebody serious in here, they’re here for the long haul.”
Part of the reason is the economic payoff per sale—financial service products are higher-ticket sales than consumer products sold by most direct sellers. Representatives can earn a significant income without recruiting a large downline.
Primerica equips its salesforce for success, too. Take its innovative, award-winning TermNow life insurance products, designed to put an acceptance letter and policy number into a customer’s hands in minutes. The totally online process is tailor-made for Primerica’s younger representatives, who live their lives online, but more mature members of the salesforce embrace it, too.
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TermNow is powered by COSMO—not the tasty cocktail, but a powerful compliance expert system developed by Primerica that can determine compliance and eligibility for rapid issue of Primerica’s unique TermNow product within 10 seconds. Once an application is deemed compliant, a third-party system is used to access databases, including records for prescription drugs, the Medical Information Bureau and the Department of Motor Vehicles. A final decision is forwarded to Primerica within 1.5 minutes on those applying for TermNow. A policy issued using traditional methods can take between one and six weeks, depending on what tests are required.
TermNow offers two huge benefits. First, the process is simple and easy for Primerica’s salesforce—a benefit every direct seller can appreciate. And second, the rapid process is faster and less intimidating for clients—a win-win for all involved.
Primerica representatives can process TermNow policies from a laptop, iPad, PC, Apple or any other device that supports traditional HTML web standards.
“We’re building our business to fit the way our representatives do everything else in their lives,” Addison says. “We’re building systems that let them access everything online about their business and sales.”
 Rick Williams and John Addison greet the crowd at a recent event.
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Future Focus
Addison emphasizes that Primerica’s success comes from a working partnership among its salesforce, employees and clients. It begins with the right products.
“We believe first and foremost in delivering the right financial products to the people we serve,” he says. “Second, we want to create opportunity for the right person to truly build a business for themselves. Not a hobby. A business. One that lets them be in control of their financial future instead of letting a job control it. We want decisions to be right for the company and our shareholders.”
John Addison and Rick Williams have both spent the majority of their careers at Primerica. So they’ve determined that when their successors open that time capsule on the company’s 100th anniversary, they will be celebrating a company with a titanium foundation that Addison and Williams helped lay by making decisions that kept the company strong for the long haul.
“Too many financial services executives are focused on chasing next quarter’s profit report, versus making the right decision for the long-term economic benefit of the organization,” Addison says. “Our focus is on the long term, not the short term. One of my fundamental beliefs is that there’s no success without successors. Rick and I view ourselves as builders, not harvesters.”
