Principal Financial Group delivered annual non-GAAP operating earnings of US$8.55 per diluted share for 2025, marking a 12% increase from the prior year and reaching the upper end of its 9-12% target range, as margin expansion across business segments offset cost pressures.
The Des Moines-based insurer returned more than $1.5 billion to shareholders during the year through $900 million in share repurchases and $700 million in common stock dividends, positioning itself among the industry's more aggressive capital deployers.
Fourth quarter non-GAAP operating earnings per diluted share reached $2.24, excluding significant variances, up 7% from the same period in 2024. Reported fourth quarter earnings rose 13%.
The results were underpinned by strong operational performance across Principal's three main business lines, company filings show. Retirement and Income Solutions pre-tax operating earnings climbed 6% year-over-year to $1.22 billion for full year 2025, with transfer deposits of $35 billion rising 9% from 2024.
Principal Asset Management posted investment management gross sales of $127 billion, up 16% from 2024, data from the insurer reveals. Operating margin in the segment expanded 90 basis points to 36%, while assets under management in International Pension surged 24% to $154 billion.
The company's Benefits and Protection division saw Specialty Benefits pre-tax operating earnings grow 11% to $530 million for the full year, with operating margin expanding 170 basis points to 16% on strong underwriting experience, according to financial statements.
The 2025 performance represents a deceleration from the prior year's exceptional growth. Non-GAAP operating earnings per diluted share grew approximately 16% from 2023 to 2024, compared to 12% growth in 2025, industry data shows.
Principal Financial ranked 20th among top US insurers by market capitalization at $20.3 billion as of July 2025, filings indicate.
"Principal delivered strong 2025 results," said Deanna Strable (pictured above), chair, president and chief executive. "We achieved our objectives across earnings growth, return on equity, and free capital flow, supported by consistent execution, sustained momentum, and the strength of our diversified businesses."
The company announced a dividend increase of $0.01 to $0.80 per share for the first quarter of 2026, representing a 7% rise from the first quarter 2025 dividend.
For 2026, Principal Financial maintained its guidance targeting 9-12% annual non-GAAP operating earnings per diluted share growth. The company set a free capital flow conversion target of 75-85% and a non-GAAP return on equity target of 15-17%.
Capital deployment guidance for 2026 ranges from $1.5 billion to $1.8 billion, including planned share repurchases of $800 million to $1.1 billion and a dividend payout ratio of 40%.
The company reported assets under management of $781 billion and excess and available capital of $1.6 billion.
