Principal Financial turns profit amid ‘extreme and unpredented’ volatility

The unpredictable economy is likely driving consumers to seek security, a trend that brought positive financial results for Principal Financial Group in the first quarter.

Principal reported a 5.6% rise in premiums and fees in its specialty benefits division, totaling $3.29 billion by the end of March. Those figures look even more impressive in light of higher-than-expected mortality.

“We are operating in a market that is incredibly dynamic,” President and CEO Deanna Strable said. “Policy shifts and uncertainty surrounding the market outlook have contributed to a more cautious investor tone and heightened focus on resilience.

“The magnitude of the volatility we have seen in April has been extreme and unprecedented and impacts our fee revenue in retirement and asset management.”

Volatility is such an issue that it makes future quarters “difficult to predict,” Strable added.

Principal Financial continues to pursue asset management, plan sponsor, and group benefits opportunities. Four segments comprise the company: Retirement and Income Solutions, Principal Global Investors, Principal International, and Benefits & Protection.

The Retirement and Income Solutions segment saw recurring deposits up 9% to $13.8 billion in the quarter, while pension risk transfer sales added $800 million.

“We remain a leader in the industry, ranking among the top four providers by sales premium and third by number of contracts, based on the 2024 LIMRA results,” Strable said of Principal’s PRT efforts. “Looking ahead, we see positive momentum in the pipeline across our retirement ecosystem.”

Joel Pitz, senior vice president and interim chief financial officer, said mortality was higher in the quarter, primarily from “net claim severity.”

“This included a single claim of $5 million of a much larger face amount shared by many carriers issued in 1999,” he explained. “While this impact results in the quarter, our one year and longer term mortality is at our expected level.”

In other news:

Tariff War. Pitz also addressed the controversial tariff war between the United States and other countries, mainly China.

“While we are closely monitoring the evolving trade policy landscape and its potential impact, our current assessment is minimal exposure to industries most likely to be directly affected by tariffs,” Pitz said.

Quarterly snapshot:

• Life insurance business market premium and fees increased 20%.
• Pretax operating earnings in the Retirement and Income Solutions segment increased 8% due to growth in business, higher net investment income, and favorable market performance.
• Financial position includes $1.75 billion of excess and available capital.
• PFG’s proprietary AI-powered assistant was honored with a CIO 100 award for its impact on employee productivity. “In just one year, it’s helped cut task completion time in half, streamline training and made it easier for teams to create content and serve our customers more efficiently,” Strable said.

Management perspective:

“Across all of our businesses, the key fundamentals remain strong, including recurring deposits, deferrals, matches and wage and employment growth. We remain focused on what matters most, delivering for our customers, operating with discipline and executing on our long-term strategy. We have built this company to perform through many cycles, resilient, diversified and purpose-led.”

Deanna Strable, president and CEO of Principal Financial Group

By the numbers:

• Net income: $48.1 million ($532.5 million in Q1 2024)
• Earnings per share: Non-GAAP operating earnings per diluted share of $1.81 ($1.65 per share in Q1 2024)
• Assets under management: $717.9 billion ($708.5 in Q1 2024)
• Share repurchases: $200 million in Q1 2025
• Dividend declared: $169 million in Q1 2025
• Stock price movement: $74.04 per share at midday Friday, down 1.28%

© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

The post Principal Financial turns profit amid ‘extreme and unpredented’ volatility appeared first on Insurance News | InsuranceNewsNet.