Primerica Financial Services (PFS) is a referral marketer of financial services through a large sales force of full-time & part-time representatives. Headquartered in Duluth, Georgia, the company is currently segregated from Citi as part of Citi Holdings, having announced its intention to completely divest away from its parent through an IPO to occur in 2010. It is the largest financial services marketing organization in North America with more than 100,000 licensed independent representatives, 26,000 of whom are FINRA securities licensed through Primerica's securities broker-dealer affiliate PFS Investments, Inc. in the US, and through PFSL Investments Canada Ltd. in Canada. The company provides financial products and services through its affiliates that include term life insurance, mutual funds, variable annuities, segregated funds, loans, long-term care insurance, pre-paid legal services, credit monitoring and debt management plans, to over 6.3 million clients through a network marketing formatted sales model. In August 2007 Primerica and Answer Financial introduced Primerica Secure, an auto and homeowner's insurance referral program to quotes from dozens of insurance carriers. In September 2009, Primerica and Equifax teamed up to offer DebtWatchers, a credit monitoring and debt management tool for clients as another way to fight debt.
Primerica conducts business principally in the United States. Primerica first expanded internationally in 1986 when it began operating in Canada, where agents sell life insurance and segregated funds from the Primerica Life Insurance Company of Canada, and securities from PFSL Investments Canada Ltd. Canadian agents also refer clients to CitiCorp Home Mortgage for their $.M.A.R.T. Loan product. In 2000 the company expanded overseas to Spain, commencing operations as CitiSoluciones. This division is now known as PriEuropa.
History
Founded in 1977 by Arthur L. Williams, Jr. as A.L. Williams & Associates (A.L. Williams), the company established a market niche by mass-marketing the concept of "Buy Term and Invest the Difference." With "BTID", the company advised its mostly middle-income client base to purchase sufficient protection with term life insurance and systematically save and invest in separate investment vehicles, such as mutual fund IRAs. A.L. Williams was initially established as a privately held general agency, at first selling term life insurance policies underwritten by Financial Assurance, Inc. (FAI).
The company expanded, outgrowing the capacity of FAI to process its business. In 1980, A.L. Williams entered into a contract with Boston-based Massachusetts Indemnity and Life Insurance Company (MILICO), a larger underwriter of life insurance, whose parent was PennCorp Financial Services based in Santa Monica. To support A.L. Williams headquartered in Atlanta, MILICO established a regional office in that city. In 1981, the company established First American National Corporation (later renamed The A.L. Williams Corporation) as a holding company for First American Life Insurance (later renamed A.L. Williams Life Insurance Company) and First American National Securities (later renamed PFS Investments, Inc). In 1982, The A.L. Williams Corporation (ALWC) underwrote a $27 million public stock offering, listed in the Over the Counter (OTC) market under the symbol ALWC. In 1983, the company became listed on the NASDAQ exchange under the same symbol.
Origin of "Primerica" name
PennCorp's massive growth due to MILICO's underwriting explosion caught the attention of Bill Woodside, Chairman & CEO of American Can Company, a former Dow Jones 30 blue chip can and container producing company based in Greenwich, Connecticut founded in 1901. Due to the growing rise of plastic as a replacement for aluminum cans, the company looked to acquire financial services providers and move away from the dying manufacturing industry, having acquired life insurance holding company Associated Madison from Gerry Tsai Jr in 1982. With this acquisition Woodside created a new financial services division for American Can and hired Tsai, who succeeded him as Chairman & CEO, as the new head. In September, 1982 American Can and PennCorp signed a merger agreement. In 1983 the merger was finalized, making American Can the parent company of PennCorp and MILICO, signing a new contract with ALWC through the year 2000. In 1986 Triangle Industries bought American Can's packaging division, along with rights to the name of the company. Therefore on March 6, 1987 American Can announced that it would change its 86-year-old name to Primerica Corporation, hence giving birth to the new and currently recognized name "Primerica."
Acquisition by Sandy Weill
The newly-named Primerica Corporation targeted Smith Barney as the first significant purchase that moved the company completely into financial services with the May 1987 announcement of its intent to buy the Wall Street brokerage for $750 million, which would later end up as Primerica's sister company under Citigroup in 1998.
In 1985 ALWC began the procedure to open business in Canada. After encountering legal and cultural roadblocks to expanding outside the United States, ALWC began selling insurance products of Pennsylvania Life Insurance Company, a Primerica subsidiary, in Canada in 1986.
On November 30, 1988 ALWC acquired MILICO from Primerica Corporation through a stock merger acquisition for 44.58 million shares of ALWC stock, making Primerica Corporation the majority shareholder of ALWC. In December 1988, Sandy Weill's Commercial Credit acquired Primerica Corporation for $1.54 billion, retaining the Primerica name. At this time, the major businesses under Primerica Corporation were A.L. Williams, Smith Barney and Commercial Credit. On February 6, 1989 Primerica Corporation began trading on the New York Stock Exchange.
Travelers and Citigroup era
In November, 1989, Primerica purchased the remaining 30% of ALWC that it did not previously own and the privately held General Agent, A.L. Williams, Inc. In 1991, Primerica Corporation changed the name of A.L. Williams to Primerica Financial Services. The following year MILICO, Primerica's life insurance underwriter, changed its name to Primerica Life Insurance Company, and its broker-dealer FANS changed to PFS Investments, Inc.
In December 1993, Primerica acquired the remaining 73% of Travelers Insurance Corporation and adopted the name Travelers Inc., which was changed to Travelers Group the following year. Travelers Group included Primerica Financial Services, Smith Barney, Travelers Life and Annuity, Travelers Property/Casualty, Commercial Credit and other financial businesses.
In December 1997, Primerica announced it was going to begin offering pre-paid legal through Pre-Paid Legal Services, Inc., at the time both subsidiaries of Travelers Group, Inc.
In 1998, the U.S. Securities and Exchange Commission (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. Prior to the SEC's ruling, PFS Investments Inc. voluntarily hired an independent consultant to review its supervisory and compliance policies and procedures to prevent and detect violations of the federal securities laws. By the date of the ruling, PFS Investments had complied with the final recommendations made by the independent consultant.
In 1998, Travelers Group and banking giant Citicorp merged creating Citigroup (NYSE: C). Primerica and its affiliates continued to operate as subsidiaries of Citigroup, although the Travelers insurance business was spun off in 2002. Along with Primerica, other major brand names under Citigroup included Citibank, CitiFinancial, Citicorp Trust Bank, Smith Barney, and Banamex.
Long-time veteran executives John Addison and Rick Williams, whom Art Williams quoted in his book Coach as "two true sons of A.L. Williams", were hired as co-CEOs in 2000, with Glen Williams promoted to President in 2005.
Conventions
Primerica held its 30th Anniversary Convention August 1, 2007 through August 4, 2007 in Atlanta, Georgia in the Georgia Dome and the Georgia World Congress Center. An estimated 60,000 representatives attended. Primerica Secure was introduced at the event, as well as the newest term life insurance product, Custom Advantage. Notable speakers included former Chairman & CEO of Citigroup Charles Prince, founder of Pre-Paid Legal Services, Inc. Harland Stonecipher, as well as Georgia Governor Sonny Perdue.
Due to the general economic downturn and Citigroup's acceptance of government bailout funds totaling nearly $45 billion in 2008, in February 2009 its management decided to cancel Primerica's 2009 convention and a trip to the Atlantis Resort in the Bahamas for top agents, days before the trip was to take place. However, in spite of the cancellation, Primerica's executives in August 2009 announced the company was holding two new trips for top producers within the company to Maui and Las Vegas planned to occur back to back in February 2010. It was publicized that the trips would be fully funded from Primerica profits, justifying the merits of the sales force.
Separation from Citi
Citigroup attempted to sell Primerica in 2008, having received several bids from life insurance companies and pr
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