Principal Financial Group, Inc. (PFG), incorporated on April 18, 2001, is a provider of retirement savings, investment and insurance products and services. As of December 31, 2011, the Company had approximately 18 million customers. PFG’s United States and international operations concentrate primarily on asset accumulation and asset management. PFG offers a range of individual and group life insurance, individual and group disability insurance, and group dental and vision insurance. It focuses on small and medium-sized businesses providing an array of retirement and employee benefit solutions. The Company operates in four segments: retirement and investor services, principal global investors, principal international, and United States insurance solutions. PFG’s corporate segment consists of the assets and activities that have not been allocated to any other segment. As of December 31, 2011, it owned 26 properties in Des Moines, Iowa, and in various other locations. In April 2011, it sold a portion of our interest in Catalyst Health Solutions, Inc. On July 1, 2011, it finalized the purchase of a 51% interest in Finisterre Capital LLP and Finisterre Holdings Limited. On August 8, 2011, PFG finalized the purchase of its 100% interest in HSBC AFORE, S.A. de C.V. (HSBC AFORE). On October 3, 2011, the Company finalized the purchase of a 74% interest in Origin Asset Management LLP. In February 2013, the Company acquired AFP Cuprum S.A.
Retirement and Investor Services Segment
PFG offers a portfolio of asset accumulation products and services for retirement savings and investment. It offers retirement savings and investment to businesses of all sizes with a concentration on small and medium-sized businesses. The Company offers products and services for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, non-qualified executive benefit plans, and employee stock ownership plan (ESOP) consulting services. For basic investment needs, it offers SIMPLE Individual Retirement Accounts (IRA) and payroll deduction plans.
The Company offers institutional clients, investment-only products, including guaranteed investment contracts (GICs) and funding agreements and it also offers employees of businesses and other individuals, the ability to accumulate funds for retirement and savings through mutual funds, individual annuities and bank products. The Company organizes its retirement and investor services operations into six product and service categories, which include service accumulation, principal funds (its mutual fund business), individual annuities, bank and trust services, investment only, and full service payout.
The Company offers a variety of investment and administrative products for defined contribution pension plans. As of December 31, 2011, it provided service accumulation products to over 29,600 defined contribution pension plans, of which approximately 24,200 were 401(k) plans, covering 3.2 million plan participants, and to over 2,400 defined benefit pension plans, covering over 325,000 plan participants.
PFG offers mutual funds to individuals, businesses and institutional investors for use within variable life and variable annuity contracts, for use in employer-sponsored pension plans, as a rollover investment option, and for general investment purposes. It provides accounting, compliance, corporate governance and product development for all mutual funds it organizes. As of December 31, 2011, its mutual fund operations served approximately 1.1 million mutual fund shareholder accounts. As of December 31, 2011, Principal Funds, Inc. (PFI) was a series mutual fund that offered 63 investment options.
As of December 31, 2011, Principal Variable Contracts Funds, Inc. was a series mutual fund that provided 34 investment options for variable annuity and variable life insurance contracts issued by Principal Life Insurance Company (Principal Life) and other insurance companies not affiliated with Principal Life. Principal Managed Portfolio is an advisory product offered by its registered investment advisor, Princor Financial Services Corporation (Princor), which permits the client to invest only in Principal Funds, Inc. Principal Advisory Select and Principal Dynamic Portfolios are advisory products offered by its investment advisor, Princor that permits the client to invest in an array of investments.
The Company’s individual annuities offer a tax-deferred means of accumulating retirement savings, as well as a tax-efficient source of income during the payout period. PFG offers both fixed and variable annuities to individuals and pension plans. The Company’s bank and trust services, includes Principal Bank and Principal Trust Company. As of December 31, 2011, Principal Bank had over 240,000 customers. As of December 31, 2011, its bank and trust products and services included a suite of consumer checking and savings accounts, money market accounts, certificates of deposit (CDs), individual retirement accounts, small account rollovers from qualified retirement plans, and health savings accounts (HSAs). In addition, PFG offers deposit and loan services to small and medium-sized businesses. The three products, for which the Company provides investment only services includes GICs, funding agreements and other investment only products.
Full service payout products respond to the needs of pension plan participants who, upon retirement or termination of their employment, seek a guaranteed income stream. Plan participants who seek these services include those from pension plans it service, as well as pension plans other providers service. The Company offers single premium group annuities, which are immediate or deferred annuities that provide a current or future specific income amount, fully guaranteed by it. These are available to defined contribution and defined benefit plan participants. The Company makes regular payments to individuals, invest the underlying assets on their behalf and provide tax reporting to them. It also reinsures single premium immediate annuities issued by another insurer.
Principal Global Investors Segment
PFG’s principal global investors segment consists of principal global investors and its affiliates. As of December 31, 2011, its principal global investors, together with its affiliates, Principal Real Estate Investors; Spectrum Asset Management; Post Advisory Group, LLC; Columbus Circle Investors; Edge Asset Management, and Morley Financial Services, managed assets. Principal Global Investors provides focused investment advisory services across a range of asset classes, investment styles and portfolio structures. These services are provided for a fee. It is diversified across three asset classes, which includes Equity Investments, Fixed Income Investments and Real Estate Investments.
Principal International Segment
PFG’s principal international segment has operations in Brazil, Chile, China, Hong Kong Special Administrative Region (SAR), India, Mexico and Southeast Asia. Through the principal international segment, the Company offers retirement products and services, annuities, mutual funds, institutional asset management and life insurance accumulation products. It offers pension, retirement income and asset accumulation products through a co-managed (minority-held) joint venture, Brasilprev Seguros e Previdencia (Brasilprev). In Chile PFG offers long-term savings products, retirement annuities, mutual funds, life insurance accumulation products, mortgage loans and institutional asset management services. Retirement annuities are offered to individuals exiting the pre-retirement accumulation system. As of December 31, 2011, annuity products were distributed through a network of brokers and independent agents numbering approximately 340.
Life insurance accumulation products are also offered to individuals through brokers and financial advisors. PFG sells and a service individual residential mortgage loan in Chile through its independent distribution network, which consists of real estate brokers and developers. It also offers institutional asset management services to pension funds, insurance companies, mutual fund companies and investment platforms. In China the Company offers mutual funds and asset management services to individuals and institutions through a minority held joint venture with China Construction Bank (CCB). It sells mutual funds through CCB.
In Hong Kong SAR, the Company sells contribution pension, mutual fund and institutional asset management products. PFG sells mutual funds to retail customers through strategic alliances with banks. In India, the Company offers mutual funds and asset management services to both retail and corporate customers. In Mexico, the Company offers defined contribution pension products, mutual funds, annuities and asset management services to institutional clients. In Southeast Asia it offers conventional and Islamic mutual funds through its minority-held joint venture with CIMB Group. It also market mutual funds through wholesale bank channels.
United States Insurance Solutions Segment
The Company’s United States Insurance Solutions segment offers individual life insurance and specialty benefits, which include group dental, group vision, group life, group disability, wellness and individual disability insurance. It focuses on providing insurance solutions for small and medium-sized businesses. As of December 31, 2011, its United States operations administered approximately 542,000 individual life insurance policies. PFG offers a variety of individual life insurance products, including universal life insurance, variable universal life insurance and term life insurance. The Company’s universal and variable universal life insurance products offer the policyholder the option of adjusting both the premium and the death benefit amounts of the insurance contract. Its traditional life insurance includes participating whole life, adjustable life products and non-participating term life insurance products.
The Company’s specialty benefits insurance includes group dental, vision, life and disability insurance and individual disability insurance. PFG offers traditional employer sponsored and voluntary products for group dental, vision, life and disability. It also offers group dental, vision, and disability on a fee-for-service basis. PFG’s group dental and vision insurance plans provide partial reimbursement for dental and vision expenses. As of December 31, 2011, it had nearly 33,000 group dental and vision insurance policies. Its group life insurance provides coverage to employees and their dependents for a specified period. As of December 31, 2011, PFG had nearly 44,000 group life insurance policies.
The Company’s group disability insurance provides a benefit to insured employees who become disabled. In most instances, group disability insurance benefit is in the form of a monthly income. Its group disability products include both short-term and long-term disability, offered on both an employer paid and voluntary basis. Its individual disability insurance products provide a benefit to the insured member in the event he/she becomes disabled. In most instances, individual disability insurance benefit is in the form of a monthly income. As of December 31, 2011, the Company served approximately 140,000 individual disability policyholders. Its Principal Wellness Company contributes in providing wellness screenings, counseling and services to employers and their employees. PFG offers administration of group dental, disability and vision benefits on a fee-for-service basis.
The Company competes with Fidelity, ING, Mass Mutual, Vanguard, John Hancock, Black Rock, PIMCO, J.P. Morgan Chase, Morgan Stanley Investment Management, T. Rowe Price, Lincoln Financial Group, AXA, Allianz, American International Group, Inc., Assurant, Guardian, UNUM, Lincoln Financial Group, MetLife, Sun Life and Prudential.
Principal Financial Group Inc
711 High Street
DES MOINES IA 50392