Archive 2005

Primerica Experiment in Insurance Pays Off

Michael Sisk
1 November 2005
(c) 2005 US Banker and SourceMedia, Inc. All rights reserved.

When it comes to a new product rollout, any IT group would savor the kind of success that Primerica Financial Services has recently had.

Primerica officials recently introduced wireless software that the IT staff had written to run on the Palm Pilot handheld device, which most agents already used to offer quotes to customers. The new software promised insurance agents they could complete applications with their customers, eliminate paperwork back at the office and, here's the kicker: pay commissions faster. By August, no less than 22 percent of all insurance applications at Primerica were done via the Palms, with September tracking close to 30 percent.

"At the top 20 offices that use the application, the percentage of wireless applications is running at 80 [percent] to 85 percent, meaning that once an office picks it up and starts using it, the numbers go way up," says Tom Swift, evp of field technology at Primerica, who says the company plans to extend the product to mutual funds and variable annuities by the end of the year.

Bob Egan, director of emerging technologies at TowerGroup, says the Primerica experience is a vivid example of what has been brewing in the industry since the 1990s, "Companies are looking to accelerate business processes," he says. "They are studying where you can save time and have an equivalent cost of ownership. The end point in the sales-delivery channel is a big hole, and empowering endpoints seems to be where mobile technology is getting some significant play. Mobility is essentially the extension of the laptop and other devices like the Palm, and it's got the attention of everyone. It's hard to find a bank doing nothing at all in this space."

Egan says there was a lot of talk about mobile devices empowering the endpoint in the '90s, but that networks were not up to the task yet, and the screens were too small. Today, that has changed, and the technological evolution is being accompanied by a close inspection of processes. "How do you leverage technology to accelerate the business?" Egan asks. One obvious way is to input the data once-eliminating paperwork and the chance for errors when the same data is rekeyed two or three times.

That kind of close look at business processes is certainly what went on at Primerica. Swift explains that "our strategic advantage is we have a huge sales force — 100,000 life insurance agents in the U.S. and Canada. And they usually do business, not in an office, but across the kitchen table with the company's six million customers. The Palm is perfect for us," he says, adding that it was a device that most agents already owned and were comfortable using. "We started by building software to quote life insurance rates and that took off."

Swift says the organization began to look around and see what else might be done via that Palm. Completing full applications was the logical next step, especially given the many problems associated with conventional paper applications. Primerica processes 30,000 to 35,000 life insurance policies a month, with 55 percent to 60 percent of those coming in the last four days of the month. It's a crush of information that requires a lot of manual intervention, such as opening mail, scanning documents and data entry. "And a certain number of applications have deficiencies," Swift says. "They can't be read, or a box isn't checked. Twenty percent of applications need followup, which means you can't completely process the application. We wanted to create efficiencies at the point of sale. We wanted cleaner applications and process efficiencies, which would allow the agents to be paid faster." What Primerica staffers came up with is its own customized Palm OS application-named Turbo Apps — to run on Palm handheld and smart phone devices.

There were challenges along the way, to be sure. Since insurance is regulated state-by-state, every state demands a unique form, and the software must handle that. And getting the approval for using the technology also needs signoff on a state-by-state basis. California, Swift notes, took two full years to approve the technology. That is an extreme example; even still, when Primerica went live in July, only 12 of the 50 states were up and running. However, it chose those 12 well, since they account for 50 percent of Primerica's life-insurance business. Another 12 states were set to join as of October 1 and Swift expects another batch in the first quarter of 2006. All states should be up and running by the end of 2006.

One of the greatest time-saving features of the new application, says Swift, involves the financial needs analysis. It is standard practice for an agent to run an FNA of a prospective customer back at the office and then return to that person's home. In the past, if the person has agreed to the policy, much of the FNA data would have to be rekeyed into the application. But now the agent can "hot sync" the FNA information to the Palm device, which populates 40 to 45 of the fields in the insurance application. "It does it automatically," Swift quips. "No mail, no scanning, no data entry."

While security has long been a bugaboo for wireless information in the financial services arena, Swift is confident that Citigroup, Primerica's parent, provides as safe a harbor for information as any institution. "I don't know of any financial organization with more stringent standards," Swift says. "Our software involves an authentication process for the agent, and the data on the device itself is encrypted. It's more secure than paper."

Not surprisingly, the people at Palm are pleased their device is being put to such good use. "It helps them be more accurate and trade in stacks of paper, By helping people be more mobile and productive, the device ultimately helps them cement relationships with customers and gives them a competitive edge," says Tara Griffin, vp of enterprise sales at Palm. "Palm has a flexible, standards-based platform that makes it easy to write for and ensures the end user will actually use it."

Swift says that the adoption of the new technology was especially impressive since many agents actually had to upgrade their Palm device to use it. Primerica arranged for a special agent discount through Palm, and by midSeptember 5,000 of the new Palms had been purchased. So far, 8,000 agents have activated the software and 4,500 have submitted at least one life insurance application.

Next up for Primerica will be rolling out the wireless capabilities for mutual-fund and variable-annuity sales. Swift notes that 30,000 of the company's agents are also licensed to sell securities, so adding this capability is no minor bolt-on initiative. Indeed, the company processes between 20,000 and 24,000 mutual-fund applications per month. Beyond that, Swift has dreams of 100 percent electronic processing of applications. "We'll always support paper, but 100 percent is the goal," he says. "I think we'll get to 70 [percent] to 80 percent pretty quickly, but convincing that last 20 percent will be tough."

Back

Wireless Processing: Primerica Goes Wireless In The Field

By Michael Sisk
October 2005
©2006 Bank Technology News and SourceMedia, Inc.

The insurer processes up to 35,000 policies a month with over half of those coming in the last four days of the month. That crush prompted a need for a faster method.

When it comes to a new product rollout, any IT group would savor the kind of success that Primerica Financial Services has recently had.

At a company conference in June, Primerica officials introduced new wireless software that the IT staff had written to run on the Palm handheld device, which most agents already used to offer quotes to customers. The new software promised insurance agents they could complete applications with their customers, eliminate paperwork back at the office and, here's the kicker, pay them their commissions faster. By August, no less than 22 percent of all insurance applications at Primerica were done via the Palms, with September tracking close to 30 percent.

"At the top 20 offices that use the application, the percentage of wireless applications is running at 80 to 85 percent, meaning that once an office picks it up and starts using it, the numbers go way up," says Tom Swift, evp of field technology at Primerica, who says the company plans to extend the product to mutual funds and variable annuities by the end of the year.

Bob Egan, director of emerging technologies at TowerGroup, says the Primerica experience is a vivid example of what has been brewing in the industry since the 1990s. "Companies are looking to accelerate business processes. They are studying where you can save time and have an equivalent cost of ownership. The end point in the sales delivery channel is a big hole, and empowering endpoints seems to be where mobile technology is getting some significant play. Mobility is essentially the extension of the laptop and other devices like the Palm, and it's got the attention of everyone. It's hard to find a bank doing nothing at all in this space."

Egan says there was a lot of talk about mobile devices empowering the endpoint in the 90s, but that networks were not up to the task yet, and the screens were too small. Today, that has changed, and the technological evolution is now being accompanied by a close inspection of processes. "How do you leverage technology to accelerate the business?" Egan asks. One obvious way is to input the data once-eliminating paperwork and the chance for errors when the same data is rekeyed two or three times.

That kind of close look at business processes is certainly what went on at Primerica. Swift explains that "our strategic advantage is we have a huge sales force-100,000 life insurance agents in the U.S. and Canada. And they usually do business, not in an office, but across the kitchen table with the company's six million customers. The Palm is perfect for us," he says, adding that it was a device that most agents already possessed and so were comfortable using it. "We started by building software to quote life insurance rates and that took off."

Swift says the organization began to look around and see what else might be done via that Palm. Completing full applications was the logical next step, especially given the many problems associated with conventional, paper applications. Primerica processes 30,000 to 35,000 life insurance policies a month, with 55 percent to 60 percent of those coming in the last four days of the month. It's a crush of information that requires a lot of manual intervention, such as opening mail, scanning documents and data entry. "And a certain number of applications have deficiencies. They can't be read, or a box isn't checked," Swift says. "Twenty percent of applications need follow up, which means you can't completely process the application. We wanted to create efficiencies at the point of sale. We wanted cleaner applications and process efficiencies, which would allow the agents to be paid faster." What Primerica staffers came up with is its own customized Palm OS application-called Turbo Apps-to run on Palm handheld and smart phone devices.

There were challenges along the way. Since insurance is regulated state-by-state every state demands a unique form, and the software must handle that. And getting the approval for using the technology also needs sign off on a state-by-state basis. California, Swift notes, took two full years to approve the technology. That is an extreme example; even still, when Primerica went live in July only 12 of the 50 states were up and running. (However, it chose those 12 well, since they account for 50 percent of Primerica's life insurance business.) Another 12 states were set to join as of October 1 and Swift expects another batch in the first quarter of 2006. All states should be up and running by the end of next year.

One of the greatest time-saving features of the new application, says Swift, involves the financial needs analysts. It is standard practice for an agent to run a financial needs analysis (FNA) of a prospective customer back at the office and then return to that person's home. In the past, if the person agreed to the policy, much of the FNA information would have to be rekeyed into the application. But now the agent can "hot sync" the FNA information to the Palm device, which populates 40 to 45 of the fields in the insurance application. "It does it automagically," Swift jokes. "No mail, no scanning, no data entry."

While security has long been a bugaboo for wireless information in the financial services arena, Swift is confident that Citigroup, Primerica's parent, provides as safe a harbor for information as any institution. "I don't know of any financial organization with more stringent standards," Swift says. "Our software involves an authentication process for the agent, and the data on the device itself is encrypted. It's more secure than paper."

Not surprisingly, the people at Palm are pleased that their device is being put to such good use. "It helps them be more accurate and trade in stacks of paper. By helping people be more mobile and productive, the device ultimately helps them cement relationships with customers and gives them a competitive edge," says Tara Griffin, vp of enterprise sales at Palm. "Palm has a flexible, standards-based platform that makes it easy to write for and ensures the end user will actually use it."

Swift says that the adoption of the new technology was especially impressive since many agents actually had to upgrade their Palm device to use it. Primerica arranged for a special discount through Palm for their agents and by mid-September 5,000 of the new Palms had been purchased. So far, 8,000 agents had activated the software and 4,500 had submitted at least one life insurance application.

Next up for Primerica will be rolling out the wireless capabilities for mutual fund and variable annuity sales. Swift notes that 30,000 of the company's agents are also licensed to sell securities, so adding this capability is no minor bolt-on initiative. Indeed, the company processes between 20,000 and 24,000 mutual fund applications per month.

Beyond that, Swift has dreams of 100 percent electronic processing of applications. "We'll always support paper, but 100 percent is the goal. I think we'll get to 70 to 80 percent pretty quickly, but convincing that last 20 percent will be tough." (c) 2005 Bank Technology News and SourceMedia, Inc. All Rights Reserved. http://www.banktechnews.com http://www.sourcemedia.com

Primerica Financial Services Agents Gear Up with Palm Devices

1 September 2005
(c) Copyright 2005 M2 Communications, Ltd. All Rights Reserved

Palm announced that agents of Primerica Financial Services, a subsidiary of Citigroup, are using 4,000 Palm handhelds and smartphones to complete insurance applications in the comfort of a client's own home.

Primerica developed its own customized Palm OS application — called TurboApps — to run on a variety of Palm devices, including the latest Palm Tungsten handhelds and Palm Treo smartphones.

Primerica provides its 6 million clients with financial products and services, such as term life insurance, mutual funds, variable annuities, loans and long-term care insurance. With up to 60 percent of applications pouring in the last week of each month, processing the high volume of paperwork was very challenging.

"We needed a technology that could handle an extensive scope of information and also ease the processing burden on our agents," said Tom Swift, executive vice president of field technology at Primerica. "With TurboApps running on Palm handhelds and smartphones, our agents have access to the applications necessary to get the job done. Being able to process apps quicker with fewer mistakes is a win for clients, agents and the company."

Palm® and Primerica team up to streamline sales and decrease order processing

Press Release, 2005

Read the press release here.

More people roll the dice, miss out on the sure thing that is compound interest

Janet Kidd Stewart
10 July 2005
The Baltimore Sun

A survey by the Consumer Federation of America found that 27 percent of respondents said their best chance of accumulating a half-million dollars or more during their lifetimes was a lottery or sweepstakes win.

Fast forward to 2005, when market expectations are far humbler. The worldwide gaming industry has soared: Two-thirds of adult Americans in a Gallup poll this year said they had gambled in the previous 12 months, and U.S. lottery players spent $49 billion in 2004.
Experts say that's money that could be invested more wisely.

"People don't understand the power of compounding interest over time," said Mark Supic, spokesman for Primerica, the financial services firm that performed the survey with the consumer group. "We did the survey to show people you don't have to put in $500 a month. Start with $50 — anything."

Back

Average Families Need Real Protection

Success from Home magazine
July 2005

Odds are you probably know someone who has been helped by Primerica. They either own a term life insurance policy, have a mutual fund or IRA account, or have been freed from the burden of high-interest debt through one of Primerica's debt consolidation loans. "What we do isn't rocket science," says Primerica's co-CEO John Addison, "We are simply delivering sound financial solutions where they are needed — to middle income families."

Primerica has built its business on the idea of financial freedom. Most middle income families today are saddled by debt, living in denial about the future and simply need someone to walk through their finances with them to help them get on the right path. Through the free, confidential Financial Needs Analysis, that's exactly what Primerica's Representatives do every day "across the kitchen table." While big brokerage firms turn away clients with less than $50,000, Primerica welcomes "the little guy." Clients can open a mutual fund or IRA for as little as $25 a month.

Primerica's success tells the story: every 77 seconds a Primerica Representative completes a Financial Needs Analysis. The company boasts some six million clients, and many are so pleased with their experience that they become parttime or full-time Representatives themselves. Primerica now claims the largest sales force in the financial services industry, with more than 107,000 licensed Independent Representatives across North America, Puerto Rico, Spain and the United Kingdom. With revenues of $2.14 billion in 2004, and $545 billion in total "in force" term life protection, Primerica has become the leader in the industry.

“We are simply delivering sound financial solutions where they are needed — to middle income families.”— John Addison, Primerica co-CEO

The Case for Term

Primerica means term insurance.

Starting back in 1977, the early A.L. Williams company (Primerica's predecessor) began a crusade when the company's founder, Art Williams, learned that the insurance industry had been steering families toward expensive "whole life" insurance (also known as "cash value" or "universal life") which paid higher commissions (whole life contains an investment component in addition to a death benefit). Williams discovered that "term" insurance was the original life insurance — it offered "pure protection" in the form of a death benefit only and families could purchase significantly more protection for much less money. When Williams' own family was affected, he began a crusade to help families "buy term and invest the difference;" that is, start a separate savings plan with the amount they saved by replacing their whole life insurance policy with a term policy. The idea sparked a revolution.

For most families, term insurance provides the largest death benefit for the lowest cost. Term pays off only if the insured person dies while the policy is in effect (generally for 10, 15 or 20 years, or until a specified age). The younger and healthier you are, the less you'll pay. For example, a 35year-old nonsmoking male can buy a $500,000 term-life policy for between $300 and $450 a year. Because it combines a term policy with an investment component, whole life insurance is significantly more expensive than term. That same 35-year-old male buying a simple whole life policy would pay roughly $4,500 to $6,500 for the same $500,000 coverage.

Financial experts agree that for most families with young children, term life insurance is the best option:

"Families with young children should generally buy term insurance policies that lock in the same rate for 20 or 30 years."
— Kiplinger's, September 2003

"What's the best type of life insurance for a young family? Go with term insurance, which provides the largest death benefit for the lowest cost."
—Parents, November 2003

"Dollar for dollar, term gives you the most protection for your money. Period."
— Kiplinger.com, March 24, 2003.

"Whole life policies hardly ever yield a reasonable return unless held for 20 years or more. So if you buy one, be prepared to pay into it for the very long haul."
Smart Money.com

A Simple Concept That Changed An Industry

Primerica created the idea of "buy term and invest the difference," a simple concept that transformed the life insurance industry. By offering low-cost but high-protection term life insurance, Primerica helps its clients to "free up" money for saving and investing. Through its parent company, Citigroup, Primerica now offers its clients an array of financial products including Smith Barney mutual funds and Travelers Life and Annuity variable annuities, as well as lending products offered through CitiFinancial, Citicorp Trust Bank, fsb and CitiMortgage. Primerica also offers long-term care insurance, debt consolidation home equity loans, first-home purchase loans and prepaid legal services.

Many of today's popular "personal finance" concepts have actually been Primerica mainstays for 30 years. Pay Yourself First, Dollar Cost Averaging, The Rule of 72, The High Cost of Waiting, and Buy Term and Invest the Difference — these are all fundamental financial concepts that Primerica Representatives have shared with their clients since its inception in 1977 (see sidebar, "Worried About Retirement'").

Back in the early days, that often meant "replacing" whole life or cash value insurance with less-expensive term insurance and encouraging families to "invest the difference." Today, Primerica's crusade has expanded to address the issue of consumer debt, a "financial cancer" that plagues today's middle income families. The issue is such a concern that the company has incorporated it into its mission statement: "To help people become debt free and financially independent." Through its Financial Needs Analysis (FNA), Primerica Representatives shed light on each family's unique financial picture and provide hope in the form of practical advice and solutions.

“Knowing we'll be debt free in 13 years is awesome.”

Pete and Sue Brenton are one example of how Primerica helps "real people." While the Brentons appeared successful to outsiders (they lived in a beautiful home in Fort Lauderdale, Florida and earned an income of $100,000 per year), their financial reality was not as pretty: they owed a whopping $100,137 in consumer debt and they were grossly underinsured. With the help of Primerica Representative Kevin Hobbs and a Financial Needs Analysis, the Brentons developed a financial game plan.

Pete and Sue still owed $124,589 on their home in addition to their $100.137 consumer debt. Using Primerica's $.M.A.R.T. Loan program (Save Money and Reduce Taxes), the couple consolidated the majority of their debts and are now on track to debt freedom. "Knowing we'll be debt free in 13 years is awesome," says Sue. With a $25,000 cash value life insurance policy on Pete and just $10,000 on Sue, the Brentons were poised for financial hardship if one of them died prematurely. The Brentons were able to purchase nearly 10 times the amount of life insurance by purchasing term insurance through Primerica, at a savings of $40 a month. Pete and Sue were so thrilled with Primerica that they constantly refer their Representative to friends and family. "We were totally blown away with how much Primerica could help us," says Pete.

While big brokerage firms turn away clients with less than $50,000, Primerica welcomes "the little guy." Clients can open a mutual fund or IRA for as little as $25 a month.

“... a Financial Needs Analysis showed us where we stood and what we needed to do before we made any major financial decisions.”

Primerica also helped Chris and Mieko Paige of Lexington, Kentucky. "Starting our marriage with a Financial Needs Analysis showed us where we stood and what we needed to do before we made any major financial decisions. It was a real eye-opener," says Chris. When they completed an FNA with Primerica Representative John Sanders, the Paiges realized that they needed to pay off their debt, purchase insurance and start saving aggressively toward their retirement.

“My education didn't teach me what I needed to know about personal finance.”

Chris and Mieko owed approximately $35,000 on their student loans and $6,000 on one of the family cars. Their Primerica Representative introduced the concept of "debt stacking," or paying off one debt and using the newly available funds to pay down another bill — to help the couple start to pay off the $41,000. At the time of their FNA, Chris and Mieko had no income protection to safeguard their family's future. Their Primerica Representative introduced a $125,000 term policy for Chris and a $125,000 term rider for Mieko. For just $41 a month, they obtained a total of $250,000 in coverage. "I shopped around to make sure we were making the best decision," says Mieko. "Primerica clearly came out on top — because of their rates and the opportunity to have a `personal financial coach' of our very own." Mieko was so impressed with how Primerica helped her family that she became a Representative. She holds an MBA and an accounting degree, but Mieko credits Primerica for teaching her how money really works. "My education didn't teach me what I needed to know about personal finance," she says. "Primerica did."

“We were overwhelmed with worry, uncertainty and stress”

Like many couples, Jeff and Trisha Bower of Toronto, Ontario, were saddled with debt when they met with a Primerica Representative. In fact, the couple's debt was so high they couldn't afford to save for the future. "We were overwhelmed with worry, uncertainty and stress," Trisha explains. Primerica Representative Claire Megraw helped the Bowers complete an FNA. With a small child at home, repairing the debt problem and planning for the family's future needs were critical. Approximately $3,000 of the couple's $6,468 monthly income went to debt payments alone.

After their FNA, the Bowers continued to pay down the remaining portion of their nonmortgage debt by devoting the majority of the $567 monthly $.M.A.R.T. savings to paying off debts, and by using nearly $2,000 of cash value freed up by replacing their traditional insurance plan with term insurance. Primerica was able to nearly triple the couple's insurance coverage for only $2 more per month. With their debt situation drastically improved, the couple began a retirement savings plan and an education savings plan. "We finally started living without a cloud of doubt and fear hanging over our heads," says Jeff.

“We learned the difference between a ‘want’ and a ‘need’.”

Joe and Rhonda Simpson of Lake Orion, Michigan were like many young couples. Their "live for today" approach to spending left them without savings and adequate life insurance — and they owed $5,000 in credit card debt. They knew they needed to get serious about their finances, but weren't ready to take that extra step. "We thought we'd never get ahead anyway," said Rhonda, "so why bother?" After the couple decided to adopt children, they opted to complete an FNA with their Primerica Representative. The results astounded them. "We learned the difference between a `want' and a `need'," says Rhonda. The couple immediately began paying off their debt and reallocating money they used to spend on treating themselves (about $700 per month) by putting aside $100 for emergencies and $600 toward retirement.

“It changed everything.”

Financial experts recommend five to 10 years' worth of income to properly protect a family against the loss of a breadwinner, and the Simpsons were about to adopt daughters Isabella and Gabriella. So the couple opted for a total of $744,000 in life insurance coverage ($434,000 term policy for Joe and a $310,000 rider for Rhonda) for just $84 a month. Since getting their FNA, Joe and Rhonda have also started saving toward their daughters' future education expenses, and they can afford to support the family solely on Joe's salary so Rhonda can be a stay-at-home mom. "It changed everything," says Rhonda. "There is no greater high than knowing you do the right right thing all the time for the client." — Mieko Page, Primerica Representative

“I thought I'd have to count pennies in retirement.”

Blaine Homistek hadn't planned on retiring, but his doctor told him he had to. Years ago, Blaine had been seriously injured in a coal mining accident. He had broken 24 bones in his body, and while seven surgeries had kept him functioning, he was still in constant pain. Now Blaine's doctor was mandating early retirement. "I had always assumed I'd work until I dropped and never thought about retiring," say; Blaine, 52, of McClellandtown,
Pennsylvania. "All I knew was work." Like most people, Blaine hadn't made plans to retire. "We were in debt. We still had a mortgage and two car payments. I had no idea what to do." A family friend recommended that Blaine and his wife, Anita, speak with Primerica Representative Brian Collins.

After reviewing the couple's FNA, Brian learned that Blaine had some savings in a 401(k) but mostly in company stock that was underperforming. Blaine's company had offered him a standard 30-year pension that would be paid monthly. Brian suggested Blaine take the pension as a lump sum instead, and roll that amount along with the 401(k) into five different mutual funds. That way, Blaine would have assets to pass along to his family if something should happen to him. "Since then, we've done very well," says Blaine. The Homisteks are now debt free — their mortgage, car payments and credit card debts have all been paid off. Their investments provide them with twice the income the pension would have provided. Anita was able to quit her job so the couple could spend some much-needed quality time together. "Now we can go places and do things," says Anita. "It's our turn to have a good time. If we want to pick up and go somewhere now, we can do it. And if we ever have any questions or concerns about anything, all we have to do is pick up the phone."

The couple was so pleased with their experience that they have referred several family members and friends to their Primerica Representative. "I can't say enough about it," says Blaine. "I thought I'd have to count pennies in retirement. My company didn't want to give me the pension up front. Brian drove up there to explain how I wanted my pension rolled over — that was a four hour drive." Anita says the peace of mind they have is priceless. "Now we don't have to worry about what's going to happen next month or next year. It takes a lot of stress and pressure off."

It’s a People Business

Primerica's grass roots crusade to reach middle income families has struck a nerve. While the traditional life insurance industry loses agents, Primerica continues to grow: the company has expanded its sales force from 79,000 in 1999 to 107,000 in 2004. "Somebody has to go to these families with a game plan that offers protection and a meaningful savings program," says co-CEO John Addison. "Most of them spend more time planning their vacation than their retirement. They need somebody to sit down with them. We believe in the 'PeopleNet,' not the Internet."

Since so many Representatives start out as clients — like Mieko Paige — they are truly inspired to help other families. "There is no greater high than knowing you do the right thing all the time for the client," says Mieko. "About eight months ago, for the first time, one of my clients passed away," she said. "`His wife and two small children had $250,000 because I did what I was supposed to do. She's grieving, but she doesn't have to worry about how she'll pay for the house or her children's college education. Nothing compares to that feeling."

The Financial Needs Analysis

Primerica's Financial Needs Analysis (FNA) is the company's "secret weapon: "The FNA is in clients' homes, "across the kitchen table." Families emerge with a clearer of their financial situation, and their Representative helps them create a game plan reaching their future goals. These financial "before" and "afters" show how the comIhas helped real people.

Pete and Sue Brenton, ages 52 and 50

Before FNA

After FNA
Debt:
Number of monthly debt payments: 20
Monthly debt payments: $1,907
Monthly debt savings:
4
$1,301
$606
Income Protection:
$25,000 cash value policy on Pete
$10,000 cash value policy on Sue
Total coverage: $35,000
Cost per month: $131
$150,000 term policy on Pete
$150,000 term rider on Sue
$300,000
$89
Monthly protection savings:
Increase in coverage:
$42
$265,000
Monthly Savings:
$200 (to Sue's 403(b) account)

$1,000
($600 in a Roth IRA for both Pete and Sue,
$250 to a money market account;
$150 to a mutual fund)


Jeff and Trisha Bower
, ages 36 and 34
Before FNA After FNA
Debt:
Monthly debt payments: $770
Total amount of debt: $13,624
Monthly debt savings:
$203
$14,726
$567

Income Protection:

$150,000 cash value policy on Jeff
$50,000 cash value policy on Trisha
$167,000 mortgage insurance
$522,000 term policy on Jeff
$474,000 term rider on Trisha
$10,000 term rider for children
Total coverage: $367,000
Cost per month: $100
Increase in coverage:
$1,006,000
$102
$639,000
Monthly Savings:

$0

$175 ($50 each to a retirement plan,
$75 to an education savings fund)


Worried About Retirement?

You're not alone. According to the 2005 Retirement Confidence Survey, nearly 7 in 10 of today's workers are skeptical that Social Security will be able to provide hem with benefits equal to those current retirees receive and less than half have even tried to figure how much they will need in retirement. Primerica's Financial Needs Analysis (FNA) has helped millions of people get on track for a comfortable retirement. The free, confidential questionnaire only takes about 30 minutes to complete, but it can help you see a clearer picture of your financial situation.

The FNA covers five main areas:

Debt Management
Provides strategies for paying off credit cards and loans efficiently with little or no additional cash outlay.

Retirement Income
Gives a detailed analysis of how much money you actually need to accumulate to live comfortably during your retirement.

Education Funding
Projects actual costs for specific schools you select, then shows several strategies for funding your children's education expenses.

Income Protection
Offers a variety of strategies to ensure your family's financial future should you die prematurely.

Building Your Financial Future
Pulls all your information together by outlining specific steps to put your plan into action.

A Primerica Representative meets with you "across the kitchen table." As you work toward creating a financial game plan, you will discover important concepts like:

Pay Yourself First: Primerica begins and ends with this basic concept: Put yourself and your family before any other demands on your money. Deposit a set amount each and every month into an investment program, no matter what.

Buy Term and Invest the Difference: A founding principle of the company: replace high-cost cash value insurance (sometimes called whole life) with less-expensive term insurance, and invest the amount you save.

Dollar Cost Averaging: An important concept to any investor: invest a certain fixed amount each month in a mutual fund, regardless of what's happening in the stock market. The price you pay (your "dollar cost") averages out over time, and you never pay the highest or the lowest price.

The High Cost of Waiting: The sooner you start saving, the less you have to set aside each month to reach your goals. For example, if a 25-year-old wants to have $500,000 set aside for retirement at age 65, she must save $78 a month until age 65. However, a 35-year-old must sock away $219 a month to reach the same goal; a 45-year-old must save $653 a month, and a 55-year-old, $2,421 *. The reason? The power of compound interest.

The Rule of 72. Shows the dramatic effect of time and compounding. To find out how long it will take to double your money at a certain interest rate, simply divide 72 by the interest rate you earn. For example, at 2°I° interest, your money will double in 36 years; at 4°I°,18 years; 6%:12 years, 8%: 9 years, and 12%: 6 years.

Through the FNA, Primerica Representatives have helped millions of families find the road to financial freedom.

*Assumes a hypothetical 10% rate and growth in values. Subject to applicable taxes. Rate of return is a nominal interest rate compounded on a monthly basis.

All in the Family

Success from Home magazine
July 2005

For nearly thirty years, Primerica Financial Services has provided countless individuals the opportunity to make a difference in the lives of their families.

Primerica is in the business of helping families. For nearly 30 years, their many products and services have helped countless middle class families get out of debt, while Primerica's incredible business opportunity has provided many more with financial freedom.

Just as importantly, Primerica frees up time: time to spend with your family; time to watch your children grow and be an active part of their lives, time to care for parents and other family members. Indeed, one of the most appealing features of Primerica is the freedom to make your own schedule.

Vance Stay's commitment to Primerica's opportunity provided the blueprint for he and his wife, Letha, to build a better relationship and become better parents to their two children, Vanessa, age 11, and Vance, Jr., age 6. "We were both working on Wall Street and going in different directions," Vance says. "My wife had her career and I had mine. I didn't know what she was doing and she didn't know what I was doing. With Primerica, this is our business. It's not mine, not hers, but ours. So we're always on the same wavelength."

Stay, a National Sales Director from New Jersey, has also benefited from the flexibility Primerica affords his schedule. "I pick my kids up everyday from school at 3 o'clock. I could never do that on Wall Street," he says. "The most important thing you can do for your kids is spend time with them. And show them that if they make the right choices and decisions in their life, they can have freedom."

Ivan Earle, a Senior National Sales Director from South Carolina, his wife, Sharon, and their children, Ivan II, Andrew and Bryson, have also been impacted by Primerica's commitment to family. "It has allowed us to get closer to our kids. We're able to spend quality time with them and instill the values that we want to instill in them, rather than having someone else do that."

Frank Dillon, National Sales Director from New Jersey, and his daughter, Myrli, would agree, which is why they turned their Primerica office into a pseudo-day care after Myrli gave birth to her second child. "I didn't want my granddaughters to be with a baby sitter all day," Frank says. "So we hired a babysitter to be at the office. Every hour, the sitter would bring the child to Myrli, to her father (Rafael, who also works in the office) or to me just to play with her, interact with her. It was like we had our own private nursery."

Having that kind of interaction with children can be a vital component of their upbringing, says Cathy Marchesani, She and her husband, Mark, are raising three children, Jake, 15, Tara, 14, Luke, 7, and have seen firsthand the rewards that come with being an active part of their lives. "My being home has impacted their self-confidence, how they feel about themselves. We get to spend time encouraging them to believe in themselves, communicating with them. Now they really believe they can accomplish anything."

Being able to provide families with the opportunity to build their children's foundation and prepare for their future is also a vital component of the opportunity Primerica provides. "I hadn't saved any money for my children's college education. Any hopes of my children going to college rested solely on their ability to get a scholarship. Then I started my own Primerica business and I was able to pay for my children to go to school," John Lennon, Senior National Sales Director from North Carolina, says. John and his wife, Angela, were able to send all three of their children to college.

Ready for Prime Time

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."

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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.

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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.

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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.

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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.

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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
For ratings and other financial strength information about these companies, visit www.ambest.com.