Principal Financial Group, Inc. (PFG) Business Profile

What it does

Principal Financial Group is a global financial-services company founded in 1879 and headquartered in Des Moines. Deanna Strable-Soethout is its President and Chief Executive Officer. It serves businesses, their employees, individual savers and institutional investors with retirement plans, investment management, workplace benefits and insurance.

The company has three operating segments. Retirement and Income Solutions administers employer retirement plans and offers retirement savings and income products, including 401(k), 403(b), defined-benefit, nonqualified-plan, pension-risk-transfer, annuity, trust and custody services. Principal Asset Management manages investments for institutional, retirement, retail and high-net-worth clients, across public equities and fixed income as well as real estate, direct lending, infrastructure debt and other alternatives. Benefits and Protection provides group dental, life, disability and supplemental-health coverage, individual disability insurance, and life-insurance solutions for business owners, executives and key employees.

It had $1,814.6 billion of assets under administration, including $781.0 billion of assets under management, as of December 31, 2025. Its U.S. retirement platform also combines recordkeeping, investment options, participant education and advice-related assistance. In its insurance businesses, Principal collects premiums and pays benefits when covered events occur; certain annuity and life products also place investment risk partly or wholly on the company.

How it makes money

Principal earns administrative, asset-management, insurance and investment income across its three operating segments. In Retirement and Income Solutions, it earns fees for administering employer plans and managing or providing investment options. It also earns spreads where investment income on general-account assets exceeds interest credited on guaranteed products such as investment-only contracts, and it charges mortality and expense fees on variable annuities. Pension-risk-transfer premiums are commonly paid as single amounts, so sales can vary by quarter.

Principal Asset Management earns mandate-based fees, generally linked to assets under management. This makes revenue sensitive to client subscriptions and withdrawals, investment performance, foreign-exchange movements and market levels. Its revenues can also include borrower, transaction and performance fees.

Benefits and Protection collects premiums for specialty-benefits and traditional-life policies and fees on universal-life, variable-universal-life and indexed-universal-life products. Premium and fee growth is a key earnings measure for that segment. Claims, benefits, policyholder payments, acquisition and servicing costs, investment costs, distribution compensation, and reinsurance premiums reduce revenue or earnings. The Corporate segment includes financing costs, income on unallocated capital, taxes, eliminations and items not allocated to the operating businesses.

It was reported on 26 October 2026 that the consensus revenue estimate was $16.2 billion for the current fiscal year and $4.3 billion for Q3 2026.

Customers and how it sells

Principal’s U.S. retirement customers include employers of all sizes, retirement-plan sponsors, plan participants, institutional clients and individuals. Its Workplace Savings and Retirement Solutions business served over 42,000 defined-contribution plans with approximately 11.3 million eligible participants, and over 1,600 defined-benefit plans, as of December 31, 2025. Management said on the Q2 2026 call that it serves 14,000,000 Americans through the retirement plans it administers.

The company targets small and medium-sized businesses in retirement, workplace benefits and business-owner insurance. Specialty Benefits serves approximately 103,000 employer groups and more than 3,300,000 employees. It sells through its retirement sales force, service and education specialists, independent advisors, consultants, agents, broker-dealers and other intermediaries. Individual annuity sales are primarily made by affiliated financial representatives, with remaining sales primarily through unaffiliated broker-dealers.

Principal Asset Management serves institutional, retirement, retail and high-net-worth investors globally. Its investment teams and distribution organizations cover U.S./Europe, Asia Pacific/Middle East and Latin America clients. International pension and local asset-management operations serve customers in Brazil, Chile, Mexico, China, Hong Kong, Southeast Asia and other selected markets, using proprietary sales forces, financial institutions, bank relationships, brokers, digital channels and joint ventures.

Suppliers and costs

Principal does not manufacture physical products. Its principal cost base includes insurance benefits and claims, policyholder payments, investment and interest-crediting costs, employee compensation, technology, distribution, customer servicing, administration, taxes and financing. It uses reinsurance programs to help manage mortality and morbidity exposure in Benefits and Protection.

The company pays retirement sales representatives through salary and production-based incentives, and it administers commission or fee payments to independent advisors, consultants and agents. In asset management, third-party asset managers provide many investment options on the Workplace Savings and Retirement Solutions platform. As of December 31, 2025, 66% of WSRS account values were managed entirely by third-party asset managers not contracted to sub-advise a Principal product.

For investment valuation, public fixed-maturity prices are primarily obtained from third-party pricing vendors. No sole-source supplier is identified. Claims experience, market rates, credit conditions, staffing and technology investment can affect the cost base and operating results.

Competitive position

Principal competes across retirement administration, investment management, annuities, insurance, custody and workplace benefits. It identifies banks, mutual funds, institutional trust companies, broker-dealers, insurers, recordkeepers, asset managers and wealth managers as competing business types. Competition includes product features, price, investment performance, distribution reach, compensation structures, capital and liquidity, financial-strength ratings and brand recognition. Principal identifies competitor types rather than naming individual competitor companies.

The company states that some competitors offer broader product ranges, lower pricing, more distribution sources, greater financial resources, better investment performance at times, stronger brand recognition or higher insurance financial-strength ratings. In specialty benefits, management said on the Q2 2026 call that it had avoided dental pricing it did not believe would provide the required profitability, while seeking bundled small- and mid-sized employer business.

Our reading: Principal’s access to small and mid-sized businesses and its retirement-plan relationships are a material distribution advantage because they connect retirement, benefits and business-owner offerings to the same employer base. [item1; call_prepared]

Our reading: The breadth of retirement administration, asset management and insurance capabilities is a moderate moat; it enables bundled offerings, but the company competes with firms that can have broader products, pricing or distribution. [item1]

Our reading: Scale in administered and managed assets supports the platform, but market performance and client flows can still move fee revenue. [item1; item7]

Growth opportunities

Principal’s stated growth priorities are retirement, small and mid-sized businesses, and global asset management. In retirement, it is adding income-oriented products and seeks to benefit when employers and participants consolidate retirement savings onto its platform. Management said on the Q2 2026 call that it introduced lifetime income builder collective investment trusts and reported $1.7 billion of retirement-plan roll-ins during the quarter.

Small and medium-sized businesses are a target market for both retirement and workplace benefits. Management said on the Q2 2026 call that specialty-benefit sales increased 11% year over year and that products per benefits customer had risen to nearly 3.2. Principal has agreed to acquire Beam Benefits, a digital-first employee-benefits company focused on this market. Beam Benefits has more than 25,000 employer customers and generated $175 million of premium in 2025. Management expects its quoting, acquisition and dental-network capabilities to support premium, fee and efficiency improvements after closing.

In asset management, Principal is expanding ETF, private-markets, institutional and international offerings. Management said on the Q2 2026 call that it launched a fixed-income ETF suite and that its committed but unfunded investment-management pipeline was around $10.0 billion. It also reported approximately $11 billion of quarterly net outflows concentrated in a small number of U.S. active-equity strategies; management expects net flows to remain somewhat challenged through the rest of 2026. The company completed the transition of its Hong Kong pension business to BCT and expects proceeds from the Chile annuity sale in the latter half of 2026.

Structural risks

• Adverse capital, credit, equity, bond and real-estate market conditions can affect liquidity, access to capital, cost of capital, account values, assets under management and profitability.

• Credit losses, credit-spread changes and valuation uncertainty in fixed maturities, mortgage loans and other investments can reduce earnings or capital. Private fixed maturities without readily available market quotes add estimation risk.

• Insurance and annuity results depend on mortality, morbidity, persistency, investment returns, interest rates and other assumptions used in product pricing and reserves. Actual experience that differs from assumptions can create losses.

• The company operates under U.S. federal, state and local rules and non-U.S. insurance, securities, banking, trust, tax, privacy and retirement-plan regulations. Regulatory or tax changes can alter profitability or operating practices.

• Asset-management fees depend generally on assets under management. Market declines, foreign-currency changes, weaker investment performance, client withdrawals and delayed institutional mandates can pressure revenue and flows.

• Failures or interruptions involving information technology, infrastructure, external systems or data confidentiality, integrity and availability could disrupt operations, harm reputation and reduce profitability.

Bottom line

Our reading

Our reading: Principal is a diversified financial-services business centered on employer retirement plans, asset management and workplace insurance, with investment and insurance balance-sheet activities alongside fee-based revenue. [item1; item7]

Our reading: Its employer relationships, especially in small and mid-sized businesses, connect distribution across retirement and benefits, while managed-asset fees remain exposed to markets and client flows. [item1; call_prepared; call_qa]

Our reading: Insurance underwriting, investment-credit exposure, regulation and operational resilience remain central determinants of results and capital needs. [item1a; item7]