Businesses at a glance

As of December 31, 2016

Segment overview

Lead the industry in helping more U.S.-based clients save enough for and have enough in retirement­ — working together with third-party administrators, advisors and plan sponsors.

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
  • Annuities
  • Pension risk transfer
  • Investment only
  • Bank and trust services
2016 financial highlights
  • 2016 pre-tax operating earnings of $795 million
  • Total account value was $231 billion as of Dec. 31, 2016
  • Total net cash flows of $7.4 billion
  • RIS-Fee net cash flows of $4.2 billion, or 2.4 percent of beginning of year account values
  • Pension risk transfer sales were a record $2.0 billion
Recognition & accomplishments
  • PLANADVISER, a leading retirement industry magazine for financial professionals, recognized Principal as a top-five provider for service to micro, small, mid and large defined contribution plans. Principal was also ranked No. 3 in best overall service to small plans, value-added advisor services and best wholesaler. (October 2016)
  • Chatham Partners Client Satisfaction Survey of defined contribution plan sponsors1 revealed Principal as a top performer in the following customer satisfaction attributes, surpassing 12 other leading defined contribution retirement services providers:
  • Would highly recommend
  • Flexible solutions for clients’ needs
  • Committed to technology
  • Simplifies plan administration
  • Easy to do business with

12016 Chatham Partners Client Satisfaction Survey of defined contribution plans with greater than $50 million in plan assets.

Segment overview

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

Products and services
  • Broad range of specialist investment capabilities spanning equities, fixed income, real estate and alternatives
  • Industry leader in delivering customized solutions, including multi-asset, multi-manager solutions, to meet specific investor objectives or outcomes
  • Capabilities offered in a wide variety of legal vehicles to address differences in investor preferences and regulatory regimes
  • Equities
  • Global & all-country
  • International (ex-U.S.)
  • Emerging markets
  • U.S.
  • Small-cap
  • Geographic and objective
  • Tailored solutions
  • Blue chip
  • MidCap
  • Fixed income
  • High yield
  • Investment-grade credit
  • Opportunistic
  • Liability-driven investments/long duration
  • Multi-sector fixed income
  • Preferred securities
  • Real estate
  • Private equity (core, value-added and opportunistic properties)
  • Public equity (real estate investment trust securities)
  • Private debt (commercial mortgages, bridge and mezzanine loans)
  • Public debt (commercial mortgage-backed securities)
  • Asset allocation
  • Strategic asset allocation
  • Dynamic outcome
  • Dynamic asset allocation
  • Alternatives and structured investment strategies
  • Currency management
2016 financial highlights
  • 2016 pre-tax operating earnings of $444 million
  • Total assets under management of $391 billion at year-end 2016 and full year net cash flows of $9.0 billion
  • 2016 pre-tax return on operating revenues less pass-through commissions1 increased to 37 percent
Recognition & accomplishments
  • For the fifth year in a row, Principal has earned a top spot in its category in Pensions & Investments' annual survey of the Best Places to Work in Money Management2.
  • Principal Global Investors received strong scores in environmental, social and governance (ESG) based on the 2016 Principles for Responsible Investment (PRI) Pilot Assessment Report. For the second year, Principal Global Investors (Direct-Property) received an “A” rating (47 out of 51 points), outperforming the median score of “C.”

1 Pre-tax return on operating revenues less pass-through commissions equals pre-tax operating earnings, adjusted for noncontrolling interest divided by operating revenues less pass-through commissions. Operating revenues less pass-through commissions is a non-GAAP financial measure the company has determined is more representative of underlying operating revenues growth for Principal Global Investors.

2 Pensions & Investments, “The Best Places to Work in Money Management among companies with 1,000 or more employees,” 12/14/16.

It is not known whether the clients mentioned in this report approve or disapprove of Principal Global Investors or the advisory services provided.

Segment overview

Offer long-term savings, asset management and retirement solutions in select Latin American and Asian emerging markets:

  • Brazil
  • Chile
  • China
  • Hong Kong SAR
  • India
  • Indonesia
  • Malaysia
  • Mexico
  • Singapore
  • Thailand
Products and services
  • Pensions
  • Mutual funds
  • Asset management
  • Islamic mutual funds
  • Islamic asset management
  • Retirement advisory services
  • Annuities
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)
2016 financial highlights
  • 2016 pre-tax operating earnings of $288 million
  • Reported assets under management of $137 billion at year-end (excluding $101 billion of AUM in our joint venture in China, which is not reported in AUM or net cash flows)
  • Reported net cash flows of $9.1 billion
  • Combined pre-tax return on net revenue (at Principal's share)1 increased to 36 percent
Recognition & accomplishments
  • Signed a Memorandum of Understanding with China Construction Bank regarding our mutual desire to explore a new pension and asset management partnership. (March 2016)
  • Principal ranked first in voluntary pensions (APV) in Chile according to the Superintendencia de Valores y Seguros. (December 2016)
  • Brasilprev ranked No. 1 in net deposits and market share. (Fenaprevi December 2016)
  • Principal Hong Kong received 2016 MPF Scheme of the Year for one of its Mandatory Provident Funds, in addition to Gold Ratings for two Mandatory Provident Funds at the 2016 MPF Awards. (March 2016)

1Combined pre-tax return on net revenue (at Principal’s share) equals pre-tax operating earnings divided by combined net revenue (at Principal’s share). Combined basis equals all Principal International companies at 100% ownership. Combined net revenue (at Principal’s share) is a non-GAAP financial measure the company has determined is more representative of underlying net revenue growth for Principal International as it reflects our proportionate share of consolidated and equity method subsidiaries. In addition, using this net revenue metric provides a more meaningful representation of our profit margins.

Segment overview

Help businesses and individuals by offering solutions that grow and protect their assets.

Products and services
  • Specialty benefits: Employer-paid and voluntary work-site solutions
  • Group dental, vision, life and disability insurance
  • Individual disability insurance
  • Individual discount dental
  • Individual life insurance: Protection, accumulation and deferred compensation solutions
  • Business solutions to meet the needs of business owners, executives, and key employees
  • Individual universal, variable, and term life insurance
  • Retail universal, variable universal, and traditional life insurance
  • Nonqualified deferred compensation
2016 financial highlights
  • 2016 pre-tax operating earnings of $361 million
  • Record pre-tax operating earnings for Specialty Benefits, driven by benefits of scale with strong retention and record sales, as well as 7 percent growth in premium and fees
  • Individual Life premium and fees grew 3 percent over 2015, reflecting underlying growth in the business
Recognition & accomplishments
  • Ranked No. 5 provider of group benefit (dental, life and disability) insurance on fully insured employer contracts in–force, No. 3 provider of non-cancelable individual disability income insurance new sale premium, and No. 20 provider of total life insurance new sale premium, based on LIMRA 2016 data.
  • Recognized by PlanSponsor magazine as the No. 1 non-qualified deferred compensation provider based on number of plans. (July 2016)