Sector: Financials | Focus: Life & Health Insurance
HQ: Des Moines, Iowa
Financial Risks
Principal Financial Group faces risks from adverse capital and credit market conditions, global market fluctuations (equity, bond, real estate), interest rate/credit spread changes, investment portfolio impairments, deferred tax asset impairments, unfavorable insurance/annuity experience, changes in DAC/actuarial balances, regulatory changes, litigation/investigations, tax audits, potential takeover difficulties, competition, credit rating downgrades, client terminations, international business risks, fraud, joint ventures, funding deficiencies, reinsurer defaults/rate increases, acquisitions, reinsurance transaction administration, catastrophic events, climate change, technological/societal disruptions, reputational damage, intellectual property infringement, employee/sales representative retention issues, IT/infrastructure disruptions, and vendor relationship/data security risks.
Financial Upside
Potential for increased investment income from higher yields and average invested assets, favorable market performance, and higher inflation-based returns. Increased fee revenue from higher average monthly account values and AUM. Favorable market conditions could also increase the value of financial assets held at fair value. Higher interest rates could increase investment income and reduce hedging costs.
