2014 Annual Report: Connected

Download Report

Businesses

The expertise and diversity across all of our business units creates a balanced business model allowing us to be aggressive while minimizing risk.

Retirement And Investor Services

Deliver long-term savings, investing and retirement income solutions for U.S.-based: growing businesses, employees and other individuals, not-for-profit organizations, and large institutions and employers.

Principal Global Investors

Provide investment management capabilities to institutional investors and Principal Financial Group businesses through a network of specialized boutique asset managers. More than 500 investment professionals around the world with clients in more than 70 countries.

Principal International

Offer long-term savings and retirement solutions in select Latin American and Asian emerging markets: Brazil, Chile, China, Hong Kong SAR, India, Indonesia, Malaysia, Mexico, Singapore, Thailand

U.S. Insurance Solutions

Protect employers, business owners, employees and individuals against risk and loss during working years and beyond, while building and protecting wealth for retirement.

PRODUCTS AND SERVICES

  • Full service accumulation products and services:
    • Defined contribution retirement plans (including 401(k) and 403(b) plans)
    • Defined benefit pension plans
    • Employee stock ownership plans
    • Nonqualified executive benefit plans
  • Mutual funds
  • Annuities and payout solutions
  • Bank and trust services
  • Investment only

2014 FINANCIAL HIGHLIGHTS

  • Retirement and Investor Services full-year 2014 operating earnings were a record $828.1 million.
  • Full Service Accumulation full-year recurring deposits were up 7% over 2013 to a record $16.8 billion, and participants with account value reached a record of 2.8 million.
  • Principal Funds had record sales of $20.0 billion for the year, and fourth quarter 2014 net cash flows of $1.2 billion were the 20th consecutive quarter of positive net cash flows.

Recognition & Accomplishments

  • PLANADVISER, a leading retirement industry magazine for financial professionals, has recognized the Principal Financial Group with a new "Adviser's Choice Award" for ranking No. 1 in defined contribution plan sponsor support. (March 2014)
  • The Principal again received a "Best in Class" ranking for our service team and a 94% overall satisfaction score. In the 2014 Chatham Partners Client Satisfaction Survey of defined benefit and defined contribution plans with more than $5 million in assets, (December 2014)
  • The Principal Financial Group received strong industry ratings in the 2014 Retirement Plan Advisor Survey conducted by PLANADVISER. We ranked No. 1 for advisor support post-sale and No. 3 in advisor sales and marketing support. (December 2014)
  • Principal Funds received a Lipper Fund Award for Principal Global Real Estate Securities Fund. The fund was named the best global real estate fund, out of 81 funds, over the 5-year period for its consistently strong risk-adjusted performance. (March 2014)
  • Principal Funds is No. 16 on the list of top advisor-sold mutual fund companies in the U.S., based on assets under management according to Strategic Insights. (December 2014)

*Entire contents copyright by Crain Communications. All rights reserved. All business information as of Dec. 31, 2014.

PRODUCTS & SERVICES

  • Equities
    • Growth, core and value U.S. equities
    • Small-, mid- and large-cap U.S. equities
    • Global, international developed and emerging markets equities
  • Fixed income
    • U.S. fixed income
    • Global/Emerging markets fixed income
    • Specialty credit
    • Structured
    • Preferred Securities
  • Real estate
    • Private real estate equity
    • Real estate investment trust securities
    • Commercial mortgage backed securities
    • Commercial mortgages, bridge and mezzanine loans
  • Asset allocation
  • Alternatives and currency management

2014 Financial Highlights

  • Principal Global Investors 2014 operating earnings were a record $116 million.
  • Record total assets under management of $314 billion at the end of 2014 and full-year net cash flows of $2.4 billion.
  • Full-year 2014 pre-tax margin increased to 26.5%.

Recognition & Accomplishments

  • The Principal Financial Group earned the top spot in its category for the third year in a row in Pensions & Investments' annual survey of Best Places to Work in Money Management.* (December 2014)
  • Principal Real Estate Investors is a Top 10 manager of real estate. Managers ranked by total worldwide real estate assets (net of leverage). "The Largest Real Estate Managers," Pensions & Investments, data as of June 30, 2014. (October 2014)
  • Principal Global Investors is the 29th largest U.S. money manager out of 300 managers profiled. Managers ranked by total assets under management as of Dec. 31, 2013. "II 300 America's Top 300 Money Managers," Institutional Investor. (July 2014)
  • Principal Global Investors named the 31st largest manager of institutional assets, out of 651 managers profiled. Managers ranked by total worldwide institutional assets as of Dec. 31, 2013. "Largest Money Managers," Pensions & Investments. (May 2014)
  • Principal Global Investors named the 13th largest manager of high yield securities, out of 90 managers profiled. Managers ranked by U.S. institutional, tax-exempt assets managed internally, as of Dec. 31, 2013. "Largest Money Managers," Pensions & Investments, Online Research Center. (May 2014)

*Entire contents copyright by Crain Communications. All rights reserved. All business information as of Dec. 31, 2014.

Products & Services

  • Annuities
  • Asset management
  • Islamic asset management
  • Islamic mutual funds
  • Mutual funds
  • Pensions
  • Retirement advisory services

Joint venture partners

  • Banco do Brasil (Brazil)
  • China Construction Bank (China)
  • CIMB Group (Southeast Asia)
  • Punjab National Bank (India)

Mutual fund/asset management boutique

  • Claritas (Brazil)

2014 Financial Highlights

  • Principal International 2014 operating earnings were a record $268 million.
  • Principal International reported assets under management of $115 billion at year end (excluding $19 billion of AUM in our joint venture in China, which is not reported in AUM).
  • Record full-year net cash flows of $13 billion were up 54% over 2013 and up 68% on a local currency basis.

Recognition & Accomplishments

  • Brasilprev reached BRL$100 billion in assets under management. (August 2014)
  • Principal Chile:
    • Ranked first in the APV according to the Asociación de Adminstradoras de Fondos Mutuos de Chile. APV is a voluntary pension product that complements the mandatory pension system in Chile. (as of November 2014)
    • Cuprum recognized as the leader in Customer Loyalty in the mandatory pension market by Alco Consultores, SA. (November 2014)
  • CIMB-Principal Asset Management was named the Best Asset Manager in Southeast Asia for the fifth year in a row by Alpha Southeast Asia in its "Best Financial Institutions Awards" (Marquee Awards). (June 2014)
  • Principal Hong Kong was named the "Asset Management Company of the Year, Hong Kong MPF" by The Asset. (June 2014)
  • Principal International recently announced the planned acquisition of AXA's pension business in Hong Kong, expected to close in the second half of 2015. The acquisition will make us the 5th largest mandatory pension provider in Hong Kong, expanding our brand and presence in Asia

*Entire contents copyright by Crain Communications. All rights reserved. All business information as of Dec. 31, 2014.

Products & Services

  • Individual Life: Protection, accumulation, and deferred compensation solutions
    • Business planning services
    • Retail universal, variable universal, indexed universal and term life insurance
    • Nonqualified deferred compensation
  • Specialty Benefits: Employer-paid and voluntary work-site solutions
    • Group life insurance
    • Group dental and vision
    • Group and multi-life disability income
    • Individual disability insurance
    • Critical illness

2014 Financial Highlights

  • U.S. Insurance Solutions 2014 operating earnings were a record $231 million.
  • The business market strategy continues to be a differentiator for Individual Life, with 2014 being the second highest year of non-qualified deferred compensation sales.
  • Specialty Benefits had record full-year sales of nearly $300 million, up 10% over 2013.

Recognition & Accomplishments

  • Recognized by PLANSPONSOR magazine as the No. 2 non-qualified deferred compensation provider based on number of plans. (July 2014)
  • Ranked as the No. 4 provider of group benefit (dental, life and disability) insurance based on 2013 LIMRA data on fully insured employer contracts in force. (April 2014)
  • Ranked as the No. 3 provider of non-cancelable individual disability income insurance based on 2013 LIMRA data of annualized new sale premium. (February 2015)
  • Ranked as the No. 17 provider of life insurance based on 2013 LIMRA data on total life new sales premium. (March 2014)
  • Delivered a series of innovative products and solutions in 2014, including group managed care vision, an "exchange-certified" pediatric dental benefit, individual disability core value (middle income) solution, indexed universal life, and VUL-Business products.
  • Deployed our group benefit solutions on 9 private exchanges, expanding options for employers and employees looking for accessible, flexible benefit options.
  • Introduced our Individual Life Accelerated Underwriting program, which leverages advanced analytics to streamline the underwriting process. This innovative approach reduces underwriting time to 2–4 days, compared to a 30+ day industry average, and eliminates lab testing and medical exams for qualified applicants, providing us a significant competitive advantage.

*Entire contents copyright by Crain Communications. All rights reserved. All business information as of Dec. 31, 2014.