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AM Best Affirms Credit Ratings of Principal Financial Group, Inc. and Its Subsidiaries

PFG
  • AM Best affirmed the A+ (Superior) Financial Strength Rating & "aa" (Superior) Long-Term Issuer Credit Ratings for Principal Life Insurance Company & Principal National Life Insurance Company.
  • The agency affirmed the "a" (Excellent) Long-Term Issuer Credit Ratings for Principal Financial Services, Inc. & Principal Financial Group, Inc. (PFG), along with the group's Long-Term Issue Credit Ratings & Short-Term Issue Credit Rating.
  • The outlook for all affirmed credit ratings is stable.
  • Principal's balance sheet strength is assessed as very strong, supported by favorable business profiles, strong operating performance, & very strong enterprise risk management.
  • Capitalization is viewed as strong based on the Best's Capital Adequacy Ratio, though growth has been limited by dividends to the parent company.
  • The group reduced product risk in 2022 by ceding fixed annuity & universal life insurance blocks with secondary guarantees via reinsurance, shifting focus toward fee-based products.
  • Favorable financial flexibility, strong liquidity, & significant excess capital at the holding company level bolster the balance sheet assessment, offset slightly by elevated mortgage allocations & captive reinsurer usage.
  • Principal maintains consistent profitability driven by diverse lines of business, distribution channels, & an expanding international presence.
  • Affirmed Long-Term Issue Credit Ratings include "a" (Excellent) on multiple senior unsecured & secured notes issued by PFG due between 2026 & 2053.
  • Program ratings for Principal Life Global Funding I & II, Principal Financial Global Funding, LLC, Principal Financial Global Funding II LLC, & Principal Life Income Funding Trusts were affirmed at "aa" (Superior).
  • Principal Life Insurance Company retained an AMB-1+ (Strongest) Short-Term Commercial Paper rating.
  • Indicative Long-Term Issue Credit Ratings on universal shelf registration securities were affirmed, including "a" (Excellent) for senior unsecured debt, "a-" (Excellent) for subordinated debt, & "bbb+" (Good) for preferred stock of PFG.
  • Preferred securities for Principal Capital I, II, & III were affirmed at "aa" (Superior).