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Principal Financial Group Inc  (PFG)
Other Ticker:  
 
    Sector  Financial    Industry Accident & Health Insurance
 
 

Principal Financial Group Inc Segments

 
Retirement & Investor Services
   59.23 % of total Revenue
International Asset Management
   14.95 % of total Revenue
Life & Health Insurance
   25.83 % of total Revenue
 

Business Segments (Sep. 30, 2015)
Revenues
(in millions $)
III. Quarter
%
(of total Revenues)
(Sep. 30, 2015)
Income
(in millions $)
III. Quarter
%
(Profit Margin)
Retirement & Investor Services
1,957.50 59.23 % 163.30 8.34 %
International Asset Management
494.00 14.95 % 76.20 15.43 %
Life & Health Insurance
853.60 25.83 % 114.50 13.41 %
Total
3,305.10 100 % 354.00 10.71 %

• View Income Statement • View Competition by Segment • View Annual Report

Growth rates by Segment (Sep. 30, 2015)
Y/Y Revenue
%
III. Quarter
Q/Q Revenue
%
(Sep. 30, 2015)
Y/Y Income
%
III. Quarter
Q/Q Income
%
Retirement & Investor Services
47.77 % -7.17 % -20.07 % -24.64 %
International Asset Management
5.53 % -1.87 % -23.11 % -16.08 %
Life & Health Insurance
4 % -0.54 % 37.45 % 94.73 %
Total
26.46 % -4.76 % -8.46 % -3.36 %

• View Growth rates • View Competitors Segment Growth • View Market Share

To get more information on Principal Financial Group Inc's Retirement & Investor Services, International Asset Management, Life & Health Insurance, Total segment. Select each division with the arrow.

  Principal Financial Group Inc's

Business Segments Description



Retirement and Investor Services Segment

Our asset accumulation activities in the U.S. date back to the 1940s when we first began providing pension plan products and services. We now offer a comprehensive portfolio of asset accumulation products and services for retirement savings and investment:

To businesses of all sizes with a concentration on small and medium-sized businesses, we offer products and services for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans and employee stock ownership plan ("ESOP") consulting services. For more basic investment needs, we offer SIMPLE Individual Retirement Accounts ("IRA") and payroll deduction plans;

To large institutional clients, we also offer investment-only products, including guaranteed investment contracts ("GICs") and funding agreements and

To employees of businesses and other individuals, we offer the ability to accumulate funds for retirement and savings through mutual funds, individual annuities and bank products.
We organize our Retirement and Investor Services operations into six product and service categories: full service accumulation, Principal Funds (our mutual fund business), individual annuities, bank and trust services, investment only and full service payout.

Full Service Accumulation

Products

We offer a wide variety of investment and administrative products for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans and ESOPs. A 403(b) plan is a plan described in Section 403(b) of the Internal Revenue Code that provides retirement benefits for employees of tax-exempt organizations and public schools.

Full service accumulation products respond to the needs of plan sponsors seeking both administrative and investment services for defined contribution plans or defined benefit plans. The investment component of both the defined contribution and defined benefit plans may be in the form of a general account, separate account, a mutual fund offering or a collective investment trust. In addition, defined contribution plans may also offer their own employer security as an investment option.

INTERNATIONAL ASSET MANAGEMENT AND ACCUMULATION SEGMENT

Our International Asset Management and Accumulation segment consists of Principal  International and the discontinued operations of BT Financial Group. Principal International has subsidiaries in Argentina, Chile, Mexico, Hong Kong and India  and joint ventures in Brazil, Japan and Malaysia. We focus on countries with favorable demographics and a trend toward private sector defined contribution  pension systems. We entered these countries through acquisitions, start-up operations and joint ventures.

PRINCIPAL INTERNATIONAL

The activities of Principal International reflect our efforts to accelerate the growth of our assets under management by capitalizing on the international trend toward private sector defined contribution pension systems. Through Principal International, we offer retirement products and services, annuities, long-term mutual funds and life insurance. We operate through subsidiaries in Argentina, Chile, Mexico, Hong Kong and India and joint ventures in Brazil, Japan and Malaysia.

PRODUCTS, MARKETS AND DISTRIBUTION

ASIA/PACIFIC REGION

HONG KONG. Our subsidiary in Hong Kong is actively competing in the defined contribution pension plan market. The government requires employers and employees each to contribute 5% of an employee's income to a Mandatory Provident Fund. We target small and medium-sized employers and distribute products through strategic  alliances with insurance companies, mutual funds or banks, direct marketing and through our own sales representatives. Our strategic partners help distribute  our Mandatory Provident Fund products and services, or use our administrative  and investment services in their own products. Our Mandatory Provident Fund  products and services are marketed by agents under the various distribution  arrangements we have with our strategic partners. On January 31, 2004, our wholly-owned  subsidiary, Principal Asset Management Company (Asia) Limited, purchased a 100% ownership of Dao Heng Fund Management ("DHFM") in Hong Kong from Guoco Group Limited. The acquisition of DHFM increases our presence in the Hong Kong defined contribution pension market.


INDIA. Our subsidiary in India competes in the mutual fund market managing and administering funds for both individuals and corporations. In addition to the current mutual fund business, we are positioning to compete in the emerging pension and long-term savings market in India. We sell our mutual funds through regional offices and regional bank offices located throughout India.

JAPAN. We own 50% of ING/Principal Pensions Company, Ltd., which sells a new defined contribution pension plan as a result of legislation adopted in June 2001. This company targets small and medium-sized businesses and offers full-service  record-keeping and plan administration. Our joint venture partner is ING Insurance  International B.V., a member of the ING Group. Our pension sales representatives  distribute our products through ING Life's independent agents to existing ING Life business clients and also through additional third-party distribution relationships  developed by ING/Principal Pensions Company, Ltd.

MALAYSIA. We own 30% of Commerce Asset Fund Managers Sendirian Berhad and Commerce Trust Berhad, two mutual fund and asset management companies. Our joint venture  partner is Commerce Asset Holdings, a large Malaysian bank holding company.  The company markets mutual funds through wholesale bank channels and its own sales force.

LATIN AMERICA

ARGENTINA. We own a life insurance company and a retirement annuity company (our "Companies"). Principal Life Compania de Seguros, S.A., our life  insurance company, targets small and medium-sized employers. We sell group and individual life insurance products through independent brokers. Principal Retiro Compania de Seguros de Retiro, S.A., our annuity company, provides annuities  to individuals exiting the compulsory private pre-retirement asset accumulation system. While recent adverse economic and political events in Argentina are expected to impact our ongoing operations, we have been positioning our Companies to work through this environment since mid-2001 and expect to manage revenues and expenses accordingly.

BRAZIL. We own 46% of BrasilPrev Seguros e Previdencia S.A. ("BrasilPrev"),  a private pension company in Brazil, through a joint venture arrangement with Banco do Brasil, Brazil's largest bank. We are Banco do Brasil's exclusive partner for distributing pension, retirement and asset accumulation products.
BrasilPrev provides defined contribution products and annuities for the retirement needs of employers and individuals. Banco do Brasil's employees sell directly  to individual clients through its bank branches. In addition, BrasilPrev reaches  corporate clients through two wholesale distribution channels: (1) a wholesale  distribution channel distributes products through a network of independent brokers who sell to the public, and (2) another channel coordinates with Banco do Brasil's  corporate account executives to reach Banco do Brasil's existing corporate clients.

CHILE. We own Principal Compania de Seguros de Vida Chile S.A., a Chilean insurance  company, that primarily sells retirement annuities to individuals exiting the  pre-retirement accumulation system. In July 1998, we acquired Compania de Seguros  de Vida El Roble, S.A., or El Roble, a Chilean life insurance company. We have fully integrated the operations of El Roble with those of Principal Compania  de Seguros de Vida Chile S.A. We distribute our annuity products through a network  of 69 captive agents and 386 independent agents as of December 31, 2003. We utilize sales representatives who sell through brokers, and we also market life  insurance products to small and medium-sized businesses and to individuals through brokers. Based upon assets, we were ranked as the fourth largest life insurance  company in Chile as of September 30, 2003, according to the Superintendencia de Valores y Seguros, the Chilean regulatory agency for insurance companies. We also own 100% of Principal Creditos Hipotecarios S.A. Through this business, we originate, sell and service mortgage loans in Chile. In November 2001, we  acquired 70% of Tanner Administradora de Fondos Mutuos S.A., a well-known Chilean  Mutual Funds Administrator, as part of our strategy to enter the Voluntary Defined Contribution Market in 2002.

MEXICO. We own Principal Mexico Compania de Seguros S.A. de C.V., ("Principal Seguros"), a life insurance company, Principal Afore S.A. de C.V., a private pension company which manages and administers individual retirement accounts under the mandatory privatized social security system in effect for all employees  in Mexico, and Principal Pensiones S.A. de C.V., ("Principal Pensiones"),  an annuity company. Our focus is on both pre-retirement and post-retirement  savings plans. We distributed Principal Afore S.A. de C.V.'s products and services  through a dedicated sales force of approximately 1,700 sales representatives as of December 31, 2003, who sell directly to individuals. As of December 31,  2003, Principal Pensiones used 138 employed sales representatives and independent  brokers to distribute annuities directly to customers. Our life insurance company,  Principal Seguros, distributes its products through an array of independent  agents and brokers. In May 2002, we acquired 100% of Zurich Afore S.A. de C.V.  from Zurich Financial Services to strengthen our competitive position in the Mexican pension market. On February 28, 2003, we acquired AFORE Tepeyac S.A. de C.V. from Mapfre American Vida, Caja Madrid and Mapfre Tepeyac . On July 31, 2003, we acquired S.I. Genera, S.A. de C.V. (Genera) a mutual fund company that manages and administers funds for both individuals and corporations, from  Vector, Casa de Bolsa, S.A. de C.V. We distribute Genera's products and services through a sales force of approximately 50 employees who are distributed throughout the major cities in the country.

LIFE AND HEALTH INSURANCE SEGMENT

Our Life and Health Insurance segment offers (1) individual and group life insurance (2) group health insurance and (3) individual and group disability insurance throughout the U.S.

INDIVIDUAL AND GROUP LIFE INSURANCE

We began as an individual life insurer in 1879. We began as a group life insurer in 1941.

Our individual and group life insurance products include: universal and variable universal life insurance, traditional life insurance and group life insurance.


GROUP HEALTH INSURANCE

We began offering group health insurance in 1941. We offer a wide array of group health insurance products including medical, dental and vision insurance.  In addition, we offer administrative services on a fee-for-service basis to large employers in the U.S.

Our U.S. group health insurance products and services include: medical insurance, dental and vision insurance and fee-for-service.


INDIVIDUAL AND GROUP DISABILITY INSURANCE

We began as an individual disability insurer in 1952. We began as a group disability  insurer in 1941.

PRODUCTS AND SERVICES

INDIVIDUAL DISABILITY INSURANCE. Individual disability insurance products provide  a benefit in the event of the disability of the insured. In most instances,  this benefit is in the form of a monthly income.

MORTGAGE BANKING SEGMENT

We began our residential lending activities in 1936. Our Mortgage Banking segment is primarily engaged in residential loan production and loan servicing in the U.S. Through our wholly-owned subsidiary, Principal Residential Mortgage, Inc.,  ("Principal Residential Mortgage"), we originate, purchase, sell and service mortgage loans. We principally originate "A" quality home mortgages and do not originate subprime mortgages to any material degree, nor do we service or purchase any subprime mortgage loans. "A" quality loans are generally defined as loans eligible for sale to the Federal National Mortgage Association, ("Fannie Mae"), Federal Home Loan Mortgage Corporation,  ("Freddie Mac") and using the Government National Mortgage Association,  ("Ginnie Mae") Program. 

LOAN PRODUCTION

Our loan production strategy is to manage our three distribution channels: correspondent lending, wholesale lending and Principal Residential Mortgage Direct, in a manner that is consistent with our loan servicing strategy. We obtain new customers through each of our three distribution channels, with the majority being obtained through our correspondent lending and wholesale lending operations.


CORRESPONDENT LENDING. Our "Correspondent Lending Service Center" on our Internet website currently offers online access to loan registration, an interactive sellers' procedure manual, seller-specific rate/price quotations and simplified contact information. We are developing online technologies to offer automated underwriting systems, pipeline reporting and account management tools and electronic business-to-business capabilities for our correspondent  sellers. Additionally, we are entering into numerous alliances with third-party  service providers to further streamline processes, improve productivity and provide outstanding customer service.

WHOLESALE. Mortgage loan brokers are approved only after a review of their  reputation and mortgage lending expertise and financial condition. Through the  "Wholesale Lending Service Center" on our Internet website, wholesale lenders can retrieve contact information and seller specific interest rate quotations.  We have developed plans and are working to provide online registration, automated  underwriting systems, pipeline reporting and account management services to our brokers. We are also developing electronic document delivery and execution  capabilities for wholesale sellers to exchange secure documents with wholesale purchasers.

PRINCIPAL RESIDENTIAL MORTGAGE DIRECT. Our Mortgage Direct channel originates prime credit quality mortgage loans through direct contact with current and new customers via telephone and the Internet. The goal of our Internet channel is to give our current customers access to a customer-focused website, allowing them to obtain home financing quickly, confidently and at an attractive value, while preserving acceptable profit margins for us. We believe that providing current customers with choice, ease of access, convenient processes and simplified procedures will encourage a growing percentage of our customers to choose us for all of their home financing needs.


LOAN SERVICING

We service residential mortgages in return for a servicing fee. Our servicing division receives and processes mortgage payments for home owners, remits payments to investors and others, holds escrow funds, contacts delinquent borrowers,  supervises foreclosures and property dispositions and performs other miscellaneous duties related to loan administration. We acquire only "A" or "A-" quality home mortgages for servicing. This practice simplifies the systems necessary  for servicing and reduces the amount of time and money spent on collections and foreclosure administration activities. Our goal is to service, on a non-recourse basis, a majority of the loans that we originate.

CORPORATE AND OTHER SEGMENT

Our Corporate and Other segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate and Other segment primarily reflect our financing activities (including interest expense), income on capital not allocated to other segments, intersegment eliminations,  income tax risks and certain income, expenses and other after-tax adjustments not allocated to the segments based on the nature of such items.

   

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