Primerica Ipo- Can The Business Opportunity Survive?
In today's economy, affiliation with a financial service company bears strong consideration
. This review will take a look at the Primerica business opportunity. Does this business retain viability after the recent IPO? Are its legs on shaky ground? Is it a good contender opportunity for a newcomer?Background: Established in Duluth, Georgia in 1987 by Arthur L. Williams, Primerica is the largest U.S. financial service provider. At origination, the focus was insurance sales. The company created its first niche by convincing uninsured Americans that term life insurance was necessary. "Buy term and invest the difference" inspired insurance purchases for many middle incomers.
The average American family agreed and bought. This fueled company expansion into other financial products such as debt relief, mutual funds, mortgages, consolidation loans and other forms of insurance.
Citigroup liked Primerica's approach and brought the company into the family umbrella. The family grew with the subsequent merger with the Travelers Group--while later departed.
Until recently, Primerica's connection with Citigroup was an asset.
In mid-March, 2010, Primerica initiated an IPO of about 21 million shares, originally priced at $15/share. At the same time, a significant amount of shares were purchased by private investor, Warburg Pincus, LLC. This corporate restructuring is geared to supply cash for Citigroup to pay off federal loans.
Primerica is surviving and apparently thriving now. The profits for 2009 were reported at $495 by the Wall Street Journal and shares are up, trading at about $21/share.
The Opportunity & Comp Plan: Primerica operates an independent sales force with over 100,000 in the U.S., Canada and Spain. Initial cost to join is $199, which is recouped when the first licensing exam is passed. A term life insurance sale yields a 25% commission.
The network structure is a typical one. Commission rates vary depending on what step of the company ladder you rise to. Training and licensing can take time and vary per student. These credentials add credibility and can be considered real assets.
Sales involves "warm marketing," connecting with friends, family and acquaintances. Personal referrals are key in this type of approach.
The real money begins when a rep recruits other reps and builds a downline as a means to obtaining commission overrides. Development of a downline requires marketing skills besides insurance knowledge and can take a considerable amount of time to get established.
Training: Primerica coaching is well respected. Quality literature and presentations are its hallmarks.
There are 2 aspects of the training: the education to qualify for the various licenses and the education of recruiting. Primerica provides both but still focuses on 'old school' ways for recruiting.
Lacking is a sponsored corporate training approach involving internet network marketing. Independent vendors have developed programs to fill this gap but whether or not these programs are worthwhile is an unknown as none seem to have company endorsement.
A consultant could always learn internet marketing skills on his/her own without apparent company prohibition. Given the explosive sales going on on internet turf, it seems remiss to ignore the internet for building a downline.
Primerica Company Review : Thumbs up! Primerica offers a lucrative opportunity. Mastering internet marketing is key to making this opportunity real for newcomers.
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