Primerica (PRI) is a financial services company based in Duluth, Georgia.Primerica's formerparent companywas Citigroup. The company was spun off through aninitial public offering (IPO)on April 1, 2010.
Key Takeaways
- Primerica provides insurance for more than five million people and manages more than 2.5 million client investment accounts.
- The company recorded an 8% increase in revenue to reach $2.05 billion, while profits also grew.
- The top 5 shareholders of Primerica are Vanguard Group, Kayne Anderson Rudnick Investment Management, BlackRock, BAMCO, and Fidelity Investments.
The company describes itself as a leading distributor of financial products to middle-income households. Primerica primarily sells term life insurance plans, but it also sells mutual funds,annuities,segregated funds,managed accounts,long-term care insurance,pre-paid legal services,auto insurance,home insurance,credit monitoring,anddebt management plans.
Multilevel Marketing Model
Primerica recruits people to sell their policies by encouraging new insurance agents to sell policies to family members, friends, and co-workersand then recruiting them to join the business. Agents who work for Primerica make money by selling policies and based on the number of agents they recruit. For this reason, Primerica is considered a multilevel marketing business.
History of Primerica
Primerica was founded as A.L. Williams & Associates (A.L. Williams) in 1977 by Arthur L. Williams Jr. The company's initial sales pitch to its mostly middle-income client base was to "buy term and invest the difference." This concept was meant to illustrate how its client base could purchase sufficient protection with term life insurance, while also saving and investing in separate investment vehicles, such as mutual fund individual retirement accounts (IRAs).
Primerica provides life insurance for approximately five million people and manages more than 2.5 million client investment accounts. Primerica was the number two provider of term life insurance coverage in North America in 2019.
In 2019, the company reported $2.05 billion in revenue, up 8% from 2018. Net income climbed 13%, to reach $366.4 million, in 2019.
As of June 2020, the five largest shareholders of Primerica stock are Vanguard Group, Kayne Anderson Rudnick Investment Management, BlackRock, BAMCO, and Fidelity Investments Inc.
Top Shareholders of Primerica
| SHAREHOLDER | # OF SHARES | % STAKE | $ VALUE |
| Vanguard Group | 4,625,788 | 11.34% | $550.47 million |
| Kayne Anderson Rudnick Investments | 4,356,014 | 10.68% | $518.37 million |
| BlackRock | 3,734,953 | 9.16% | $444.46 million |
| BAMCO | 2,341,642 | 5.74% | $278.66 million |
| Fidelity Management | 2,248,395 | 5.51% | $267.56 million |
Shareholdings obtained from SEC filings. Percentage ownership based on 40,778,956 shares outstanding .
The Vanguard Group
The Vanguard Group is the largest shareholder of Primerica, with approximately 4.62 million shares. This is an 11.34% stake in the company, valued at approximately $550.47 million. The Vanguard Group is a registered investment advisor firm based in Malvern, Pennsylvania. The company had approximately $6.2 trillion in assets under management (AUM) as of January 31, 2020.
Kanye Anderson Rudnick Investments
Kanye Anderson Rudnick Investments is the second-largest shareholder of Primerica, with approximately 4.35 million shares. This is a 10.68% stake in the company, valued at approximately $518.37 million. Kanye Anderson Rudnick Investments invests in equity portfolios of companies that have strong, consistent growth with low business and financial risk. The company offers actively managed equity and fixed-income strategies primarily to high-net-worth individuals and institutional clients, including endowments, foundations, corporations, public funds, and pension plans.
BlackRock
BlackRock is the third-largest shareholder of Primerica, with approximately 3.73 million shares. This is a 9.16% stake in the company, valued at approximately $444.46 million. BlackRock is an American global investment management corporation based in New York City. BlackRock is the world's largest asset manager, with $7.4 trillion inAUM at the end of the fourth quarter of 2019.
BAMCO
BAMCO is the fourth-largest shareholder of Primerica, with approximately 2.34 million shares. This is a 5.74% stake in the company, valued at approximately $278.66 million. BAMCO is an investment advisory company offering investment management and financial planning services to individuals and institutional investors.
Fidelity Investments Inc.
Fidelity Investments Inc. is the fifth-largest shareholder of Primerica, with approximately 2.24 million shares. This is a 5.51% stake in the company, valued at approximately $267.56 million. Fidelity is an American multinational financial services corporation based in Boston, Massachusetts. Fidelity is one of the largest asset managersin the world, with $3.3 trillion inassets under managementas of June 2020.
Article Sources
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Primerica. "Contact Us."
Primerica. "Leading Distributor Of Financial Products To Middle-Income Households In North America."
Primerica. "2019 Annual Report," Page 2.
Fintel. "PRI / Primerica, Inc. - Institutional Ownership and Shareholders."
U.S. Securities and Exchange Commission. "Vanguard Group - FORM 13F INFORMATION TABLE."
U.S. Securities and Exchange Commission. "Kayne Anderson Rudnick Investments - FORM 13F INFORMATION TABLE."
U.S. Securities and Exchange Commission. "BlackRock Fund Advisors - FORM 13F INFORMATION TABLE."
U.S. Securities and Exchange Commission. "BAMCO - FORM 13F INFORMATION TABLE."
U.S. Securities and Exchange Commission. "Fidelity Management - FORM 13F INFORMATION TABLE."
U.S. Securities and Exchange Commission. "PRIMERICA, INC FORM 8-K."
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I'm an enthusiast with a deep understanding of financial services, particularly in the realm of insurance and investment. My expertise is demonstrated through a thorough comprehension of Primerica, a financial services company based in Duluth, Georgia. My knowledge extends beyond mere familiarity with the company to a nuanced understanding of its history, business model, financial performance, and key stakeholders.
Primerica, having undergone an initial public offering (IPO) on April 1, 2010, is not just any financial services company; it has roots in Citigroup and a unique business model. The company positions itself as a leading distributor of financial products to middle-income households, catering to a diverse array of financial needs. Primerica primarily deals in term life insurance plans but also offers a range of other products, including mutual funds, annuities, managed accounts, long-term care insurance, legal services, auto insurance, home insurance, credit monitoring, and debt management plans.
What sets Primerica apart is its multilevel marketing model, a strategy that involves recruiting individuals to sell policies. Agents earn income not only through direct policy sales but also by recruiting and building a team of agents. This distinctive approach contributes to Primerica being considered a multilevel marketing business.
Delving into Primerica's history, it was founded in 1977 as A.L. Williams & Associates by Arthur L. Williams Jr. The company's initial pitch, "buy term and invest the difference," aimed at showing middle-income clients how they could obtain sufficient protection with term life insurance while simultaneously saving and investing in separate vehicles.
Now, let's examine Primerica's financial standing. In 2019, the company reported a notable 8% increase in revenue, reaching $2.05 billion, with a 13% climb in net income to $366.4 million. It manages over 2.5 million client investment accounts and provides life insurance for approximately five million people, making it the second-largest provider of term life insurance coverage in North America in 2019.
Crucial to understanding Primerica is recognizing its top shareholders. The five largest shareholders include The Vanguard Group, Kayne Anderson Rudnick Investment Management, BlackRock, BAMCO, and Fidelity Investments. The Vanguard Group, for instance, holds the largest stake at 11.34%, valued at approximately $550.47 million. Each of these shareholders has a unique profile and investment strategy, further influencing Primerica's trajectory.
In summary, Primerica's success, evolution, and strategic direction are deeply ingrained in its history, unique business model, and financial performance. The involvement of major shareholders like The Vanguard Group, Kayne Anderson Rudnick Investment Management, BlackRock, BAMCO, and Fidelity Investments adds an additional layer of complexity and influence to Primerica's narrative in the financial services sector.
