- AM Best affirms Principal Financial Group, Inc.'s (PFG, Financial) ratings with a stable outlook.
- Principal Life Insurance and Principal National Life Insurance maintain A+ (Superior) ratings.
- AM Best acknowledges Principal's strong capitalization and diverse business profile.
AM Best has affirmed the financial strength rating of A+ (Superior) and the long-term issuer credit ratings (Long-Term ICRs) of "aa" (Superior) for Principal Life Insurance Company and Principal National Life Insurance Company, subsidiaries of Principal Financial Group, Inc. (PFG) [NASDAQ: PFG]. The outlook for these credit ratings remains stable, reflecting Principal's robust balance sheet and strong operating performance.
In addition to the subsidiary ratings, Principal Financial Group, Inc. and Principal Financial Services, Inc. have retained their Long-Term ICRs of "a" (Excellent) and the group's short-term issue credit rating also remains stable. AM Best recognized Principal's strong risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), despite capital growth being limited by dividends to the parent company. The group's strategic shift towards fee-based products and reinsurance arrangements to lower product risk have been positively noted.
Principal's robust risk management, diverse business structure, and significant capital access at the holding company level bolster its financial flexibility. However, its higher allocation to commercial mortgages compared to peers presents a nuanced risk. Looking ahead, AM Best acknowledged potential impacts from political and macroeconomic risks in Principal's international markets, which could influence future performance.
Principal Financial Group, Inc. has received "a" (Excellent) ratings on its senior unsecured notes due between 2025 and 2053. Similarly, Principal Life Global Funding I and II, along with Principal Financial Global Funding, LLC, continue to hold "aa" (Superior) ratings on their program ratings and outstanding notes.
