Principal Financial Group The

The Principal's office

An insurance and financial services goliath, The Principal Financial Group employs 14,800 people worldwide and offers services in 13 countries, including Australia, Brazil, Chile, China, Japan, Indonesia, Malaysia, Mexico and the United Kingdom.  Principal provides a broad range of insurance and financial products and services through a network of subsidiaries led by the Principal Life Insurance Company.  With $270.4 million worth of insurance in force and 5.2 million covered members in June 30, 2009, Principal Life ranks as the eighth largest life insurer in the United States.  The firm's asset management division, which manages money for institutional investors, oversees about $257.7 billion in assets as of June 2009.  Its family of mutual funds targets individual investors.  With some 800,000 shareholders, the firm ranks as one of the top 100 fund managers in the United States.  In May 2009, Principal was ranked on Fortune's Largest 500 Corporations, coming in at No. 273.


Founded on principle

Founded by Edward Temple as the Bankers Life Association in 1879, the entity originally relied on volunteers to provide low-cost protection to bankers and their families.  Gradually offering insurance to non-bankers, the association became a company in 1911.  Bankers Life began offering group life insurance in 1941 and added individual accident and health insurance in the 1950s and 1960s amidst rapid growth.  In 1986, the holding company was renamed The Principal Financial Group, with its largest unit becoming Principal Mutual Life Insurance.  In 1998, the company launched an online banking arm which had gathered $13.1 million in customer assets by the end of the year.


Trimming the fat

At the turn of the 21st century, like many of its competitors, Principal was rocked by the WorldCom and Enron scandals and suffered from payouts in the wake of the September 11 World Trade Center attacks.  As a result, the company's revenue fell flat for 2002, and its net income was down in 2002, from $359 million in 2001 to $142 million.  Principal narrowed its focus and trimmed some fat when it sold the majority of its BT Financial Group subsidiary, as well as its retail mortgage banking operations.  Not content with the sale of the retail mortgage segment, Principal sold off the entire remains of its mortgage banking business to rival financial services giant Citigroup in July 2004.  The $1.27 billion deal cemented Principal's focus on retirement products.


Going international

In February 2004, the company announced it had acquired Hong Kong-based fund manager Dao Heng.  By June 2004, having about $2 billion worth of assets,  Principal ranked as the second largest pension company in Brazil and had earned the same distinction for new annuity sales in Chile.  By July 2004, the company had nearly 5 million international customers, an increase of 35 percent from 2002.  Taking a cue from its success in the domestic retirement segment, in December 2004, the firm announced that it had agreed to buy the Chicago-based pension and retirement business of Dutch Bank ABN AMRO.  While financial terms were not disclosed, the acquisition added about 300 employer-sponsored retirement plans to its administration which represents approximately $3.6 billion in account values.  Earlier, in October 2004, the firm had also announced its intention to acquire a majority interest in Columbus Circle Investors, a Connecticut-based asset management firm specializing in growth equities, with more than $3 billion in assets under management.  Principal entered a joint venture with China Construction Bank (CCB), the country's third largest, in August 2005.  Long enamored with the growing pension and mutual fund markets in China, the business represented Principal's first entry into the country.  Under the agreement, Principal would take 25 percent interest in CCB-Principal Asset Management Company.  China's mutual fund management market doubled in 2004 to nearly $40 billion in assets under management.


Record numbers

Principal brought in strong results in 2005, its seventh consecutive year of record operating earnings, up some 13 percent from 2004 to $862 million.  Assets under management grew to $28 billion, and the company also celebrated a record net income available to common stockholders of $901.3 million.  Each of the company's primary retirement and investment products also hit record sales in 2005: $3.4 billion for mutual funds; $2 billion for individual annuities; and $6.1 billion for organic full service accumulation.  In 2006, the company's assets under management reached $256.9 billion, up by 32 percent in the previous year.  While 2007 was marked by unfavorable credit conditions, Principal's financial results remained strong, with $2.9 billion operating revenue compared to $2.53 billion last year.  In 2008, however, its operating revenue dropped 4 percent, and its assets under management also declined 21 percent.  Still, the company managed to increase its assets by 9 percent in the second quarter of 2009, completing two capital raises amounting to $1.9 billion.


Principal perks

Most sources report flexible hours (as long as the 9 a.m.-to-3 p.m. range is covered) and flexible schedules (employees can plan a four-day workweek).  Telecommuting is also allowed "when necessary."

Employees say the dress code is "business casual."  One informant adds that some areas, "particularly those dealing with higher level investment matters," require formal business attire.  But other units allow for jeans if the work merits it and the employee is out of customer/client view.  The company also has "jeans day Fridays," when employees may buy a jeans day for a $1 donation per day to charity on Thursdays; sometimes, the company also declares "jeans weeks."

Other company perks include yearly eight hours of volunteer time off, a break room called "High Street Retreat," on-site fitness centers, full cafeterias, on-site pharmacies, dry cleaning drop-off service and an on-site daycare center.



Principal Financial Group The


711 High Street
Des Moines, IA 50392
Phone: (515) 247-5111
Fax: (515) 246-5475
www.principal.com

STATS


  • Employer Type: Public
  • Stock Symbol: PFG
  • Stock Exchange: NYSE
  • Chairman, President and CEO: Larry D. Zimpleman
  • 2008 Employees: 16,234

Major Office Locations

  • Des Moines, IA

Key Financials

  • 2008 Income: $458 million
  • 2008 Revenue: $9,936 million

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