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What changed in Principal Financial Group's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Principal Financial Group's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+257 added−1541 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-20)

Top changes in Principal Financial Group's 2024 10-K

257 paragraphs added · 1541 removed · 222 edited across 1 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

222 edited+35 added−1319 removed156 unchanged
Biggest changeThe net realized loss relating to the change in the allowance for credit loss and credit related sales of fixed maturities was $48.9 million, $29.7 million and $34.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. 71 Table of Contents Fixed Maturities Available-for-Sale The following tables present our fixed maturities available-for-sale by industry category, as of the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ Gross Gross Allowance ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ for credit ​ Carrying ​ ​ cost ​ gains ​ losses ​ loss ​ amount ​ (in millions) Finance — Banking ​ $ 1,885.8 ​ $ 8.2 ​ $ 151.9 ​ $ — ​ $ 1,742.1 Finance — Brokerage ​ 674.1 ​ 5.4 ​ 58.3 ​ — ​ 621.2 Finance — Finance Companies ​ 377.6 ​ 1.9 ​ 43.1 ​ — ​ 336.4 Finance — Financial Other ​ 1,435.9 ​ 12.8 ​ 123.3 ​ — ​ 1,325.4 Finance — Insurance ​ 1,759.4 ​ 29.0 ​ 152.3 ​ — ​ 1,636.1 Finance — Real estate investment trusts (“REITs”) ​ 1,729.3 ​ 0.3 ​ 175.7 ​ — ​ 1,553.9 Industrial — Basic Industry ​ 1,203.9 ​ 22.8 ​ 85.5 ​ — ​ 1,141.2 Industrial — Capital Goods ​ 1,350.1 ​ 17.1 ​ 101.5 ​ — ​ 1,265.7 Industrial — Communications ​ 2,261.1 ​ 58.0 ​ 149.3 ​ — ​ 2,169.8 Industrial — Consumer Cyclical ​ 1,129.8 ​ 6.4 ​ 85.7 ​ — ​ 1,050.5 Industrial — Consumer Non-Cyclical ​ 2,929.8 ​ 23.7 ​ 188.1 ​ 1.6 ​ 2,763.8 Industrial — Energy ​ 1,869.7 ​ 57.1 ​ 113.5 ​ — ​ 1,813.3 Industrial — Other ​ 767.6 ​ 7.5 ​ 33.0 ​ — ​ 742.1 Industrial — Technology ​ 1,357.5 ​ 12.4 ​ 107.5 ​ — ​ 1,262.4 Industrial — Transportation ​ 1,771.2 ​ 24.2 ​ 123.2 ​ — ​ 1,672.2 Utility — Electric ​ 2,898.6 ​ 27.9 ​ 279.3 ​ — ​ 2,647.2 Utility — Natural Gas ​ 423.3 ​ 5.2 ​ 49.5 ​ — ​ 379.0 Utility — Other ​ 270.4 ​ 2.9 ​ 29.2 ​ — ​ 244.1 Government guaranteed ​ 271.7 ​ 15.9 ​ 14.5 ​ — ​ 273.1 Total corporate securities ​ 26,366.8 ​ 338.7 ​ 2,064.4 ​ 1.6 ​ 24,639.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed pass-through securities ​ 3,187.8 ​ 25.1 ​ 161.4 ​ — ​ 3,051.5 Commercial mortgage-backed securities ​ 4,316.7 ​ — ​ 515.3 ​ — ​ 3,801.4 Residential collateralized mortgage obligations ​ 3,598.6 ​ 13.8 ​ 410.1 ​ 0.1 ​ 3,202.2 Asset-backed securities — Home equity (1) ​ 139.0 ​ 2.9 ​ 4.3 ​ — ​ 137.6 Asset-backed securities — All other ​ 2,209.6 ​ 13.6 ​ 76.2 ​ — ​ 2,147.0 Collateralized debt obligations — Credit ​ 16.6 ​ — ​ 4.9 ​ — ​ 11.7 Collateralized debt obligations — Loans ​ 3,669.6 ​ 6.1 ​ 20.3 ​ — ​ 3,655.4 Total mortgage-backed and other asset-backed securities ​ 17,137.9 ​ 61.5 ​ 1,192.5 ​ 0.1 ​ 16,006.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government and agencies ​ 1,257.9 ​ 19.3 ​ 73.0 ​ — ​ 1,204.2 States and political subdivisions ​ 5,748.6 ​ 42.6 ​ 651.3 ​ — ​ 5,139.9 Non-U.S. governments ​ 400.3 ​ 17.0 ​ 40.8 ​ — ​ 376.5 Total fixed maturities, available-for-sale ​ $ 50,911.5 ​ $ 479.1 ​ $ 4,022.0 ​ $ 1.7 ​ $ 47,366.9 (1) This exposure is all related to sub-prime mortgage loans. ​ 72 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ Gross Gross Allowance ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ for credit ​ Carrying ​ ​ cost ​ gains ​ losses ​ loss ​ amount ​ (in millions) Finance — Banking ​ $ 2,396.8 ​ $ 3.7 ​ $ 234.6 ​ $ — ​ $ 2,165.9 Finance — Brokerage ​ 667.3 ​ 1.6 ​ 88.4 ​ — ​ ​ 580.5 Finance — Finance Companies ​ 338.6 ​ — ​ 61.9 ​ — ​ ​ 276.7 Finance — Financial Other ​ 1,120.5 ​ 1.5 ​ 162.6 ​ — ​ ​ 959.4 Finance — Insurance ​ 1,882.8 ​ 27.2 ​ 190.9 ​ — ​ ​ 1,719.1 Finance — REITs ​ 1,785.4 ​ 0.4 ​ 237.6 ​ — ​ ​ 1,548.2 Industrial — Basic Industry ​ 1,220.6 ​ 10.6 ​ 116.7 ​ — ​ ​ 1,114.5 Industrial — Capital Goods ​ 1,518.7 ​ 5.5 ​ 158.5 ​ — ​ ​ 1,365.7 Industrial — Communications ​ 2,286.8 ​ 47.4 ​ 219.1 ​ — ​ ​ 2,115.1 Industrial — Consumer Cyclical ​ 1,216.9 ​ 5.5 ​ 135.0 ​ — ​ ​ 1,087.4 Industrial — Consumer Non-Cyclical ​ 3,329.2 ​ 15.4 ​ 292.9 ​ — ​ ​ 3,051.7 Industrial — Energy ​ 1,872.0 ​ 39.9 ​ 159.2 ​ — ​ ​ 1,752.7 Industrial — Other ​ 807.9 ​ 0.7 ​ 65.9 ​ — ​ ​ 742.7 Industrial — Technology ​ 1,392.8 ​ 2.6 ​ 153.1 ​ — ​ ​ 1,242.3 Industrial — Transportation ​ 1,637.0 ​ 5.4 ​ 176.2 ​ — ​ ​ 1,466.2 Utility — Electric ​ 2,886.8 ​ 17.8 ​ 382.2 ​ — ​ ​ 2,522.4 Utility — Natural Gas ​ 389.3 ​ 0.7 ​ 58.9 ​ — ​ ​ 331.1 Utility — Other ​ 359.8 ​ — ​ 66.3 ​ — ​ ​ 293.5 Government guaranteed ​ 171.8 ​ 10.3 ​ 13.3 ​ — ​ ​ 168.8 Total corporate securities ​ 27,281.0 ​ 196.2 ​ 2,973.3 ​ — ​ ​ 24,503.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed pass-through securities ​ 2,348.8 ​ 5.8 ​ 187.6 ​ — ​ ​ 2,167.0 Commercial mortgage-backed securities ​ 4,334.7 ​ — ​ 556.2 ​ — ​ ​ 3,778.5 Residential collateralized mortgage obligations ​ 3,113.8 ​ 2.6 ​ 451.8 ​ 0.1 ​ ​ 2,664.5 Asset-backed securities — Home equity (1) ​ 73.5 ​ 1.6 ​ 2.9 ​ — ​ ​ 72.2 Asset-backed securities — All other ​ 1,662.1 ​ — ​ 125.2 ​ — ​ ​ 1,536.9 Collateralized debt obligations — Credit ​ 16.8 ​ — ​ 5.2 ​ — ​ ​ 11.6 Collateralized debt obligations — CMBS ​ — ​ 0.3 ​ — ​ — ​ ​ 0.3 Collateralized debt obligations — Loans ​ 3,264.7 ​ 1.1 ​ 108.9 ​ — ​ ​ 3,156.9 Total mortgage-backed and other asset-backed securities ​ 14,814.4 ​ 11.4 ​ 1,437.8 ​ 0.1 ​ ​ 13,387.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government and agencies ​ 1,443.9 ​ 0.1 ​ 90.2 ​ — ​ ​ 1,353.8 States and political subdivisions ​ 5,281.8 ​ 9.8 ​ 751.4 ​ — ​ ​ 4,540.2 Non-U.S. governments ​ 423.0 ​ 18.8 ​ 44.0 ​ — ​ ​ 397.8 Total fixed maturities, available-for-sale ​ $ 49,244.1 ​ $ 236.3 ​ $ 5,296.7 ​ $ 0.1 ​ $ 44,183.6 (1) This exposure is all related to sub-prime mortgage loans.
Biggest changeFixed Maturities Available-For-Sale The following tables present our fixed maturities available-for-sale by industry category, as of the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ Gross Gross Allowance ​ ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ for credit ​ Carrying ​ ​ cost ​ gains ​ losses ​ loss ​ amount ​ (in millions) Finance — Banking ​ $ 1,814.7 ​ $ 7.2 ​ $ 133.8 ​ $ — ​ $ 1,688.1 Finance — Brokerage ​ 875.2 ​ 8.7 ​ 85.8 ​ — ​ 798.1 Finance — Finance Companies ​ 325.2 ​ 3.0 ​ 21.5 ​ — ​ 306.7 Finance — Financial Other ​ 1,542.7 ​ 13.2 ​ 108.6 ​ — ​ 1,447.3 Finance — Insurance ​ 1,967.1 ​ 22.9 ​ 172.7 ​ — ​ 1,817.3 Finance — Real estate investment trusts (“REITs”) ​ 1,809.7 ​ 10.7 ​ 158.4 ​ — ​ 1,662.0 Industrial — Basic Industry ​ 1,349.6 ​ 16.9 ​ 88.7 ​ — ​ 1,277.8 Industrial — Capital Goods ​ 1,430.9 ​ 18.4 ​ 113.9 ​ — ​ 1,335.4 Industrial — Communications ​ 2,304.4 ​ 49.2 ​ 169.9 ​ — ​ 2,183.7 Industrial — Consumer Cyclical ​ 934.7 ​ 4.6 ​ 69.3 ​ — ​ 870.0 Industrial — Consumer Non-Cyclical ​ 3,081.7 ​ 17.9 ​ 228.7 ​ 11.9 ​ 2,859.0 Industrial — Energy ​ 2,077.1 ​ 51.7 ​ 129.1 ​ — ​ 1,999.7 Industrial — Other ​ 914.5 ​ 22.4 ​ 28.5 ​ — ​ 908.4 Industrial — Technology ​ 1,393.0 ​ 11.8 ​ 135.9 ​ — ​ 1,268.9 Industrial — Transportation ​ 2,226.8 ​ 32.7 ​ 143.0 ​ — ​ 2,116.5 Utility — Electric ​ 3,173.7 ​ 20.5 ​ 325.9 ​ — ​ 2,868.3 Utility — Natural Gas ​ 449.3 ​ 3.0 ​ 56.9 ​ — ​ 395.4 Utility — Other ​ 247.8 ​ 2.2 ​ 37.0 ​ 4.2 ​ 208.8 Government guaranteed ​ 167.8 ​ 7.9 ​ 17.0 ​ — ​ 158.7 Total corporate securities ​ 28,085.9 ​ 324.9 ​ 2,224.6 ​ 16.1 ​ 26,170.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed pass-through securities ​ 3,870.1 ​ 8.7 ​ 214.2 ​ — ​ 3,664.6 Commercial mortgage-backed securities ​ 4,770.3 ​ 2.8 ​ 370.5 ​ — ​ 4,402.6 Residential collateralized mortgage obligations ​ 4,432.7 ​ 16.5 ​ 430.0 ​ 0.2 ​ 4,019.0 Asset-backed securities — Home equity (1) ​ 56.7 ​ 2.4 ​ 3.8 ​ — ​ 55.3 Asset-backed securities — All other ​ 2,696.3 ​ 18.9 ​ 37.4 ​ — ​ 2,677.8 Collateralized debt obligations — Credit ​ 16.5 ​ — ​ 4.8 ​ — ​ 11.7 Collateralized debt obligations — Loans ​ 4,958.7 ​ 23.3 ​ 0.6 ​ — ​ 4,981.4 Total mortgage-backed and other asset-backed securities ​ 20,801.3 ​ 72.6 ​ 1,061.3 ​ 0.2 ​ 19,812.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government and agencies ​ 1,197.6 ​ 0.2 ​ 95.2 ​ — ​ 1,102.6 States and political subdivisions ​ 5,634.2 ​ 10.3 ​ 809.2 ​ — ​ 4,835.3 Non-U.S. governments ​ 435.4 ​ 12.6 ​ 55.9 ​ — ​ 392.1 Total fixed maturities, available-for-sale excluding portfolio layer method basis adjustment ​ ​ 56,154.4 ​ ​ 420.6 ​ ​ 4,246.2 ​ ​ 16.3 ​ ​ 52,312.5 Unallocated portfolio layer method basis adjustment ​ ​ (55.7) ​ ​ 55.7 ​ ​ — ​ ​ — ​ ​ — Total fixed maturities, available-for-sale ​ $ 56,098.7 ​ $ 476.3 ​ $ 4,246.2 ​ $ 16.3 ​ $ 52,312.5 (1) This exposure is all related to sub-prime mortgage loans. ​ 66 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ Gross Gross Allowance ​ ​ ​ Amortized ​ unrealized ​ unrealized ​ for credit ​ Carrying ​ ​ cost ​ gains ​ losses ​ loss ​ amount ​ (in millions) Finance — Banking ​ $ 1,885.8 ​ $ 8.2 ​ $ 151.9 ​ $ — ​ $ 1,742.1 Finance — Brokerage ​ 674.1 ​ 5.4 ​ 58.3 ​ — ​ ​ 621.2 Finance — Finance Companies ​ 377.6 ​ 1.9 ​ 43.1 ​ — ​ ​ 336.4 Finance — Financial Other ​ 1,435.9 ​ 12.8 ​ 123.3 ​ — ​ ​ 1,325.4 Finance — Insurance ​ 1,759.4 ​ 29.0 ​ 152.3 ​ — ​ ​ 1,636.1 Finance — REITs ​ 1,729.3 ​ 0.3 ​ 175.7 ​ — ​ ​ 1,553.9 Industrial — Basic Industry ​ 1,203.9 ​ 22.8 ​ 85.5 ​ — ​ ​ 1,141.2 Industrial — Capital Goods ​ 1,350.1 ​ 17.1 ​ 101.5 ​ — ​ ​ 1,265.7 Industrial — Communications ​ 2,261.1 ​ 58.0 ​ 149.3 ​ — ​ ​ 2,169.8 Industrial — Consumer Cyclical ​ 1,129.8 ​ 6.4 ​ 85.7 ​ — ​ ​ 1,050.5 Industrial — Consumer Non-Cyclical ​ 2,929.8 ​ 23.7 ​ 188.1 ​ 1.6 ​ ​ 2,763.8 Industrial — Energy ​ 1,869.7 ​ 57.1 ​ 113.5 ​ — ​ ​ 1,813.3 Industrial — Other ​ 767.6 ​ 7.5 ​ 33.0 ​ — ​ ​ 742.1 Industrial — Technology ​ 1,357.5 ​ 12.4 ​ 107.5 ​ — ​ ​ 1,262.4 Industrial — Transportation ​ 1,771.2 ​ 24.2 ​ 123.2 ​ — ​ ​ 1,672.2 Utility — Electric ​ 2,898.6 ​ 27.9 ​ 279.3 ​ — ​ ​ 2,647.2 Utility — Natural Gas ​ 423.3 ​ 5.2 ​ 49.5 ​ — ​ ​ 379.0 Utility — Other ​ 270.4 ​ 2.9 ​ 29.2 ​ — ​ ​ 244.1 Government guaranteed ​ 271.7 ​ 15.9 ​ 14.5 ​ — ​ ​ 273.1 Total corporate securities ​ 26,366.8 ​ 338.7 ​ 2,064.4 ​ 1.6 ​ ​ 24,639.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed pass-through securities ​ 3,187.8 ​ 25.1 ​ 161.4 ​ — ​ ​ 3,051.5 Commercial mortgage-backed securities ​ 4,316.7 ​ — ​ 515.3 ​ — ​ ​ 3,801.4 Residential collateralized mortgage obligations ​ 3,598.6 ​ 13.8 ​ 410.1 ​ 0.1 ​ ​ 3,202.2 Asset-backed securities — Home equity (1) ​ 139.0 ​ 2.9 ​ 4.3 ​ — ​ ​ 137.6 Asset-backed securities — All other ​ 2,209.6 ​ 13.6 ​ 76.2 ​ — ​ ​ 2,147.0 Collateralized debt obligations — Credit ​ 16.6 ​ — ​ 4.9 ​ — ​ ​ 11.7 Collateralized debt obligations — Loans ​ 3,669.6 ​ 6.1 ​ 20.3 ​ — ​ ​ 3,655.4 Total mortgage-backed and other asset-backed securities ​ 17,137.9 ​ 61.5 ​ 1,192.5 ​ 0.1 ​ ​ 16,006.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government and agencies ​ 1,257.9 ​ 19.3 ​ 73.0 ​ — ​ ​ 1,204.2 States and political subdivisions ​ 5,748.6 ​ 42.6 ​ 651.3 ​ — ​ ​ 5,139.9 Non-U.S. governments ​ 400.3 ​ 17.0 ​ 40.8 ​ — ​ ​ 376.5 Total fixed maturities, available-for-sale ​ $ 50,911.5 ​ $ 479.1 ​ $ 4,022.0 ​ $ 1.7 ​ $ 47,366.9 (1) This exposure is all related to sub-prime mortgage loans.
For net investment income and net realized capital gains (losses) variance information, see “Investments — Investment Results” under the captions “Net Investment Income” and “Net Realized Capital Gains (Losses),” respectively.
For net investment income and net realized capital losses variance information, see “Investments — Investment Results” under the captions “Net Investment Income” and “Net Realized Capital Gains (Losses),” respectively.
See Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 14, Income Taxes” under the caption, “Effective Income Tax Rate” for further discussion. Results of Operations by Segment For results of operations by segment see Item 8.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 14, Income Taxes” under the caption, “Effective Income Tax Rate” for further discussion. Results of Operations by Segment For results of operations by segment see Item 8.
These risks and uncertainties include: (1) the risk that our assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) the risk that our investment professionals are making decisions based on fraudulent or misstated information in the financial statements provided by issuers and (4) the risk that new information obtained by us or changes in other facts and circumstances lead us to change our intent to not sell the security prior to recovery of its amortized cost.
These risks and uncertainties include: (1) the risk that our assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) the risk that our investment professionals are making decisions based on fraudulent or misstated information in the financial statements provided by issuers and (4) the risk that new information obtained by us or changes in other facts and circumstances lead us to change our intent to not sell the security prior to recovery of its amortized cost.
Our sources of strength include our laddered long-term debt maturities with the next maturity occurring in 2025, access to revolving credit facility and contingent funding arrangements, a strong risk-based capital position and our available cash and liquid assets. Our legal entity structure has an impact on our ability to meet cash flow needs as an organization.
Our sources of strength include our laddered long-term debt maturities with the next maturity occurring in May 2025, access to revolving credit facility and contingent funding arrangements, a strong risk-based capital position and our available cash and liquid assets. Our legal entity structure has an impact on our ability to meet cash flow needs as an organization.
Our insurance business typically generates positive cash flows from operating activities, as premiums collected from our insurance products and income received from our investments exceed acquisition costs, benefits paid, redemptions and operating expenses. These positive cash flows are then invested to support the obligations of our insurance and investment products and required capital supporting these products.
Our insurance business typically generates positive cash flows from operating activities, as premiums collected from our insurance products and investment income received exceed acquisition costs, benefits paid, redemptions and operating expenses. These positive cash flows are then invested to support the obligations of our insurance and investment products and required capital supporting these products.
Prior to his current position, he was the Global Head of Investments for Principal Asset Management from 2023 to February 10, 2024, and Chief Operating Officer of Principal Asset Management from 2020 to 2023. Previously, he held leadership roles at OC Private Capital, OppenheimerFunds, TIAA, Mellon Asset Management and Citigroup.
Prior to his current position, he was the Global Head of Investments for Principal Asset Management from 2023 to February 2024 and Chief Operating Officer of Principal Asset Management from 2020 to 2023. Previously, he held leadership roles at OC Private Capital, OppenheimerFunds, TIAA, Mellon Asset Management and Citigroup.
Management holds relevant expertise in assessing and managing cybersecurity threats. Numerous members of management and employees across the information security and risk functions hold nationally recognized designations or certifications, including the Certified Information Systems Security Professional designation, Global Information Assurance Certifications or Amazon Web Services Cloud Certifications.
Management holds relevant expertise in assessing and managing cybersecurity threats. Numerous members of management and employees across the information security and risk functions hold nationally recognized designations and certifications, including the Certified Information Systems Security Professional designation, Global Information Assurance Certifications and Amazon Web Services Cloud Certifications.
For long-duration insurance contracts, reserves for individual and group annuities are generally equal to the present value of expected future policy benefit payments, while the reserves for non-participating term life insurance, individual disability income contracts and individual and group long-term care contracts is generally equal to the present value of expected future policy benefits less the present value of expected net premiums.
For long-duration insurance contracts, reserves for individual and group annuities are generally equal to the present value of expected future policy benefit payments, while the reserves for non-participating term life insurance and individual disability income contracts is generally equal to the present value of expected future policy benefits less the present value of expected net premiums.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements; Note 9, Contractholder Funds, Note 10, Future Policy Benefits and Claims, Note 12, Reinsurance, Note 13, Debt and Note 16, Contingencies, Guarantees, Indemnifications and Leases.” As of December 31, 2023, we had no unique material cash requirements from known contractual and other obligations.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements; Note 9, Contractholder Funds, Note 10, Future Policy Benefits and Claims, Note 12, Reinsurance, Note 13, Debt and Note 16, Contingencies, Guarantees, Indemnifications and Leases.” As of December 31, 2024, we had no unique material cash requirements from known contractual and other obligations.
Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of Principal Life’s statutory policyholder surplus as of the previous year-end excluding admitted disallowed interest maintenance reserve or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus.
Extraordinary dividends include those made, together with dividends and other distributions, within the preceding twelve months that exceed the greater of (i) 10% of statutory policyholder surplus as of the previous year-end excluding admitted disallowed interest maintenance reserve or (ii) the statutory net gain from operations from the previous calendar year, not to exceed earned surplus.
We have had no significant changes or actions in ratings and rating outlooks that have occurred from January 1, 2023, through the date of this filing. The following table summarizes our significant financial strength and debt ratings from the major independent rating organizations. A rating is not a recommendation to buy, sell or hold securities.
We have had no significant changes or actions in ratings and rating outlooks that have occurred from January 1, 2024, through the date of this filing. The following table summarizes our significant financial strength and debt ratings from the major independent rating organizations. A rating is not a recommendation to buy, sell or hold securities.
For a discussion of our approaches to managing foreign currency exchange rate risk, see Item 7A “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk.” Effects of Inflation The impact of inflation has not had a material effect on our annual consolidated results of operations over the past three years.
For a discussion of our approaches to managing foreign currency exchange rate risk, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk.” Effects of Inflation The impact of inflation has not had a material effect on our annual consolidated results of operations over the past two years.
Previously, she served as an Assistant U.S. Attorney in the Criminal Division of the U.S. Attorney’s Office of the Southern District of New York and worked as an attorney at Debevoise & Plimpton LLP. Christopher Littlefield, 57, has been President, Retirement and Income Solutions since March 2022.
Previously, she served as an Assistant U.S. Attorney in the Criminal Division of the U.S. Attorney’s Office of the Southern District of New York and worked as an attorney at Debevoise & Plimpton LLP. Christopher Littlefield, 58, has been President, Retirement and Income Solutions since March 2022.
For additional information on the senior notes and junior subordinated notes, see Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 13, Debt.” PFS, a wholly owned subsidiary of PFG, has guaranteed each of the registered notes on a full and unconditional basis.
For additional information on the senior notes, see Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 13, Debt.” PFS, a wholly owned subsidiary of PFG, has guaranteed each of the registered notes on a full and unconditional basis.
Overall Composition of Invested Assets Invested assets as of December 31, 2023, were predominantly high quality and broadly diversified across asset class, individual credit, industry and geographic location. Asset allocation is determined based on cash flow and the risk/return requirements of our products.
Overall Composition of Invested Assets Invested assets as of December 31, 2024, were predominantly high quality and broadly diversified across asset class, individual credit, industry and geographic location. Asset allocation is determined based on cash flow and the risk/return requirements of our products.
We establish a valuation allowance subject to periodic revisions, if necessary, to adjust the carrying value of the property to reflect the lower of its current carrying value or the fair value, less associated selling costs. The valuation allowance did not change for the year ended December 31, 2023 or for the year ended December 31, 2022.
We establish a valuation allowance subject to periodic revisions, if necessary, to adjust the carrying value of the property to reflect the lower of its current carrying value or the fair value, less associated selling costs. The valuation allowance did not change for the year ended December 31, 2024 or for the year ended December 31, 2023.
The key inputs, judgments and assumptions necessary in determining estimated fair value include: ● weighted average cost of capital ● long-term growth rate ● corporate income tax rate ● AUM growth rate 45 Table of Contents ● net revenue growth rate ● business margins on AUM and net revenue For reporting units that performed a qualitative test of goodwill, we concluded the estimated fair values of all such reporting units were in excess of their carrying values and, therefore, goodwill was not impaired.
The key inputs, judgments and assumptions necessary in determining estimated fair value include: ● weighted average cost of capital ● long-term growth rate ● corporate income tax rate ● AUM growth rate ● net revenue growth rate ● business margins on AUM and net revenue For reporting units that performed a qualitative test of goodwill, we concluded the estimated fair values of all such reporting units were in excess of their carrying values and, therefore, goodwill was not impaired.
Amy Friedrich, 53, has been President of Benefits and Protection since May 2017. Prior to her current position, she was Senior Vice President of the Specialty Benefits division of U.S. Insurance Solutions from 2015 to 2017 and Vice President of Specialty Benefits from 2008 to 2015.
Amy Friedrich, 54, has been President of Benefits and Protection since May 2017. Prior to her current position, she was Senior Vice President of the Specialty Benefits division of U.S. Insurance Solutions from 2015 to 2017 and Vice President of Specialty Benefits from 2008 to 2015.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 15, Employee and Agent Benefits” for further discussion. 47 Table of Contents Income Taxes We provide for income taxes based on our estimate of the liability for taxes due.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 15, Employee and Agent Benefits” for further discussion. 44 Table of Contents Income Taxes We provide for income taxes based on our estimate of the liability for taxes due.
Kathleen Kay, 61, has been Executive Vice President of the Company and Principal Life since March 2022 and Chief Information Officer of the Company and Principal Life since May 2020. Prior to her current position, she was Senior Vice President of the Company and Principal Life from 2020 to 2022.
Kathleen Kay, 62, has been Executive Vice President of the Company and Principal Life since March 2022 and Chief Information Officer of the Company and Principal Life since May 2020. Prior to her current position, she was Senior Vice President of the Company and Principal Life from 2020 to 2022.
“Quantitative and Qualitative Disclosures About Market Risk.” We also issue certain annuity, universal life and other contracts that include embedded derivatives that have been bifurcated from the host contract. They are valued using a combination of historical data and actuarial judgment. See Item 8.
“Quantitative and Qualitative Disclosures About Market Risk.” 41 Table of Contents We also issue certain annuity, universal life and other contracts that include embedded derivatives that have been bifurcated from the host contract. They are valued using a combination of historical data and actuarial judgment. See Item 8.
Reserves are remeasured as of each reporting date to reflect the current upper-medium grade fixed income instruments yields, with the impact reported in OCI. If the current upper-medium grade yields decrease 100 basis points, the reduction in OCI would be approximately $2.3 billion, net of income taxes, based on December 31, 2023, reported amounts.
Reserves are remeasured as of each reporting date to reflect the current upper-medium grade fixed income instruments yields, with the impact reported in OCI. If the current upper-medium grade yields decrease 100 basis points, the reduction in OCI would be approximately $2.2 billion, net of income taxes, based on December 31, 2024, reported amounts.
We believe the cash flows from these sources are sufficient to satisfy the current liquidity requirements of our operations, including reasonably foreseeable contingencies. We maintain a level of cash and securities which, combined with expected cash inflows from investments and operations, we believe to be adequate to meet anticipated short-term and long-term payment obligations.
We believe the cash flows from these sources are sufficient to satisfy the current liquidity requirements of our operations, including reasonably foreseeable contingencies. 52 Table of Contents We maintain a level of cash and securities which, combined with expected cash inflows from investments and operations, we believe to be adequate to meet anticipated short-term and long-term payment obligations.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 4, Investments” under the caption, “Balance Sheet Offsetting.” A dedicated risk management team is responsible for centralized monitoring of the commercial mortgage loan portfolio. We apply a variety of guidelines to minimize credit risk in our commercial mortgage loan portfolio.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 4, Investments” under the caption, “Balance Sheet Offsetting.” 61 Table of Contents A dedicated risk management team is responsible for centralized monitoring of the commercial mortgage loan portfolio. We apply a variety of guidelines to minimize credit risk in our commercial mortgage loan portfolio.
No other subsidiary of PFG has guaranteed any of the registered notes. 60 Table of Contents Summary financial information is presented below on a combined basis for PFG and PFS (the “obligor group”) and transactions between the obligor group have been eliminated. The summary financial information excludes subsidiaries that are not issuers or guarantors.
No other subsidiary of PFG has guaranteed any of the registered notes. Summary financial information is presented below on a combined basis for PFG and PFS (the “obligor group”) and transactions between the obligor group have been eliminated. The summary financial information excludes subsidiaries that are not issuers or guarantors.
However, both the Board and management have an integral role in the identification, assessment and management of cybersecurity risk. 38 Table of Contents The Board oversees management’s execution and performance of its risk management responsibilities, which includes cybersecurity threats.
However, both the Board and management have an integral role in the identification, assessment and management of cybersecurity risk. 35 Table of Contents The Board oversees management’s execution and performance of its risk management responsibilities, which includes cybersecurity threats.
Thomas Cheong, 55, has been Executive Vice President of the Company since January 2021 and President, Principal Asia of the Company since March 2019. Thomas is from Singapore and is located in our Hong Kong office.
Thomas Cheong, 56, has been Executive Vice President of the Company since January 2021 and President, Principal Asia of the Company since March 2019. Thomas is from Singapore and is located in our Hong Kong office.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 4, Investments” under the caption, “Financing Receivables Credit Monitoring.” We categorize loans that are 60 days or more delinquent, loans in process of foreclosure and loans with borrowers or credit tenants in bankruptcy that are delinquent as “problem” loans.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 4, Investments” under the caption, “Financing Receivables Credit Monitoring.” 69 Table of Contents We categorize loans that are 60 days or more delinquent, loans in process of foreclosure and loans with borrowers or credit tenants in bankruptcy that are delinquent as “problem” loans.
Such impairment adjustments are recorded as net realized capital losses in our consolidated results of operations. No such impairment adjustments were recorded for the year ended December 31, 2023 or for the year ended December 31, 2022.
Such impairment adjustments are recorded as net realized capital losses in our consolidated results of operations. No such impairment adjustments were recorded for the year ended December 31, 2024 or for the year ended December 31, 2023.
We also manage liquidity risk by limiting the sales of liabilities with features such as puts or other options that can be exercised at inopportune times. For example, as of December 31, 2023, approximately $14.8 billion, or 99%, of our institutional guaranteed investment contracts and funding agreements cannot be redeemed by contractholders prior to maturity.
We also manage liquidity risk by limiting the sales of liabilities with features such as puts or other options that can be exercised at inopportune times. For example, as of December 31, 2024, approximately $14.9 billion, or 99%, of our institutional guaranteed investment contracts and funding agreements cannot be redeemed by contractholders prior to maturity.
Kamal Bhatia, 52, has been the President and Chief Executive Officer of Principal Asset Management of the Company and Principal Life since February 10, 2024, and President and Chief Executive Officer of Principal Funds since August 2019.
Kamal Bhatia, 53, has been the President and Chief Executive Officer of Principal Asset Management of the Company and Principal Life since February 10, 2024 and President and Chief Executive Officer of Principal Funds since August 2019.
However, because the dividend test is based on dividends previously paid over rolling twelve-month periods, if paid before a specified date during 2024, some or all of such dividends may be extraordinary and require regulatory approval. ​ ​ 18.
However, because the dividend test is based on dividends previously paid over rolling twelve month periods, if paid before a specified date during 2025, some or all of such dividends may be extraordinary and require regulatory approval.
Previously, he served as President and Chief Executive Officer of Fidelity & Guaranty Life Insurance Holdings from 2014 to 2018 and held several leadership roles at Aviva USA Corporation and AmerUS Group Co. 40 Table of Contents Kenneth McCullum, 59, has been Executive Vice President and Chief Risk Officer of the Company and Principal Life since April 2023.
Previously, he served as President and Chief Executive Officer of Fidelity & Guaranty Life Insurance Holdings from 2014 to 2018 and held several leadership roles at Aviva USA Corporation and AmerUS Group Co. 37 Table of Contents Kenneth McCullum, 60, has been Executive Vice President and Chief Risk Officer of the Company and Principal Life since April 2023.
We have regular interactions with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. In addition, 15% of our invested asset portfolio as of December 31, 2023, was invested in privately placed fixed maturities with no readily available market quotes to determine the fair market value.
We have regular interactions with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. In addition, 16% of our invested asset portfolio as of December 31, 2024, was invested in privately placed fixed maturities with no readily available market quotes to determine the fair market value.
As of December 31, 2023, no significant changes to guarantees and indemnifications have occurred since December 31, 2022. For guarantee and indemnification information, see Item 8.
As of December 31, 2024, no significant changes to guarantees and indemnifications have occurred since December 31, 2023. For guarantee and indemnification information, see Item 8.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 14, Income Taxes.” 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).
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 14, Income Taxes.” 57 Table of Contents 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).
Fixed Maturities Watch List. We monitor any decline in the credit quality of fixed maturities through the designation of “problem securities,” “potential problem securities” and “restructured securities”.
We monitor any decline in the credit quality of fixed maturities through the designation of “problem securities,” “potential problem securities” and “restructured securities”.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following analysis discusses our financial condition as of December 31, 2023, compared with December 31, 2022, our consolidated results of operations for the years ended December 31, 2023, 2022 and 2021, and, where appropriate, factors that may affect our future financial performance.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following analysis discusses our financial condition as of December 31, 2024, compared with December 31, 2023, our consolidated results of operations for the years ended December 31, 2024 and 2023, and, where appropriate, factors that may affect our future financial performance.
The following table presents loan-to-value and debt service coverage ratios for our brick and mortar commercial mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average loan ‑ to ‑ value ratio ​ Debt service coverage ratio ​ December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 New mortgages 50 % 50 % 1.4 x 2.3 x Entire mortgage portfolio 49 % 46 % 2.5 x 2.5 x ​ We also seek to manage call or prepayment risk arising from changes in interest rates.
The following table presents loan-to-value and debt service coverage ratios for our brick and mortar commercial mortgage loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average loan ‑ to ‑ value ratio ​ Debt service coverage ratio ​ December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 New mortgages 53 % 50 % 1.7 x 1.4 x Entire mortgage portfolio 50 % 49 % 2.3 x 2.5 x ​ We also seek to manage call or prepayment risk arising from changes in interest rates.
Natalie Lamarque, 47, has been Executive Vice President and General Counsel of the Company and Principal Life since July 2022 and Secretary of the Company and Principal Life since October 2022.
Natalie Lamarque, 48, has been Executive Vice President and General Counsel of the Company and Principal Life since July 2022 and Secretary of the Company and Principal Life since October 2022.
In addition, the policyholder behavior assumptions used in the valuation of embedded derivatives include risk margins, which increase the fair value of the embedded derivative liabilities. 44 Table of Contents We have entered into coinsurance with funds withheld reinsurance arrangements.
In addition, the policyholder behavior assumptions used in the valuation of embedded derivatives include risk margins, which increase the fair value of the embedded derivative liabilities. We have entered into coinsurance with funds withheld reinsurance arrangements.
Future policy benefits and claims include reserves for individual traditional and group life insurance, disability, medical and long-term care insurance and individual and group annuities that provide periodic income payments. These reserves are computed using assumptions of mortality, interest, morbidity and lapse. These assumptions are based on our experience, industry results, emerging trends and future expectations.
Future policy benefits and claims include reserves for individual traditional life insurance, disability insurance and individual and group annuities that provide periodic income payments. These reserves are computed using assumptions of mortality, interest, morbidity and lapse. These assumptions are based on our experience, industry results, emerging trends and future expectations.
One aspect of managing credit risk is through industry, issuer and asset class diversification. Our credit concentrations are managed to established limits. The top 10 exposures comprised 4.8% of single-name credit fixed maturity exposures as of both December 31, 2023 and December 31, 2022. Fixed Maturities Valuation and Credit Quality.
One aspect of managing credit risk is through industry, issuer and asset class diversification. Our credit concentrations are managed to established limits. The top 10 exposures comprised 5.4% of single-name credit fixed maturity exposures as of December 31, 2024, and 4.8% as of December 31, 2023. Fixed Maturities Valuation and Credit Quality.
We do not anticipate contributions will be needed in 2024 to satisfy the minimum funding requirements of ERISA for our qualified pension plan. We are unable to estimate the amount that may be contributed, but it is possible that we may fund the plans in 2024 up to $75.0 million.
We do not anticipate contributions will be needed in 2025 to satisfy the minimum funding requirements of ERISA for our qualified pension plan. We are unable to estimate the amount that may be contributed, but it is possible that we may fund the plans in 2025 up to $70.0 million.
These impacts were calculated by comparing (a) the difference between current year results and prior year results to (b) the difference between current year results and prior year results translated using current year exchange rates for both periods. We use this approach to calculate the impact of exchange rates on all revenue and expense line items.
This impact was calculated by comparing (a) the difference between current year results and prior year results to (b) the difference between current year results and prior year results translated using current year exchange rates for both periods. We use this approach to calculate the impact of exchange rates on all revenue and expense line items.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 4, Investments” under the caption, “Financing Receivables Valuation Allowance.” Real Estate Real estate consists primarily of commercial equity real estate. As of December 31, 2023 and December 31, 2022, the carrying amount of our equity real estate investment was $2,343.4 million and $2,237.4 million, respectively.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 4, Investments” under the caption, “Financing Receivables Valuation Allowance.” Real Estate Real estate consists primarily of commercial equity real estate. As of December 31, 2024 and December 31, 2023, the carrying amount of our equity real estate investment was $2,463.7 million and $2,343.4 million, respectively.
Sales generate both gains and losses. A number of significant risks and uncertainties are inherent in the process of monitoring credit losses and determining the allowance for credit loss.
Sales generate both gains and losses. 65 Table of Contents A number of significant risks and uncertainties are inherent in the process of monitoring credit losses and determining the allowance for credit loss.
We purchase CMBS to diversify the overall credit risks of the fixed maturities portfolio and to provide attractive returns. The primary risks in holding CMBS are structural and credit risks. Structural risks include the security’s priority in the issuer’s capital structure, the adequacy of and ability to realize proceeds from the collateral and the potential for prepayments.
We purchase commercial mortgage-backed securities (“CMBS”) to diversify the overall credit risks of the fixed maturities portfolio and to provide attractive returns. The primary risks in holding CMBS are structural and credit risks. Structural risks include the security’s priority in the issuer’s capital structure, the adequacy of and ability to realize proceeds from the collateral and the potential for prepayments.
Net realized capital gains on funds withheld assets decreased due to lower net gains on sales of funds withheld assets as a result of lower sales in 2023 resulting from less portfolio re-positioning by the external reinsurer.
Net realized capital gains on funds withheld assets decreased due to lower net gains on sales of funds withheld assets as a result of lower sales in 2024 resulting from less portfolio re-positioning by an external reinsurer.
Excluding separate account assets as of December 31, 2023, 3% of our net assets (liabilities) were Level 1, 88% were Level 2 and 9% were Level 3. As of December 31, 2022, 43% of our net assets (liabilities) were Level 1, 54% were Level 2 and 3% were Level 3.
Excluding separate account assets as of December 31, 2023, 3% of our net assets (liabilities) were Level 1, 88% were Level 2 and 9% were Level 3.
On an absolute fair value basis as of December 31, 2023, the majority of our OTC derivative assets and liabilities were valued using pricing valuation models using market observable data with less than 1% using broker quotes. See Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 18, Fair Value Measurements” for further discussion.
On an absolute fair value basis as of December 31, 2024, the majority of our OTC derivative assets and liabilities were valued using pricing valuation models using market observable data with approximately 3% using broker quotes. See Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 18, Fair Value Measurements” for further discussion.
Previously, he served as President, Retirement, Insurance and Financial Services of the Company and Principal Life from 2010 to 2014 and held several leadership roles in Retirement and Income Solutions of the Company and Principal Life.
Previously, he served as President, Retirement, Insurance and Financial Services of the Company and Principal Life from 2010 to 2014 and held several leadership roles in Retirement and Income Solutions of the Company and Principal Life. He currently serves as Executive Chairman of the Company and Principal Life.
In June 2021, our Board authorized a share repurchase program of up to $1.2 billion of our outstanding common stock, which was completed in August 2022. In January 2022, our Board authorized a $1.6 billion increase to the June 2021 share repurchase program authorization, which has no expiration date.
(2) In January 2022, our Board authorized a $1.6 billion increase to the June 2021 share repurchase program authorization, which was completed in April 2024. In February 2024, our Board authorized a share repurchase program of up to $1.5 billion of our outstanding common stock, which has no expiration date.
Deferred income taxes (including federal, state and foreign withholding) have not been provided on approximately $1,362.6 million of accumulated but undistributed earnings from operations of foreign subsidiaries as of December 31, 2023. We do not record deferred income taxes on foreign earnings not expected to be distributed to the U.S.
Deferred income taxes (including federal, state and foreign withholding) have not been provided on approximately $1,276.3 million of accumulated but undistributed earnings from operations of foreign subsidiaries as of December 31, 2024. We do not record deferred income taxes on foreign earnings not expected to be distributed to the U.S.
The net underfunded status of the pension and OPEB obligation was $449.9 million pre-tax and $459.7 million pre-tax as of December 31, 2023 and 2022, respectively. Nonqualified pension plan assets are not included as part of the funding status mentioned above. The nonqualified pension plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants.
The net underfunded status of the pension and OPEB obligation was $391.8 million pre-tax and $449.9 million pre-tax as of December 31, 2024 and 2023, respectively. Nonqualified pension plan assets are not included as part of the funding status mentioned above. The nonqualified pension plan assets are held in Rabbi trusts for the benefit of all nonqualified plan participants.
If the current market credit spreads reflecting our own creditworthiness move to zero (tighten), the reduction to OCI would be approximately $113.1 million, net of income taxes, based on December 31, 2023, reported amounts.
If the current market credit spreads reflecting our own creditworthiness move to zero (tighten), the reduction to net income would be approximately $35.1 million, net of income taxes, based on December 31, 2024, reported amounts.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 18, Fair Value Measurements” for further details, including a reconciliation of changes in Level 3 fair value measurements. As of December 31, 2023, 46% of our net assets (liabilities) were Level 1, 51% were Level 2 and 3% were Level 3.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 18, Fair Value Measurements” for further details, including a reconciliation of changes in Level 3 fair value measurements. As of December 31, 2024, 47% of our net assets (liabilities) were Level 1, 50% were Level 2 and 3% were Level 3.
The following discussion of our operating, investing and financing portions of the cash flows excludes cash flows attributable to the separate accounts. Net cash provided by operating activities was $3,792.4 million, $3,172.9 million and $3,254.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
The following discussion of our operating, investing and financing portions of the cash flows excludes cash flows attributable to the separate accounts. Net cash provided by operating activities was $4,602.9 million and $3,792.4 million for the years ended December 31, 2024 and 2023, respectively.
The amortized cost and weighted average yield, calculated using amortized cost, of non-structured fixed maturity securities that will be callable at the option of the issuer, excluding securities with a make-whole provision, were $2,159.0 million and 4.0%, respectively, as of December 31, 2023, and $2,539.0 million and 3.9%, respectively, as of December 31, 2022.
The amortized cost and weighted average yield, calculated using amortized cost, of non-structured fixed maturity securities that will be callable at the option of the issuer, excluding securities with a make-whole provision, were $2,091.5 million and 4.0%, respectively, as of December 31, 2024, and $2,159.0 million and 4.0%, respectively, as of December 31, 2023.
Best Fitch Moody’s S&P Last review date ​ March 2023 ​ June 2023 ​ January 2022 ​ April 2023 Current outlook ​ Stable ​ Stable ​ Stable ​ Stable Principal Financial Group Senior Unsecured Debt a A- Baa1 A- Junior Subordinated Debt a- Baa2 BBB 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+ ​ Impacts of Income Taxes For income tax information, see Item 8.
Best Fitch Moody’s S&P Last review date ​ March 2024 ​ June 2024 ​ July 2024 ​ April 2024 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+ ​ Impacts of Income Taxes For income tax information, see Item 8.
We have relationships with various types of special purpose entities and other entities where we have a variable interest as described in Item 8.
Off-Balance Sheet Arrangements Variable Interest Entities. We have relationships with various types of special purpose entities and other entities where we have a variable interest as described in Item 8.
The average loan size of our commercial mortgage portfolio was $22.9 million and $20.7 million as of December 31, 2023 and December 31, 2022, respectively. Commercial Mortgage Loan Credit Monitoring. For further details on monitoring and management of our commercial mortgage loan portfolio, see Item 8.
The average loan size of our commercial mortgage portfolio was $23.2 million and $22.9 million as of December 31, 2024 and December 31, 2023, respectively. Commercial Mortgage Loan Credit Monitoring. For further details on monitoring and management of our commercial mortgage loan portfolio, see Item 8.
Profitability Our profitability depends in large part upon our amount of AUM and our ability to: ● manage the difference between the investment income we earn and the interest we credit to policyholders; ● generate fee revenues by providing trust and custody, administrative and investment management services; ● price our insurance products at a level that enables us to earn a margin over the cost of providing benefits and the related expenses; ● manage our investment portfolio to maximize investment returns and minimize risks such as interest rate changes or defaults or impairments of invested assets; 42 Table of Contents ● effectively hedge fluctuations in foreign currency to U.S. dollar exchange rates on certain transactions and ● manage our operating expenses.
Higher levels of unemployment may impact new sales in our businesses and reduce in-group growth in our Specialty Benefits business in the short-term. ​ 39 Table of Contents Profitability Our profitability depends in large part upon our amount of AUM and our ability to: ● manage the difference between the investment income we earn and the interest we credit to policyholders; ● generate fee revenues by providing trust and custody, administrative and investment management services; ● price our insurance products at a level that enables us to earn a margin over the cost of providing benefits and the related expenses; ● manage our investment portfolio to maximize investment returns and minimize risks such as interest rate changes or defaults or impairments of invested assets; ● effectively hedge fluctuations in foreign currency to U.S. dollar exchange rates on certain transactions and ● manage our operating expenses.
As of December 31, 2023 and December 31, 2022, the total number of commercial mortgage loans outstanding were 596 and 656, of which 38% and 43% were for loans with principal balances less than $10.0 million as of December 31, 2023 and December 31, 2022, respectively.
As of December 31, 2024 and December 31, 2023, the total number of commercial mortgage loans outstanding were 620 and 596, of which 35% and 38% were for loans with principal balances less than $10.0 million as of December 31, 2024 and December 31, 2023, respectively.
We regularly review our investments to determine whether we should re-rate them, employing the following criteria: ● material changes in the issuer’s revenues, margins, capital structure or collateral values; ● significant management or organizational changes; ● significant changes regarding the issuer’s industry; ● debt service coverage or cash flow ratios that fall below industry-specific thresholds; ● violation of financial covenants and ● other business factors that relate to the issuer. 66 Table of Contents We purchase credit default swaps to hedge certain credit exposures in our investment portfolio.
We regularly review our investments to determine whether we should re-rate them, employing the following criteria: ● material changes in the issuer’s revenues, margins, capital structure or collateral values; ● significant management or organizational changes; ● significant changes regarding the issuer’s industry; ● debt service coverage or cash flow ratios that fall below industry-specific thresholds; ● violation of financial covenants and ● other business factors that relate to the issuer.
In years when foreign currencies weaken against the U.S. dollar, translating foreign currencies into U.S. dollars results in fewer U.S. dollars to be reported. When foreign currencies strengthen, translating foreign currencies into U.S. dollars results in more U.S. dollars to be reported. Foreign currency exchange rate fluctuations create variances in our financial statement line items.
When foreign currencies strengthen, translating foreign currencies into U.S. dollars results in more U.S. dollars to be reported. Foreign currency exchange rate fluctuations create variances in our financial statement line items.
The following tables present the fair value and the gross unrealized losses on our fixed maturities available-for-sale for which an allowance for credit loss has not been recorded by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2023 and December 31, 2022, respectively. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ Less than ​ Greater than or ​ ​ ​ ​ ​ ​ ​ ​ twelve months ​ equal to twelve months ​ Total ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ Fair ​ unrealized ​ Fair ​ unrealized ​ Fair ​ unrealized ​ value losses value losses value losses ​ (in millions) Fixed maturities, available-for-sale (1): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government and agencies ​ $ 316.4 ​ $ 3.1 ​ $ 672.5 ​ $ 69.8 ​ $ 988.9 ​ $ 72.9 Non-U.S. governments ​ 37.4 ​ 1.0 ​ 208.8 ​ 39.8 ​ 246.2 ​ 40.8 States and political subdivisions ​ 563.6 ​ 18.2 ​ 3,622.4 ​ 633.0 ​ 4,186.0 ​ 651.2 Corporate ​ 1,968.7 ​ 57.8 ​ 16,294.4 ​ 2,005.4 ​ 18,263.1 ​ 2,063.2 Residential mortgage-backed pass-through securities ​ 633.0 ​ 4.9 ​ 1,272.1 ​ 157.4 ​ 1,905.1 ​ 162.3 Commercial mortgage-backed securities ​ 246.1 ​ 3.6 ​ 3,319.7 ​ 510.8 ​ 3,565.8 ​ 514.4 Collateralized debt obligations (2) ​ 357.0 ​ 1.4 ​ 2,039.6 ​ 23.9 ​ 2,396.6 ​ 25.3 Other debt obligations ​ 806.1 ​ 14.7 ​ 3,281.9 ​ 475.8 ​ 4,088.0 ​ 490.5 Total fixed maturities, available-for-sale ​ $ 4,928.3 ​ $ 104.7 ​ $ 30,711.4 ​ $ 3,915.9 ​ $ 35,639.7 ​ $ 4,020.6 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded.
(2) Primarily consists of collateralized loan obligations backed by secured corporate loans. ​ 68 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ Less than ​ Greater than or ​ ​ ​ ​ ​ ​ ​ ​ twelve months ​ equal to twelve months ​ Total ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ Fair ​ unrealized ​ Fair ​ unrealized ​ Fair ​ unrealized ​ value losses value losses value losses ​ (in millions) Fixed maturities, available-for-sale (1): ​ ​ ​ ​ ​ ​ U.S. government and agencies ​ $ 316.4 ​ $ 3.1 ​ $ 672.5 ​ $ 69.8 ​ $ 988.9 ​ $ 72.9 Non-U.S. governments ​ 37.4 ​ 1.0 ​ 208.8 ​ 39.8 ​ 246.2 ​ 40.8 States and political subdivisions ​ 563.6 ​ 18.2 ​ 3,622.4 ​ 633.0 ​ 4,186.0 ​ 651.2 Corporate ​ 1,968.7 ​ 57.8 ​ 16,294.4 ​ 2,005.4 ​ 18,263.1 ​ 2,063.2 Residential mortgage-backed pass-through securities ​ 633.0 ​ 4.9 ​ 1,272.1 ​ 157.4 ​ 1,905.1 ​ 162.3 Commercial mortgage-backed securities ​ 246.1 ​ 3.6 ​ 3,319.7 ​ 510.8 ​ 3,565.8 ​ 514.4 Collateralized debt obligations (2) ​ 357.0 ​ 1.4 ​ 2,039.6 ​ 23.9 ​ 2,396.6 ​ 25.3 Other debt obligations ​ 806.1 ​ 14.7 ​ 3,281.9 ​ 475.8 ​ 4,088.0 ​ 490.5 Total fixed maturities, available-for-sale ​ $ 4,928.3 ​ $ 104.7 ​ $ 30,711.4 ​ $ 3,915.9 ​ $ 35,639.7 ​ $ 4,020.6 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 17, Stockholders’ Equity.” Capitalization The following table summarizes our capital structure: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 ​ ​ ($ in millions) Debt: ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 61.1 ​ $ 80.7 ​ Long-term debt ​ 3,930.9 ​ 3,997.0 ​ Total debt ​ 3,992.0 ​ 4,077.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity attributable to PFG ​ 10,916.0 ​ 9,976.7 ​ Total capitalization ​ $ 14,908.0 ​ $ 14,054.4 ​ Debt to equity ​ 37 % 41 % Debt to capitalization ​ 27 % 29 % ​ Pension and OPEB Plan Funding We have defined benefit pension plans covering substantially all of our U.S. employees and certain agents.
“Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 17, Stockholders’ Equity.” Capitalization The following table summarizes our capital structure: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 ​ ​ ($ in millions) Debt: ​ ​ ​ ​ ​ ​ ​ Short-term debt ​ $ 152.7 ​ $ 61.1 ​ Long-term debt ​ 3,955.3 ​ 3,930.9 ​ Total debt ​ 4,108.0 ​ 3,992.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders’ equity attributable to PFG ​ 11,086.4 ​ 10,916.0 ​ Total capitalization ​ $ 15,194.4 ​ $ 14,908.0 ​ Debt to equity ​ 37 % 37 % Debt to capitalization ​ 27 % 27 % ​ Pension and OPEB Plan Funding We have defined benefit pension plans covering substantially all of our U.S. employees and certain agents.
If the current market credit spreads reflecting our own creditworthiness move to zero (tighten), the reduction to net income would be approximately $4.9 million, net of income taxes, based on December 31, 2023, reported amounts.
If the current market credit spreads reflecting our own creditworthiness move to zero (tighten), the reduction to OCI would be approximately $42.0 million, net of income taxes, based on December 31, 2024, reported amounts.
Our investment policy limits total international fixed maturities investments and we are within those internal limits. Exposure to Canada is not included in our international exposure. As of December 31, 2023 and December 31, 2022, our investments in Canada totaled $958.0 million and $982.9 million, respectively. Fixed Maturities Credit Concentrations.
Our investment policy limits total international fixed maturities investments and we are within those internal limits. Exposure to Canada is not included in our international exposure. As of December 31, 2024 and December 31, 2023, our investments in Canada totaled $966.1 million and $958.0 million, respectively. 63 Table of Contents Fixed Maturities Credit Concentrations.
In February 2024, our Board authorized a share repurchase program of up to $1.5 billion of our outstanding common stock, which has no expiration and is in addition to the $287.9 million that remained available under our existing share repurchase authorization as of December 31, 2023. ​ ​ 41 Table of Contents ​ Item 7.
In February 2025, our Board authorized a share repurchase program of up to $1.5 billion of our outstanding common stock, which has no expiration date, and is in addition to the $786.2 million that remained available under existing share repurchase authorizations as of December 31, 2024. ​ ​ 38 Table of Contents ​ Item 7.
Consequently, we do not anticipate the ultimate resolution of audits ongoing or not yet commenced to have a material impact on our net income. See Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 14, Income Taxes” for further discussion. Transactions Affecting Comparability of Results of Operations Acquisition China Pension Joint Venture.
We do not anticipate the ultimate resolution of audits ongoing or not yet commenced to have a material impact on our net income. See Item 8. “Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 14, Income Taxes” for further discussion.
We test for and resolve weaknesses and vulnerabilities within our systems and applications by using network and infrastructure vulnerability testing and adversary emulation, also known as red teaming, and hire a third party to do the same at least once a year.
We test for and resolve vulnerabilities within our systems and applications by using network and infrastructure vulnerability testing and adversary emulation, also known as red teaming and hire a third party to do the same at least once a year. We maintain a vulnerability disclosure program to enhance discovery and remediation of external-facing vulnerabilities.
Any of these situations could result in a charge to net income in a future period. As of December 31, 2023, we had $48,178.6 million in AFS fixed maturities with gross unrealized losses totaling $5,872.9 million. Included in the gross unrealized losses are losses attributable to both movements in market interest rates as well as movement in credit spreads.
Any of these situations could result in a charge to net income in a future period. As of December 31, 2024, we had $46,367.3 million in AFS fixed maturities with gross unrealized losses totaling $6,475.2 million. Included in the gross unrealized losses are losses attributable to both movements in market interest rates as well as movement in credit spreads.
Fixed maturities were diversified by category of issuer, as shown in the following table for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 ​ ​ Carrying amount ​ Percent of total ​ Carrying amount ​ Percent of total ​ ​ ($ in millions) U.S. government and agencies $ 1,231.9 3 % $ 1,432.4 3 % Non-U.S. governments ​ 378.5 1 ​ 400.0 1 ​ States and political subdivisions ​ 5,143.7 11 ​ 4,544.9 10 ​ Corporate - public ​ 13,690.1 29 ​ 15,661.4 35 ​ Corporate - private ​ 11,258.2 24 ​ 9,144.4 20 ​ Residential mortgage-backed pass-through securities ​ 3,061.8 5 ​ 2,172.3 5 ​ Commercial mortgage-backed securities ​ 3,854.5 8 ​ 3,861.9 9 ​ Residential collateralized mortgage obligations ​ 3,214.8 7 ​ 2,666.9 6 ​ Asset-backed securities ​ 5,968.8 12 ​ 4,861.2 11 ​ Total fixed maturities ​ $ 47,802.3 100 % $ 44,745.4 100 % ​ We believe it is desirable to hold residential mortgage-backed pass-through securities due to their credit quality and liquidity as well as portfolio diversification characteristics.
Fixed maturities were diversified by category of issuer, as shown in the following table for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ Carrying amount Percent of total Carrying amount Percent of total ​ ​ ($ in millions) U.S. government and agencies ​ $ 1,102.6 ​ 2 % $ 1,231.9 ​ 3 % Non-U.S. governments ​ 393.0 ​ 1 ​ 378.5 ​ 1 ​ States and political subdivisions ​ 4,836.3 ​ 9 ​ 5,143.7 ​ 11 ​ Corporate - public ​ 13,405.7 ​ 25 ​ 13,690.1 ​ 29 ​ Corporate - private ​ 13,193.4 ​ 25 ​ 11,258.2 ​ 24 ​ Residential mortgage-backed pass-through securities ​ 3,673.6 ​ 7 ​ 3,061.8 ​ 5 ​ Commercial mortgage-backed securities ​ 4,446.8 ​ 8 ​ 3,854.5 ​ 8 ​ Residential collateralized mortgage obligations ​ 4,043.3 ​ 8 ​ 3,214.8 ​ 7 ​ Asset-backed securities ​ 7,865.6 ​ 15 ​ 5,968.8 ​ 12 ​ Total fixed maturities ​ $ 52,960.3 ​ 100 % $ 47,802.3 ​ 100 % ​ We believe it is desirable to hold residential mortgage-backed pass-through securities due to their credit quality and liquidity as well as portfolio diversification characteristics.
Effective December 15, 2017, we changed our listing to the Nasdaq Global Select Market and continue trading under the symbol “PFG”. On February 2, 2024, there were 210,544 stockholders of record of our common stock. We have historically paid cash dividends on our common stock.
Effective December 15, 2017, we changed our listing to the Nasdaq Global Select Market and continue trading under the symbol “PFG”. On January 30, 2025, there were 201,942 stockholders of record of our common stock. We have historically paid cash dividends on our common stock.
The market value of assets held in these trusts was $342.2 million and $336.7 million as of December 31, 2023 and 2022, respectively.
The market value of assets held in these trusts was $348.8 million and $342.2 million as of December 31, 2024 and 2023, respectively.
Typically, a 0.25% increase in this rate would result in a decrease to expense at the same levels. The assumed return on plan assets is based on the fair market value of plan assets as of December 31, 2023.
Typically, a 0.25% decrease in the assumed long-term rate of return would increase the NPPC by approximately $6.7 million. Typically, a 0.25% increase in this rate would result in a decrease to expense at the same levels. The assumed return on plan assets is based on the fair market value of plan assets as of December 31, 2024.
Due to the financial strength and the strong relationships we have with these providers, we are comfortable we have very low risk the financial institutions would be unable or unwilling to fund this facility. The Holding Companies: PFG and PFS.
Most of the banks supporting the credit facility have other relationships with us. Due to the financial strength and the strong relationships we have with these providers, we are comfortable we have very low risk the financial institutions would be unable or unwilling to fund this facility. 53 Table of Contents The Holding Companies: PFG and PFS.

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