Primerica, Inc. is a leading distributor of financial products to middle income
households in the United States and Canada with 106,710 licensed sales representatives.
We assist our clients in meeting their needs for term life insurance, which
we underwrite, and mutual funds, annuities and other financial products, which
we distribute primarily on behalf of third parties. Our distribution model uniquely
positions us to reach underserved middle income consumers in a cost effective
manner and has proven itself in both favorable and challenging economic environments.
Our mission is to serve middle income families by helping them make informed
financial decisions and providing them with a strategy and means to gain financial
independence. Our distribution model is designed to:
Address our clients’ financial needs. Our licensed sales representatives
primarily use our proprietary financial needs analysis tool (“FNA”)
and an educational approach to demonstrate how our products can assist clients
to provide financial protection for their families, save for their retirement
and other needs, and manage their debt. Typically, our clients are the friends,
family members and personal acquaintances of our sales representatives. Meetings
are generally held in informal, face-to-face settings, usually in the clients’
homes.
Provide a business opportunity. We provide an entrepreneurial business opportunity
for individuals to distribute our financial products. Low entry costs and the
ability to begin part-time allow our sales representatives to supplement their
income by starting their own independent businesses without incurring significant
start-up costs or leaving their current jobs. Our unique compensation structure,
technology, training and back-office processing are designed to enable our sales
representatives to successfully grow their independent businesses.
We conduct our core business activities in the United States through three
principal entities, all of which are direct or indirect wholly owned subsidiaries
of the Parent Company:
Primerica Financial Services, Inc. (“PFS”), our general agency and
marketing company;
Primerica Life Insurance Company (“Primerica Life”), our principal
life insurance underwriting company; and
PFS Investments Inc. (“PFS Investments”), our investment and savings
products company, broker-dealer and registered investment advisor.
Primerica Life is domiciled in Massachusetts, and its wholly owned subsidiary,
National Benefit Life Insurance Company (“NBLIC”), is a New York-domiciled
life insurance underwriting company.
We conduct our core business activities in Canada through three principal entities,
all of which are indirect wholly owned subsidiaries of the Parent Company:
Primerica Life Insurance Company of Canada (“Primerica Life Canada”),
our Canadian life insurance underwriting company;
PFSL Investments Canada Ltd. (“PFSL Investments Canada”), our Canadian
licensed mutual fund dealer; and
PFSL Fund Management Ltd. (“PFSL Fund Management”), our Canadian
investment funds manager.
New sales representatives are recruited by existing sales representatives.
When these new recruits join our sales force, they are assigned an upline relationship
with the sales representative who recruited them and with the recruiting sales
representative’s respective upline RVP organization. As new sales representatives
are successful in recruiting other sales representatives, they begin to build
their own organization of sales representatives who become their downline sales
representatives. We encourage our sales representatives to bring in new recruits
to build their own sales organizations, enabling them to earn override commissions
on sales made by members of their downline organization.
RVPs establish and maintain their own offices, which we refer to as field offices.
Additionally, they are responsible for funding the costs of their administrative
staff, marketing materials, travel and training and certain recognition events
for the sales representatives in their respective downline organizations. Field
offices provide a location for conducting recruiting meetings, training events
and sales-related meetings, disseminating our Internet-streamed broadcasts,
conducting compliance functions, and housing field office business records.
Some business locations contain more than one onsite field office.
Our sales-related expenses are largely variable costs that fluctuate with product
sales volume. Sales-related expenses consist primarily of sales commissions
and incentive programs for our sales representatives, as well as costs associated
with information technology, compliance, administrative activities, sales management,
and training.
With support provided by our home office staff, RVPs play a major role in training,
motivating and monitoring their sales representatives. Because the sales representative’s
compensation grows with the productivity of his or her downline organization,
our distribution model provides financial rewards to sales representatives who
successfully develop, support and monitor productive sales representatives.
Furthermore, we have developed proprietary tools and technology to enable our
RVPs to reduce the time spent on administrative responsibilities associated
with their sales organizations so they can devote more time to the sales and
recruiting activities that drive our growth. We believe that our tools and technology,
coupled with our bonus and equity incentive award programs, further incentivize
our sales representatives to become RVPs.
To encourage our most successful RVPs to build large downline sales organizations
that generate strong sales volumes, we established the Primerica Ownership Program.
This program provides qualifying RVPs a contractual right, upon meeting certain
criteria, to transfer their Primerica businesses to another RVP or transfer
it to a qualifying family member.
Both the structure of our sales force and the capacity of our support capabilities
provide us with a high degree of scalability as we grow our business. Our support
systems and technology are capable of supporting a large sales force and a high
volume of transactions. In addition, by sharing training and compliance activities
with our RVPs, we are able to grow without incurring proportionate overhead
expenses.
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