AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 19/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Contractual distribution exclusivity is a concrete barrier within one channel. Embedded customer relationships broaden support, but neither a company-wide cost advantage nor network effects are demonstrated.
durability · 2/4 · Exclusivity lasts until October 2032 and retirement relationships involve ongoing servicing. Renewal beyond that date and quantified long-term customer lock-in are unproven.
customer dependency · 2/4 · Recurring deposits, participant consolidation and multiple products support meaningful attachment. They do not establish that customers cannot readily substitute providers.
erosion resilience · 2/4 · Reported deposit and engagement growth show current relationship strength despite competition. Performance dependence and annual renewability limit evidence of durable resistance; pricing pressure is a possibility rather than a demonstrated loss.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Fee revenue increased primarily with market-supported account values. No observed fee-rate or premium-rate change isolates realized pricing in either direction.
retention · 3/4 · Reported recurring deposit growth, increased participant deferrals, roll-ins and higher products per benefits customer provide strong evidence of repeat demand and engagement. This assessment uses indirect retention evidence, not a disclosed renewal or churn rate.
margin resilience · 2/4 · The disclosed operating comparison shows earnings growth despite expense increases. Favorable markets and variable investment income contributed, preventing attribution to pricing or proof of resilience through a downturn.
contractual freedom · 2/4 · Principal can determine guaranteed-option crediting rates subject to contractual minimums. Premium regulation and Chilean servicing obligations without contribution fees constrain flexibility; broad unilateral repricing rights are not disclosed.
Predictability71
Financial-sector stability over five consecutive reported annual periods: equal weights for nondeclining revenue frequency, revenue-growth volatility (5–40pp), positive consolidated earnings frequency, and net-income/revenue margin volatility (3–20pp). Uses reported accounting scope; not industrial FCF or a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 17.77
- positiveEarningsShare
- 100.00
- netMarginStdDev
- 8.00
Financial strength50
Qualitative insurance assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-industry-1; not an industrial ratio score or credit rating.
capital adequacy · 2/4 · Principal Life met minimum NAIC RBC requirements at year-end 2025; the proxy reports a 406% statutory RBC ratio and $1.6 billion of excess and available capital. The ratio's exact denominator and intervention thresholds are absent, so headroom cannot be quantified. Affiliated reinsurers also use permitted asset-admission practices.
liquidity funding · 2/4 · Disclosed revolving and contingent funding, laddered debt and actual subsidiary remittances support funding capacity. Parent cash rose in 2025 after distributions and debt repayment. Subsidiary dividend restrictions, an approaching November 2026 maturity and missing quantified consolidated liquidity coverage limit the assessment.
asset liability risk · 2/4 · At June 2026, 97% of Principal Life's fixed maturities in unrealized loss positions were investment grade, but gross unrealized losses were $5.327 billion. The $2.759 billion hypothetical rate sensitivity excludes important liabilities and is not a net economic loss estimate. Reserve experience and reinsurance recoverability remain insufficiently disclosed.
earnings resilience · 2/4 · The disclosed six-month operating comparison shows higher earnings despite rising expenses, while Corporate operating losses increased. Market-supported fees and variable investment income aided results; these selected comparisons do not demonstrate consolidated earnings resilience through a full adverse cycle.
Capital allocation—
Insufficient current sector evidence for every criterion; no category score is inferred.
capital efficiency · — · The passages define non-GAAP ROE and disclose performance-award outcomes, but omit actual realized ROE or equivalent return-on-capital values. Compensation thresholds and payout percentages cannot substitute for those returns.
distributions and buffers · 2/4 · Actual 2025 parent cash outflows included $902.7 million of treasury-stock acquisition and $684 million of dividends, alongside $400 million of debt repayment. Principal Life met minimum RBC requirements and the proxy reports available capital. Missing regulatory headroom and consolidated payout coverage prevent a stronger buffer assessment.
dilution and cost · 2/4 · First-half 2026 shares fell from 217.381 million to 214.635 million as treasury acquisitions exceeded issuance. This demonstrates net share reduction, but repurchases consume cash and comprehensive compensation expense and financing costs are absent.
investment discipline · 2/4 · Capitalized contract-acquisition costs incurred a $45.4 million impairment in first-half 2025, with none reported in 2026. This provides mixed evidence on recoverability of customer-acquisition spending; acquisition returns and broader reinvestment outcomes are not supplied.
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Parent cash flows document subsidiary remittances, shareholder distributions and debt repayment, while shares declined after issuance. Capital compliance supports the record, but incomplete solvency headroom and return-on-capital evidence limit confidence in allocation quality.
incentive alignment · 3/4 · Actual three-year PSUs vested and paid at 83% of target based on financial and relative shareholder-return measures, demonstrating performance-sensitive compensation. Double-trigger protections have disclosed exceptions; executive ownership levels are absent.
execution · 3/4 · Deposit growth, participant consolidation and increased products per customer demonstrate delivery across several commercial initiatives. These are issuer-reported operating outcomes and indirect execution evidence; favorable markets also supported earnings.
governance · 3/4 · An independent, financially qualified Audit Committee has defined oversight duties, and management does not determine its own compensation. These are concrete governance arrangements, although the passages cannot establish exceptional effectiveness.
Evidence
Brasilprev has the exclusive distribution rights of its pension accumulation and income annuity products through the Banco network until October 2032.
Business / International Pension / Brazil / exclusive distribution rights · Filed 18/02/2026
We owned 25.0% of the economic interest and 50.0% of the voting shares as of December 31, 2025.
Business / International Pension / Brazil / economic and voting interests · Filed 18/02/2026
Banco’s employees sell these products directly to individual clients through its bank branches and digital channels.
Business / International Pension / Brazil / branch and digital distribution · Filed 18/02/2026
These specialists play a key role in the ongoing servicing of plans by providing local services to our customers, such as reviewing plan performance, investment options and plan design, communicating the customers’ needs and feedback to us and helping employees understand the benefits of their plans.
Business / retirement distribution / ongoing plan servicing · Filed 18/02/2026
Transfer deposits grew 9% year over year, and recurring deposits increased 5%.
Letter to shareholders / 2025 transfer and recurring deposits · Filed 06/04/2026
Participant engagement also grew, with increases in both the number of participants deferring and their average deferrals.
Letter to shareholders / participant engagement · Filed 06/04/2026
And participant roll-ins were up 15%, as participants consolidate retirement savings from previous employers onto our platform.
Letter to shareholders / participant roll-ins · Filed 06/04/2026
• Principal continues to be a top provider for Pension Risk Transfers (PRT) with a #4 ranking in assets according to LIMRA.2 Notably, nearly a quarter of 2025 PRT premiums came from existing clients, highlighting the power of our integrated retirement solutions.
Letter to shareholders / pension risk transfer sales to existing clients · Filed 06/04/2026
Our group benefits customers now have over three products with us, up nearly 3% compared to 2024.
Letter to shareholders / group benefits products per customer · Filed 06/04/2026
Our ability to increase and retain AUM is directly related to the quality of our recordkeeping system and services and the performance of our investments as measured against market averages and the performance of our competitors.
Risk factors / retention dependence on recordkeeping and investment performance · Filed 18/02/2026
We offer traditional group life insurance that does not provide for the accumulation of cash values on both an employer-paid and voluntary basis, and our business remains focused on the traditional, annually renewable term product.
Business / group life / annually renewable products · Filed 18/02/2026
Competitor pricing may pressure us to reduce premiums or fees.
Risk factors / competitive pricing pressure · Filed 18/02/2026
Net Revenue Net revenue increased primarily due to a $46.0 million increase in fee revenue primarily due to an increase in average monthly account values, which largely resulted from more favorable financial markets, and a $35.6 million increase in variable investment income.
MD&A / six-month operating results / market-driven fee revenue growth · Filed 29/07/2026
Customers have the option to allocate all or a portion of their account to our guaranteed option, in which case we credit interest at rates we determine, subject to contractual minimums.
Business / variable annuities / discretion over crediting rates and contractual minimums · Filed 18/02/2026
State insurance departments have broad administrative powers over the insurance business, including insurance company licensing and examination, agent licensing, establishment of reserve requirements and solvency standards, premium rate regulation, admittance of assets to statutory surplus, policy form approval, unfair trade and claims practices regulation and other matters.
Regulation / premium rates, reserves and policy forms · Filed 18/02/2026
If a customer stops contributing before retirement age, we collect no fees but services are still provided.
Revenue recognition / Chile / continued service without contribution fees · Filed 18/02/2026
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Pre-Tax Operating Earnings Pre-tax operating earnings increased due to an increase in net revenue, which was slightly offset by an increase in operating expenses as described below.
MD&A / six-month comparison / pre-tax operating earnings · Filed 29/07/2026
128 Table of Contents Operating Expenses Operating expenses increased primarily due to a $19.4 million impact from a one-time expense accrual release in 2025 with no corresponding activity in 2026, a $9.1 million increase in plan administration expenses and an $8.2 million impact from growth in the business.
MD&A / six-month comparison / operating expense increases · Filed 29/07/2026
245 Table of Contents Statements of Cash Flows For the year ended December 31, 2025 2024 2023 (in millions) Operating activities Net income $ 1,185.1 $ 1,571.0 $ 623.2 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Net realized capital gains (0.3) — — Stock-based compensation 1.6 1.6 1.7 Equity in the net income of subsidiaries (1,363.0) (1,738.8) (787.8) Changes in: Net cash flows for trading securities and equity securities with operating intent 388.7 — — Current and deferred income taxes (benefits) 13.5 (33.5) (10.7) Other 1.8 47.1 27.0 Net cash provided by (used in) operating activities 227.4 (152.6) (146.6) Investing activities Fixed maturities available-for-sale and equity securities with intent to hold: Maturities 1.6 1.4 1.9 Net purchases of property and equipment — — (0.1) Net change in other investments (0.5) — 0.6 Dividends and returns of capital received from unconsolidated entities 1,793.1 1,545.4 1,239.0 Net cash provided by investing activities 1,794.2 1,546.8 1,241.4 Financing activities Issuance of common stock 43.7 67.7 57.8 Acquisition of treasury stock (902.7) (1,042.4) (740.4) Dividends to common stockholders (684.0) (658.4) (625.5) Principal repayments of long-term debt (400.0) — (700.0) Issuance of long-term debt — — 691.5 Net cash used in financing activities (1,943.0) (1,633.1) (1,316.6) Net increase (decrease) in cash and cash equivalents 78.6 (238.9) (221.8) Cash and cash equivalents at beginning of year 31.8 270.7 492.5 Cash and cash equivalents at end of year $ 110.4 $ 31.8 $ 270.7 See accompanying notes.
Schedule II / parent-only statements of cash flows / 2023–2025 · Filed 18/02/2026
Stockholders’ Equity Common Stock Dividends For the three months ended For the six months ended June 30, June 30, 2026 2025 2026 2025 Dividends declared per common share $ 0.82 $ 0.76 $ 1.62 $ 1.51 Reconciliation of Outstanding Common Shares For the three months ended For the six months ended June 30, June 30, 2026 2025 2026 2025 Beginning balance 216,449,333 224,971,715 217,380,912 226,225,161 Shares issued 677,847 201,106 2,301,120 1,836,356 Treasury stock acquired (2,491,746) (1,987,132) (5,046,598) (4,875,828) Ending balance 214,635,434 223,185,689 214,635,434 223,185,689 In February 2024, our Board of Directors (“Board”) authorized a share repurchase program of up to $1.5 billion of our outstanding common stock, which was completed in December 2025.
Stockholders' equity / dividends and outstanding share reconciliation · Filed 29/07/2026
We continue to be in a strong capital position, with excess and available capital of $1.6 billion, including statutory risk-based capital (RBC) ratio for Principal Life Insurance Company of 406%.
Letter to shareholders / year-end 2025 available capital and Principal Life RBC ratio · Filed 06/04/2026
As of December 31, 2025, Principal Life met the minimum RBC requirements.
Statutory accounting / Principal Life minimum RBC compliance · Filed 18/02/2026
Based on the Company’s three-year average Non-GAAP return on equity (“ROE”) and three-year average operating margin1 performance, and the relative total shareholder return2 metric, the 2023-2025 Performance Based RSUs (“PSUs”) vested on December 31, 2025, and 83% of the target number of shares were paid out in February 2026, according to the established performance scale, and approved by the Human Resources Committee.
Executive compensation / actual 2023–2025 PSU vesting and payout · Filed 06/04/2026
Mills H. Elizabeth Mitchell Alfredo Rivera Chair • Appoints, terminates, compensates, and oversees the Company’s independent auditor and selects the lead audit partner; • Reviews and reports to the Board on the independent auditor’s activities; • Approves all audit engagement fees and preapproves compensation of the independent auditor for non-audit engagements, consistent with the Company’s Auditor Independence Policy; • Reviews internal audit plans and results; • Reviews and reports to the Board on accounting policies and legal and regulatory compliance; • Reviews the Company’s policies on risk assessment and management; and • All members of the Audit Committee are financially literate and are independent, as defined in the Nasdaq listing standards, and are “audit committee financial experts,” as defined by the Sarbanes-Oxley Act.
Corporate governance / independent Audit Committee responsibilities and qualifications · Filed 06/04/2026
Members of management, including the CEO, do not have a role in determining their own compensation.
Executive compensation / management exclusion from own compensation decisions · Filed 06/04/2026
All benefits provided to the Named Executive Officers upon a Change of Control are paid after both a Change of Control and Qualifying Termination of employment have occurred (sometimes referred to as a “double trigger”), except that the then current value of the Named Executive Officer’s Excess Plan and NQDB will be paid upon a Change of Control to ensure that the value of those plans is not reduced if the Company is sold.
Executive compensation / change-of-control double-trigger provisions and exceptions · Filed 06/04/2026
These agreements do not provide excise tax gross ups.
Executive compensation / absence of excise tax gross-ups · Filed 06/04/2026
Our sources of strength include our laddered long-term debt maturities with the next maturity occurring in November 2026, access to revolving credit facility and contingent funding arrangements, a strong risk-based capital position and our available cash and liquid assets.
Liquidity and Capital Resources / debt maturities and available funding arrangements · Filed 29/07/2026
State insurance statutes also typically place restrictions and limitations on the amount of dividends or other distributions payable by insurance company subsidiaries to their parent companies.
Regulation / subsidiary distribution restrictions · Filed 18/02/2026
A.M. Best Fitch Moody’s S&P Last review date April 2026 April 2026 June 2026 May 2026 Current outlook Stable Stable Stable Stable Principal Financial Group Senior Unsecured Debt a A- Baa1 A- Long-Term Issuer Default Rating A Principal Life Insurance Company Insurer Financial Strength A+ AA- A1 A+ Issuer Credit Rating aa Commercial Paper AMB‑1+ P-1 A-1+ Principal National Life Insurance Company Insurer Financial Strength A+ AA- A1 A+ Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).
Liquidity and Capital Resources / disclosed financial strength and debt ratings · Filed 29/07/2026
Of the total amounts, Principal Life Insurance Company’s (“Principal Life’s”) consolidated portfolio represented $43,278.6 million in available-for-sale fixed maturities with gross unrealized losses of $5,327.4 million.
Investments / Principal Life fixed maturities in unrealized loss positions at June 30, 2026 · Filed 29/07/2026
Of the available-for-sale fixed maturities within Principal Life’s consolidated portfolio in a gross unrealized loss position, 97% were investment grade (rated AAA through BBB-) with an average price of 89 (carrying value/amortized cost) as of June 30, 2026.
Investments / investment-grade share of fixed maturities in unrealized loss positions · Filed 29/07/2026
We estimate a hypothetical 100 basis point immediate, parallel increase in interest rates would reduce the net reported fair value of our financial assets and derivatives by $2,759.1 million as of June 30, 2026, compared to $2,730.6 million as of December 31, 2025.
Market risk / hypothetical 100-basis-point interest-rate sensitivity · Filed 29/07/2026
Assets and liabilities not reported at fair value on our consolidated statements of financial position – including mortgage loans, liabilities relating to insurance contracts, investment contracts, debt and bank deposits – are excluded from this sensitivity analysis.
Market risk / assets and liabilities excluded from sensitivity analysis · Filed 29/07/2026
We believe the excluded liability items would economically serve as a partial offset to the net interest rate risk of the financial instruments included in the sensitivity analysis.
Market risk / management's assessment of excluded liability offsets · Filed 29/07/2026
As of December 31, 2025 and 2024, assets admitted under these practices totaled $4,321.7 million and $4,254.5 million, respectively.
Statutory accounting / assets admitted under affiliated reinsurer permitted practices · Filed 18/02/2026
For the three and six months ended June 30, 2025, amortization expense included $0.0 million and $45.4 million, respectively, of impairment loss in relation to the costs capitalized.
Revenue recognition / capitalized contract-cost impairment in first-half 2025 · Filed 29/07/2026
We did not have any impairment losses in 2026.
Revenue recognition / absence of contract-cost impairment in 2026 · Filed 29/07/2026
Non-GAAP return on equity (“ROE”) is defined as Non-GAAP operating earnings divided by average stockholders’ equity available to common stockholders excluding cumulative change in fair value of funds withheld embedded derivative and accumulated other comprehensive income other than foreign currency translation adjustment.
Executive compensation / definition of non-GAAP ROE · Filed 06/04/2026
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Pre-Tax Operating Losses Pre-tax operating losses increased primarily due to a $17.6 million increase in compensation costs and a $12.8 million decrease in interest income related to tax settlements.
MD&A / Corporate segment / increased pre-tax operating losses · Filed 29/07/2026
Net Revenue Net revenue increased primarily due to a $46.0 million increase in fee revenue primarily due to an increase in average monthly account values, which largely resulted from more favorable financial markets, and a $35.6 million increase in variable investment income.
Six months ended June 30, 2026 versus 2025, Net Revenue · Filed 29/07/2026
A majority of our revenue is based upon contractual rates applied to the market value of the clients’ portfolios and considered variable consideration.
Revenues from Contracts with Customers, contractual fee basis · Filed 29/07/2026
2023−2025 PSU Performance
Based on the Company’s three-year average Non-GAAP return on equity (“ROE”) and three-year average operating margin1 performance, and the relative total shareholder return2 metric, the 2023-2025 Performance Based RSUs (“PSUs”) vested on December 31, 2025, and 83% of the target number of shares were paid out in February 2026, according to the established performance scale, and approved by the Human Resources Committee.
2023–2025 PSU Performance · Filed 06/04/2026
Net Revenue Net revenue increased primarily due to a $46.0 million increase in fee revenue primarily due to an increase in average monthly account values, which largely resulted from more favorable financial markets, and a $35.6 million increase in variable investment income.
MD&A, six months ended June 30, 2026 compared with 2025, Net Revenue · Filed 29/07/2026
A majority of our revenue is based upon contractual rates applied to the market value of the clients’ portfolios and considered variable consideration.
Revenues from Contracts with Customers, contractual fee basis · Filed 29/07/2026
2023−2025 PSU Performance
Based on the Company’s three-year average Non-GAAP return on equity (“ROE”) and three-year average operating margin1 performance, and the relative total shareholder return2 metric, the 2023-2025 Performance Based RSUs (“PSUs”) vested on December 31, 2025, and 83% of the target number of shares were paid out in February 2026, according to the established performance scale, and approved by the Human Resources Committee.
Executive compensation, 2023–2025 PSU Performance · Filed 06/04/2026
