Primerica Independence Day
George Boelcke CCP
April 09, 2010
It may have been April Fools Day, but for Primerica Financial Services, April 1st,2010 was anything but that. In fact, it became Independence Day for the 33-year old Financial Services giant, with their IPO (initial public offering) on the New York Stock Exchange (NYSE: PRI).
If the truth were told, most of us probably have a distant relative or another, who we´d rather not talk about, or want to hang around with. For a number of years, that has been the case with Primerica´s parent company Citigroup, Inc. As one of the largest "bailout banks," Citigroup has certainly had their share of problems. For that reason, the company decided to sell Primerica and launch it April 1st as its own publicly traded company. Like the General Motors sale of its crown jewel, GMAC, the sale wasn´t by choice. Rather, it was more a necessity in order for Citigroup to raise cash. In fact, one analyst described it as the Citi sale of one of the last remaining gems.
Primerica, however, became the real winner with this new independence. Or to borrow a line from the great Dr. Martin Luther King, Jr.: Free at last! The company started 33 years ago as A.L. Williams & Associates as the anti-establishment insurance company, whose sole crusade (as they refer to it) was to educate people to purchase inexpensive term-life insurance, and invest the (up to) 90% savings in premiums. Today, the company has grown to be the largest seller of individual term-life policies.
Wall Street, certainly not known for looking at anything beyond the next quarterly results, certainly loves Primerica´s success. After all, net income almost tripled in the past year. However, Primerica is not about Wall Street, but rather about Main Street. The focus of their more than 100,000 licensed representatives is about millions of kitchen table appointments, on the ground, and with families, where it matters. The impact Primerica has won´t ever be reflected in their stock price, as much as in helping real families, far away from Wall Street, to becoming debt free and financially independent. As part of their mission statement readily states: They don´t succeed if families don´t succeed. While that may be a great line many companies pay lip service to, their representatives actually believe it, and live it, on a daily basis. It´s something Wall Street won´t understand about the company.
No, I don´t work for Primerica. In fact, very few people within the company actually know I exist, or that an entire chapter of my: It´s Your Money! book features Primerica. I could not even buy their stock, as it would have created a conflict of interest in talking about them. However, it is not hard to understand the value of the company, particularly in one specific area of their business: Over the years, Primerica has made vast numbers of refinanced mortgage loans through a product they call SMART (Saving Money and Reducing Taxes). NONE of these have ever been adjustable rate mortgages. The company has NEVER originated any ARMs with their refinancing products. Their clients are watching the mortgage crisis from the sidelines, with the safety of fixed-rate terms and consolidations, thinking: "that could have been me in a foreclosure…"
While Wall Street may now be familiar with the company, the vast majority of people are not. There aren´t any Primerica billboards, or cute radio jingles. In fact, Primerica does not do any advertising. For most people, their own criteria for choosing which financial institution will get their business should be determined by the credibility of a lender. Just because other companies pay money to be on TV or the radio does not make them credible. It only makes them advertisers. Credibility is measured by what a company does – not by what it says; and there is now ample evidence of what the cost, and damage to the economy, has been to ignore that difference. Because Primerica refuses to do false, misleading, or gimmick advertising, they need to work harder to make themselves known, despite the fact that they keep doing the right thing, in the right way?
How sad, how wrong, and how dangerous, that the credibility of lenders or insurance companies, can so often be bought by simple advertising. If you´re looking for a second opinion, or perhaps a way out, it might be worth your time to get in touch with them, because you´ll certainly be hearing a lot more about this company in the years to come.
If the truth were told, most of us probably have a distant relative or another, who we´d rather not talk about, or want to hang around with. For a number of years, that has been the case with Primerica´s parent company Citigroup, Inc. As one of the largest "bailout banks," Citigroup has certainly had their share of problems. For that reason, the company decided to sell Primerica and launch it April 1st as its own publicly traded company. Like the General Motors sale of its crown jewel, GMAC, the sale wasn´t by choice. Rather, it was more a necessity in order for Citigroup to raise cash. In fact, one analyst described it as the Citi sale of one of the last remaining gems.
Primerica, however, became the real winner with this new independence. Or to borrow a line from the great Dr. Martin Luther King, Jr.: Free at last! The company started 33 years ago as A.L. Williams & Associates as the anti-establishment insurance company, whose sole crusade (as they refer to it) was to educate people to purchase inexpensive term-life insurance, and invest the (up to) 90% savings in premiums. Today, the company has grown to be the largest seller of individual term-life policies.
Wall Street, certainly not known for looking at anything beyond the next quarterly results, certainly loves Primerica´s success. After all, net income almost tripled in the past year. However, Primerica is not about Wall Street, but rather about Main Street. The focus of their more than 100,000 licensed representatives is about millions of kitchen table appointments, on the ground, and with families, where it matters. The impact Primerica has won´t ever be reflected in their stock price, as much as in helping real families, far away from Wall Street, to becoming debt free and financially independent. As part of their mission statement readily states: They don´t succeed if families don´t succeed. While that may be a great line many companies pay lip service to, their representatives actually believe it, and live it, on a daily basis. It´s something Wall Street won´t understand about the company.
No, I don´t work for Primerica. In fact, very few people within the company actually know I exist, or that an entire chapter of my: It´s Your Money! book features Primerica. I could not even buy their stock, as it would have created a conflict of interest in talking about them. However, it is not hard to understand the value of the company, particularly in one specific area of their business: Over the years, Primerica has made vast numbers of refinanced mortgage loans through a product they call SMART (Saving Money and Reducing Taxes). NONE of these have ever been adjustable rate mortgages. The company has NEVER originated any ARMs with their refinancing products. Their clients are watching the mortgage crisis from the sidelines, with the safety of fixed-rate terms and consolidations, thinking: "that could have been me in a foreclosure…"
While Wall Street may now be familiar with the company, the vast majority of people are not. There aren´t any Primerica billboards, or cute radio jingles. In fact, Primerica does not do any advertising. For most people, their own criteria for choosing which financial institution will get their business should be determined by the credibility of a lender. Just because other companies pay money to be on TV or the radio does not make them credible. It only makes them advertisers. Credibility is measured by what a company does – not by what it says; and there is now ample evidence of what the cost, and damage to the economy, has been to ignore that difference. Because Primerica refuses to do false, misleading, or gimmick advertising, they need to work harder to make themselves known, despite the fact that they keep doing the right thing, in the right way?
How sad, how wrong, and how dangerous, that the credibility of lenders or insurance companies, can so often be bought by simple advertising. If you´re looking for a second opinion, or perhaps a way out, it might be worth your time to get in touch with them, because you´ll certainly be hearing a lot more about this company in the years to come.
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