Ric Sweeney
Photography by Randy Anderson
Success from Home magazine
July 2005
Having revolutionized the insurance industry, the men and women of Primerica
Financial Services are on a crusade to spread the dream of financial security
to middle class families.
The Georgia Dome's foundation is starting to quiver. Inside, the raucous
capacity crowd's rising decibel is running out of places to hide. The
nearly deafening noise they're generating is trapped inside the domed
structure, bouncing off every nook and cranny and enveloping the building
in a cacophony of sound that's threatening to shake the home of the NFL's
Atlanta Falcons to the ground.
But Michael Vick and his football heroics are nowhere to be found on
this day. The frenzied throng has gathered to sing the praises of Primerica
Financial Services, which, since its inception in 1977, has provided each
of them an incredibly unique opportunity to build their own business with
limitless opportunity for growth and wealth.
The more than 50,000 men and women crammed into the Georgia Dome for
the company's 2005 International Convention comprise a committed sales
force that has pushed the company from plucky underdog to a leader in
the financial services industry with more than 100,000 licensed representatives
and six million clients.
Collectively, they've been saviors, financial gurus and industry mentors
to countless family members, friends and neighbors by educating them about
the basic financial concepts and products that can lead to financial freedom.
But Primerica hasn't always been awash in such accolades. In their 28-year
history, they've endured an endless stream of name-calling and finger-pointing.
Rebel. Outcast. Industry Pariah. They've heard them all before. In fact,
the Duluth, Georgia-based company could probably add a few themselves
at this point. But that's inevitably what happens when you stand toe-to-toe
with the establishment, slay its sacred cows, revolutionize an industry
and change the lives of countless people.
The energy, enthusiasm and perseverance of Primerica's sales force helped
sustain the company during rough times and is now driving the business
to greater heights. These men and women, with their varied backgrounds
and unique individual success stories of how Primerica has impacted their
lives, have joined together to continue the work initiated by the company's
founder, who launched a crusade built around improving a system that too
often put profits ahead of people.
Two of a Kind
Helping nurture and empower Primerica's energetic sales force falls at
the feet of the company's dynamic duo, John Addison and Rick Williams,
who, together, share the title of CEO. Splitting the responsibilities
of such a prominent position is a rarity in corporate America's dog-eat-dog
culture, but Primerica has always marched to the beat of its own drummer.
Not surprisingly, given Primerica's track record. the unlikely alliance
is working. One of the biggest reasons for the tandem's success is that
both Addison and Williams are on the same page when it comes to what's
best for their company. "One of the things that really makes our
partnership work is the absolute consistent agreement on the focus, the
direction and the strategy of the company," Williams says. The two
have worked in various incarnations of the company for more than 20 years
and have worked together since the early 1990s.
In their tenure, they've endured numerous changes, watched the company
struggle and grow and bonded over their unified attempts to push the company
in what they've felt is the proper direction. "Rick and I had worked
together for a very long time, and we had been there with a lot of different
CEOs," Addison recalls. "Nothing makes you closer — or
drags you further apart if your personalities are such that you're going
to move apart — than being in the battle together."
Equally important, however, is how the two have been able to play off
of one another's strengths. "(John) has his sphere of responsibilities
and I have mine, but we communicate with each other all the time. I know
virtually everything that's going on in John's world and he knows everything
that's going on in my world." Addison's engaging personality is the
face of the company, encouraging the sales force and keeping the energy
percolating while Williams' boardroom savvy has strengthened the company's
bottom line. Without a trace of hostility or, more importantly, ego, the
combination is helping Primerica Financial Services to record numbers
and revenue. Their stable of licensed insurance agents has grown in the
face of industry downsizing, swelling to 107,000 in 2004, up from 79,000
when Addison and Williams were dually appointed in late 1999. Meanwhile,
profits continue to soar. In 2004, Primerica Financial Services reported
a net income of $544 million.
The more than 50,000 men and women crammed into the Georgia Dome for
the company's 2005 International Convention comprise a committed sales
force that has pushed the company from plucky underdog to a leader in
the financial services industry with more than 100,000 licensed Representatives
and six million clients.
Stuck in the Middle
But one has to look beyond the numbers to experience Primerica's greatest
accomplishment. Throughout its history, even as it has stayed ahead of
the industry curves and diversified itself, the company has always focused
on helping the millions of middle class families who are too often afterthoughts
in the profit oriented environment of big business. Their mission to help
these individuals become debt free and financially independent is being
fulfilled by a variety of tested avenues, honed over the course of the
company's history.
First and foremost, Primerica representatives educate their clients.
"We help people understand their finances, help them understand the
alternative uses of money and spend a lot of time walking them through
the theory of managing household finances," Williams explains.
Once families grasp the concepts, and have a better understanding of
their own shortcomings, Primerica Financial Services offers them simple,
effective financial products and solutions designed to pinpoint a variety
of problem areas common to most families. These include products and services
designed to protect income, reduce debt and create long-term savings plans.
"People spend more time planning their vacation than they do their
financial future," Addison says. "They procrastinate; they put
it off; they think it's too hard until someone comes to their home and
sits down with them and says, 'This isn't as hard as you think.' We can
sit down and show you a way to have more protection, more savings and
a meaningful plan to get out of debt."
Further, Primerica offers a tremendous independent business opportunity
to its clients, a chance to sell the same products they've used to manage
their own finances. The direct selling component of Primerica Financial
Services, termed "warm market referral," has provided money
and time flexibility to many of its Representatives, encouraging them
to grow and own their own business as a means of further enriching their
lives while setting in place a foundation for future generations.
The company often uses its numerous success stories to underscore what
too few Americans realize — that the vast majority of millionaires
across the country made their fortune owning their own businesses. Since
its inception, Primerica's opportunity has created a new way of life for
fifty-two men and women who have earned a million dollars or more (in
a 12-month period) selling Primerica's products, twenty-one of which have
crossed that plateau since 2000.
"We market hope and opportunity to a frustrated people," Addison
says. Primerica counts among its many success stories: teachers, construction
workers and waitresses, everyday people from all walks of life, who don't
necessarily possess high levels of education, athletic skill or wealthy
relatives. It attracts people looking for f a chance — a chance to
get ' out of debt, a chance to make money, a chance to live a better life.
These are people who want to learn the nuances of finance and, more importantly,
put themselves in position to join the ranks of Bill Gates, Sam Walton
and other successful entrepreneurs who understand that the real key to
financial freedom comes from owning your own business.
"There are people in this world who do not want to be 'average and
ordinary.' They want to make something of their lives, and we provide
the opportunity for them to do that, and providing that opportunity, has
really driven the success of this company," Williams says.
Use the Sales Force
"When John and I took over, our strategy was to grow the size of
our sales force so we could help more people achieve financial security
and that's what we're continuing to focus on very diligently," Williams
says. The reason for the urgency is reaction to the changing climate of
the insurance industry, which is fazing out the traditional life insurance
agent. "If you look at the life insurance industry in the United
States, it's in disarray. Their distribution systems are shrinking. There
are fewer licensed agents today than there were in 1977. And the average
age of a life insurance agent is 55 years old. They are an aging, shrinking
dinosaur business."
Traditional insurance companies are scrambling to find a way to grow,
but are failing to do so. Over the past 30 years, the industry has experienced
a net loss of 80,000 agents; meanwhile, certification requirements are
moving in the opposite direction as it's now harder than ever to get a
license. "In the state of California, for instance, it takes 52 hours
of pre-licensing education," Addison says. "Meaning you have
to go sit in a classroom for 52 hours just to go take a test." The
standards are forcing remaining agents to set their sights higher in order
to continue to make a lucrative living. "What the industry has done
is target what they call `the mass affluent' — those are families
with $200,000 or more to invest," Addison says. "The people
we're targeting are hard-working families. middle income families, who
have too much debt, not enough protection and no meaningful savings program.
Our game plan is to continue to aggressively grow distribution to the
middle income market."
"To meet the needs of those families, we need more people out there
selling, making kitchen-table presentations," Williams says.
Global View
In their trailblazing history, Primerica Financial
Services has never let boundaries stand in its way. So when co-CEOs
John Addison and Rick Williams made growing the Duluth, Georgia-based
company's sales force their top priority, it didn't take long for
the tandem to look beyond North America's borders.
Hoping to capitalize on an already strong Hispanic
contingent stateside, Primerica officially, dipped its toe into
the international market in September 2000 when they opened Citisoiuciones
in Spain. Global expansion had been in the works in some form or
another since 1998, when Primerica's then parent company, Travelers
Group, merged with Citicorp, which boasted more than 200 million
customer accounts in 100 countries. The two companies merged to
become Citigroup, the world's largest financial services company.
"One of the advantages brought by the Citicorp transaction
was there was a lot of international experience that we could draw
upon in expanding abroad, so it wasn't a bunch of U.S. executives
without any international experience," Williams says. "We
were able to utilize a lot of the infrastructure and the talent
and the research of our Citicorp brethren.
"In fact, we looked at expanding internationally
several times in the past, but the Citicorp deal made it easier
to accomplish because of their international expertise."
As the company explored global expansion at
the close of the century, they discovered that for all the differences
in culture and language, at the end of the day, insurance and financial
service industries abroad have much in common with those in North
America. "It's essentially not very different," Williams
says. "Just like we had seen in the U.S., the middle-market
client is really being ignored by the traditional financial services
companies, specifically insurance companies."
When the company was targeting potential destinations
overseas, Spain immediately stood out because of its dynamic economy
and the less stringent entry barriers into the insurance industry.
Still, Spain presented Primerica some initial challenges. "People
in Spain don't purchase things with a checking account, so we had
to figure out how to draft premiums for life insurance," Addison
explains. "And people typically don't buy life insurance there,
so we were creating a market versus exploiting a market." But
in just under five years, Citisoluciones has made great strides.
"Early on, we struggled just figuring out what worked and what
didn't work, but now we're starting to really have some success,"
Addison says, citing the company's 3,000 representatives.
Flush with success, Primerica next turned its
attention to the United Kingdom which, like Spain, was strategically
chosen. "For every four dollars worth of credit card debt in
all of Europe," Bob Safford says, "three of those dollars
are in the UK." Safford, an International Sales Director who's
been with the company since its inception, volunteered to be a part
of Primerica's march into England. Though still early, the company
is already seeing results. "We didn't come over here to fail,"
Safford says.
"In the UK, a lot of the people being
recruited into our business are British nationals from Africa, India,
Pakistan — a real cross section of people who have immigrated
to England looking for an opportunity," Addison says. "Primerica
wants to be there for them all across the globe just like we've
been there for people here in America." |
The Kitchen Table Approach
Since the beginning, Primerica has no: advertised. Its business is generated
through the referrals of satisfied clients. A referral leads to a "kitchen
table," a term that refers to the initial meeting of a Primerica
Representative with a prospective client in his or her home across the
kitchen table. This one-on-one dynamic has allowed Primerica to build
a strong word-of-mouth following. "We get our leads through warm
market referral, so the people who are sitting down at the kitchen table
are sitting down with friends and family members. They're not sitting
down with strangers, Williams explains. "As a result, they have their
best interests at heart. You're selling to your cousin, your brother,
your preacher at your church and to people you know and care about."
Although that emotional investment can make the delivery of a death claim
especially difficult, it can be gratifying to know you've helped someone.
A policyholder's death also serves as a reminder of just how important
life insurance can be to a family that, in time, will take solace in the
financial stability their policy provides. "On September 11th 2001,
we paid death claims to families of people in all planes and in both towers
of the World Trade Center," Addison says. "We do something very
important for families."
Equally important, the Representatives make it a point to focus on the
entire family. "From the start, our philosophy has always been for
us to be at the kitchen table, one-on-one, with you and your spouse,"
Addison explains. "We don't want to set up an appointment and come
see you if you both aren't going to be there, because if both of you aren't
there, it's very difficult to make a financial decision."
One of the key components of the kitchen table meeting is the Financial
Needs Analysis. "The natural inclination of families everywhere is
to avoid thinking about their financial situation," Williams says.
"Your financial situation is something that you're scared about and
it's almost best to not think about it. By being at the kitchen table
with our approach, we open people's eyes. We provide the mechanism for
them to focus, understand and demystify it — to take some of the
scariness out of it."
That mechanism is the complimentary Financial Needs Analysis (FNA) the
company offers. The FNA is a diagnostic tool that analyzes each family's
individual financial situation. This customized report gives families
an overview of their current financial situation and offers realistic
solutions for eliminating debt, protecting income and saving for education
expenses and retirement. "The Financial Needs Analysis provides a
holistic view of a family's finances and helps them understand their options,"
Williams explains. "It's not financial planning. Our people do not
get financial planning designations. We consider ourselves to be in the
financial education business." In fact, teaching families how money
works is a critical component of the
kitchen table presentation. "Many people don't understand that the
power of compound interest works for you when you're saving your money
and it works against you when you owe money. We help people understand
simple concepts like this that can have a dramatic effect on their financial
lives."
Even as other companies have moved to a "do-it-yourself' business
model through websites and 1-800 telephone numbers, the kitchen table
remains a staple of Primerica. "The products have changed, but the
approach has not," Addison says. "We call it the 'PeopleNet.'
We still rely on personal contact from our representatives."
What makes the venture such a success is the people, Primerica Representatives,
tasked to help families conquer their financial difficulties often once
shared many of the same fears and difficulties as the families they are
serving. Primerica Representatives go from home-to-home, sharing their
unique stories. These are real people others can relate to, not unlike
the man who founded the company.
Term Reform
Change was not a welcome commodity in the close-knit life insurance community
when the A.L. Williams Company was launched in the late `70s. Rather brazenly,
its founder, A.L. (Art) Williams and a group of 85 like-minded people
took on the entire life insurance establishment, which had a history of
frowning upon his brand of unconventional thinking. Actually, frowning
is being kind — established agents were routinely out-and-out hostile
to outsiders who tried to muscle into their territory. Williams was undeterred.
"He was a maverick," Rick Williams says of the company's founder.
"He really was going completely against industry trends and if he
succeeded, the traditional industry lost. So there was a very combative
atmosphere around Art and what he was doing."
The company wanted to help middle income families, and they would do
so by reeducating them and refocusing their time, energy and, most importantly,
money. The "buy term and invest the difference" concept became
the foundation of the company.
Led by Primerica's crusade, today virtually all consumerists advocate
"buy term and invest the difference" as the best solution for
families. With lower cost term insurance, families can get the protection
they need at a price they can afford. At the time of the company's declaration,
cash value insurance policies dominated industry sales. Term insurance
was often overlooked or ignored by traditional life insurance companies
because it wasn't as profitable.
By the Numbers: Primerica Leads the Industry
- $545 billion in total, in force term life
protection (#1 company)
- $91 billion in term life face amount sold
in 2004 (industry leader)
- Average policy size issued in 2004 was
$274,000 — more than twice that of the industry average
policy size of $119,310
- More than two million policies in force,
providing protection for some 5 million insured clients, including
riders
- Largest mutual fund licensed sales force
in North America (30,000 NASD registered Representatives)
- $3.3 billion in mutual funds, $3.8 billion
in debt consolidated loans and $1.1 billion in variable annuities
sold in 2004
|
The Theory of Decreasing Responsibility
Primerica further developed a concept called the "Theory of Decreasing
Responsibility" to help illustrate the effectiveness of their "buy
term and invest the difference" philosophy.
According to this theory, clients need the most protection when they're
young and their responsibilities are at their peak. Younger people often
have children, a mortgage and a host of other obligations — new cars,
school loans and credit card debt. What they often don't have is savings.
Their income is stretched thin to cover mounting expenses. If, during
this period, a breadwinner were to pass away, it would financially devastate
the family, making the need for death protection a necessity.
As people get older, however, the financial picture is often turned upside
down. "Over time, as the children get through school and move out,
as your mortgage is paid down, and as your investments and savings increase,
the number of dependents counting on you to support them has significantly
decreased," Williams explains. "And that is why term insurance
is such a practical solution for many." Term insurance provides affordable
pure death protection without bundling a savings component as is the case
with higher-cost cash value insurance.
Policyholders were quick to recognize the company's common sense approach
to personal finance. And by the mid-to-late 1980s, Primerica had built
a sales staff of 200,000 strong: "We had a combination of having
the right idea for the consumer and the right game plan to execute it,"
Addison says. "All the folks who were among those original founders
of the company did something extraordinary." Extraordinary may have
been an understatement. The company went from being a very small start-up
outfit in Atlanta, Georgia, to being the largest writer of life insurance
in the United States by 1984.
That success got the attention of competing insurance companies. "Buy
term and invest the difference" had given power back to the consumers,
and they were exercising their new freedom. That monumental shift shook
the insurance industry to its foundations. "In the late `70s, 100%
of the business — or 99.9% — was whole life [insurance],"
Williams says. "With term insurance — because it's just the
life coverage itself — the premiums are low and therefore the commissions
are low, as well. And the traditional industry cannot make a living through
selling term insurance."
Investing the Difference
As the `70s came to a close, the company had encouraged a great number
of people to "buy term." They then expanded their product offerings
to provide more opportunities for their clients to "invest the difference."
It would prove to be another boom to the company's fortunes. "In
the early 1980s, we started offering our clients mutual funds," Addison
recalls. "In 1986, we introduced The Common Sense Trust, our own
family of mutual funds." And today, the company has expanded its
product offerings to include a variety of mutual funds and has more than
$22.5 billion in assets under management.
In 1989, Primerica Corporation, headed by renowned Wall Street dealmaker
Sandy Weill, acquired the A. L Williams Corp. Its name was officially
changed to Primerica Financial Services two years later. Primerica Corp.,
parent company to Primerica, would next form a strategic alliance with
Travelers. By year's end, Primerica Corporation purchased Travelers Corp.
outright after which it adopted the name Travelers Group. This landmark
purchase allowed Primerica Financial Services to thrive under Travelers'
trademark red umbrella.
Weill's next groundbreaking move launched the company into the stratosphere.
In 1998, Travelers merged with Citicorp, a global financial behemoth providing
some 200 customer accounts in more than 100 countries with financial products
and services. The merger created Citigroup, putting Primerica under the
wing of one of the world's largest corporations.
Primerica Representatives still sell term insurance, but they also offer
consumers an expanded array of products from Citigroup subsidiaries, including
Smith Barney, Citi-Mortgage, CitiFinancial and Citicorp Trust Bank, fsb.
Williams estimates only 50 percent of the company's business is now tied
to the insurance industry. "As the market has evolved, so too has
our company," Williams says.
Sticking to their Roots
The company continues to diversify and grow, expanding now into international
markets, yet its co-CEOs remain committed to the fundamental concepts
that fueled the company's success. "When John and I took over, we
stated our strategy was to grow the size of our sales force and that's
what we're working very diligently and very hard to do, because to meet
the needs of those families, we need more people out there selling, making
kitchen-table presentations," Williams says.
To keep energy high, Addison and Williams have created a unique environment
for their sales people. Addison spearheads the company's private television
network, providing weekly programs targeting training, motivation and
other pertinent topics. And every two years, the company invites its Representatives
to the Georgia Dome for a State of the Union-style convention which draws
in excess of 50,000. "We wanted to create an environment of fun for
the sales force, where they feel good about what they're doing and good
about what they're a part of," Addison says. The company often dangles
enticing carrots in front of its sales force, from smaller contests in
which Representatives vie for a T-shirt, to larger prizes. "We run
huge incentive trips — I mean, gigantic incentive trips," Addison
says excitedly. Past trips have included the company taking over two resort
hotels in Orlando, Florida, and renting out Universal Studios for exclusive
use for one night, which led Addison to temporarily rechristen the park,
"Primerica Studios." In 2005, the company will be offering an
incentive to trip to Hawaii for 1,500 Representatives and their partners,
the largest such offering in its history.
No matter how big Primerica Financial Services eventually grows, however,
it will always remain true to its roots. The monumental shift in the life
insurance industry that began when the company was founded in 1977 has
indeed provided countless middle class families with security, a debt-free
life and financial independence. And helping those individuals continues
to be the lifeblood of Primerica.
From ragtag army to recognized leader in life insurance, Primerica has
come a long way. But as John Addison says of the company's future, "The
best is yet to come. We don't want to read history. We want to write it."
That remains to be seen but if the enthusiasm and determination —
characteristics that built the business — remain as strong as they
are in Addison and Williams, the rest of the decade should belong to Primerica.
Ring of Achievement
"People are drawn to an attractive environment. They're repelled
by a repugnant one," Primerica Financial Services' co-CEO John Addison
says. "So you have to constantly focus on creating an environment
of fun and excitement."
Addison may very well be onto something. In Primerica Financial Services'
first 20 years, the company produced 31 milliondollar earners. Since 2000,
a year after Addison and Rick Williams were named co-CEOs and made growing
the sales force their number one priority, 21 additional people have joined
the exclusive community, bringing the total since 1977 to 52. The recent
surge is no accident. Addison and Williams have carefully constructed
an atmosphere that recognizes and rewards individuals, as well as partners
and groups, for their outstanding achievement.
Fostering such an environment requires consistency. In an industry rife
with turnover, Addison and Williams have made stability a staple of Primerica's
ongoing efforts to galvanize their sales force. Doing so allows the representatives
to focus on the task at hand, without the underlying worry of how or if
they'll be compensated for their efforts. "At the end of the day,
people have to make money and the business opportunity has to work for
them. So, we spend a lot of time focused on making sure that the business
is working," Addison says.
To generate fun and excitement, the company has set up a series of recognitions,
rewards and incentives to honor those among the company that excel. At
the company's international convention, held every two years at the Georgia
Dome in Atlanta, top performers are called up to walk across the stage
in front of a sold-out stadium to accept their award. These include people
who qualify for a variety of reasons: new promotions, top sales producers
by product line, leading builders and, of course, new ring earners.
"The ring" is what all new Representatives focus on. Originally
conceived to both honor and unite the company's first group of $100,000
earners (in a 12-month period), the "Ring" now commemorates
a host of achievements, including $100,000 earners with at least 100 recruits,
million dollar earners, and those earning $2, $3 and $4 million dollars.
Competition is encouraged and is key to helping people achieve their
goals. The company promotes competition by putting several rewards up
for grabs — from the small to the very expensive. On the higher end,
the company offers incredible incentive trips but even those involve varying
degrees of competition.
When the company recently booked an all-inclusive incentive trip to Orlando,
it rented out two hotels. "The top winners stayed at the Ritz Carlton
and the next-tier winners stayed at the JW Marriott," Addison says.
"So we had a contest within a contest." In 2005, Primerica will
offer a trip to Hawaii, their largest incentive trip to date.
Such events allow the Primerica family to form close bonds with one another,
bringing people from all walks of life, with differing backgrounds, education
levels, races and creeds together to share a common goal. "We create
an environment where we get people to laugh and have a lot of fun."
Addison says. He goes on to add, "But what makes this really special
is that we know what we do changes people's lives for the better. That's
something that will never change."
Dynamic Duo
Success from Home magazine
July 2005
As Primerica Financial Services' co-CEOs, John Addison and Rick Williams
are a potent one-two punch.
Egos, violent takeovers, political backstabbing and flat-out greed often
turn the business landscape into a survival of the fittest. Collaboration
under these conditions, especially at the top of the corporate hierarchy
where power is a commodity rarely shared, is unusual to say the least.
Against this backdrop, Primerica's parent company, Citigroup, stepped
outside the box and named John Addison and Rick Williams co-CEOs in 1999.
But rather than send shockwaves throughout the company, the unique alliance
seemed a logical progression for what's always been a revolutionary company.
Founded in 1977, Primerica transformed the life insurance industry by
encouraging middle income families to purchase affordable term life insurance
so they would have more money to invest in their family's future.
The company's groundbreaking "buy term and invest the difference"
mantra has remained a significant piece of their foundation even as they've
diversified over the course of their nearly 30 years in business. Today,
in addition to life insurance. Primerica offers debt consolidation loans,
first mortgages, variable annuities, long term care, pre-paid legal protection,
retirement savings vehicles and programs to fund education expenses. They
serve more than six million clients in North America and have more than
100,000 Representatives.
When Addison and Williams were appointed co-CEOs in late 1999, the total
face amount of life insurance sold for the year totaled $56.2 billion;
this number grew rapidly to total $91.4 billion in 2004. Over that same
five-year period, Primerica's net income has grown from $454.4 million
to $544 million and their plan to grow the sales force has been incredibly
successful as the number of Representatives has increased from 79,000
to 106,000. All the while, the rest of the industry continued to shrink.
Tunnel Vision
Addison and Williams' success can be traced to the two sharing a common
vision for the company, forged in their more than 15 years of working
together, all at Primerica. "We've had a lot of people coming in
to run the company with visions that didn't mesh with John's and my view
of how we thought the company should be run," Williams says. "So
by the time we took over, we both viewed the challenges and the opportunities
of the company the same, and that's a very critical component of making
our partnership work."
The dynamic duo's focus is rooted in what they believe to be the key
component of Primerica's success. "Several previous CEOs focused
on increasing the productivity of each individual Representative. John
and I understood that you don't need the people doing more, you need more
people. That's where our foc us has been," Williams says.
They've grown the business by empowering their sales leaders and generating
an atmosphere conducive to succeeding, things that make Primerica an attractive
opportunity for someone seeking to own their own business. "You have
to focus on the right things," Addison says. "You have to have
fun and create an attractive environment. But then at the end of the day,
people have to make money and the business opportunity has to work for
them. So we spend a lot of time making sure that the business is working."
Opposites Attract
While their vision for Primerica is similar, Addison and Williams are
not. "We have an appreciation for what the other does and an understanding
of what the other does, but we know what each of our unique skill sets
are, so I don't try to do his job and he doesn't try to do mine,"
Addison says.
John often spearheads the marketing and sales strategies, while Rick
oversees many of the financial decisions that drive the business. Not
that their positions are autonomous. "So much of our business is
just indelibly tied," Mark Supic, Executive Vice President of Corporate
Relations, explains.
"You can't separate the marketing from the operations from the administrative
factors, so there's got to be collaboration." Williams agrees. "It's
not like the marketing people report to John and the financial administration
people report to me. They report to both of us jointly. John's viewpoints
on my side of the business and mine on his are equally valid."
Addison is a visionary leader who helped craft and now helps maintain
the company's message. More than Williams, he's the face of the company,
out front and in charge. "John can motivate a stadium full of people,"
Williams says. "I can speak to them but I can't motivate them like
John does. John is a master at that."
At the office, John's likely to wear a polo shirt with khakis and loafers.
He spends his off hours following his alma mater's football team, the
Georgia Bulldogs. John and his family live on a 44-acre farm in the country,
as far away from the metropolitan downtown of Atlanta as he can get. "I
prefer to be out on the farm. I'm not a person that likes being in the
middle of a very crowded city," Addison says.
Ironically, Rick grew up on a farm but left it as soon as he could, though
the experience taught him the value of hard work. "It's a great place
to grow up," Williams has said of his upbringing on a Southern New
Jersey dairy farm. "You learn great values and that hard work matters."
Williams prefers the concrete jungle to the outdoors, calling the heart
of downtown Atlanta home. In his offhours, Williams collects fine wines
and indulges in his love of jazz. Rick prefers tailored suits and silk
ties, and his is desk is neat and pristine.
Rick studies things to the infinite detail," Addison says. "If
I'm ever looking at purchasing something and I know Rick just bought one,
all I have to do is go buy what
Rick bought because it's going to be the best."
"One of the things I've learned through time is you're far better
off to go with your personality," Addison says. "If you spend
all your time focused on things that aren't your strengths, the best you
will ever be is average — no matter how hard you work at them. I
think you're far better off to focus on your strengths and go be great
at them versus average at your weaknesses."
"At the end of the day, people have to make money and the business
opportunity has to work for them. So we spend a lot of time making sure
that the business is working."
— John Addison
Fate Plays Its Hand
Only after a series of remarkable events did John Addison and Rick Williams
work for the same company.
After receiving his bachelor's degree and MBA from the prestigious Wharton
School of Business, Williams began his career in 1979 when he joined the
Greenwich, Connecticut-based American Can Company, a predecessor company
to what is now Citigroup. He began in their strategic planning department,
after which, he headed the company's mergers and acquisitions area for
financial services. At the time, American Can was transforming its business
focus away from the container business into financial services, ultimately
changing its name to Primerica Corporation in 1987 to better reflect its
new strategy.
Meanwhile, Addison was graduating from college with a B.A. in economics
from the University of Georgia (he later earned an MBA from Georgia State
University). After working briefly at another insurance company, Addison
joined the fledgling A. L. Williams Corporation in 1982 as a business
systems analyst. During the heavy growth period of the `80s. John was
able to gain experience in a wide variety of areas — both on the
operational and marketing sides — receiving promotion after promotion.
Then, in the late `80s, a series of mergers ultimately resulted in Wall
Street legend Sanford I. (Sandy) Weill's 1988 acquisition of Primerica
Corporation, which already had partial ownership of A.L. Williams. Weill
liked what he saw in this huge distribution powerhouse — particularly
how they so effectively reached the middle market — so he decided
to purchase the rest of The A.L. Williams Corporation in 1989. It was
at this time that Weill asked Williams to move to Atlanta and promoted
him to Chief Financial Officer of A.L. Williams (which changed its name
to Primerica Financial Services in 1991). So it was through this series
of chance events, that John and Rick found themselves working at the same
place. Little did they know what the future held.
In 1999, when the last executive left his post as Primerica's CEO, Citigroup,
by then Primerica's parent company, took a different approach to filling
the vacancy. Primerica's unique structure offered a distinct challenge
because it did business the "old-fashioned" way: face to face
over the kitchen table. Handshakes are every bit as important to the company's
success as dotted I's and crossed T's. Because Representatives grow their
businesses by building relationships with their clients, Addison says
they believe in the "PeopleNet" rather than the Internet.
A group as large as Primerica's sales force often needs more than just
direction. "You have to lead the organization; you can't manage it.
That means you have to inspire," Addison says. Always the extrovert,
Addison was an obvious choice to head that component of the business.
Williams, with his high-level financial expertise, easily met the requirements
for someone needed to head the operations side.
Together, Rick and John form the perfect CEO. "John operates more
on instinct.
Rick's more analytical," Supic says. "So they're very different
personality-wise, but that's one reason it works."
Even as Primerica continues to grow its business, reaching greater heights
and enjoying success overseas as they expand globally, the two CEOs seem
content with their partnership, not just now, but for the foreseeable
future. "This is the last stop. Neither one of us is running for
higher, exalted office." Addison says. "One of the things I
think makes a co-situation not work is if the two of you are competing
to see who's going to come out on top. There's no way that can work. Addison
says. "We are nothing like that. At the end of the day. Primerica
is where we want to he and we are both getting to do what we want to do.
Rick feels the same way."
Measures of Growth |
Since being named co-CEOs in 1999, John Addison and Rick Williams
have overseen explosive growth for Primerica Financial Services. |
Sales Force Licensing |
1999 |
2004 |
Life:
Securities:
Variable Annuities: |
79,809
24,566
16,424 |
105,000
30,000
23,000 |
Life Insurance — Year to Date |
1999 |
2004 |
Issued Policies:
Face Issued:
Policies in Force:
Face in Force: |
209,849
$56.2 billion
2.14 million
$394.9 billion |
287,000
$91.4 billion
2.34 million
$545.4 billion |
Sales |
1999 |
2004 |
Consolidation loans:
Mutual funds:
Variable annuities: |
$2.1 billion
$2.9 billion
$990.1 million |
$3.3 billion
$2.9 billion
$1.1 billion |
| Net income |
1999 |
2004 |
| |
$454.4 million |
$544 million |
On the Rise
Success from Home magazine
July 2005
These young entrepreneurs are reaping the rewards of being their own
boss.
As a fixture in the insurance and financial industry for nearly three
decades, Primerica Financial Services has a history of success stories
from individuals who are constantly raising the bar for future generations,
setting a standard that inspires those who follow. The keys to their success
are personal drive and ambition, in addition to having the right tools
at their disposal.
Daniel Alonzo was working as an office assistant making $7 an hour when
he was approached by a friend about Primerica. At first, he was skeptical.
"It took me four months to even go to a presentation," Daniel
recalls. "But as soon as it was over, I was on board all the way.
I have never been so inspired by a company before. They provided an easy-to-duplicate
system and spent a lot of time teaching and training, creating a sense
of urgency to get people off to a great start."
Daniel was attending college when he started his business with Primerica.
Both were competing for his time, and he wasn't sure which direction to
go. Then one day, he approached his professor because an exam conflicted
with a Primerica Convention. His professor would not allow him to take
the exam early, and from that point forward, Daniel's mind was made up.
"It was a difficult decision to go full-time and leave school, but
I was so sure about Primerica, my enthusiasm was hard to contain,"
Daniel says. "I felt confident and competent that the sky was the
limit."
Now, tenaciously working his business with his wife, Karma, they view
their opportunities as unlimited. "We are in a position to have our
dreams come true as well as helping others obtain theirs," Karma
says. "Primerica has taught us how to create and build leaders, and
how to develop as people." As Daniel says, "I was just an average
student. I didn't know I could be this good."
“I have never been so inspired by a company before.”
The prospects of starting a family prompted Chris and Sherri Royce to
look for a new opportunity. Sherri wanted to stay home with their daughter,
yet also earn an income. "Our goal was to make $1,000 a week, have
no boss and allow Sherri to stay home without putting our daughter in
day care," Chris remarks. "With the tools and support from Primerica,
we were off to a fast start and our enthusiasm is still growing."
The Royces now have two children and are still building their Primerica
business every day. "We are working as hard as we did when we first
started, but now everything has compounded. 1\ e have exceeded our expectations
of income, as well as the people we have influenced along the way,"
Sherri says. "It's not about the material things — you can only
have so much stuff — it's about living life with no limits and expanding
growth for you and those around you."
“With the tools I and support from Primerica, we were off to
a fast start and our enthusiasm is still growing.”
Dan Defeo started working with Primerica 11 years ago. But when he married
Kate, he decided to refocus his business plan to include her. "We
are a product of the Primerica system," Dan says. "We don't
deviate too much from what we were taught; we don't get too creative;
we just follow the system that has been used by other successful Representatives."
They went from personal producers to financial educators by fundamentally
following the Primerica philosophy.
"It's not a `get rich quick' scheme; you have to work hard. And
it takes some time to duplicate yourself before you'll start multiplying.
We call it `geometric progression' because it is so many people doing
so many things," Kate says. "We are looking for the people that
are looking for us; they just don't know that they're looking for us yet."
“We just follow the system that has been used by other successful
Representatives.”
Pushing Up People
Amy Wilson
Success from Home magazine
July 2005
Primerica has always been a company where "ordinary people"
can find success and live their dreams. Since its inception in 1977, the
company's founder, Art Williams, believed in a single principle: "Pushing
Up People." He always wanted to own his own business, to be free
of a boss or corporate system. He also knew that just about everybody
else craved freedom. Over time, he developed a "company within a
company' philosophy, where each salesperson would, in effect, build their
own personal company under the bigger Primerica umbrella. He created a
company "by salespeople, for salespeople," and his philosophy
can be seen in virtually all aspects of Primerica today.
Along with the knowledge that they are helping families, recognition
is the primary fuel that keeps Primerica's 107,000 licensed Representatives
going. "Recognition is an extremely vital part of the success I've
had," says Rene Turner, a Georgia-based power-earner and Senior Vice
President who currently cash flows around $300,000 a year. "When
you excel and achieve, you know you will reach your goals and your achievements
are celebrated," says Turner. When she started with the company back
in 1985, Turner said her first goal was to make it onto the "Leader's
Bulletin," an early version of today's Competition Scoreboard —
an online ranking of who is earning and recruiting the most. "It
was really important for me," says Turner. "Every month, I was
working to move up to a higher level. It was a way of seeing where I stood
in the company." Turner says the company culture is unique in that
everyone's success is celebrated. "These are highly competitive people,
but they still get excited about other people's success. Seeing other
people win always inspired me. It told me that I could have that success
too."
Primerica Financial Services' President Glenn Williams says the company
devotes a huge amount of resources to recognition. More than 73,000 Representatives
received recognition in 2004 for reaching milestones. Their rewards included
company trips, TV appearances, diamond-encrusted rings, watches, lapel
pins and T-shirts celebrating even the smallest of beginnings. "People
crave recognition and positive reinforcement," says Williams. "Most
corporations do a poor job of it. So we make a consistent effort to do
it publicly — we don't just send our Representatives something in
the mail." At Primerica, public recognition happens weekly ia a closed-captioned
TV broadcast, multiple times a year during incentive trips and —
most dramatically — every two years at the company's pull-out-all-the-stops
international convention.
Many of Primerica's most successful representatives say they've had "defining
moments" at one of the conventions. "The convention was our
catalyst," says Dave Harms, a Colorado-based Senior Vice President
who, along with his partner, Kelly, cash flows about $484,000 a year.
"In the first six months I made $200. After that first convention
in 1996, I made the decision to go full-time." (Many of Primerica's
Representatives start out part-time with the company.) "I was on
the verge of graduating college and I was going into aircraft maintenance.
My wife quit her job two months later. The convention was critical to
our success."
Recognized as Atlanta's largest corporate meeting, the 2005 convention,
held in the Georgia Dome, will welcome 70,000 Representatives and add
some $45 million to the local economy. It will take four days for the
home office staff to unpack and prepare the 1,000 awards that will be
presented, and a staff of more than 200 to set up the stage, lights and
audio-visual pyrotechnics that will inspire new Representatives. "We
had never seen anything like it," says Dave Harms of his first convention
experience. "We saw all these people — their kids and wives
speaking about them with such love and admiration. We wanted that life."
Harms recalls the conventions closing session, when emotions ran high.
"Hector La Marque's kids spoke that night. Where I'm from, guys almost
never cry — and I was bawling like a baby. I saw that we really did
have a chance to be financially independent; to travel, to make money
and do the things we had only dreamed of." Dave and Kelly made that
vision a reality. "We took our parents on one of the company incentive
trips to Hawaii two years ago, and they had never been before. Our five-year-old,
Mackenzie, has now been to Hawaii three times."
"We had never seen anything like it. We saw all these people —
their kids and wives speaking about them with such love and admiration.
We wanted that life.
Incentive trips are another way Primerica recognizes the success of its
Representatives. Even the newest Representatives can compete for destinations
like Atlantis in the Bahamas, Cancun, Hawaii, Las Vegas, Palm Springs
and Boca Raton. Representatives compete for exotic destinations several
times a year — especially appealing in the dead of winter. More than
3,700 couples traveled on Primerica incentive trips in 2004. "I remember
my first company trip," recalls Turner. "I realized that I belonged
with the winners. I knew I ad a long way to go, but being around the champions
was the first step." Troy and Jennifer Fields, a Louisiana-based
power couple who cash flow: $551,000 a year, say the trips are a major
incentive for their success. They recall a trip to Hawai two years ago
when they could afford to bring their parents. "It's not the trip,
it's the people,' Jennifer says.
Recognizing the importance of people is one of Primerica's secrets to
success. The company also excels at creating a family-friendly atmosphere:
the Partnership Empowerment Program organization was created to help Representatives
succeed by building support from family and friends. Spouses, close friends
or family members are invited along to company "Opportunity Nights,"
informal meetings where the business opportunity is presented. If they
choose, new Representatives can then identify a "partner" to
join them in their venture. Partners are encouraged to support Representatives
as they grow their new business, and they also share the success. Partners
are included in company incentive trips, they walk across the stage during
recognition events to have their picture taken and their names are alwavs
included on company trophies and plaques. "It's a family," says
Jennifer Fields. "New Representatives meet all of us. I'm in the
office four days a week, and Troy's mom is a secretary. We're a big family
and we do everything with food," she jokes. "We have tons of
events: bonfires in the fall, crawfish boils, potlucks, cruises, trips
to Gulf Shores, Alabama we had 200 people at our Easter picnic."
Fields says her two children, Chandler, 5, and Savannah, 21 months, regularly
accompany her to the office. Harms agrees: "Our kids are around the
office all the time. We have people over to our house every six to eight
weeks for new associate night. We have barbecue and play ping-pong. It's
a real family atmosphere."
When asked about the company's culture, most Representatives say working
for themselves and helping families keeps them inspired. "The idea
that we can control our own future and work for ourselves — that
makes us more positive and excited," says Harms. "Our market
is unlimited," says Turner. "An unlimited number of people need
what we do — and what we do helps people. Every success story is
proof that there's more room for success."
Back
Primerica Representatives Re-define "Office
Space"
Success from Home magazine
July 2005
Through Primerica's "Virtual Base Shop," Representatives can
access their office — from virtually anywhere, at any time.
When you think of an office, what comes to mind? Working nine to five?
A cubicle surrounding a chair and desk with stacks of paperwork covering
the top? Primerica is redefining the idea of "office space"
for its Representatives through exciting new technology that caters to
their kind of "field-focused" business.
Primerica is a unique business that allows Representatives not only to
set their own hours but to get out of the office. It's amazing, but true!
The way Representatives help families and build their businesses is by
meeting new people, expanding their warm markets and recruiting new people
into their organizations — all of which is hard to do when buried
under paperwork behind a desk!
With the development of Virtual Base Shop, Representatives can now tap
in to their base shop's forms, announcements and client documents from
any computer with Internet access. They can file paperwork online, get
updates on where client applications are in the process, report their
activity ...and more!
"I love Virtual Base Shop because our entire base shop is on the
system and all of the Representatives in my organization can access everything
they need — immediately — no matter where they are or what time
it is." says Jim Meyer of Florida. Primerica Senior National Sales
Director. It's just one more way Primerica helps us build our businesses
without being confined to a typical office environment."
Virtual Base Shop is Just one of the many new technological advancements
Primerica has put into place to help Representatives' lives easier so
they can focus on what's really important to them: building their business,
helping middle income families and living out their dreams of being entrepreneurs.
With the development of Virtual Base Shop, Representatives can now tap
in to their base shop's forms, announcements and client documents from
any computer with Internet access.
Back
Primerica Creates Revolutionary Technology to
Life Easier
Success from Home magazine
July 2005
With TurboApps, Primerica Representatives can submit applications electronically
and get paid faster than ever before.
Primerica is constantly looking for ways to make their Representatives'
businesses run more smoothly. Representatives know that while they're
in business with Primerica, they have access to an entrepreneur's dream
support system! Not only do they work with a company heralded around the
globe as a financial powerhouse, they can feel confident that their businesses
are supported by the best high-tech, in-touch solutions designed to help
them achieve success.
One of Primerica's latest technological standouts is TurboApps. This
new software program allows Representatives to input client data into
a hand-held Palm™ device and immediately submit it to Primerica's
home office for processing. It helps Representatives save not only paper,
but more importantly, precious time that could be better spent building
their businesses and helping more families.
By using TurboApps, Representatives can eliminate most of the time-consuming
paper process. In the past, Representatives had to laboriously fill out
life applications for each client. In fact, sometimes the Representative
would fill out as many as three different applications in order to provide
the client with different premium quote scenarios! But now Representatives
can reduce paper and still provide multiple quotes to clients in a fraction
of the time.
One of the greatest benefits of TurboApps is that Representatives can't
submit an inaccurate application. There are no missing signatures or information,
because the software won't let the Representative send in an application
unless all of the required fields are filled in. Before TurboApps was
invented, incomplete applications sent in to the Primerica home office
would be held up until the missing information was found. But now those
challenges are a thing of the past. And that means that not only does
the application get processed faster, the Representative gets paid more
quickly too!
TurboApps has created quite a stir and Representatives are clamoring
for the launch in their area. For the lucky few who were part of the pilot
program, Primerica's new technology has already made a huge impact on
how they do business.
"TurboApps has absolutely revolutionized our business," enthuses
Senior Vice President Jerry Williams of Lawrenceville, Georgia. "The
speed and accuracy is unbeatable!"
Here are some of the TurboApps features Primerica Representatives are
most excited about:
- They can simply tap and click the client's information into their
handheld device, send it in for processing to the Primerica home office
through the company's intranet reducing the amount of paper used.
- No more lost time mailing applications in to the Primerica home
office and waiting for the applications to be processed into the system.
Plus they'll eliminate postal expenses.
- Error free applications! TurboApps won't submit an application unless
all required information is filled in!
Shane Rudman, Primerica Senior National Sales Director, in Overland Park,
Kansas, is sold on the usability of TurboApps. "It's unbelievable.
After using this software. I never want to go back to filling out paper
applications again. It's so awesome the way Primerica constantly looks
to make its Representatives lives easier. Knowing that I'm in business
with a company that truly wants me to be a successful entrepreneur and
puts systems in place to help me reach my business goals is incredible."
Primerica's new technology has already made a huge impact on how Representatives
do business.
Doing What’s Right
Success from Home magazine
July 2005
Primerica Representatives are changing lives by helping families become
debt free and financially independent.
Though the United States is the richest country in the world, families
are struggling to make ends meet and get ahead. We are now seeing the
consequences of the "buy now, pay later" generation — a
society that has forgotten how to live on the money they make. The stark
reality of poor personal financial decisions is starting to sink in and
have many worried. In an Associated Press/IPSOS poll of 1,000, half of
those surveyed said they worry frequently about their debt, many of them
saying they worry "most of the time."
According to USA Today, less than 40 percent of Americans think they'll
have enough money to live comfortably in retirement, and only 42 percent
routinely set aside money for the time when they stop working. That represents
the lowest percentage of people saving for their retirement years since
1980!
Debt: a Danger to the Family and the Economy
But there's more. The Federal Reserve has revealed that in 2005, credit
card debt — and household debt in general — is at a record all
time high when compared to disposable income. Many analysts are concerned
that this unprecedented level of debt poses a significant danger, not
only to the financial health of American households, but our entire economy.
If you are like most people who've accumulated a significant amount of
debt, you not only need a plan that will help get you out of debt, you
need help in establishing a long-term game plan to help you attain financial
independence. This is where Primerica can help. Their mission: to help
families become debt free and financially independent.
Primerica is changing lives in a variety of ways:
- Through Education
- Through Financial Solutions
- Through the Primerica Financial Business Opportunity
Through Education: Financial Needs Analysis
One of the main reasons families struggle financially is that most don't
understand how money works. To help solve the fundamental financial problems
that keep families from achieving their goals and dreams, Primerica offers
a unique diagnostic tool — its Financial Needs Analysis (FNA) —
free of charge.
As part of the FNA, Primerica Representatives meet with families in their
own homes to review their current financial situation and provide realistic
solutions for
- Eliminating debt
- Protecting Income
- Saving for Education
- Providing for a worry-free retirement
“We feel good about what we do at Primerica. We help families
get out of debt and dream for the future.” — Vance & Letha
Stay, New Jersey
For many people, the FNA is an eye-opener — and in some cases a
wake-up call. Representatives help families understand where they stand
financially and then offer solutions to help them make their money work
for them — so they won't continue to make the same costly mistakes.
In a society that encourages people to live beyond their means, the FNA
helps people see the need to rein in their debt and set the framework
for a solid financial future.
Through Financial Solutions: The Right Kind of Insurance
Once a family understands their actual financial situation, it becomes
easier for them to pinpoint any problem areas. Primerica offers a variety
of customized products and services designed to help people protect their
income, reduce their debt and save for both short- and long-term expenses,
such as college and retirement.
Primerica takes pride in offering people simple, practical solutions.
With a philosophy of "buy term and invest the difference," Primerica
believes people should buy life insurance with maximum coverage and minimum
dollars. This philosophy allows consumers to afford the amount of death
protection they need and accumulate enough savings by investing the difference
to retire worry-free.
Primerica sells term insurance 100 percent of the time because they believe
it's the right product for most families. This crusade is making a difference
and has not only helped Primerica to become a leader in the term insurance
industry, it also makes protecting the often underserved middle income
families a reality.
“We love being part of a company that does what's right for the
consumer.”— Giancarlo & Joy Gigone, Ontario
Through the Primerica Financial Business Opportunity
Many people have three dreams. The first is becoming debt free. With
discipline and a plan, it's a reachable goal. The second dream is owning
your own business. But most people believe they can never own their own
business because of a lack of start-up capital to buy a franchise or provide
collateral for a huge business loan. There is also lack of security; giving
up a steady income to "gamble" on success. And, there is also
the fear of failure; over 50 percent of new businesses fail.
The third dream is the ability to control one's own destiny. And like
starting a business, most people don't believe they can control their
own destiny. The reason? The real world can knock people around. And after
a few rounds of getting beat up, people stop dreaming and start to believe
that institutions and other people are in control.
Primerica offers a way for people to start dreaming again and take back
control of their own lives. In fact, over 100,000 people are changing
their destiny through the Primerica business opportunity. Representatives
come from all walks of life. They're coaches and college professors, health
care workers and homemakers, managers and mechanics. But they all have
something in common: the desire to make a difference — both in their
lives and the lives of others. Today they have the kind of security for
their families they never dreamed was possible.
“We were looking for an opportunity to create something great
for our family. That's when we found Primerica.” — Mark &
Cathy Marchesani, Colorado
Unmatched Support System
When people start their own business with Primerica, they're joining
a family of companies heralded around the globe as a financial powerhouse,
and have the support of time-tested solutions designed to help the new
Representative build a strong and productive business.
Home Office
More than 1,800 employees working behind the scenes for continued support.
Securities Operations
Over 3 million shareholder accounts are processed through their state-of-the-art
processing center.
Life Operations
Handles an average of 205 new claims a week and pays out almost $2 million
in death claim benefits every day.
Primerica Data Center
Operates 24 hours a day, every day, processing all applications and business
statements.
Primerica Online
An Intranet network that allows Representatives to keep track of their
business at the touch of a button.
EPN-TV
One of the largest corporate-owned television networks in operation. The
Entrepreneurial Network airs hundreds of hours of informational and educational
programming annually.
“Primerica's support system helps keep our business on track.”
— Tyrone & Carolyn Taylor, Michigan
What began as a small company with a revolutionary idea has grown into
an international network of more than 100,000 entrepreneurs. More than
25 years later, the "buy term and invest the difference" philosophy
continues to be the cornerstone of Primerica's mission: to help families
become debt free and financially independent. By "doing what's right,"
Primerica Representatives are able to achieve financial freedom and change
their lives.
Many analysts are concerned that this unprecedented level of debt
poses a significant danger, not only to the financial health of American
households, but our entire economy.
Back
Limited Term License Proponents Find Ammo
In New Study
Jim Connolly
6 June 2005
(c) 2005 The National Underwriter Company
A new study that finds minority groups are underserved in the sale of
life insurance products will be used during an upcoming hearing to buttress
the argument for establishing a limited term insurance license.
The hearing will be held on June 11 during the summer meeting of the
National Association of Insurance Commissioners.
Primerica Financial Services, Duluth, Ga., a unit of Citigroup, New York,
and legislators including Rep. Shirley Bowler, R-Harahan, La., are among
those who have argued for the establishment of such a license to open
up the market.
At press time, the National Association of Insurance and Financial Advisors,
Falls Church, Va., reiterated its opposition to the proposal but declined
further comment.
North Dakota Insurance Commissioner Jim Poolman, chair of the producer
licensing working group, has cited the need to maintain a uniform approach
to licensing as part of a broader effort to reinforce the general need
for uniformity.
The survey offers the following findings:
- Minorities are more likely than whites to consider life insurance
a must-have.
- 92% of African Americans and 82% of Hispanics agree that life insurance
is essential, as compared to 72% of whites who said the same.
- Less than half (47%) of Hispanics nationwide reportedly are covered
by a life insurance policy, far less than the national average of
63%. Another 37% of Hispanics admit that they have no insurance coverage
and 30% of blacks say the same.
- While 69% of blacks acknowledged some familiarity with life insurance
policies, the remainder said they were not knowledgeable on the subject.
- Respondents with yearly incomes of $30,000 or less were 9% more
likely than the national population not to have life insurance.
"People in this market have a great need for insurance," says
Peter Schneider, executive vice president and general counsel with Primerica.
He cites the fact that those with lower incomes were less likely to have
insurance if a breadwinner dies.
He says he hopes the study will start a debate about how to better serve
the market.
Increasing commissions on a "commodity" product that already
has a thin margin would make sale of term more unattractive to insurers,
he says.
But, a tiered licensing system similar to the securities industry could
help create more agents and reduce costs, he adds, noting there are different
licenses required for mutual fund, equities and options selling.
When asked why existing agents could not reach out to church or other
community groups to more efficiently serve the market, Schneider says
if there were a limited term license, then there would be agents in those
churches and community groups to do that.
Primerica Workers Help Tsunami Relief
Maria Saporta
26 May 2005
(c) 2005 The Atlanta Journal-Constitution, All Rights Reserved
Employees at Duluth-based Primerica raised $150,000 to support the American
Red Cross' tsunami relief efforts. Then Bobby Buisson, the company's senior
national sales director, matched that donation with a $150,000 gift from
his family foundation for the American Red Cross' disaster relief efforts.
Back
Companies Push Recruitment Of Minority
Agents
Steven Tuckey
9 May 2005
National Underwriter Life & Health — Financial Services Edition
(c) 2005 The National Underwriter Company
Duluth, Ga.-based Primerica Financial Services Inc. is currently backing
an effort to create a term-only life insurance license, which it believes
will help make financial services available to those middle market neighborhoods
that the mainstream industry now is said to avoid for its lack of profitability.
The term-only license could serve as a good entry into the business for
members of those underserved communities, Primerica spokesman Mark Supic
says.
Back
Land of Opportunity
May 2005
American Executive
John Addison tells Liz French that letting entrepreneurs run their own
businesses within the larger entity spells success for his financial services
company.
Primerica
In an age where the word `job' stands for 'just-over-broke' for many
Americans, where people are increasingly frustrated with their work and
lack the upward career movement they once had, more and more people want
to go into business for themselves. Queue Primerica, a company that offers
financial solutions and products to middle-income families while providing
business opportunities for entrepreneurs who want to take their finances
— and their destinies into their own hands.
Primerica is the largest financial services marketing organization in
North America that builds its distribution from a volunteer army of more
than 100,000 licensed independent contractors. "The structure is
uncommon in financial services, which is one of the reasons we have been
so successful. The founders of the company, back in 1977, decided they
were going to build a business a different way," said John Addison,
co-CEO of the Duluth, Ga.-based company that today serves over 6 million
clients.
Giving 'job' a new meaning
The bedrock concept of Primerica is "buy term and invest the difference,"
explained Addison. Instead of buying a traditional cash-value life insurance
policy, which is usually bundled with other investment products, one can
buy substantially more death protection by buying lower cost term insurance
and then investing the savings separately, generally in a mutual fund.
"The 'buy term and invest the difference' concept has been around
forever, but the founders of the company figured out that using part-time
people would make it economically viable to sell term insurance. The reason
term insurance never sold well was that a traditional insurance agent
could make $1,000 selling you a whole-life policy or $100 selling you
a term-life policy. Which are they going to sell?" said Addison.
"It was a stroke of genius, and it has led us to be an industry leader
in term life insurance in the US, Canada, and now into Europe."
Addison and his co-CEO, Rick Williams, do not consider themselves the
heads of the sales force. "We are in a leadership position and it
is our job to be good stewards. They are not our employees. I can't say,
`If you don't make X number of sales, you're fired,"' said Addison.
Primerica representatives can choose to run their own part-time or fulltime
businesses and decide for themselves how much they want to grow. Reps
can also recruit other independent contractors to earn additional income.
Because they are independent contractors, Primerica representatives are
not subject to specific sales quotas. Instead, they set their own goals,
whether it is simply supplementing their current income or becoming a
full-time regional vice president. "But there are behavioral and
compliance standards that must be met and maintained because we operate
in the highly regulated financial services industry. "The biggest
thing that leads to our success is that our people know their incomes
and promotions are strictly subjective based upon their efforts. Socalled
office politics will get you nowhere, unlike what many find is the case
in a more corporate environment."
An abandoned market
Another factor in Primcrica's success is that its products are simple
and geared toward middleincome families. "The middle-income market
has been abandoned. All the big financial services companies are targeting
the affluent. If you don't have a couple hundred thousand to invest, they
don't want to talk to you," said Addison.
Mark Supic, executive vice president of corporate relations, explained
that most people get overwhelmed by all the research necessary to make
informed decisions about life insurance and saving for retirement, so
they end up paralyzed. "We break it down in a basic manner and use
an educational approach," lie said. "For the few people who
have the financial acumen and want to do it themselves, that is great.
But we looked at the most successful Internet provider of term life insurance,
which issued 125,000 policies over a seven-year period. During that same
period Primerica issued 1.7 million Policies."
Addison added that most people spend more time planning their vacations
than they do planning their financial future. "They have a tendency
to procrastinate, and what you wind up with in the wealthiest economy
in the history of the world is the accumulation of a lot more credit card
debt," said Addison. "So when one of our agents calls someone
to put together a comprehensive financial game plan, he or she is interested
and excited that someone is there to help."
And help they do. Last year, Primerica paid out over $640 million in
death benefits and issued $91.4 billion in new insurance face-amount protection.
"When our people go to someone's house to sell them term life insurance,
it can make a huge difference for that family," said Addison. "If
there was no Primerica and these people had their old whole-life policies,
or like most of the people we see, no insurance whatsoever, that $600
million that flowed back to widows, orphans, and families would have been
$100 million," he said.
He added that Primerica paid more than $10 million in death benefits
to 40 insured families of 9/11 victims. The company had clients in both
towers and on all three planes. "I guarantee that the families of
the 9/11 victims, who received $200,000 to $400,000 death benefits, are
very happy that one of our part-time people sat down with them before
an event like that," he said.
Simplifying the process
The biggest challenge that faces distribution of financial services is
the increasing complexity of getting licensed. During the last 10 to 20
years, states have increased the amount of tune and energy it takes to
earn a license by making the tests more complex. In order to address this
growing problem of underinsured and uninsured lower-to-middle-income families,
Primerica is working to propose a term-only license that would incent
new agents to target these underserved markets.
"If all you are going to market is terra life insurance, which is
much simpler, why should you have to study products you are not going
to market? Therefore, have a simpler test to make it easier for people
who are part time to get a license," said Addison. "It is not
rocket science to understand a term life insurance policy and most experts
agree that for a typical middle, income family, term is the best way to
afford adequate protection."
These entry barriers make it more difficult to build distribution in
the industry as a whole, and as a result, there are less insurance agents
licensed in the US today than there were in 1987, Addison said. "You
get the attitude that people will buy life insurance on their own via
the Internet or toll-free numbers. That sounds good in theory, but people
don't get up in the morning and say, `You know what? I think I am going
to buy life insurance today' Statistics show that 97% of life insurance
is sold through agents."
In Canada, part-time is not available in A jurisdictions. Where it is
available, it is subject to certain restrictions.
Back
Term-Only Life License Debated as Way
to Reach Middle-Income Market
14 April 2005
Copyright 2005 (c) A.M. Best Company, Inc. All Rights Reserved.
DULUTH, Ga. (BestWire) — One life insurer's attempt to persuade
U.S. state legislators to pass laws allowing agents to sell only term
life insurance products is under fire by the National Association of Insurance
and Financial Advisors. The group contends such laws would create a "second-class"
license that would limit consumers' ability to choose the right insurance
products to meet their financial needs.
Over time, it's become increasingly difficult for life insurance agents
— faced with more and more requirements for becoming an agent —
to serve middle-income consumers, said Peter Schneider, executive vice
president and general counsel for Primerica Financial Services, a Duluth,
Ga.-based subsidiary of Citigroup Inc. (NYSE:C). "That has been driven
by the increasing sophistication of investment-related products,"
such as variable annuities, whole life and universal life products, Schneider
said.
Primerica, a leading term life writer, had $91.4 billion in term life
issued in 2004.
The industry now has a "one-size-license fits all," with requirements
geared to sell "sophisticated" products to the affluent, Schneider
said.
The term-only life insurance license legislation has been introduced
in Alabama, Mississippi and Illinois, states Primerica targeted because
they are "grossly underserved markets," said Schneider, noting
that Illinois has a large Hispanic community.
The number of life insurance agents is falling dramatically, said Schneider,
citing data from Limra International Inc. Career agents are down 30% since
1989, he said. Looking to the future, the Bureau of Labor Statistics predicts
a 31% drop in career agents by 2010, Schneider said.
But Primerica's efforts were criticized sharply by NAIFA and a key insurance
regulator.
NAIFA opposes any state legislation that would create what it calls a
"second-class" license to sell term life.
"From our perspective, to say that because people are lower income,
they shouldn't have to deal with a fully qualified agent, but only a partially
qualified agent, is a little like saying that people who don't have much
income shouldn't deal with a doctor, that they should only deal with a
first-year medical student," said David F. Woods, NAIFA's chief executive,
likening the debate to "class warfare."
"Somehow, I just believe that they deserve to be treated exactly
like everybody else in America to get the bestqualified advice they can
get," Woods said of the customers Primerica has in mind.
NAIFA believes a term-only license wouldn't serve the best interests
of consumers, said NAIFA President C. Robert Brown. "A fully licensed
life insurance agent can help find a solution that best suits that individual's
needs and circumstances," he said in a statement.
Citigroup Keeps Primerica for Its Distribution
Ron Panko
7 February 2005
Copyright 2005 (c) A.M. Best Company, Inc. All Rights Reserved.
OLDWICK, N.J. (BestWire) — Primerica Life Insurance Co. is a significant
and central business to Citigroup, the core reason that the parent organization
kept the Duluth, Ga.-based subsidiary when it sold Travelers Life &
AnnuityCo. to MetLife Inc. for $11.5 billion.
"We have always and will continue to view Primerica as a distribution
company that effectively reaches the underserved middle-income market,"
said Marge Magner, chief executive officer of Citigroup's Global Consumer
Group. "We don't view it as a life insurance manufacturer. That's
the reason we have for years reported the financial results of Primerica
Financial Services and managed their business as part of Retail Banking,
not life insurance."
Primerica's 2004 results illustrate Magner's point, according to numbers
provided by the company. The 107,000 life agents that make up Primerica
Financial Services, the company's distribution system, are prodigious
sellers of a variety of Citigroup products even though most work at the
job part time. Primerica last year registered $3.3 billion in mutual fund
sales at net asset value, slightly more than half in funds run by Citigroup
subsidiary Smith Barney. Loan volume through CitiCorp Trust, Citimortgage
and CitiFinancial totaled $3.8 billion. Variable annuity sales were $1.1
billion. The total face amount of life insurance issued was $91.4 billion.
Though Travelers manufactures the variable annuities, Primerica will
continue to sell these products under terms of the Citigroup-MetLife deal.
"Many of our clients have a need for a variable-annuity product,"
said Rick Williams, one of Primerica's two co-chief executive officers.
"We had a great partner with Travelers Life and Annuity, and that
will continue with Travelers/MetLife."
Craig Weber, a senior analyst at Celent Communications in Boston, said
Citigroup held onto Primerica because its products and distribution "are
a better fit for what Citi does" than Travelers. "Through its
financial needs analysis, Primerica drives business to other parts of
Citi, so you can see why Citi kept them as a front end of their businesses,"
he said.
For MetLife, the Travelers acquisition was a way to add another kind
of distribution. Weber said that Travelers brings to MetLife a network
of high-end independent agents increasingly focused on the affluent market.
"Met has low expectations on the expense-saving side of the deal,"
he said. "It's excited about the distribution side." Primerica's
distribution system, conversely, might in some ways overlap Met's career
agents, and Primerica's focus on term insurance "might be uncomfortable
to Met as a marriage," Weber said. He added that Primerica's focus
on term insurance "is not where large providers want to play."
Primerica and its agents can expect to continue doing what they do well
as part of Citigroup, Weber said.
Team Primerica
Ron Panko
January 2005
Best's Review
WORKING TOGETHER: Co-Chief Executive Officers John Addison, left, and
Rick Williams use their complementary talents Addison is the marketing
guy and Williams handles the financial side — to keep Primerica's
business booming.
Primerica Life Insurance Co.'s vibrant business with middle-income Americans
defies the norm in today's life industry. An extra surprise is that co-CEOs
head up its management.
There is hardly anything conventional about Primerica Life Insurance
Co. So it should be no surprise that when it comes to top leadership,
the Duluth, Ga.-based company is one of the few to successfully divide
power between two chief executive officers.
Splitting the duties since 1999 are John Addison, 47, and Rick Williams,
48. Both hold master's degrees in business administration and have been
employed by the company for a long time, but that's where the similarities
end. In fact, the two are polar opposites in personality and skills.
"I am clearly the marketing side of the brain," said Addison.
"I'm intuitive and use my gut feel. Sometimes I'm too quick to make
a decision. Rick's background was in mergers and acquisitions. He's very
methodical; he goes through the facts and digs through the numbers. So
I do the marketing, and Rick does the financial half, but we collaborate.
I won't make decisions in marketing without consulting him, and Rick won't
make decisions on the financial side until we collaborate:"
"John is the leader of the sales force and the motivational speaker,"
said Mark Supic, Primerica's head of corporate relations. "He is
the out-front guy. Kick has a Wharton MBA and was the chief financial
officer who worked with Sandy Weill before Commercial Credit bought Primerica.
They're very different personality-wise, but that's one reason it works:'
Power sharing rarely lasts in a corporate world influenced by egos, office
politics, back-stabbing or just bad luck. Even Weill and John Reed could
not long hold together a co-CEO arrangement at 1'rimerica's parent company
Citigroup, the company that emerged from a 1998 merger of Travelers and
Citicorp.
For Addison and Williams, however, sharing the CEO position comes naturally.
Part of the reason is that the two forged a relationship of trust and
appreciation over many years. "The way we operate now is the way
we operated when I was chief marketing officer and he was the CFO,"
said Addison. "Ours is not a forced relationship. The other thing
that makes it work is that our career goals are to run Primerica. He and
I aren't jockeying for the next big promotion. This is what we want to
do. There's a comfort level, a trust level and a competency level; we're
both very good at what we do:"
What they do is often fun, the pair admit. That may be because what Primerica
does is unusual in the life industry, and probably unique. Primerica is
the renegade, the black sheep, the company that dares to be different
and succeeds. At a time when the number of agents in the life industry
is shrinking, for example, Primerica's has grown the past five years to
107,000 from 79,000. While most companies forsake the career agency system
as being too expensive and instead build distribution relationships with
banks, independent general agents, stock brokers and financial planners,
Primerica sticks with its career system. While other big life insurers
depend on creating a constant flow of sophisticated new products, Primerica
sticks with term insurance. And, oh yes, Primerica guides clients to "invest
the difference" between the low cost of term coverage and the higher
costs of cash-value policies, a strategy that harkens back to Primerica's
early ties with the A.L. Williams Corp. Over the years, the strategy has
evoked the wrath of disciples of permanent insurance.
| Measures of
Growth |
Primerica has thrived since John Addison and Rick Williams became
co-CEOs in 1999. |
|
1999 Year End |
2003 Year End |
3rd Quarter 2004 |
Sales Force Licensing |
|
|
|
Life
Securities
Variable Annuities |
79,809
24,568
16,424 |
107,312
31,489
23,270 |
108,117
31,040
23,719 |
Life Insurance — Year to Date |
|
|
|
Issued Policies
Face Issued ($000)
Policies In Force
Face In Force ($000) |
209,849 $56,228,745 2,135,508 $394,947,218 |
264,440 $79,254,290 2,272,188 $503,561,481 |
216,229
$68,314,881
2,327,783
$534,180,045 |
Sales ($ Millions) |
|
|
|
Consolidated Loans
Mutual Funds
Variable Annuities |
$2,145.0
$2,908.4
$990.1 |
$6,360.1
$2,377.0
$761.0 |
$3,323
$2,199
$818.0 |
| Net Income |
|
|
|
Including Realized
Gain/Loss |
$454.4 |
$566.6* |
$454.0 |
*Net income before adjustments with Citigroup
Source: Primerica Life Insurance Co.
Key Points
- Primerica's co-CEOs worked together for more than 15 years before
assuming top leadership.
- The company's system that reaches middle-income families is hard
to duplicate.
- Most agents work part time.
- Agents use a comprehensive financial needs analysis to sell products
of other members of parent corporation Citigroup.
Reaching Middle-income Investors
Most insurers cannot handle small and frequent transactions costs effectively,
but Primerica is set up to handle them:
- Average initial lump trade is $3,300.
- Average automatic monthly bank draft is $71.
- 70% of all investments are in tax-qualified plans, which emphasize
long-term investing rather than trading.
- Investors can open an account through Primerica for as little as
a $250 lump sum or a minimum of $25 a month as a monthly bank draft.
Source: Primerica Life Insurance Co.
Over the Kitchen Table
Perhaps the most significant of Primerica's peculiarities is that it
sells the old-fashioned way: over the kitchen table to middle-income America,
the part of the public that most life insurers can't or no longer know
how to reach. This market has become a huge Primerica niche and a fertile
ground for future sales. In 2003, the company reports it issued 264,440
life policies in face amounts totaling $82 billion. As of early December,
it was on track to top S90 billion in 2004. The in-force amount has grown
to $534.2 billion through the third quarter of 2004, up from $395 billion
in 1999.
Primerica pulls off these feats through a grass-roots effort, what Addison
refers to as the "PeopleNet:" Most of its agents work only part
time while keeping their full-time jobs. Agents reach prospects through
personal contact; Primerica does not advertise in the media. And agents
often help grow the work force by recruiting their own clients.
The key to making the system work is the Financial Needs Analysis, a
personalized report prepared for clients by company agents based on input
from each client. The analysis helps customers identify their financial
goals and assesses how well they are reaching them. The agent is then
able to recommend term-life insurance and products from other Citigroup
subsidiaries, including the mutual funds of Smith Barney, the variable
annuities of Travelers Life & Annuity Co., and debt-consolidation
products through Citicorp Trust Bank.
A major challenge for Addison and Williams is to supervise the system,
manage it and provide the right incentives. Primerica's distribution arm,
Primerica Financial Services, has eight office-of-supervisory-jurisdiction
administrators, 460 office jurisdictions that supervise more than 4,000
regional vice presidents and 11,000 regional leaders, most of whom are
full time in the business. This system is set up so that commissions are
shared among the selling agent and supervisors at higher levels. It therefore
provides economic incentives for productivity and advancement.
Despite its size, the system is not unwieldy, the two CEOs say. "The
whole system is designed for managing large numbers;" said Addison.
"We wish we had 217,000 agents. We have a good structure that supports
them, a compliance system that manages them, and simple products and concepts
that a client can understand and an agent won't misrepresent"
High-tech tools help management run the system. One is a sophisticated
Intranet, Primerica Online. for training agents and promoting initiatives.
Another is the company's own channel on a satellite TV network to which
agent offices subscribe. Weekly broadcasts at noon on Mondays provide
training, motivation and company news. Other segments focus on providing
information on specific products. "Third, we have meetings constantly;"
said Addison. "I'm on the road a lot; I'm a frequent flier's frequent
flier. And every two years, we have a convention." A June 2001 convention
attracted 53,000 to the Georgia Dome, the largest single-company convention
in the history of Atlanta.
Both Addison and Williams have been with the companv for more than 20
years. Williams started his career with American Can Co. in 1979 in Greenwich,
Conn., and got to know what became Primerica when American Can acquired
Primerica's predecessor company, A.L. Williams, a financial-services provider
that originated the "buy-term-and-invest-the-difference" strategy.
Williams said he was involved in the strategic study that helped American
Can to decide which of the 104 businesses it owned to retain and which
to jettison. It chose to keep its services industries, primarily financial
services, and changed its name to Primerica. In 1988, Commercial Credit
acquired Primerica, and Williams moved to Atlanta in 1989 as the CFO.
Primerica merged with Travelers Corp. in 1993.
Addison came to the company in 1982 as systems analyst for an A.L. Williams
agency. He moved to the marketing side when Williams was the CFO. "We
developed a very good relationship through the 1990s, "Addison said.
"We went through an era when there were a lot of CEOs, and we forged
a unique bond. So at the end of 1999, Citigroup decided to go with co-CEOs.
Our relationship was based on mutual trust and was forged on the battlefield:"
"I saw early on that John had the 'X' factor, an ability to move
and motivate people," said Williams. "I respected him from day,
one. The early 1990s was a difficult time for the company, but we forged
a relationship where we could rely on each other. When Joe Plumeri left
his CEO post at the end of 1999, it was clear to the parent company that
John and 1 were unique individuals and worked well together. We still
have a common vision for the company of growing our distribution system:'
Financial Needs Analyzed
Addison uses several one-liners to describe Primerica's target market.
They typically spend more time planning vacations than retirement. They
stuff their important papers into desk drawers. Most have too much month
at the end of the money. He also said they have too many credit cards
and carry too much debt.
Putting new clients onto the right track usually involves a few fixes
that often start with consolidating debt. Williams reported that through
the first three quarters of last year, Primerica agents sold $3.3 billion
in debt-consolidation loans. That freed up money to help new clients to
buy $68.3 billion in level-premium term insurance and invest $2.2 billion
in mutual funds and 5818 million in variable annuities. Two thirds of
the company's life insurance sales go to people buying for the first time,
while the other third replaces whole life policies that charge higher
annual premiums and provide lower face amounts, said Addison. When agents
are not licensed to sell securities or loans, they bring in a Primerica
broker dealer and mortgage broker to handle the transactions. Only about
a third of Primerica agents are securities-licensed.
"Somebody has got to go to these families with a game plan that
offers protection and a meaningful savings program;" said Addison.
"In the next 20 years we're going to have a Social Security crisis...
unless the baby boomers commit suicide. You can't pay enough in taxes
to support a system that is fundamentally broken:"
According to Williams, three of five boomers don't have an insurance
program and savings program, and hardly any financial-services representatives
talk to them. Addison said Primerica's agents are currently selling the
same number of term policies in a calendar quarter as the leading online
insurance broker has sold in the past seven years. "I fundamentally
believe people have to have somebody sit down with them," he said
in assessing the volume of sales on the Internet.
Primerica has little competition for several reasons. One is that term
life insurance offers plenty of coverage, but relatively little in premiums
compared with cash-value policies. (Primerica's average face amount is
5270,000 compared with the industry average of $119,310. according to
the American Council of Life Insurers' 2003 Fact Book.) "To service
that, you must have an efficient operating system, and ours was built
to handle that;' said Williams. Some insurers are product manufacturers
with a sales force to serve the company, added Addison. Our business is
sales-force-centric," he said. "Our goal is to build and service
a distribution system, and it is the center of our decision-making process:"
And the economics of running a Primerica-like system can be daunting.
Williams said Primerica's three top competitors today are all different
from the top three in 1999. "What invariably happens to companies
that try to duplicate our model is that they do well for a while, but
then they don't do well because they don't know how to balance the components,"
he said. "You have to balance sales and marketing excitement with
compliance and supervisory responsibilities in selling a regulated product.
Then there's the economic component — you have to make money —
and the administrative component — can you process and support the
growth? The companies we see spring up have the promotional flash, but
not the support. Or they are product-focused, and the whole thing collapses
into a mass of litigation by harmed consumers:' Primerica has three separate
product-compliance departments to meet insurance, debt and securities
regulations.
That's not to say Primerica doesn't continually face challenges. Its
biggest strategic issue today is licensing the part-time agents, said
Addison. In California, for example, new agents must take 52 hours of
prelicensing instruction and then pass a test with 70% to 80% of the questions
on products Primerica doesn't sell, he noted. But Primerica overcomes
recruitment challenges by attracting high-quality candidates from middleincome
America, such as teachers and police officers, who don't have to quit
their current jobs to become agents, said Addison. The system also offers
the option to become full time and make a career change, or to simply
earn some extra money by working part time. Some part-timers have been
with the company for 20 years, he said.
"The typical insurance company spends $140,000 to get an agent up
and running, but the industry five-year retention rate is only 1 1 %;"
he said. But Primerica is not investing six figures on new agents, so
it is OK with Addison if an agent writes just one sale a year. "As
long as the agent meets the continuing education requirements and in-house
training, he or she can stay around forever on our computer," he
said.
A Good Mix of Talents
John Addison and Rick Williams share the leadership of Primerica Life
Insurance Co., even though they are very different personalities.
Expertise:
JA: Marketing and people skills.
RW: Financial matters and compliance.
Desktop management:
JA: Piles of paper, organized clutter.
RW: No paper on desk. Neatly labeled folders in file cabinets.
Attire:
JA: Primerica golf shirt.
RW: Suits, ties and cuff links.
Residence:
JA: 45-acre farm in the country. Tries to avoid downtown Atlanta.
RW: Lives in downtown Atlanta.
Hobbies:
JA: Outdoor work. Golf. Georgia Bulldog football games. Voracious reader.
RW: Avid runner. Reading. Listening to jazz. Collecting wines.
Public Speaking:
JA: Loves the spotlight.
RW: Prefers a desk lamp.
Wishes:
JA: That he won't ever have to do RW's job.
RW: That he won't ever have to do JA's job.
Co-CEOs Share Vision, Respect and Skills
Marge Magner, who designed the debt-consolidation loan program that helps
fuel much of the business of Primerica Life Insurance Co., recognizes
that John Addison and Rick Williams, co-chief executive officers of Primerica,
are a unique success story.
"Primerica has a very large sales force, one that truly needs to
be led and inspired," said Magner, CEO of Citigroup's Global Consumer
Group, which earned $5.64 billion in the first half of last year on $23.6
billion of revenues, a business larger than many national economies. 'John
is the leader of that and does a fabulous job. But that's just part of
what Primerica is. You need someone like Rick to understand how to run
the business and to maintain the scale and efficiency to make it work.
It's a very serious business that has to be run in a very serious manner,
and the combination of Rick and John is just perfect:'
Addison is generally acknowledged to be the extrovert of the two, but
Magner recalled one night at a big meeting when Williams was on the stage
and delivered a powerful and motivational speech. "I was thinking
John had rubbed off on Rick," she said. A short time later, she listened
during
a financial review to an Addison discourse on the numbers. "Then
I was thinking that those two guys had morphed into each other. I think
the reason is they have so much respect for one another that they have
really learned from each other. And there's no ego to get into the way."
Magner launched the debt-consolidation program in 1989. Primerica sold
$6.36 billion in loans in 2003. "ICS important to Primerica's business
because it's primarily, part of what middle-income American families need
to do," she said. "When you sit down with them, most families
tell you they can't talk about issues of insurance, investments and retirement
because of debt and servicing their debt:" The reality is that if
an agent can help relieve the costs of debt, then families are more ready
to talk about developing a financial plan and sticking with it, she added.
The loan program also flourished as its products better addressed the
credit ratings of customers and as Citigroup created regional processing
centers that better serviced the business appropriate for Primerica, Magner
said. Loan applications were down in 2004 as higher interest rates cooled
the market boom in refinancing.
Quick Facts and Stats
- Primerica reps complete a financial needs analysis for a consumer
somewhere every 77 seconds.
- Primerica reps submit a life insurance application every 85 seconds.
- Primerica Life is a charter member of the Insurance Marketplace
Standards Association.
- Primerica Life paid $616 million in death benefits in 2003.
- Average issued face amount (for all Primerica companies) is $270,000;
industry average is $119,310, according the ACL1 2003 Fact Book.
Source: Primerica Life Insurance Co.
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Primerica Life Insurance Co.
A.M. Best Company # 06693
Distribution: Exclusive agents
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visit www.ambest.com.