Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-16725 | |
Entity Registrant Name | PRINCIPAL FINANCIAL GROUP, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 42-1520346 | |
Entity Address, Address Line One | 711 High Street | |
Entity Address, City or Town | Des Moines | |
Entity Address, State or Province | IA | |
Entity Address, Postal Zip Code | 50392 | |
City Area Code | 515 | |
Local Phone Number | 247-5111 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | PFG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 242,774,745 | |
Entity Central Index Key | 0001126328 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Position - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Fixed maturities, available-for-sale | $ 65,396.9 | $ 62,889.9 |
Fixed maturities, trading | 787.9 | 760.7 |
Equity securities (2023 and 2022 include $761.6 million and $740.0 million related to consolidated variable interest entities) | 1,733.3 | 1,708.6 |
Mortgage loans (2023 and 2022 include $1,166.7 million and $1,179.7 million related to consolidated variable interest entities) | 20,603.5 | 20,629.8 |
Real estate (2023 and 2022 include $710.3 million and $649.0 million related to consolidated variable interest entities) | 2,300.1 | 2,239.7 |
Policy loans | 788 | 784.7 |
Other investments (2023 and 2022 include $396.6 million and $375.9 million related to consolidated variable interest entities) | 6,421.5 | 6,122 |
Total investments | 98,031.2 | 95,135.4 |
Cash and cash equivalents (2023 and 2022 include $44.5 million and $32.4 million related to consolidated variable interest entities) | 4,640.9 | 4,848 |
Accrued investment income | 797.7 | 742.1 |
Reinsurance recoverable and deposit receivable | 20,881.5 | 21,154 |
Premiums due and other receivables | 3,837.6 | 3,933.3 |
Deferred acquisition costs | 3,948.3 | 3,948 |
Market risk benefit asset | 107.3 | 109.2 |
Property and equipment | 986.2 | 996.1 |
Goodwill | 1,636.1 | 1,598.2 |
Other intangibles | 1,535.5 | 1,533.3 |
Separate account assets (2023 and 2022 include $36,276.3 million and $34,193.8 million related to consolidated variable interest entities) | 162,000.8 | 155,375.1 |
Other assets | 1,005.1 | 1,205.6 |
Total assets | 299,408.2 | 290,578.3 |
Liabilities | ||
Contractholder funds (2023 and 2022 include $329.2 million and $334.0 million related to consolidated variable interest entities) | 42,958 | 42,825.3 |
Future policy benefits and claims | 44,699.9 | 43,025.3 |
Market risk benefit liability | 194.4 | 207.4 |
Other policyholder funds | 930.9 | 911.5 |
Short-term debt | 24.2 | 80.7 |
Long-term debt | 4,688.6 | 3,997 |
Income taxes currently payable | 24.6 | 19.2 |
Deferred income taxes | 1,417.1 | 1,324.2 |
Separate account liabilities (2023 and 2022 include $36,276.3 million and $34,193.8 million related to consolidated variable interest entities) | 162,000.8 | 155,375.1 |
Funds withheld payable | 20,524.4 | 20,436.1 |
Other liabilities (2023 and 2022 include $101.2 million and $86.8 million related to consolidated variable interest entities) | 11,411.8 | 12,096.7 |
Total liabilities | 288,874.7 | 280,298.5 |
Redeemable noncontrolling interest (2023 and 2022 include $250.9 million and $235.3 million related to consolidated variable interest entities) | 272.7 | 262 |
Stockholders' equity | ||
Common stock, par value $0.01 per share; 2,500.0 million shares authorized; 491.5 million and 489.8 million shares issued as of 2023 and 2022; 243.1 million and 243.5 million shares outstanding as of 2023 and 2022 | 4.9 | 4.9 |
Additional paid-in capital | 10,790.9 | 10,740.4 |
Retained earnings | 16,398.8 | 16,697.3 |
Accumulated other comprehensive income (loss) | (6,201.3) | (6,879) |
Treasury stock, at cost (248.4 million and 246.3 million shares as of 2023 and 2022) | (10,775.4) | (10,586.9) |
Total stockholders' equity attributable to Principal Financial Group, Inc. | 10,217.9 | 9,976.7 |
Noncontrolling interest | 42.9 | 41.1 |
Total stockholders' equity | 10,260.8 | 10,017.8 |
Total liabilities and stockholders' equity | $ 299,408.2 | $ 290,578.3 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Position (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Equity securities | $ 1,733.3 | $ 1,708.6 |
Mortgage loans | 20,603.5 | 20,629.8 |
Real estate | 2,300.1 | 2,239.7 |
Other investments | 6,421.5 | 6,122 |
Cash and Cash Equivalents, at Carrying Value | 4,640.9 | 4,848 |
Separate account assets | 162,000.8 | 155,375.1 |
Contractholder funds | 42,958 | 42,825.3 |
Separate account liabilities | 162,000.8 | 155,375.1 |
Other liabilities | 11,411.8 | 12,096.7 |
Redeemable noncontrolling interest | $ 272.7 | $ 262 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 2,500 | 2,500 |
Common stock, issued (in shares) | 491.5 | 489.8 |
Common stock, outstanding (in shares) | 243.1 | 243.5 |
Treasury stock (in shares) | 248.4 | 246.3 |
Aggregate consolidated variable interest entities | ||
Equity securities | $ 761.6 | $ 740 |
Mortgage loans | 1,166.7 | 1,179.7 |
Real estate | 710.3 | 649 |
Other investments | 396.6 | 375.9 |
Cash and Cash Equivalents, at Carrying Value | 44.5 | 32.4 |
Separate account assets | 36,276.3 | 34,193.8 |
Contractholder funds | 329.2 | 334 |
Separate account liabilities | 36,276.3 | 34,193.8 |
Other liabilities | 101.2 | 86.8 |
Redeemable noncontrolling interest | $ 250.9 | $ 235.3 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Revenues | |||
Premiums and other considerations | $ 1,448.6 | $ 887.4 | |
Fees and other revenues | 995.3 | 1,219.2 | |
Net investment income (loss) | 986.7 | 1,125.5 | |
Net realized capital gains (losses) | [1] | (66) | (136.6) |
Net realized capital gains (losses) on funds withheld assets | [1] | 81 | |
Change in fair value of funds withheld embedded derivative | (626.6) | 0 | |
Total revenues | 2,819 | 3,095.5 | |
Expenses | |||
Benefits, claims and settlement expenses | 1,773.9 | 1,490.7 | |
Net liability for future policy benefits remeasurement (gain) loss | (5.6) | 13.4 | |
Market risk benefit remeasurement (gain) loss | (2.9) | 8.9 | |
Dividends to policyholders | 23.2 | 23.1 | |
Operating expenses | 1,242.9 | 1,181 | |
Total expenses | 3,031.5 | 2,717.1 | |
Income (loss) before income taxes | (212.5) | 378.4 | |
Income taxes (benefits) | (78) | 35.2 | |
Net income (loss) | (134.5) | 343.2 | |
Net income (loss) attributable to noncontrolling interest | 5.6 | 4.5 | |
Net income (loss) attributable to Principal Financial Group, Inc. | $ (140.1) | $ 338.7 | |
Earnings per common share | |||
Basic earnings per common share (in dollars per share) | $ (0.58) | $ 1.31 | |
Diluted earnings per common share (in dollars per share) | $ (0.58) | $ 1.28 | |
[1] Includes realized and unrealized gains (losses). See Note 3, Investments, for further details. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income (loss) | $ (134.5) | $ 343.2 |
Other comprehensive income (loss), net: | ||
Net unrealized gains (losses) on available-for-sale securities | 1,078.1 | (4,112.2) |
Net unrealized gains (losses) on derivative instruments | (18.8) | |
Liability for future policy benefits discount rate remeasurement gain (loss) | (540.9) | 2,519.1 |
Market risk benefit nonperformance risk remeasurement gain | 6 | 73.7 |
Foreign currency translation adjustment | 132.1 | 155.1 |
Net unrecognized postretirement benefit obligation | 3.8 | 6.7 |
Other comprehensive income (loss) | 679.1 | (1,376.4) |
Comprehensive income (loss) | 544.6 | (1,033.2) |
Comprehensive income (loss) attributable to noncontrolling interest | 7 | 5.9 |
Comprehensive income (loss) attributable to Principal Financial Group, Inc. | $ 537.6 | $ (1,039.1) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Common stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Treasury Stock | Noncontrolling interest | Total | |
Balances at Dec. 31, 2021 | $ 4.8 | $ 10,495 | $ 12,594.2 | $ (2,084.1) | $ (8,925.8) | $ 56.4 | $ 12,140.5 | |
Increase (decrease) in stockholders' equity | ||||||||
Common stock issued | 0.1 | 19.5 | 19.6 | |||||
Stock-based compensation | 31.9 | (2.9) | 29 | |||||
Treasury stock acquired, common | (754.1) | (754.1) | ||||||
Accelerated share repurchase | (140) | (140) | ||||||
Dividends to common stockholders | (167) | (167) | ||||||
Distributions to noncontrolling interest | (16.1) | (16.1) | ||||||
Contributions from noncontrolling interest | 1.5 | 1.5 | ||||||
Purchase of subsidiary shares from noncontrolling interest | [1] | (4.3) | (2.4) | (6.7) | ||||
Adjustments to redemption amount of redeemable noncontrolling interest | 0.3 | (0.4) | (0.1) | |||||
Net income (loss) | [1] | 338.7 | 14.8 | 353.5 | ||||
Other comprehensive income (loss) | [1] | (1,377.8) | 1.3 | (1,376.5) | ||||
Balances at Mar. 31, 2022 | 4.9 | 10,402.4 | 12,763 | (3,461.9) | (9,679.9) | 55.1 | 10,083.6 | |
Balances at Dec. 31, 2022 | 4.9 | 10,740.4 | 16,697.3 | (6,879) | (10,586.9) | 41.1 | 10,017.8 | |
Increase (decrease) in stockholders' equity | ||||||||
Common stock issued | 19.8 | 19.8 | ||||||
Stock-based compensation | 31.4 | (2.9) | 0.1 | 28.6 | ||||
Treasury stock acquired, common | (188.5) | (188.5) | ||||||
Dividends to common stockholders | (155.5) | (155.5) | ||||||
Distributions to noncontrolling interest | (2.1) | (2.1) | ||||||
Contributions from noncontrolling interest | 1.4 | 1.4 | ||||||
Purchase of subsidiary shares from noncontrolling interest | [1] | (1.2) | (1.2) | |||||
Adjustments to redemption amount of redeemable noncontrolling interest | 0.5 | 0.1 | 0.6 | |||||
Net income (loss) | [1] | (140.1) | 1.1 | (139) | ||||
Other comprehensive income (loss) | [1] | 677.7 | 1.2 | 678.9 | ||||
Balances at Mar. 31, 2023 | $ 4.9 | $ 10,790.9 | $ 16,398.8 | $ (6,201.3) | $ (10,775.4) | $ 42.9 | $ 10,260.8 | |
[1] Excludes amounts attributable to redeemable noncontrolling interest. See Note 15, Stockholders’ Equity, for further details. |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities | ||
Net Cash Provided by (Used in) Operating Activities | $ 695.3 | $ 31.5 |
Investing activities | ||
Fixed maturities available-for-sale and equity securities with intent to hold: Purchases | (3,874.5) | (5,413.1) |
Fixed maturities available-for-sale and equity securities with intent to hold: Sales | 1,714.5 | 4,358.9 |
Fixed maturities available-for-sale and equity securities with intent to hold: Maturities | 1,318 | 2,045.7 |
Mortgage loans acquired or originated | (318.2) | (1,191.9) |
Mortgage loans sold or repaid | 439.9 | 407.7 |
Real estate acquired | (41.2) | (86.8) |
Real estate sold | 71.6 | |
Net (purchases) sales of property and equipment | (31.4) | (25.4) |
Net change in other investments | (311.2) | (39.9) |
Net cash provided by (used in) investing activities | (1,104.1) | 126.8 |
Financing activities | ||
Issuance of common stock | 19.8 | 19.6 |
Accelerated share repurchase | (140) | |
Acquisition of treasury stock | (188.5) | (754.1) |
Payments for financing element derivatives | (10.5) | (12.9) |
Purchase of subsidiary shares from noncontrolling interest | (2.8) | (6.7) |
Dividends to common stockholders | (155.5) | (167) |
Issuance of long-term debt | 691.5 | |
Principal repayments of long-term debt | (0.6) | (0.5) |
Net proceeds from (repayments of) short-term borrowings | (61.2) | 193.2 |
Investment contract deposits | 3,264.3 | 2,441.7 |
Investment contract withdrawals | (3,047.2) | (1,790.9) |
Net increase (decrease) in banking operation deposits | (307.6) | 468.5 |
Net cash provided by (used in) financing activities | 201.7 | 250.9 |
Net increase (decrease) in cash and cash equivalents | (207.1) | 409.2 |
Cash and cash equivalents at beginning of period | 4,848 | 2,332 |
Cash and cash equivalents at end of period | $ 4,640.9 | $ 2,741.2 |
Nature of Operations and Signif
Nature of Operations and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Nature of Operations and Significant Accounting Policies | |
Nature of Operations and Significant Accounting Policies | 1. Nature of Operations and Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Principal Financial Group, Inc. (“PFG”) have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023, are not necessarily indicative of the results that may be expected for the year ended December 31, 2023, especially when considering risks and uncertainties that may impact our business, results of operations, financial condition and liquidity. Our use of estimates and assumptions affect amounts reported and disclosed and includes, but is not limited to, the fair value of investments in the absence of quoted market values, investment impairments and valuation allowances, the fair value of derivatives, funds withheld embedded derivative, deferred acquisition costs (“DAC”) and other actuarial balances, measurement of goodwill and intangible assets, the liability for future policy benefits and claims, the value of pension and other postretirement benefits and accounting for income taxes and the valuation of deferred tax assets. Our estimates and assumptions could change in the future. Our results of operations and financial condition may also be impacted by other uncertainties including evolving regulatory, legislative and standard-setter accounting interpretations and guidance. These interim unaudited condensed consolidated financial statements should be read in conjunction with our annual audited financial statements as of December 31, 2022, included in our Form 10-K for the year ended December 31, 2022, filed with the United States Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated statement of financial position as of December 31, 2022, has been derived from the audited consolidated statement of financial position but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. On January 1, 2023, we adopted the guidance commonly referred to as long-duration targeted improvements (“LDTI”), which updates certain requirements in the accounting for long-duration insurance and annuity contracts. The guidance was applied as of the January 1, 2021, transition date. As such, results for 2022 and 2021 have been recast and are also presented under the new LDTI guidance. In the first quarter of 2023 we implemented changes to our organizational structure to better align businesses, distribution teams and product offerings for future growth. We integrated our global asset management and international pension businesses under one segment, Principal Asset Management. Results of our historically reported Principal Global Investors and Principal International segments are reported within this segment. Additionally, we are now reporting results for our Retirement and Income Solutions segment in total and not separated into Fee and Spread components. Finally, we updated the name of our U.S. Insurance Solutions segment to Benefits and Protection and will continue to report the results of Specialty Benefits and Life Insurance within this segment. Our segment results have been modified to reflect these changes, which did not have an impact on our consolidated financial statements. See Note 17, Segment Information, for financial results of our segments. During the second quarter of 2022, we closed a coinsurance with funds withheld reinsurance transaction with Talcott Life &Annuity Re, Ltd. (“Talcott Life & Annuity Re”), a limited liability company organized under the laws of the Cayman Islands and an affiliate of Talcott Resolution Life, Inc., a subsidiary of Sixth Street, pursuant to which we ceded our in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee (“ULSG”) blocks of business (the “Reinsurance Transaction”). The economics of the Reinsurance Transaction were effective as of January 1, 2022. See Note 10, Reinsurance, for further details. Certain reclassifications have been made to prior periods relating to the presentation of our loss adjustment expense (“LAE”) liability and the change in that liability to conform to the current presentation. See Note 8, Future Policy Benefits and Claims. The LAE liability was previously reported in other liabilities in the consolidated statements of financial position and the change in the liability was previously reported in operating expenses in the consolidated statements of operations. The LAE liability is now reported in future policy benefits and claims in the consolidated statements of financial position and the change in the liability is now reported in benefits, claims and settlement expenses in the consolidated statements of operations. Consolidation We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a variable interest entity (“VIE”) or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 2, Variable Interest Entities. If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method. Recent Accounting Pronouncements Description Date of adoption Effect on our consolidated financial statements or other significant matters Standards adopted: Targeted improvements to the accounting for long-duration insurance contracts This authoritative guidance updated certain requirements in the accounting for long-duration insurance and annuity contracts. 1. The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts are reviewed and updated periodically. Cash flow assumptions are reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and are updated quarterly with the impact recognized in other comprehensive income (“OCI”). 2. Market risk benefits, which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. January 1, 2023 We created a governance framework and a plan to support implementation of the standard. Our implementation and evaluation process included, but was not limited to the following: ● identifying and documenting contracts and contract features in scope of the guidance; ● identifying the actuarial models, systems and processes to be updated; ● evaluating and selecting our systems solutions for implementing the new guidance; ● building models and evaluating preliminary output as models are developed; ● evaluating and finalizing our key accounting policies; ● assessing the impact to our chart of accounts; ● developing format and content of new disclosures; Description Date of adoption Effect on our consolidated financial statements or other significant matters 3. DAC and other actuarial balances for all insurance and annuity contracts are amortized on a constant basis over the expected term of the related contracts. 4. Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances as well as disclosures about significant inputs, judgments, assumptions and methods used in measurement. The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC was applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented (January 1, 2021, also referred to as the transition date) based on their existing carrying amounts. An entity could elect to apply the changes retrospectively. The guidance for market risk benefits was applied retrospectively. ● conducting financial dry runs using model output and updated chart of accounts; ● evaluating transition requirements and impacts and ● establishing and documenting appropriate internal controls. This guidance changed how we account for many of our insurance and annuity products. The guidance did not have a material impact on our consolidated statements of operations. Further details about transition impacts of the guidance are included under the caption “Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts Guidance.” The additional disclosure requirements can be found in the following notes: ● Note 5, Deferred Acquisition Costs and Other Actuarial Balances ● Note 6, Separate Account Balances ● Note 7, Contractholder Funds ● Note 8, Future Policy Benefits and Claims ● Note 9, Market Risk Benefits Troubled debt restructurings and vintage disclosures This authoritative guidance eliminated the accounting requirements for Troubled Debt Restructurings (“TDRs”) by creditors and enhanced the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. The update required entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update were applied prospectively, except for the transition method related to the recognition and measurement of troubled debt restructurings, for which an entity had the option to apply a modified retrospective transition method. Early adoption was permitted. January 1, 2023 This guidance did not have a material impact on our consolidated financial statements. Description Date of adoption Effect on our consolidated financial statements or other significant matters Targeted improvements to accounting for hedging activities – portfolio layer method This authoritative guidance is intended to further align the economics of a company’s risk management activities in its financial statements with hedge accounting requirements. The guidance expanded the current single-layer method to allow multiple hedge layers of a single closed portfolio. Non-prepayable assets can also be included in the same portfolio. This guidance also clarified the current guidance on accounting for fair value basis adjustments applicable to both a single hedged layer and multiple hedged layers. Upon adoption, the application of these hedge strategies was applied prospectively. Early adoption was permitted. January 1, 2023 This guidance did not have a material impact on our consolidated financial statements. Facilitation of the effects of reference rate reform on financial reporting This authoritative guidance provided optional expedients and exceptions for contracts and hedging relationships affected by reference rate reform. An entity could elect not to apply certain modification accounting requirements to contracts affected by reference rate reform and instead account for the modified contract as a continuation of the existing contract. Also, an entity could apply optional expedients to continue hedge accounting for hedging relationships in which the critical terms changed due to reference rate reform. This guidance eased the financial reporting impacts of reference rate reform on contracts and hedging relationships and was effective until December 31, 2022. A subsequent amendment issued in December 2022 extended the relief date from December 31, 2022, to December 31, 2024, and was effective upon issuance. March 12, 2020 We adopted the guidance upon issuance prospectively and elected the applicable optional expedients and exceptions for contracts and hedging relationships impacted by reference rate reform through December 31, 2024. The guidance did not have an impact on our consolidated financial statements upon adoption. When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts Guidance As mentioned above, we adopted LDTI on January 1, 2023. For traditional and limited-payment long-duration contracts, we review and update, if necessary, assumptions used to measure cash flows for the liability for future policy benefits during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. The change in our liability estimate as a result of updating cash flow assumptions is recognized in net income. Actual cash flows are grouped into issue-year cohorts for the liability calculation and updated quarterly. Cohorts are used as the unit of account for liability measurement. Discount rate assumptions are prescribed as the current upper-medium grade (low-credit-risk) fixed-income instrument yield. The discount rate is updated quarterly at each reporting date with the impact recognized in OCI. The provision for risk of adverse deviation is eliminated, as is premium deficiency, or loss recognition, testing. We also removed unrealized gain (loss) adjustments, previously recorded in accumulated other comprehensive income (“AOCI”), attributable to the impact of unrealized gains and losses on premium deficiency testing. Under LDTI, market risk benefits (“MRBs”), which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. Certain contract features previously accounted for as an embedded derivative or as an additional liability for annuitization benefits or death or other insurance benefits are recorded as MRBs under LDTI. LDTI simplified the amortization of DAC and other actuarial balances such as the unearned revenue liability and sales inducement asset for long-duration contracts. These balances were previously amortized in proportion to premiums, estimated gross profits, estimated gross margins or estimated gross revenues; however, these balances are now amortized on a constant level basis over the expected life of the related contracts. Impairment testing is no longer applicable for DAC. We also removed unrealized gain (loss) adjustments, previously recorded in AOCI, as the LDTI amortization is not impacted by investment gains and losses. LDTI also requires disaggregated rollforwards for the liability for future policy benefits, additional liability for certain benefit features, MRBs, DAC and other actuarial balances required to be amortized on a basis consistent with DAC. Although the accounting for the additional liability for certain benefit features, separate account liabilities and contractholder funds does not change under LDTI, the guidance requires disaggregated rollforwards for those balances. Further, for certain actuarial balances, disclosures are required for the significant inputs, judgments, assumptions and methods used in measurement, including changes in those inputs, judgments and assumptions, and the effect of those changes on measurement. The LDTI guidance is not prescriptive as to the appropriate level of aggregation for disclosures; however, amounts from different reportable segments cannot be aggregated. Factors to consider in determining the level of aggregation for disclosures include the type of coverage, geography and market or type of customer. We have identified the following levels of aggregation for LDTI disclosures. The disclosures do not include levels of aggregation for insignificant balances. ● Retirement and Income Solutions: o Workplace savings and retirement solutions – Group annuity contracts offered to the plan sponsors of defined contribution plans or defined benefit plans o Individual variable annuities – Variable deferred annuities offered to individuals for both qualified and nonqualified retirement savings o Pension risk transfer – Single premium group annuities offered to pension plan sponsors and other institutions o Individual fixed deferred annuities – An exited business that offered single premium deferred annuity contracts and flexible premium deferred annuities (“FPDAs”) to individuals for both qualified and nonqualified retirement savings o Individual fixed income annuities – An exited business that offered single premium immediate annuities (“SPIAs”) and deferred income annuities (“DIAs”) to individuals for both qualified and nonqualified retirement savings o Investment only – Primarily guaranteed investment contracts (“GICs”) and funding agreements offered to retirement plan sponsors and other institutions ● Principal Asset Management – Principal International o Latin America: ◾ Individual fixed income annuities – SPIAs offered to individuals ◾ Pension – Certain retirement accumulation products where the segregated funds and associated obligation to the client are consolidated within our financial statements as separate account assets and liabilities and are only in the scope of LDTI disclosures for separate accounts o Asia: ◾ Guaranteed pension – Pension savings schemes offered to both employers and employees ● Benefits and Protection – Specialty Benefits: o Individual disability – Disability insurance providing protection to individuals and/or business owners ● Benefits and Protection – Life Insurance: o Universal life – Universal life, variable universal life and indexed universal life insurance products offered to individuals and/or business owners, which will be collectively referred to hereafter as “universal life” contracts; includes our exited ULSG business o Term life – Term life insurance products offered to individuals and/or business owners o Participating life – Participating life insurance contracts offered to individuals, some of which are part of a closed block of business and are only in the scope of LDTI disclosures for DAC ● Corporate: o Long-term care insurance – A closed block of long-term care insurance that is fully reinsured, which was offered on both a group and individual basis. For the separate account liability disclosures, our Retirement and Income Solutions segment will use a Group retirement contracts level of aggregation. This consists primarily of separate account liabilities for the workplace savings and retirement solutions business as well as amounts for the investment only and pension risk transfer businesses. Impact of Adoption We adopted the guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC and other actuarial balances on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented based on their existing carrying amounts. We adopted the guidance for MRBs and cost of reinsurance retrospectively. Results for reporting periods beginning January 1, 2021, within our consolidated financial statements are presented under the new guidance. A cumulative effect adjustment of $159.9 million was recorded as a decrease to retained earnings and a cumulative effect adjustment of $5,128.0 million was recorded as a decrease to AOCI as of January 1, 2021, as shown below. Accumulated other Retained earnings comprehensive income Pre-Tax Tax After-Tax Pre-Tax Tax After-Tax (in millions) DAC and other actuarial balances: Adjustment for reversal of unrealized loss from AOCI (1) $ — $ — $ — $ 421.5 $ (88.5) $ 333.0 Cost of reinsurance asset (liability): Cumulative effect of amortization basis change (9.0) 1.9 (7.1) — — — Adjustment of unrealized loss in AOCI — — — 16.1 (3.4) 12.7 Reinsurance recoverable: Adjustment for reversal of unrealized gain from AOCI (2) — — — (45.5) 9.5 (36.0) Adjustment under the modified retrospective approach (3) 31.4 (6.6) 24.8 — — — Effect of remeasurement of the recoverable at the current discount rate — — — 201.8 (42.4) 159.4 Liability for future policy benefits: Adjustment for reversal of unrealized loss from AOCI (2) — — — 1,965.3 (452.2) 1,513.1 Adjustment under the modified retrospective approach (3) (119.1) 29.8 (89.3) 17.9 (4.8) 13.1 Effect of remeasurement of the liability at the current discount rate — — — (9,043.1) 2,024.8 (7,018.3) Market risk benefits: Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date — — — (4.8) 1.0 (3.8) Adjustments to the host contract for differences between previous carrying amount and measurement of the MRB 20.9 (4.4) 16.5 — — — Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes) (258.8) 54.4 (204.4) — — — Reclassification of nonperformance risk changes between retained earnings and AOCI (4) 108.4 (22.5) 85.9 (108.4) 22.5 (85.9) Investment in equity method subsidiary impacted by LDTI (5) 22.8 (9.1) 13.7 (25.5) 10.2 (15.3) Total impact on opening balance as of January 1, 2021 $ (203.4) $ 43.5 $ (159.9) $ (6,604.7) $ 1,476.7 $ (5,128.0) (1) Includes the impact for DAC, sales inducement asset and the unearned revenue liability. We have not included the disaggregated rollforwards for the sales inducement asset within the footnote disclosures due to immateriality. (2) Prior period unrealized gain (loss) adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (3) The impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI. The foreign currency translation related to the liability for future policy benefits was reflected as an adjustment to the opening balance of AOCI. (4) The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI. (5) Reflects the impact from our equity method investment in Brasilprev Seguros e Previdencia, which had transition impacts for the liability for future policy benefits and the additional liability for certain benefit features. The table below reflects the increase (decrease) to the impacted line items in the consolidated statements of financial position related to the cumulative effect adjustment as of January 1, 2021. Increase (decrease) (in millions) Assets Other investments (1) $ (1.6) Reinsurance recoverable and deposit receivable 187.7 Premiums due and other receivables (2) (24.4) Deferred acquisition costs 450.9 Market risk benefit asset (3) 18.9 Other assets (4) 19.3 Total assets $ 650.8 Liabilities Contractholder funds (5) $ (397.9) Future policy benefits and claims (6) 7,143.4 Market risk benefit liability (3) 663.5 Other policyholder funds (7) 48.8 Deferred income taxes (1,519.1) Total liabilities 5,938.7 Stockholders’ equity Retained earnings (159.9) Accumulated other comprehensive income (5,128.0) Total stockholders’ equity (5,287.9) Total liabilities and stockholders’ equity $ 650.8 (1) Reflects the impact on our investment in Brasilprev Seguros e Previdencia, which is accounted for using the equity method. (2) Includes the impact on the cost of reinsurance asset. (3) This is a new line item on the consolidated statements of financial position as a result of implementing LDTI. These contract features were previously recorded as embedded derivatives within contractholder funds or additional liabilities for certain benefit features within future policy benefits and claims on the consolidated statements of financial position. (4) Reflects the impact on the sales inducement asset. (5) Reflects the impact of contract features previously recorded as embedded derivatives that are recorded as MRBs under LDTI. (6) Includes the impact on the liability for future policy benefits and cost of reinsurance liability. Also includes the impact on contract features classified as additional liabilities for certain benefit features that are recorded as MRBs under LDTI. (7) Reflects the impact on the unearned revenue liability. The disaggregated rollforwards below reconcile the ending asset or liability balances as of December 31, 2020, to the opening balance as of January 1, 2021, which is the earliest period presented within the consolidated financial statements, for those balances impacted by LDTI with associated disaggregated disclosure requirements. The level of aggregation presented within the rollforwards is consistent with the disaggregated rollforwards required by the guidance. The balances as of December 31, 2020, shown in the rollforwards below, do not equal amounts reported on the consolidated statements of financial position as they do not include balances for short-duration contracts, insignificant balances not included in our levels of aggregation for disclosures and other amounts not within the scope of the disaggregated rollforwards. Deferred Acquisition Costs Adjustment for reversal of Balance as of unrealized loss Balance as of December 31, 2020 from AOCI (1) January 1, 2021 (2) (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 424.6 $ 52.6 $ 477.2 Individual variable annuities 281.7 0.2 281.9 Pension risk transfer (3) — — — Individual fixed deferred annuities 11.5 181.2 192.7 Investment only 12.6 — 12.6 Total Retirement and Income Solutions 730.4 234.0 964.4 Benefits and Protection: Specialty Benefits: Individual disability 529.8 — 529.8 Life Insurance: Universal life 1,443.0 165.3 1,608.3 Term life 607.9 — 607.9 Participating life 60.3 51.6 111.9 Total Benefits and Protection 2,641.0 216.9 2,857.9 Total $ 3,371.4 $ 450.9 $ 3,822.3 (1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) Does not include DAC for short-duration contracts or insignificant balances for long-duration contracts not included in our levels of aggregation for disclosures. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on DAC. (3) This product began recording DAC upon implementing LDTI. The balances and changes in DAC for 2021 for each level of aggregation were as follows: Retirement and Income Solutions For the year ended December 31, 2021 Workplace savings and Individual Pension Individual retirement variable risk fixed deferred Investment solutions annuities transfer (1) annuities only (in millions) Balance at beginning of period $ 477.2 $ 281.9 $ — $ 192.7 $ 12.6 Costs deferred 50.1 26.4 2.7 7.6 9.1 Amortized to expense (38.3) (27.1) — (38.1) (3.6) Balance at end of period $ 489.0 $ 281.2 $ 2.7 $ 162.2 $ 18.1 (1) Amortization during 2021 was nominal. Benefits and Protection For the year ended December 31, 2021 Specialty Benefits Life Insurance Individual disability Universal life Term life Participating life (in millions) Balance at beginning of period $ 529.8 $ 1,608.3 $ 607.9 $ 111.9 Costs deferred 89.8 84.3 126.5 1.9 Amortized to expense (38.9) (96.4) (55.5) (11.5) Balance at end of period $ 580.7 $ 1,596.2 $ 678.9 $ 102.3 Unearned Revenue Liability Adjustment for reversal of Balance as of unrealized gain Balance as of December 31, 2020 from AOCI (1) January 1, 2021 (2) (in millions) Benefits and Protection - Life Insurance: Universal life $ 335.6 $ 48.8 $ 384.4 Total $ 335.6 $ 48.8 $ 384.4 (1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) Reported within other policyholder funds in the consolidated statements of financial position. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on the unearned revenue liability. Benefits and Protection The balances and changes in the unearned revenue liability for 2021 for Life Insurance – Universal life were as follows: For the year ended December 31, 2021 (in millions) Balance at beginning of period $ 384.4 Deferrals 66.1 Revenue recognized (25.2) Balance at end of period $ 425.3 Liability for Future Policy Benefits Effect of Adjustment remeasurement Adjustment under the of the liability Balance as of for reversal of modified at the current Balance as of December 31, unrealized loss retrospective discount January 1, 2020 from AOCI (1) approach (2) rate (3) 2021 (4) (in millions) Retirement and Income Solutions: Pension risk transfer $ 21,982.8 $ (947.0) $ — $ 4,827.9 $ 25,863.7 Individual fixed income annuities 6,147.2 (215.0) 0.1 1,213.5 7,145.8 Total Retirement and Income Solutions 28,130.0 (1,162.0) 0.1 6,041.4 33,009.5 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities 5,038.4 (634.6) 61.7 2,096.0 6,561.5 Benefits and Protection: Specialty Benefits: |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities | |
Variable Interest Entities | 2. Variable Interest Entities We have relationships with various types of entities which may be VIEs. Certain VIEs are consolidated in our financial results. See Note 1, Nature of Operations and Significant Accounting Policies, under the caption “Consolidation” for further details of our consolidation accounting policies. We did not provide financial or other support to investees designated as VIEs for the periods ended March 31, 2023 and December 31, 2022. Consolidated Variable Interest Entities Mandatory Retirement Savings Funds We hold an equity interest in Chilean mandatory privatized social security funds in which we provide asset management services. We determined the mandatory privatized social security funds, which also include contributions for voluntary pension savings, voluntary non-pension savings and compensation savings accounts, are VIEs. This is because the equity holders as a group lack the power, due to voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance and also because equity investors are protected from below-average market investment returns relative to the industry’s return, due to a regulatory guarantee that we provide. Further, we concluded we are the primary beneficiary through our power to make decisions and our significant variable interest in the funds. The purpose of the funds, which reside in legally segregated entities, is to provide long-term retirement savings. The obligation to the customer is directly related to the assets held in the funds and, as such, we present the assets as separate account assets and the obligation as separate account liabilities within our consolidated statements of financial position. Principal International Hong Kong offers retirement pension schemes in which we provide trustee, administration and asset management services to employers and employees under the Hong Kong Mandatory Provident Fund and Occupational Retirement Schemes Ordinance pension schemes. Each pension scheme has various guaranteed and non-guaranteed constituent funds, or investment options, in which customers can invest their money. The guaranteed funds provide either a guaranteed rate of return to the customer or a minimum guarantee on withdrawals under certain qualifying events. We determined the guaranteed funds are VIEs due to the fact the equity holders, as a group, lack the obligation to absorb expected losses due to the guarantee we provide. We concluded we are the primary beneficiary because we have the power to make decisions and to receive benefits and the obligation to absorb losses that could be potentially significant to the VIE. Therefore, we consolidate the underlying assets and liabilities of the funds and present as separate accounts or within the general account, depending on the terms of the guarantee. Real Estate We invest in several real estate limited partnerships and limited liability companies. The entities invest in real estate properties. Certain of these entities are VIEs based on the combination of our significant economic interest and related voting rights. We determined we are the primary beneficiary as a result of our power to control the entities through our significant ownership. Due to the nature of these real estate investments, the investment balance will fluctuate as we purchase and sell interests in the entities and as capital expenditures are made to improve the underlying real estate. Sponsored Investment Funds We sponsor and invest in certain investment funds for which we provide asset management services. Although our asset management fee is commensurate with the services provided and consistent with fees for similar services negotiated at arms-length, we have a variable interest for funds where our other interests are more than insignificant. The funds are VIEs as the equity holders lack power through voting rights to direct the activities of the entity that most significantly impact its economic performance. We determined we are the primary beneficiary of the VIEs where our interest in the entity is more than insignificant and we are the asset manager. Residential Mortgage Loans We invest in ABS trusts. The trusts issue various collateralized mortgage obligation certificates and purchase residential mortgage loans. The trusts are considered VIEs due to insufficient equity to sustain themselves. We concluded we are the primary beneficiary as we purchase substantially all of the certificates and have the obligation to absorb losses that could potentially be significant to the VIEs. We deconsolidated a trust during the fourth quarter of 2022 as we no longer held substantially all of the certificates. Assets and Liabilities of Consolidated Variable Interest Entities The carrying amounts of our consolidated VIE assets, which can only be used to settle obligations of consolidated VIEs, and liabilities of consolidated VIEs for which creditors do not have recourse were as follows: March 31, 2023 December 31, 2022 Total Total Total Total assets liabilities assets liabilities (in millions) Mandatory retirement savings funds (1) $ 36,985.1 $ 36,606.1 $ 34,876.9 $ 34,528.3 Real estate (2) 753.6 52.2 689.6 42.2 Sponsored investment funds (3) 501.4 7.2 471.4 2.6 Residential mortgage loans (4) 1,169.6 41.4 1,182.6 41.8 Total $ 39,409.7 $ 36,706.9 $ 37,220.5 $ 34,614.9 (1) The assets of the mandatory retirement savings funds primarily include separate account assets and equity securities. The liabilities primarily include separate account liabilities and contractholder funds. (2) The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities. (3) The assets of sponsored investment funds are primarily fixed maturities and equity securities, certain of which are reported with other investments, and cash. The consolidated statements of financial position included a $250.9 million and $235.3 million redeemable noncontrolling interest for sponsored investment funds as of March 31, 2023 and December 31, 2022, respectively. (4) The assets of the residential mortgage loans VIEs primarily include residential mortgage loans. The liabilities primarily include other liabilities. Unconsolidated Variable Interest Entities We hold a variable interest in a number of VIEs where we are not the primary beneficiary. Our investments in these VIEs are reported in fixed maturities, available-for-sale; fixed maturities, trading; equity securities and other investments in the consolidated statements of financial position and are described below. Unconsolidated VIEs include certain commercial mortgage-backed securities (“CMBS”), residential mortgage-backed pass-through securities (“RMBS”) and other ABS. All of these entities were deemed VIEs because the equity within these entities is insufficient to sustain them. We determined we are not the primary beneficiary in the entities within these categories of investments. This determination was based primarily on the fact we do not own the class of security that controls the unilateral right to replace the special servicer or equivalent function. We invest in cash collateralized debt obligations, collateralized bond obligations, collateralized loan obligations and other collateralized structures, which are VIEs due to insufficient equity to sustain the entities. We have determined we are not the primary beneficiary of these entities primarily because we do not control the economic performance of the entities and were not involved with the design of the entities or because we do not have a potentially significant variable interest in the entities for which we are the asset manager. We have invested in various VIE trusts and similar entities as a debt holder. Most of these entities are classified as VIEs due to insufficient equity to sustain them. In addition, we have an entity classified as a VIE based on the combination of our significant economic interest and lack of voting rights. We have determined we are not the primary beneficiary primarily because we do not control the economic performance of the entities and were not involved with the design of the entities. We have invested in partnerships and other funds, which are classified as VIEs. The entities are VIEs as equity holders lack the power to control the most significant activities of the entities because the equity holders do not have either the ability by a simple majority to exercise substantive kick-out rights or substantive participating rights. We have determined we are not the primary beneficiary because we do not have the power to direct the most significant activities of the entities. As previously discussed, we sponsor and invest in certain investment funds that are VIEs. We determined we are not the primary beneficiary of the VIEs for which we are the asset manager but do not have a potentially significant variable interest in the funds. We hold an equity interest in Mexican mandatory privatized social security funds in which we provide asset management services. Our equity interest in the funds is considered a variable interest. We concluded the funds are VIEs because the equity holders as a group lack decision-making ability through their voting rights. We are not the primary beneficiary of the VIEs because although we, as the asset manager, have the power to direct the activities of the VIEs, we do not have a potentially significant variable interest in the funds. The carrying value and maximum loss exposure for our unconsolidated VIEs were as follows: Maximum exposure to Asset carrying value loss (1) (in millions) March 31, 2023 Fixed maturities, available-for-sale: Corporate $ 162.9 $ 174.8 Residential mortgage-backed pass-through securities 2,794.9 2,951.5 Commercial mortgage-backed securities 4,927.8 5,555.1 Collateralized debt obligations (2) 4,902.3 5,136.6 Other debt obligations 6,906.7 7,934.9 Fixed maturities, trading: Residential mortgage-backed pass-through securities 11.1 11.1 Commercial mortgage-backed securities 78.7 78.7 Collateralized debt obligations (2) 4.7 4.7 Other debt obligations 30.2 30.2 Equity securities 110.2 110.2 Other investments: Other limited partnership and fund interests (3) 1,539.5 2,614.6 December 31, 2022 Fixed maturities, available-for-sale: Corporate $ 111.8 $ 127.2 Residential mortgage-backed pass-through securities 2,228.7 2,420.6 Commercial mortgage-backed securities 4,864.6 5,572.2 Collateralized debt obligations (2) 4,566.4 4,820.0 Other debt obligations 6,507.6 7,566.2 Fixed maturities, trading: Residential mortgage-backed pass-through securities 5.4 5.4 Commercial mortgage-backed securities 83.4 83.4 Collateralized debt obligations (2) 5.7 5.7 Other debt obligations 80.0 80.0 Equity securities 99.8 99.8 Other investments: Other limited partnership and fund interests (3) 1,473.5 2,434.9 (1) Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale, plus any unfunded commitments and/or guarantees and similar provisions for collateralized debt obligations and other debt obligations. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. A carrying value of zero is used if distributions have been received in excess of our investment, resulting in a negative carrying value for the investment. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. (3) As of March 31, 2023 and December 31, 2022, the maximum exposure to loss for other limited partnership and fund interests includes $146.7 million and $144.3 million, respectively, of debt within certain of our managed international real estate funds that is fully secured by assets whose value exceeds the amount of the debt, but also includes recourse to the investment manager. Money Market Funds We are the investment manager for certain money market mutual funds. These types of funds are exempt from assessment under any consolidation model due to a scope exception for money market funds registered under Rule 2a-7 of the Investment Company Act of 1940 or similar funds. As of March 31, 2023 and December 31, 2022, money market mutual funds we manage held $4.5 billion and $4.2 billion in total assets, respectively. We have no contractual obligation to contribute to these funds; however, we provide support through the waiver of fees and through expense reimbursements. The amount of fees waived and expenses reimbursed was insignificant. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Investments | |
Investments | 3. Investments Our investments include assets backing reserves as part of a coinsurance with funds withheld agreement. The funds withheld invested assets are reported within their respective line items, primarily consisting of fixed maturities available-for-sale, mortgage loans and other investments. See Note 10, Reinsurance, for more information on the funds withheld invested assets. Fixed Maturities and Equity Securities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. We classify fixed maturities as either available-for-sale or trading at the time of the purchase and, accordingly, carry them at fair value. Equity securities are also carried at fair value. See Note 16, Fair Value Measurements, for methodologies related to the determination of fair value. Unrealized gains and losses related to fixed maturities, available-for-sale, excluding those in fair value hedging relationships, are reflected in stockholders’ equity, net of adjustments associated with related actuarial balances, derivatives in cash flow hedge relationships and applicable income taxes. Mark-to-market adjustments on certain equity securities and mark-to-market adjustments on certain fixed maturities, trading are reflected in net realized capital gains (losses). Mark-to-market adjustments on certain fixed maturities, trading are reflected in market risk benefit remeasurement (gain) loss. Unrealized gains and losses related to hedged portions of fixed maturities, available-for-sale in fair value hedging relationships are reflected in net investment income. Mark-to-market adjustments related to certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reflected in net investment income. The amortized cost of fixed maturities includes cost adjusted for amortization of premiums and discounts, computed using the interest method. The amortized cost of fixed maturities, available-for-sale is adjusted for changes in fair value of the hedged portions of securities in fair value hedging relationships and excludes accrued interest receivable. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Fixed maturities, available-for-sale are subject to an allowance for credit loss and changes in the allowance are reported in net income as a component of net realized capital gains (losses). Interest income, as well as prepayment fees and the amortization of the related premium or discount, is reported in net investment income. For loan-backed and structured securities, we recognize income using a constant effective yield based on currently anticipated cash flows. The amortized cost, gross unrealized gains and losses, allowance for credit loss and fair value of fixed maturities, available-for-sale were as follows: Gross Gross Allowance Amortized unrealized unrealized for credit cost (1) gains losses loss Fair value (in millions) March 31, 2023 Fixed maturities, available-for-sale: U.S. government and agencies $ 2,041.5 $ 1.5 $ 213.1 $ — $ 1,829.9 Non-U.S. governments 584.3 20.9 56.0 — 549.2 States and political subdivisions 7,061.5 21.5 909.6 — 6,173.4 Corporate 40,630.6 542.6 3,872.6 4.0 37,296.6 Residential mortgage-backed pass-through securities 2,951.5 16.3 172.9 — 2,794.9 Commercial mortgage-backed securities 5,555.1 1.2 628.5 — 4,927.8 Collateralized debt obligations (2) 5,024.6 8.8 131.1 — 4,902.3 Other debt obligations 7,564.7 13.7 655.5 0.1 6,922.8 Total fixed maturities, available-for-sale $ 71,413.8 $ 626.5 $ 6,639.3 $ 4.1 $ 65,396.9 Gross Gross Allowance Amortized unrealized unrealized for credit cost (1) gains losses loss Fair value (in millions) December 31, 2022 Fixed maturities, available-for-sale: U.S. government and agencies $ 1,990.9 $ 0.1 $ 251.2 $ — $ 1,739.8 Non-U.S. governments 611.2 20.9 64.8 — 567.3 States and political subdivisions 7,355.4 13.7 1,136.8 — 6,232.3 Corporate 40,370.4 461.0 4,640.5 7.7 36,183.2 Residential mortgage-backed pass-through securities 2,420.6 6.2 198.1 — 2,228.7 Commercial mortgage-backed securities 5,572.2 0.5 708.1 — 4,864.6 Collateralized debt obligations (2) 4,705.6 4.5 143.7 — 4,566.4 Other debt obligations 7,236.8 5.7 734.8 0.1 6,507.6 Total fixed maturities, available-for-sale $ 70,263.1 $ 512.6 $ 7,878.0 $ 7.8 $ 62,889.9 (1) Amortized cost excludes accrued interest receivable of $632.6 million and $578.0 million as of March 31, 2023 and December 31, 2022, respectively. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. The amortized cost and fair value of fixed maturities, available-for-sale as of March 31, 2023, by expected maturity, were as follows: Amortized cost Fair value (in millions) Due in one year or less $ 1,603.7 $ 1,593.3 Due after one year through five years 9,104.5 8,819.0 Due after five years through ten years 11,055.5 10,268.5 Due after ten years 28,554.2 25,168.3 Subtotal 50,317.9 45,849.1 Mortgage-backed and other asset-backed securities 21,095.9 19,547.8 Total $ 71,413.8 $ 65,396.9 Actual maturities may differ because borrowers may have the right to call or prepay obligations. Our portfolio is diversified by industry, issuer and asset class. Credit concentrations are managed to established limits. Net Realized Capital Gains and Losses Net realized capital gains and losses on sales of investments are determined on the basis of specific identification. In general, in addition to realized capital gains and losses on investment sales and periodic settlements on derivatives not designated as hedges, we report gains and losses related to the following in net realized capital gains (losses) on the consolidated statements of operations: mark-to-market adjustments on certain equity securities, mark-to-market adjustments on certain fixed maturities, trading, mark-to-market adjustments on sponsored investment funds, mark-to-market adjustments on derivatives not designated as hedges, cash flow hedge gains (losses) when the hedged item impacts realized capital gains (losses), changes in the valuation allowance for fixed maturities available-for-sale and certain financing receivables, impairments of real estate held for investment and impairments on equity method investments. Investment gains and losses on sales of certain real estate held for sale due to investment strategy and mark-to-market adjustments on certain securities carried at fair value with an investment objective to realize economic value through mark-to-market changes are reported as net investment income and are excluded from net realized capital gains (losses). The major components of net realized capital gains (losses) on investments are shown below and are net of amounts on funds withheld invested assets that are passed directly to the reinsurer. See Note 10, Reinsurance, for further details. The amounts below do not include net realized capital gains (losses) on funds withheld assets that are not passed to the reinsurer, which are separately reported on the consolidated statements of operations For the three months ended March 31, 2023 2022 (in millions) Fixed maturities, available-for-sale: Gross gains $ 17.8 $ 165.8 Gross losses (28.0) (120.7) Net credit losses (7.7) (6.1) Hedging, net (1) (1.2) (0.7) Fixed maturities, trading (2) (0.5) (6.3) Equity securities (3) (15.6) (105.2) Mortgage loans (2.7) (19.6) Derivatives (1) (42.9) 8.4 Other 14.8 (52.2) Net realized capital losses $ (66.0) $ (136.6) (1) The change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships are reported in net investment income with the earnings effect of fixed maturities, available-for-sale. Gains (losses) for fixed maturities, available-for-sale related to terminated cash flow hedges continue to be reflected in net realized capital gains (losses). (2) Unrealized gains (losses) on fixed maturities, trading still held at the reporting date were $(1.8) million and $(5.2) million for the three months ended March 31, 2023 and 2022, respectively. This excludes $1.8 million and $(7.9) million in unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in market risk benefit remeasurement (gain) loss and $(2.8) million and $0.0 million of unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in net realized capital gains (losses) on funds withheld assets. (3) Unrealized gains (losses) on equity securities still held at the reporting date were $(13.7) million and $(105.5) million for the three months ended March 31, 2023 and 2022, respectively . This excludes $(0.6) million and $(19.3) million of unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in net investment income and $1.7 million and $0.0 million of unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in net realized capital gains (losses) on funds withheld assets. Proceeds from sales of investments (excluding call and maturity proceeds) in fixed maturities, available-for-sale were $1,639.0 million and $4,859.7 million for the three months ended March 31, 2023 and 2022, respectively. Allowance for Credit Loss We have a process in place to identify fixed maturity securities that could potentially require an allowance for credit loss. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions and other similar factors. This process also involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. Each reporting period, all securities in an unrealized loss position are reviewed to determine whether a decline in value is due to credit. Relevant facts and circumstances considered include: (1) the extent the fair value is below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events and (4) for structured securities, the adequacy of the expected cash flows. To the extent we determine an unrealized loss is due to credit, an allowance for credit loss is recognized through a reduction to net income. We estimate the amount of the allowance for credit loss as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The ABS cash flow estimates are based on security specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate security cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or liquidations using bond specific facts and circumstances including timing, security interests and loss severity. We do not measure a credit loss allowance on accrued interest receivable because we write off the accrued interest receivable balance to net investment income in a timely manner when we have concern regarding collectability. Amounts on fixed maturities, available-for-sale deemed to be uncollectible are written off and removed from the allowance for credit loss. A write-off may also occur if we intend to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity. A rollforward of the allowance for credit loss by major security type was as follows. For the three months ended March 31, 2023 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ 7.7 $ — $ — $ — $ 0.1 $ 7.8 Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — (4.2) — — — — (4.2) Foreign currency translation adjustment — — — 0.5 — — — — 0.5 Ending balance $ — $ — $ — $ 4.0 $ — $ — $ — $ 0.1 $ 4.1 For the three months ended March 31, 2022 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ 15.1 $ — $ 0.3 $ — $ 0.1 $ 15.5 Additions for credit losses not previously recorded — — — 1.0 — — — — 1.0 Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — 3.0 — — — — 3.0 Foreign currency translation adjustment — — — 0.9 — — — — 0.9 Ending balance $ — $ — $ — $ 20.0 $ — $ 0.3 $ — $ 0.1 $ 20.4 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. During 2023 and 2022, we did not write off any accrued interest to net investment income. Available-for-Sale Securities in Unrealized Loss Positions Without an Allowance for Credit Loss For available-for-sale securities with unrealized losses for which an allowance for credit loss has not been recorded, the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows: March 31, 2023 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1): U.S. government and agencies $ 879.6 $ 86.0 $ 605.2 $ 127.3 $ 1,484.8 $ 213.3 Non-U.S. governments 257.4 21.4 131.5 34.5 388.9 55.9 States and political subdivisions 3,191.6 372.3 2,251.2 537.3 5,442.8 909.6 Corporate 17,165.8 1,571.1 12,333.1 2,303.7 29,498.9 3,874.8 Residential mortgage-backed pass-through securities 616.0 16.4 1,159.9 156.5 1,775.9 172.9 Commercial mortgage-backed securities 996.4 78.4 3,749.0 548.6 4,745.4 627.0 Collateralized debt obligations (2) 1,738.4 33.5 2,484.8 97.5 4,223.2 131.0 Other debt obligations 2,413.2 116.9 3,382.9 538.5 5,796.1 655.4 Total fixed maturities, available-for-sale $ 27,258.4 $ 2,296.0 $ 26,097.6 $ 4,343.9 $ 53,356.0 $ 6,639.9 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. Of the total amounts, Principal Life Insurance Company’s (“Principal Life”) consolidated portfolio represented $51,982.6 million in available-for-sale fixed maturities with gross unrealized losses of $6,493.8 million. Of the available-for-sale fixed maturities within Principal Life’s consolidated portfolio in a gross unrealized loss position, 94% were investment grade (rated AAA through BBB-) with an average price of 89 (carrying value/amortized cost) as of March 31, 2023. Gross unrealized losses in our fixed maturities portfolio decreased during the three months ended March 31, 2023, primarily due to a decrease in interest rates. For those securities that had been in a continuous unrealized loss position for less than twelve months, Principal Life’s consolidated portfolio held 4,895 securities with a carrying value of $26,573.1 million and unrealized losses of $2,243.3 million reflecting an average price of 92 as of March 31, 2023. Of this portfolio, 94% was investment grade (rated AAA through BBB-) as of March 31, 2023, with associated unrealized losses of $2,170.6 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, Principal Life’s consolidated portfolio held 5,130 securities with a carrying value of $25,409.5 million and unrealized losses of $4,250.5 million as of March 31, 2023. The average credit rating of this portfolio was A+ with an average price of 86 as of March 31, 2023. Of the $4,250.5 million in unrealized losses, the corporate sector accounts for $2,228.7 million in unrealized losses with an average price of 84 and an average credit rating of BBB+. Furthermore, unrealized losses include $544.5 million within the CMBS sector with an average price of 87 and an average credit rating of AA; $530.8 million within the states and political subdivision sector with an average price of 81 and an average credit rating of AA-; and $415.0 million within the collateralized mortgage obligation security sector with an average price of 84 and an average credit rating of AAA. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. Because we expected to recover our amortized cost, we did not record an allowance for credit loss on these securities as of March 31, 2023. Because it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be at maturity, we did not write down these investments to fair value. December 31, 2022 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1): U.S. government and agencies $ 1,528.3 $ 209.4 $ 181.5 $ 41.8 $ 1,709.8 $ 251.2 Non-U.S. governments 407.5 57.7 19.9 7.1 427.4 64.8 States and political subdivisions 5,303.5 1,008.9 391.9 127.8 5,695.4 1,136.7 Corporate 27,309.5 3,944.6 2,944.1 698.0 30,253.6 4,642.6 Residential mortgage-backed pass-through securities 1,201.7 97.5 574.8 105.7 1,776.5 203.2 Commercial mortgage-backed securities 3,648.5 484.0 1,124.8 222.5 4,773.3 706.5 Collateralized debt obligations (2) 2,832.2 89.0 1,330.1 54.7 4,162.3 143.7 Other debt obligations 3,419.8 292.0 2,283.8 437.6 5,703.6 729.6 Total fixed maturities, available-for-sale $ 45,651.0 $ 6,183.1 $ 8,850.9 $ 1,695.2 $ 54,501.9 $ 7,878.3 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. Of the total amounts, Principal Life’s consolidated portfolio represented $53,353.1 million in available-for-sale fixed maturities with gross unrealized losses of $7,741.4 million. Of the available-for-sale fixed maturities within Principal Life’s consolidated portfolio in a gross unrealized loss position, 94% were investment grade (rated AAA through BBB-) with an average price of 87 (carrying value/amortized cost) as of December 31, 2022. Gross unrealized losses in our fixed maturities portfolio increased during the year ended December 31, 2022, primarily due to an increase in interest rates and a widening of credit spreads. For those securities that had been in a continuous unrealized loss position for less than twelve months, Principal Life’s consolidated portfolio held 7,589 securities with a carrying value of $44,857.0 million and unrealized losses of $6,096.3 million reflecting an average price of 88 as of December 31, 2022. Of this portfolio, 95% was investment grade (rated AAA through BBB-) as of December 31, 2022, with associated unrealized losses of $5,920.4 million. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. For those securities that had been in a continuous unrealized loss position greater than or equal to twelve months, Principal Life’s consolidated portfolio held 1,654 securities with a carrying value of $8,496.1 million and unrealized losses of $1,645.1 million as of December 31, 2022. The average credit rating of this portfolio was AA- with an average price of 84 as of December 31, 2022. Of the $1,645.1 million in unrealized losses, the corporate sector accounts for $654.9 million in unrealized losses with an average price of 80 and an average credit rating of BBB+. Furthermore, unrealized losses include $320.2 million within the collateralized mortgage obligation security sector with an average price of 81 and an average credit rating of AAA; $220.9 million within the CMBS sector with an average price of 83 and an average credit rating of AA+; and $126.8 million within the states and political subdivision sector with an average price of 75 and an average credit rating of AA-. The unrealized losses on these securities can primarily be attributed to changes in market interest rates and changes in credit spreads since the securities were acquired. Because we expected to recover our amortized cost, we did not record an allowance for credit loss on these securities as of December 31, 2022. Because it was not our intent to sell the fixed maturity available-for-sale securities with unrealized losses and it was not more likely than not that we would be required to sell these securities before recovery of the amortized cost, which may be at maturity, we did not write down these investments to fair value. Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments The net unrealized gains and losses on investments in available-for-sale securities and the net unrealized gains and losses on derivative instruments in cash flow hedge relationships are reported as separate components of stockholders’ equity. The cumulative amount of net unrealized gains and losses on available-for-sale securities and derivative instruments in cash flow hedge relationships net of adjustments related to actuarial balances, policyholder liabilities, noncontrolling interest and applicable income taxes was as follows: March 31, 2023 December 31, 2022 (in millions) Net unrealized losses on fixed maturities, available-for-sale (1) $ (6,072.3) $ (7,445.7) Net unrealized gains on derivative instruments 50.7 50.7 Adjustments for assumed changes in amortization patterns (1.5) (1.7) Adjustments for assumed changes in policyholder liabilities 0.4 0.5 Net unrealized gains (losses) other investments and noncontrolling interest adjustments (6.2) 7.9 Provision for deferred income tax benefits 1,288.8 1,570.1 Net unrealized losses on available-for-sale securities and derivative instruments $ (4,740.1) $ (5,818.2) (1) Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships. Financing Receivables Mortgage Loans Mortgage loans consist of commercial and residential mortgage loans. Our commercial mortgage loan portfolio consists primarily of non-recourse, fixed rate mortgages on stabilized properties. Our residential mortgage loan portfolio is composed of first lien and home equity mortgages concentrated in Chile and the United States. Commercial and residential mortgage loans are generally reported at cost adjusted for amortization of premiums and accrual of discounts, computed using the interest method and net of valuation allowances. Amortized cost excludes accrued interest receivable. Interest income is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income, as well as prepayment of fees and the amortization of the related premium or discount, is reported in net investment income on the consolidated statements of operations. Accrued interest receivable is reported in accrued investment income on the consolidated statements of financial position. Any changes in the loan valuation allowances are reported in net realized capital gains (losses) on the consolidated statements of operations. Further details relating to our valuation allowance are included under the caption “Financing Receivables Valuation Allowance.” Direct Financing Leases Our direct financing leases are concentrated in Chile. Our Chilean operations enter into private placement contracts for commercial, industrial and office space properties whereby our Chilean operations purchase the real estate and/or building from the seller-lessee but then lease the property back to the seller-lessee. Ownership of the property is transferred to the lessee by the end of the lease term. Direct financing leases are reported as a component of other investments in the consolidated statements of financial position. Reinsurance Recoverable and Deposit Receivable Our reinsurance recoverables include amounts due from reinsurers for paid or unpaid claims, claims incurred but not reported or policy benefits. We cede life, disability, medical and long-term care insurance as well as fixed annuity contracts with significant life insurance risk to other insurance companies through reinsurance. Deposit receivables include amounts due from the reinsurer for fixed annuity contracts without significant life insurance risk recorded using the deposit method of accounting. Credit Quality Information for Financing Receivables The amortized cost of our financing receivables by credit risk and vintage was as follows: March 31, 2023 2023 2022 2021 2020 2019 Prior Total (in millions) Commercial mortgage loans: A- and above $ 71.0 $ 1,039.4 $ 2,302.1 $ 1,779.6 $ 2,206.7 $ 6,595.5 $ 13,994.3 BBB+ thru BBB- 14.9 454.2 444.2 185.4 390.9 827.2 2,316.8 BB+ thru BB- 31.8 116.4 18.2 3.2 — 136.9 306.5 B+ and below — — — — — 49.5 49.5 Total $ 117.7 $ 1,610.0 $ 2,764.5 $ 1,968.2 $ 2,597.6 $ 7,609.1 $ 16,667.1 Direct financing leases: A- and above $ — $ 129.8 $ 14.7 $ 62.7 $ 1.5 $ 235.8 $ 444.5 BBB+ thru BBB- — 25.5 23.2 52.2 12.8 84.1 197.8 BB+ thru BB- 2.2 — 62.0 8.7 — 1.9 74.8 Total $ 2.2 $ 155.3 $ 99.9 $ 123.6 $ 14.3 $ 321.8 $ 717.1 Residential mortgage loans: Performing $ 81.6 $ 1,114.0 $ 1,730.4 $ 448.6 $ 132.9 $ 493.8 $ 4,001.3 Non-performing — 5.3 4.7 3.8 1.4 7.7 22.9 Total $ 81.6 $ 1,119.3 $ 1,735.1 $ 452.4 $ 134.3 $ 501.5 $ 4,024.2 Reinsurance recoverable and deposit receivable $ 20,884.0 December 31, 2022 2022 2021 2020 2019 2018 Prior Total (in millions) Commercial mortgage loans: A- and above $ 1,036.4 $ 2,277.9 $ 1,807.3 $ 2,210.2 $ 2,187.9 $ 4,624.9 $ 14,144.6 BBB+ thru BBB- 385.6 439.6 156.8 418.7 238.9 691.7 2,331.3 BB+ thru BB- 104.0 16.8 3.0 — 8.9 71.7 204.4 B+ and below — — — — 8.3 41.7 50.0 Total $ 1,526.0 $ 2,734.3 $ 1,967.1 $ 2,628.9 $ 2,444.0 $ 5,430.0 $ 16,730.3 Direct financing leases: A- and above $ 110.5 $ 13.0 $ 39.9 $ 1.4 $ 42.9 $ 167.3 $ 375.0 BBB+ thru BBB- 33.9 21.9 62.4 11.9 11.7 70.4 212.2 BB+ thru BB- 2.7 57.3 12.1 2.0 — 2.1 76.2 B+ and below — 1.6 — — — — 1.6 Total $ 147.1 $ 93.8 $ 114.4 $ 15.3 $ 54.6 $ 239.8 $ 665.0 Residential mortgage loans: Performing $ 1,144.8 $ 1,740.7 $ 447.1 $ 133.0 $ 75.4 $ 417.8 $ 3,958.8 Non-performing 8.0 4.7 2.2 1.7 0.6 7.0 24.2 Total $ 1,152.8 $ 1,745.4 $ 449.3 $ 134.7 $ 76.0 $ 424.8 $ 3,983.0 Reinsurance recoverable and deposit receivable $ 21,156.7 The amortized cost of commercial mortgage loans, direct financing leases and residential mortgage loans excluded accrued interest receivable of $54.3 million, $1.7 million and $10.9 million, respectively, as of March 31, 2023, and $57.7 million, $0.0 million and $19.6 million, respectively, as of December 31, 2022. Financing Receivables Credit Monitoring Commercial Mortgage Loan Credit Risk Profile Based on Internal Rating We actively monitor and manage our commercial mortgage loan and direct financing lease portfolios. All commercial mortgage loans and direct financing leases are analyzed regularly and substantially all are internally rated, based on a proprietary risk rating cash flow model, in order to monitor the financial quality of these assets. The models stress expected cash flows at various levels and at different points in time depending on the durability of the income stream, which includes our assessment of factors such as location (macro and micro markets), tenant quality and lease expirations. Our internal rating analysis presents expected losses in terms of an S&P Global (“S&P”) bond equivalent rating for domestic commercial mortgage loans and Feller rate equivalent for Chilean commercial mortgage loans and direct financing leases. As the credit risk for commercial mortgage loans and direct financing leases increases, we adjust our internal ratings downward with loans in the category “B+ and below” having the highest risk for credit loss. Internal ratings on commercial mortgage loans and direct financing leases are updated |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 4. Derivative Financial Instruments Derivatives are generally used to hedge or reduce exposure to market risks associated with assets held or expected to be purchased or sold and liabilities incurred or expected to be incurred. Derivatives are used to change the characteristics of our asset/liability mix consistent with our risk management activities. Derivatives are also used in asset replication strategies. Types of Derivative Instruments Interest Rate Contracts Interest rate risk is the risk we will incur economic losses due to adverse changes in interest rates. Sources of interest rate risk include the difference between the maturity and interest rate changes of assets with the liabilities they support, timing differences between the pricing of liabilities and the purchase or procurement of assets and changing cash flow profiles from original projections due to prepayment options embedded within asset and liability contracts. We use various derivatives to manage our exposure to fluctuations in interest rates. Interest rate swaps are contracts in which we agree with other parties to exchange, at specified intervals, the difference between fixed rate and/or floating rate interest amounts based upon designated market rates or rate indices and an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by any party. Cash is paid or received based on the terms of the swap. We use interest rate swaps primarily to more closely match the interest rate characteristics of assets and liabilities and to mitigate the risks arising from timing mismatches between assets and liabilities (including duration mismatches). We also use interest rate swaps to hedge against changes in the value of assets we anticipate acquiring and other anticipated transactions and commitments. Interest rate swaps are used to hedge against changes in the value of the guaranteed minimum withdrawal benefit (“GMWB”) MRB. The GMWB rider on our variable annuity products provides for guaranteed minimum withdrawal benefits regardless of the actual performance of various equity and/or fixed income funds available with the product. Additionally, we utilize interest rate swaps to replicate the returns of floating rate assets. Interest rate options, including interest rate caps and interest rate floors, which can be combined to form interest rate collars, are contracts that entitle the purchaser to pay or receive the amounts, if any, by which a specified market rate exceeds a cap strike interest rate, or falls below a floor strike interest rate, respectively, at specified dates. We use interest rate options to manage prepayment risks in our assets and minimum guaranteed interest rates and lapse risks in our liabilities. A swaption is an option to enter into an interest rate swap at a future date. We have purchased swaptions to hedge interest rate exposure for certain assets and liabilities. Swaptions not only hedge against the downside risk, but also allow us to take advantage of any upside benefits. In exchange-traded futures transactions, we agree to purchase or sell a specified number of contracts, the values of which are determined by the values of designated classes of securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. We enter into exchange-traded futures with regulated futures commissions merchants who are members of a trading exchange. We use exchange-traded futures to hedge against changes in value of the GMWB MRB. Interest rate forwards, including to be announced (“TBA”) forwards, bond forwards and treasury forwards, are contracts to take delivery of a fixed income security at a specified price at a future date. TBA forwards deliver government guaranteed mortgage-backed securities. Bond forwards and treasury forwards deliver corporate or municipal and U.S. Treasury bonds, respectively. At inception of the TBA and treasury forward contracts we do not intend to take physical delivery. We intend to take delivery of the bond forwards referencing corporate or municipal bonds. We have used TBA forwards to gain exposure to the investment risk and return of agency mortgage-backed security pools in order to reduce asset and liability duration mismatch. Treasury forwards are used to hedge against changes in the value of the GMWB MRB. Bond forwards are used to gain leverage through synthetic exposure during the forward period and fix the purchase price of a bond at a specified date in future. Foreign Exchange Contracts Foreign currency risk is the risk we will incur economic losses due to adverse fluctuations in foreign currency exchange rates. This risk arises from foreign currency-denominated funding agreements issued to nonqualified institutional investors in the international market, foreign currency-denominated fixed maturity and equity securities, and our international operations, including expected cash flows and potential acquisition and divestiture activity. We use various derivatives to manage our exposure to fluctuations in foreign currency exchange rates. Currency swaps are contracts in which we agree with other parties to exchange, at specified intervals, a series of principal and interest payments in one currency for that of another currency. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. The interest payments are primarily fixed-to-fixed rate; however, they may also be fixed-to-floating rate or floating-to-fixed rate. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. We use currency swaps to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. Currency forwards are contracts in which we agree with other parties to deliver or receive a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. We use currency forwards to reduce market risks from changes in currency exchange rates with respect to investments or liabilities denominated in foreign currencies that we either hold or intend to acquire or sell. We use currency forwards to hedge certain foreign-denominated real estate funds in our domestic operations and net equity investments in foreign operations, including certain sponsored investment funds. Currency options are contracts that give the holder the right, but not the obligation to buy or sell a specified amount of the identified currency within a limited period of time at a contracted price. The contracts are net settled in cash, based on the differential in the current foreign exchange rate and the strike price. Purchased and sold options can be combined to form a foreign currency collar where we receive a payment if the foreign exchange rate is below the purchased option strike price and make a payment if the foreign exchange rate is above the sold option strike price. We have used currency options to hedge expected cash flows from our foreign operations. Equity Contracts Equity risk is the risk that we will incur economic losses due to adverse fluctuations in common stock prices. We use various derivatives to manage our exposure to equity risk, which arises from products in which the return or interest we credit is tied to an external equity index as well as products subject to minimum contractual guarantees. We purchase equity call spreads (“option collars”) to hedge the equity participation rates promised to contractholders in conjunction with our fixed deferred annuity and universal life products that credit interest based on changes in an external equity index. We use exchange-traded futures and equity put options to hedge against changes in the value of the GMWB MRB related to the GMWB rider on our variable annuity product. The premium associated with certain options is paid quarterly over the life of the option contract. We also use exchange-traded futures to hedge against the economic exposure to certain fund closures in process. Credit Contracts Credit risk relates to the uncertainty associated with the continued ability of a given obligor to make timely payments of principal and interest. We use credit default swaps to enhance the return on our investment portfolio by providing comparable exposure to fixed income securities that might not be available in the primary market. They are also used to hedge credit exposures in our investment portfolio. Credit derivatives are used to sell or buy credit protection on an identified name or names on an unfunded or synthetic basis in return for receiving or paying a quarterly premium. The premium generally corresponds to a referenced name’s credit spread at the time the agreement is executed. In cases where we sell protection, we also buy a quality cash bond to match against the credit default swap, thereby entering into a synthetic transaction replicating a cash security. When selling protection, if there is an event of default by the referenced name, as defined by the agreement, we are obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced security in a principal amount equal to the notional value of the credit default swap. Other Contracts Embedded Derivatives. We offer group annuity contracts that have guaranteed separate accounts as an investment option. We have fixed deferred annuities and universal life products that credit interest based on changes in an external equity index. We have a funds withheld payable associated with our coinsurance with funds withheld agreement with Talcott Life & Annuity Re. The funds withheld payable has an embedded total return swap as the total return of the funds withheld assets are transferred to Talcott Life & Annuity Re, which is not based on our own creditworthiness. Exposure Our risk of loss is typically limited to the fair value of our derivative instruments and not to the notional or contractual amounts of these derivatives. We are also exposed to credit losses in the event of nonperformance of the counterparties. Our current credit exposure is limited to the value of derivatives that have become favorable to us. This credit risk is minimized by purchasing such agreements from financial institutions with high credit ratings and by establishing and monitoring exposure limits. We also utilize various credit enhancements, including collateral and credit triggers to reduce the credit exposure to our derivative instruments. Derivatives may be exchange-traded or they may be privately negotiated contracts, which are usually referred to as over-the-counter (“OTC”) derivatives. Certain of our OTC derivatives are cleared and settled through central clearing counterparties (“OTC cleared”), while others are bilateral contracts between two counterparties (“bilateral OTC”). Our derivative transactions are generally documented under International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements. Management believes that such agreements provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Under such agreements, in connection with an early termination of a transaction, we are permitted to set off our receivable from a counterparty against our payables to the same counterparty arising out of all included transactions. For reporting purposes, we do not offset fair value amounts of bilateral OTC derivatives for the right to reclaim cash collateral or the obligation to return cash collateral against fair value amounts recognized for derivative instruments executed with the same counterparties under master netting agreements. OTC cleared derivatives have variation margin that is legally characterized as settlement of the derivative exposure, which reduces their fair value in the consolidated statements of financial position. We posted $674.0 million and $750.9 million in cash and securities under collateral arrangements as of March 31, 2023 and December 31, 2022, respectively, to satisfy collateral and initial margin requirements associated with our derivative credit support agreements and FCM agreements. Certain of our derivative instruments contain provisions that require us to maintain an investment grade rating from each of the major credit rating agencies on our debt. If the ratings on our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fair value, inclusive of accrued interest, of all derivative instruments with credit-risk-related contingent features that were in a liability position without regard to netting under derivative credit support annex agreements as of March 31, 2023 and December 31, 2022, was $504.3 million and $632.6 million, respectively. Cleared derivatives have contingent features that require us to post excess margin as required by the FCM. The terms surrounding excess margin vary by FCM agreement. With respect to derivatives containing collateral provisions, we posted collateral and initial margin of $674.0 million and $750.9 million as of March 31, 2023 and December 31, 2022, respectively, in the normal course of business, which reflects netting under derivative agreements. If the credit-risk-related contingent features underlying these agreements were triggered on March 31, 2023, we would be required to post an additional $94.1 million of collateral to our counterparties. As of March 31, 2023 and December 31, 2022, we had received $136.5 million and $148.8 million, respectively, of cash collateral associated with our derivative credit support annex agreements and FCM agreements, for which we recorded a corresponding liability reflecting our obligation to return the collateral. Notional amounts are used to express the extent of our involvement in derivative transactions and represent a standard measurement of the volume of our derivative activity. Notional amounts represent those amounts used to calculate contractual flows to be exchanged and are not paid or received, except for contracts such as currency swaps. Credit exposure represents the gross amount owed to us under derivative contracts as of the valuation date. The notional amounts and credit exposure of our derivative financial instruments by type were as follows: March 31, 2023 December 31, 2022 (in millions) Notional amounts of derivative instruments Interest rate contracts: Interest rate swaps $ 54,333.8 $ 52,249.9 Interest rate options 3,049.0 4,418.9 Interest rate forwards 2,370.7 2,527.5 Interest rate futures 960.5 877.5 Foreign exchange contracts: Currency swaps 1,617.9 1,634.7 Currency forwards 1,585.3 1,123.1 Equity contracts: Equity options 1,999.1 2,049.3 Equity futures 732.7 574.1 Credit contracts: Credit default swaps 400.0 400.0 Other contracts: Embedded derivatives 23,164.3 23,209.3 Total notional amounts at end of period $ 90,213.3 $ 89,064.3 Credit exposure of derivative instruments Interest rate contracts: Interest rate swaps $ 68.3 $ 64.2 Interest rate options 32.3 41.7 Interest rate forwards 5.4 0.1 Foreign exchange contracts: Currency swaps 190.8 171.1 Currency forwards 70.8 34.0 Equity contracts: Equity options 24.6 16.5 Credit contracts: Credit default swaps 3.7 3.6 Total gross credit exposure 395.9 331.2 Less: collateral received 219.0 191.9 Net credit exposure $ 176.9 $ 139.3 The fair value of our derivative instruments classified as assets and liabilities was as follows: Derivative assets (1) Derivative liabilities (2) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 (in millions) Derivatives designated as hedging instruments Interest rate contracts $ 16.7 $ 20.0 $ 90.2 $ 105.1 Foreign exchange contracts 132.8 134.6 28.3 19.7 Total derivatives designated as hedging instruments $ 149.5 $ 154.6 $ 118.5 $ 124.8 Derivatives not designated as hedging instruments Interest rate contracts $ 82.9 $ 81.1 $ 323.7 $ 439.9 Foreign exchange contracts 126.2 65.9 9.0 21.9 Equity contracts 24.5 16.5 55.2 45.6 Credit contracts 3.6 3.5 1.9 2.0 Other contracts — — (2,970.7) (3,606.4) Total derivatives not designated as hedging instruments 237.2 167.0 (2,580.9) (3,097.0) Total derivative instruments $ 386.7 $ 321.6 $ (2,462.4) $ (2,972.2) (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $55.5 million and $46.4 million as of March 31, 2023 and December 31, 2022, respectively, are reported with contractholder funds on the consolidated statements of financial position. Embedded derivatives with a net (asset) liability fair value of $(3,026.2) million and $(3,652.8) million as of March 31, 2023 and December 31, 2022, respectively, are reported with funds withheld payable on the consolidated statements of financial position. Credit Derivatives Sold When we sell credit protection, we are exposed to the underlying credit risk similar to purchasing a fixed maturity security instrument. Our credit derivative contracts sold reference a single name or reference security (referred to as “single name credit default swaps”). These instruments are either referenced in an OTC credit derivative transaction or embedded within an investment structure that has been fully consolidated into our financial statements. These credit derivative transactions are subject to events of default defined within the terms of the contract, which normally consist of bankruptcy, failure to pay, or modified restructuring of the reference entity and/or issue. If a default event occurs for a reference name or security, we are obligated to pay the counterparty an amount equal to the notional amount of the credit derivative transaction. As a result, our maximum future payment is equal to the notional amount of the credit derivative. In certain cases, we also may have purchased credit protection with identical underlyings to certain of our sold protection transactions. As of March 31, 2023 and December 31, 2022, we did not purchase credit protection relating to our sold protection transactions. In certain circumstances, our potential loss could also be reduced by any amount recovered in the default proceedings of the underlying credit name. The following tables show our credit default swap protection sold by types of contract, types of referenced/underlying asset class and external agency rating for the underlying reference security. The maximum future payments are undiscounted and have not been reduced by the effect of any offsetting transactions, collateral or recourse features described above. March 31, 2023 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.2 $ 40.0 2.2 BBB 190.0 2.5 190.0 2.9 BB 20.0 (0.1) 20.0 4.2 Sovereign A 20.0 0.3 20.0 2.2 Total credit default swap protection sold $ 270.0 $ 2.9 $ 270.0 2.8 December 31, 2022 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.4 $ 40.0 2.5 BBB 190.0 2.2 190.0 3.1 BB 20.0 (0.2) 20.0 4.5 Sovereign A 20.0 0.2 20.0 2.5 Total credit default swap protection sold $ 270.0 $ 2.6 $ 270.0 3.1 Fair Value and Cash Flow Hedges Fair Value Hedges We use fixed-to-floating rate interest rate swaps to more closely align the interest rate characteristics of certain assets and have used them to align the interest rate characteristics of certain liabilities. In general, these swaps are used in asset and liability management to modify duration, which is a measure of sensitivity to interest rate changes. The net interest effect of interest rate swap transactions for derivatives in fair value hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The following amounts were recorded on the consolidated statements of financial position related to cumulative basis adjustments for fair value hedges. The amortized cost includes the amortized cost basis and the fair value hedging basis adjustment. Cumulative amount of fair value hedging basis adjustment Line item in the consolidated statements increase/(decrease) included in the of financial position in which the Amortized cost of hedged item amortized cost of the hedged item hedged item is included March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 (in millions) Fixed maturities, available-for-sale (1): Active hedging relationships $ 3,454.0 $ 3,498.6 $ (126.1) $ (153.4) Discontinued hedging relationships 75.5 48.8 0.3 1.3 Total fixed maturities, available-for-sale in active or discontinued hedging relationships $ 3,529.5 $ 3,547.4 $ (125.8) $ (152.1) (1) These amounts include the amortized cost basis of closed portfolios used to designate last-of-layer hedging relationships in which the hedged last layer amount is expected to remain at the end of the hedging relationship. As of March 31, 2023 and December 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $3,215.0 million and $3,256.9 million, respectively, the cumulative basis adjustments associated with these hedging relationships was $(83.5) million and $(102.4) million, respectively, and the amount of the designated hedged items were $1,110.0 million and $1,110.0 million, respectively. Cash Flow Hedges We utilize floating-to-fixed rate interest rate swaps to eliminate the variability in cash flows of recognized financial assets and liabilities. We enter into currency exchange swap agreements to convert both principal and interest payments of certain foreign denominated assets and liabilities into U.S. dollar denominated fixed rate instruments to eliminate the exposure to future currency volatility on those items. We use bond forwards and have used floating-to-fixed rate interest rate swaps to hedge forecasted transactions. The net interest effect of interest rate swap and currency swap transactions for derivatives in cash flow hedges is recorded as an adjustment to income or expense of the underlying hedged item in our consolidated statements of operations. The maximum length of time we are hedging our exposure to the variability in future cash flows for forecasted transactions, excluding those related to the payments of variable interest on existing financial assets and liabilities, is 3.9 years. As of March 31, 2023, we had $15.9 million of net gains reported in AOCI on the consolidated statements of financial position related to active hedges of forecasted transactions. If a hedged forecasted transaction is no longer probable of occurring, cash flow hedge accounting is discontinued. If it is probable that the hedged forecasted transaction will not occur, the deferred gain or loss is immediately reclassified from AOCI into net income. The following table shows the effect of derivatives in cash flow hedging relationships on the consolidated statements of financial position. Amount of gain (loss) recognized in AOCI on derivatives for the Derivatives in cash three months ended March 31, flow hedging relationships Related hedged item 2023 2022 (in millions) Interest rate contracts Fixed maturities, available-for-sale $ 15.9 $ (44.2) Interest rate contracts Investment contracts (3.3) 9.5 Foreign exchange contracts Fixed maturities, available-for-sale (10.1) 13.0 Total $ 2.5 $ (21.7) We expect to reclassify net gains of $20.8 million from AOCI into net income in the next 12 months, which includes both net deferred gains on discontinued hedges and net gains on periodic settlements of active hedges. Actual amounts may vary from this amount as a result of market conditions. Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations The following tables show the effect of derivatives in fair value and cash flow hedging relationships and the related hedged items on the consolidated statements of operations. For the three months ended March 31, 2023 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 986.7 $ (66.0) $ 1,773.9 Gains on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 26.2 $ — $ — Loss recognized on derivatives (22.6) — — Amortization of hedged item basis adjustments (0.1) — — Amounts related to periodic settlements on derivatives 12.6 — — Total gain recognized for fair value hedging relationships $ 16.1 $ — $ — Gains on cash flow hedging relationships: Interest rate contracts: Gain reclassified from AOCI on derivatives $ 1.1 $ — $ — Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 1.4 — Amounts related to periodic settlements on derivatives — — 3.1 Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 1.2 — Amounts related to periodic settlements on derivatives 5.4 — — Total gain recognized for cash flow hedging relationships $ 6.5 $ 2.6 $ 3.1 For the three months ended March 31, 2022 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 1,125.5 $ (136.6) $ 1,490.7 Losses on fair value hedging relationships: Interest rate contracts: Loss recognized on hedged item $ (71.1) $ — $ — Gain recognized on derivatives 68.0 — — Amortization of hedged item basis adjustments (0.4) — — Amounts related to periodic settlements on derivatives (4.2) — — Total loss recognized for fair value hedging relationships $ (7.7) $ — $ — Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain reclassified from AOCI on derivatives $ 3.3 $ — $ — Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 2.9 — Amounts related to periodic settlements on derivatives — — (0.2) Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 0.6 — Amounts related to periodic settlements on derivatives 2.7 — — Total gain (loss) recognized for cash flow hedging relationships $ 6.0 $ 3.5 $ (0.2) Net Investment Hedges We may take measures to hedge our net equity investments in our foreign operations from currency risk. This is accomplished with the use of currency forwards. Gains and losses associated with net investment hedges are recorded in AOCI and will be released into net income if our investment in the foreign operation is sold or substantially liquidated. The following table shows the effect of foreign exchange contracts used to hedge a portion of our net investment in certain sponsored investment funds on the consolidated financial statements. Amount of loss Amount of loss recognized reclassified from AOCI into in AOCI on derivatives net realized capital gains (losses) for the three months ended for the three months ended March 31, March 31, Derivatives in net investment hedging relationships 2023 2022 2023 2022 (in millions) Foreign exchange contracts $ (0.6) $ (0.7) $ — $ — Total $ (0.6) $ (0.7) $ — $ — Derivatives Not Designated as Hedging Instruments Our use of futures, certain swaptions and swaps, option collars, options and forwards are effective from an economic standpoint, but they have not been designated as hedges for financial reporting purposes. As such, periodic changes in the market value of these instruments, which includes mark-to-market gains and losses as well as periodic and final settlements, primarily flow directly into net realized capital gains (losses) on the consolidated statements of operations. However, the change in fair value of the funds withheld embedded derivative is separately reported on the consolidated statements of operations. Additionally, mark-to-market gains and losses as well as periodic and final settlements for derivatives used to hedge market risk benefits are reported in market risk benefit (gain) loss on the consolidated statements of operations. The following table shows the effect of derivatives not designated as hedging instruments, including fair value changes of embedded derivatives that have been bifurcated from the host contract, on the consolidated statements of operations. Amount of gain (loss) recognized in net income on derivatives for the three months ended March 31, Derivatives not designated as hedging instruments 2023 2022 (in millions) Interest rate contracts $ (17.8) $ (229.4) Foreign exchange contracts 29.2 67.9 Equity contracts (63.1) (5.3) Credit contracts 0.8 0.1 Other contracts (1) (639.2) 12.8 Total $ (690.1) $ (153.9) (1) Includes the change in fair value of the funds withheld embedded derivative. |
Deferred Acquisition Costs and
Deferred Acquisition Costs and Other Actuarial Balances | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Policy Acquisition Costs And Other Actuarial Balances | |
Deferred Acquisition Costs and Other Actuarial Balances | 5. Deferred Acquisition Costs and Other Actuarial Balances Deferred Acquisition Costs Incremental direct costs of contract acquisition as well as certain costs directly related to acquisition activities (underwriting, policy issuance and processing, medical and inspection and sales force contract selling) for the successful acquisition of new and renewal insurance policies and investment contracts are capitalized in the period they are incurred. Maintenance costs and acquisition costs that are not deferrable are charged to operating expenses as incurred. For our long-duration insurance products and certain investment contracts, DAC is amortized on a constant level basis over the expected life of the contracts using groupings and assumptions consistent with those used in computing policyholder liabilities. For each of our long-duration insurance products, we select an inforce measure as a basis for amortization that will result in a constant level amortization pattern for the expected life of the contract. If our actual contract terminations differ from our expectation, the amortization pattern is adjusted on a prospective basis. Some of our life and disability products within the Benefits and Protection segment have renewal commissions resulting in new DAC capitalizations in the years following the initial capitalization. We also have life products that allow for underwritten death benefit increases and cost of living adjustments, resulting in an immaterial amount of new DAC capitalizations each year. The new capitalizations are added to the existing DAC balance when incurred and amortized over the remaining life of the business. DAC on short-duration group benefits contracts is amortized over the estimated life of the underlying contracts. We review and update actuarial experience assumptions (such as mortality, surrenders, lapse, and premium persistency) serving as inputs to the models that establish the expected life for DAC and other actuarial balances during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. We make model refinements as necessary, and any changes resulting from these assumption updates are applied prospectively. DAC amortization expense of $97.9 million and $95.8 million related to our long-duration and short-duration contracts was recorded in operating expenses on the consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively. The following tables summarize disaggregated DAC amounts and reconcile the totals to those reported in the consolidated statements of financial position. March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 500.2 $ 498.0 Individual variable annuities 276.8 278.0 Pension risk transfer 10.2 8.1 Individual fixed deferred annuities 124.7 131.0 Investment only 13.7 14.9 Total Retirement and Income hope soSolutions 925.6 930.0 Benefits and Protection: Specialty Benefits: Individual disability 635.0 626.1 Life Insurance: Universal life 1,560.4 1,569.7 Term life 687.1 685.7 Participating life 90.8 93.0 Total Benefits and Protection 2,973.3 2,974.5 Short-duration contracts 40.2 34.7 Other balances (1) 9.2 8.8 Total DAC per consolidated statements of financial position $ 3,948.3 $ 3,948.0 (1) Includes insignificant balances for long-duration contracts. Retirement and Income Solutions The balances and changes in DAC were as follows: Workplace Individual savings and Individual Pension fixed retirement variable risk deferred Investment solutions annuities transfer annuities only (in millions) Balances as of January 1, 2022 $ 489.0 $ 281.2 $ 2.7 $ 162.2 $ 18.1 Costs deferred 48.3 22.5 5.6 — 1.4 Amortized to expense (39.3) (25.7) (0.2) (31.2) (4.6) Balances as of December 31, 2022 498.0 278.0 8.1 131.0 14.9 Costs deferred 12.0 5.2 2.2 — — Amortized to expense (9.8) (6.4) (0.1) (6.3) (1.2) Balances as of March 31, 2023 $ 500.2 $ 276.8 $ 10.2 $ 124.7 $ 13.7 Benefits and Protection The balances and changes in DAC were as follows: Specialty Benefits Life Insurance Individual disability Universal life Term life Participating life (in millions) Balances as of January 1, 2022 $ 580.7 $ 1,596.2 $ 678.9 $ 102.3 Costs deferred 87.6 70.6 66.7 1.4 Amortized to expense (42.2) (97.1) (59.9) (10.7) Balances as of December 31, 2022 626.1 1,569.7 685.7 93.0 Costs deferred 19.9 14.9 16.6 0.3 Amortized to expense (11.0) (24.2) (15.2) (2.5) Balances as of March 31, 2023 $ 635.0 $ 1,560.4 $ 687.1 $ 90.8 Unearned Revenue Liability An unearned revenue liability is established when we collect fees or other policyholder assessments, inclusive of cost of insurance charges, administrative charges and other similar fees, for services to be provided in future periods. These unearned front-end fees are deferred and the amortization is recorded using an approach consistent with DAC. The unearned revenue liability is included within other policyholder funds in the consolidated statements of financial position. The following table summarizes disaggregated unearned revenue liability amounts and reconciles the totals to those reported in the consolidated statements of financial position. March 31, 2023 December 31, 2022 (in millions) Benefits and Protection - Life Insurance: Universal life $ 466.6 $ 459.0 Other balances (1) 8.8 8.4 Total unearned revenue liability $ 475.4 $ 467.4 (1) Includes insignificant balances for long-duration contracts. Benefits and Protection The balances and changes in the unearned revenue liability for Life Insurance – Universal life contracts were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 (in millions) Balance at beginning of period $ 459.0 $ 425.3 Deferrals 15.0 61.8 Revenue recognized (7.4) (28.1) Balance at end of period 466.6 459.0 Reinsurance impact (227.4) (227.9) Balance at end of period after reinsurance $ 239.2 $ 231.1 |
Separate Account Balances
Separate Account Balances | 3 Months Ended |
Mar. 31, 2023 | |
Separate Account Balances | |
Separate Account Balances | 6. Separate Account Balances The separate accounts are legally segregated and are not subject to claims that arise out of any of our other business. The client, rather than us, directs the investments and bears the investment risk of these funds. The separate account assets represent the fair value of funds that are separately administered by us for contracts with equity, real estate and fixed income investments and are presented as a summary total within the consolidated statements of financial position. An equivalent amount is reported as separate account liabilities, which represent the obligation to return the monies to the client. Refer to Note 16, Fair Value Measurements, for further information on the valuation methodologies. We receive fees for mortality, withdrawal and expense risks, as well as administrative, maintenance and investment advisory services that are included in the consolidated statements of operations. Net deposits, net investment income and realized and unrealized capital gains and losses of the separate accounts are not reflected in the consolidated statements of operations. The Retirement and Income Solutions segment offers variable annuity contracts that allow the policyholder to allocate deposits into various investment options in a separate account. The variable annuity contracts can also include GMWB riders and guaranteed minimum death benefit (“GMDB”) riders that are accounted for as MRBs. Retirement and Income Solutions also offers certain group annuity contracts that have separate accounts as an investment option. The Principal Asset Management segment offers retirement pension schemes in Asia that offer various guaranteed and non-guaranteed constituent fund investment options to customers. The retirement pension schemes can include a guaranteed rate of return to the customer or a minimum guarantee on withdrawals under certain qualifying events. The minimum guarantee on withdrawals under certain qualifying events is accounted for as an MRB. Principal Asset Management separate account assets and liabilities also include certain retirement accumulation products in Latin America where the segregated funds and associated obligation to the client are consolidated within the financial statements. We have determined that summary totals are the most meaningful presentation for these funds. The Benefits and Protection segment offers variable universal life products with separate account investment options. Refer to Note 9, Market Risk Benefits, for further information on the MRBs associated with the contracts mentioned above. As of March 31, 2023 and December 31, 2022, the separate accounts included a separate account valued at $ 88.5 million and $101.4 million, respectively, which primarily included shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. In the consolidated statements of financial position, the separate account shares are recorded at fair value and are reported as separate account assets with a corresponding separate account liability. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations. Separate Account Assets The aggregate fair value of assets, by major investment category, supporting separate accounts were as follows: March 31, 2023 December 31, 2022 (in millions) Fixed maturities: U.S. government and agencies $ 7,916.9 $ 7,339.6 Non-U.S. governments 8,956.1 8,424.3 States and political subdivisions 225.9 211.7 Corporate 15,538.1 14,429.7 Residential mortgage-backed securities 3,994.7 3,894.5 Commercial mortgage-backed securities 199.5 206.2 Other debt obligations 360.8 299.5 Total fixed maturities 37,192.0 34,805.5 Equity securities 109,562.8 105,053.3 Real estate 604.0 610.6 Other investments 9,887.0 10,278.6 Cash and cash equivalents 3,639.9 3,583.8 Other assets 1,115.1 1,043.3 Total separate account assets per consolidated statements of financial position $ 162,000.8 $ 155,375.1 Separate Account Liabilities The following tables summarize disaggregated separate account liability amounts and reconcile the totals to separate account liabilities reported in the consolidated statements of financial position. March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Group retirement contracts $ 111,275.8 $ 107,240.1 Individual variable annuities 8,910.3 8,659.0 Total Retirement and Income Solutions 120,186.1 115,899.1 Principal Asset Management — Latin America: Pension 35,385.8 33,316.7 Asia: Guaranteed pension 928.8 915.0 Total Principal Asset Management — Principal International 36,314.6 34,231.7 Benefits and Protection - Life Insurance: Universal life 5,254.2 5,011.0 Other balances (1) 245.9 233.3 Total separate account liabilities per consolidated statements of financial position $ 162,000.8 $ 155,375.1 (1) Includes insignificant balances for long-duration contracts. Retirement and Income Solutions The balances and the changes in separate account liabilities were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 Group Individual Group Individual retirement variable retirement variable contracts annuities contracts annuities (in millions) Balance at beginning of period $ 107,240.1 $ 8,659.0 $ 131,188.6 $ 11,000.0 Premiums and deposits (1) 2,881.3 94.8 14,859.3 354.1 Policy charges (77.7) (51.2) (383.7) (211.1) Surrenders, withdrawals and benefit payments (1) (2,747.8) (217.3) (14,479.4) (790.1) Investment performance 5,016.8 417.6 (20,641.3) (1,723.3) Net transfers (to) from general account (1) (1,331.8) 7.4 (2,571.7) 29.4 Other (2) 294.9 — (731.7) — Balance at end of period $ 111,275.8 $ 8,910.3 $ 107,240.1 $ 8,659.0 Cash surrender value (3) $ 109,850.4 $ 8,789.3 $ 106,125.7 $ 8,538.7 (1) Within the policyholder account balances rollforwards in Note 7, Contractholder Funds, amounts in these lines for Individual variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in net transfers from (to) separate account. (2) Includes amounts to be settled between the separate account and general account due to the timing of trade settlements as of the reporting date. (3) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. Principal Asset Management – Principal International The balances and the changes in separate account liabilities were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 Latin America Asia Latin America Asia Guaranteed Guaranteed Pension pension Pension pension (in millions) Balance at beginning of period $ 33,316.7 $ 915.0 $ 33,030.6 $ 971.3 Premiums and deposits 812.7 66.1 3,620.4 276.2 Policy charges (4.7) (4.7) (18.2) (19.8) Surrenders, withdrawals and benefit payments (988.9) (66.7) (3,984.6) (247.0) Investment performance (303.8) 24.5 498.8 (64.0) Other (28.7) (0.1) (0.8) (0.4) Foreign currency translation adjustment 2,582.5 (5.3) 170.5 (1.3) Balance at end of period $ 35,385.8 $ 928.8 $ 33,316.7 $ 915.0 Cash surrender value $ 35,385.8 $ 928.8 $ 33,316.7 $ 915.0 Benefits and Protection The balances and the changes in separate account liabilities for Life Insurance – Universal life were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 (in millions) Balance at beginning of period $ 5,011.0 $ 5,886.1 Premiums and deposits (1) 126.5 514.7 Policy charges (31.9) (122.1) Surrenders, withdrawals and benefit payments (1) (115.7) (208.6) Investment performance 262.0 (1,054.5) Net transfers (to) from general account (1) 2.3 (4.6) Balance at end of period $ 5,254.2 $ 5,011.0 Cash surrender value (2) $ 5,308.6 $ 5,055.8 (1) Within the policyholder account balances rollforwards in Note 7, Contractholder Funds, amounts in these lines are reflected in net transfers from (to) separate account. (2) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. Certain products include surrender value enhancement riders that result in cash surrender values greater than account balances. |
Contractholder Funds
Contractholder Funds | 3 Months Ended |
Mar. 31, 2023 | |
Contractholder Funds | |
Contractholder Funds | 7. Contractholder Funds Contractholder funds include policyholder account balances related to contracts with significant insurance risk and investment contracts. The following tables summarize disaggregated policyholder account balance amounts and reconcile the totals to contractholder funds reported in the consolidated statements of financial position. March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 12,476.6 $ 12,154.7 Individual variable annuities 366.1 381.4 Individual fixed deferred annuities 6,785.7 7,228.3 Total Retirement and Income Solutions 19,628.4 19,764.4 Benefits and Protection - Life Insurance: Universal life 6,915.4 6,947.9 Corporate: Inter-segment eliminations (359.4) (362.7) Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue 26,184.4 26,349.6 Reconciling items: Investment contracts without significant fee revenue (1) 16,374.4 16,104.0 Embedded derivatives (2) 55.5 46.4 Other balances (3) 343.7 325.3 Total contractholder funds per consolidated statements of financial position $ 42,958.0 $ 42,825.3 (1) Includes GICs, funding agreements, individual fixed income annuities and guaranteed pension contracts. These contracts are not included within the disaggregated rollforward or guaranteed minimum interest rate (“GMIR”) disclosures below. (2) Refer to Note 16, Fair Value Measurements, for details on the changes in Level 3 fair value measurements of embedded derivatives. (3) Includes insignificant balances for long-duration contracts and amounts that are not accrued to the benefit of the contractholder and, therefore, are not included within the disaggregated rollforward or GMIR disclosures below. Retirement and Income Solutions The changes in policyholder account balances were as follows: For the three months ended March 31, 2023 For the year ended December 31, 2022 Workplace Workplace savings and Individual Individual savings and Individual Individual retirement variable fixed deferred retirement variable fixed deferred solutions annuities annuities (1) solutions annuities annuities ($ in millions) Balance at beginning of period $ 12,154.7 $ 381.4 $ 7,228.3 $ 10,996.2 $ 380.9 $ 9,646.3 Premiums and deposits 1,337.6 110.2 7.5 3,719.5 426.5 35.9 Policy charges (7.5) — — (28.5) — — Surrenders, withdrawals and benefit payments (1,960.2) (243.1) (492.8) (2,866.7) (843.2) (2,655.6) Net transfers from (to) separate account (2) 896.8 115.1 — 164.6 406.6 — Interest credited 63.3 2.5 42.7 194.3 10.6 201.7 Other (8.1) — — (24.7) — — Balance at end of period $ 12,476.6 $ 366.1 $ 6,785.7 $ 12,154.7 $ 381.4 $ 7,228.3 Weighted-average crediting rate (3) 2.16 % 2.81 % 2.67 % 1.94 % 2.79 % 2.63 % Cash surrender value (4) $ 10,797.2 $ 363.3 $ 6,648.8 $ 10,341.7 $ 378.6 $ 7,081.4 (1) We use the deposit method of accounting for the reinsurance of this exited business. (2) Within the separate account liabilities rollforwards in Note 6, Separate Account Balances, these transfers for Individual variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account. (3) The weighted-average crediting rate is calculated on a year-to-date basis based on account value. (4) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. The net amount at risk for policyholder account balances for Individual variable annuities is equal to the MRB net amount at risk, as reported in Note 9, Market Risk Benefits. Workplace savings and retirement solutions and Individual fixed deferred annuities do not have guarantees that provide for benefits in excess of the current policyholder account balances. Benefits and Protection The changes in policyholder account balances for Life Insurance – Universal life were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ 6,947.9 $ 6,962.5 Premiums and deposits 312.4 1,267.2 Policy charges (213.5) (837.8) Surrenders, withdrawals and benefit payments (170.4) (390.0) Net transfers from (to) separate account (1) (13.1) (301.5) Interest credited 52.4 247.5 Other (0.3) — Balance at end of period 6,915.4 6,947.9 Reinsurance impact (3,496.8) (3,528.9) Balance at end of period after reinsurance $ 3,418.6 $ 3,419.0 Weighted-average crediting rate (2) 3.33 % 3.35 % Net amount at risk (3) $ 86,335.6 $ 86,547.9 Cash surrender value (4) $ 5,883.5 $ 5,911.5 (1) Within the separate account liabilities rollforwards in Note 6, Separate Account Balances, these transfers are reflected in premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account. (2) The weighted-average crediting rate is calculated on a year-to-date basis based on account value, including indexed credits. (3) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the death benefit in excess of the current account balance or the fixed death benefit at the consolidated statement of financial position date. (4) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. Guaranteed Minimum Interest Rate The account values, for contracts with significant insurance risk and investment contracts with significant fee revenue by range of GMIR and the related range of difference, in basis points, between rates credited to policyholders and the respective GMIR were as follows. The amounts are before reinsurance impacts of our exited U.S. retail fixed annuity and ULSG businesses. March 31, 2023 Excess of crediting rates over GMIR Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total (in millions) Retirement and Income Solutions Workplace savings and retirement solutions Up to 1.00% $ 0.2 $ 4.0 $ 128.5 $ 1,119.4 $ 685.5 $ 1,937.6 1.01% - 2.00% — 524.8 5,995.9 1,653.0 279.2 8,452.9 2.01% - 3.00% 7.7 0.1 0.7 0.5 — 9.0 3.01% - 4.00% 7.7 — — — — 7.7 4.01% and above 18.5 — — — — 18.5 Subtotal 34.1 528.9 6,125.1 2,772.9 964.7 10,425.7 No GMIR 2,050.9 Total $ 12,476.6 Individual variable annuities Up to 1.00% $ 28.9 $ — $ — $ — $ — $ 28.9 1.01% - 2.00% 3.6 — — — — 3.6 2.01% - 3.00% 319.3 — — — — 319.3 3.01% - 4.00% — — — — — — 4.01% and above — — — — — — Subtotal 351.8 — — — — 351.8 No GMIR 14.3 Total $ 366.1 Individual fixed deferred annuities Up to 1.00% $ 402.1 $ 156.5 $ 210.2 $ 747.5 $ 1,024.8 $ 2,541.1 1.01% - 2.00% 121.4 1.3 39.2 234.4 0.8 397.1 2.01% - 3.00% 3,386.6 — — — — 3,386.6 3.01% - 4.00% 166.2 — — — — 166.2 4.01% and above — — — — — — Subtotal 4,076.3 157.8 249.4 981.9 1,025.6 6,491.0 No GMIR 294.7 Total $ 6,785.7 Benefits and Protection - Life Insurance Universal life Up to 1.00% $ — $ 1.7 $ 16.2 $ — $ 1.2 $ 19.1 1.01% - 2.00% 312.4 — 412.4 707.8 132.8 1,565.4 2.01% - 3.00% 846.9 881.9 945.0 61.0 0.4 2,735.2 3.01% - 4.00% 1,695.1 30.2 29.7 29.2 3.2 1,787.4 4.01% and above 39.7 10.9 3.4 1.5 — 55.5 Subtotal 2,894.1 924.7 1,406.7 799.5 137.6 6,162.6 No GMIR 752.8 Total $ 6,915.4 December 31, 2022 Excess of crediting rates over GMIR Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total (in millions) Retirement and Income Solutions Workplace savings and retirement solutions Up to 1.00% $ 3.9 $ 24.8 $ 1,188.9 $ 307.8 $ 364.9 $ 1,890.3 1.01% - 2.00% — 549.9 6,090.2 1,477.0 9.4 8,126.5 2.01% - 3.00% 15.1 0.1 — 0.1 — 15.3 3.01% - 4.00% 7.8 — — — — 7.8 4.01% and above 18.8 — — — — 18.8 Subtotal 45.6 574.8 7,279.1 1,784.9 374.3 10,058.7 No GMIR 2,096.0 Total $ 12,154.7 Individual variable annuities Up to 1.00% $ 33.0 $ — $ — $ — $ — $ 33.0 1.01% - 2.00% 3.6 — — — — 3.6 2.01% - 3.00% 331.8 — — — — 331.8 3.01% - 4.00% — — — — — — 4.01% and above — — — — — — Subtotal 368.4 — — — — 368.4 No GMIR 13.0 Total $ 381.4 Individual fixed deferred annuities Up to 1.00% $ 426.4 $ 161.7 $ 236.2 $ 879.2 $ 993.0 $ 2,696.5 1.01% - 2.00% 139.8 1.4 39.9 250.5 0.6 432.2 2.01% - 3.00% 3,617.1 — — — — 3,617.1 3.01% - 4.00% 169.7 — — — — 169.7 4.01% and above — — — — — — Subtotal 4,353.0 163.1 276.1 1,129.7 993.6 6,915.5 No GMIR 312.8 Total $ 7,228.3 Benefits and Protection - Life Insurance Universal life Up to 1.00% $ — $ 8.4 $ 10.1 $ — $ 0.7 $ 19.2 1.01% - 2.00% 315.7 — 407.0 695.5 155.0 1,573.2 2.01% - 3.00% 865.9 951.2 903.5 59.9 0.4 2,780.9 3.01% - 4.00% 1,698.9 35.8 21.9 25.3 3.2 1,785.1 4.01% and above 40.6 10.1 3.4 1.6 — 55.7 Subtotal 2,921.1 1,005.5 1,345.9 782.3 159.3 6,214.1 No GMIR 733.8 Total $ 6,947.9 |
Future Policy Benefits and Clai
Future Policy Benefits and Claims | 3 Months Ended |
Mar. 31, 2023 | |
Future Policy Benefits and Claims | |
Future Policy Benefits and Claims | 8. Future Policy Benefits and Claims Future policy benefits and claims include reserves for short-duration contracts and long-duration contracts as well as certain reinsurance balances, when in a liability position. The following tables summarize disaggregated amounts included in future policy benefit and claims and reconcile the totals to those reported in the consolidated statements of financial position. March 31, 2023 December 31, 2022 (in millions) Liability for future policy benefits by segment (1): Retirement and Income Solutions: Pension risk transfer $ 22,146.1 $ 21,211.4 Individual fixed income annuities 5,092.3 5,019.4 Total Retirement and Income Solutions 27,238.4 26,230.8 Principal Asset Management — Latin America: Individual fixed income annuities 5,416.9 5,042.3 Benefits and Protection: Specialty Benefits: Individual disability 1,815.9 1,698.8 Life Insurance: Term life 961.2 909.0 Total Benefits and Protection 2,777.1 2,607.8 Corporate: Long-term care insurance 188.4 183.5 Total liability for future policy benefits 35,620.8 34,064.4 Additional liability for certain benefit features by segment (2): Benefits and Protection - Life Insurance: Universal life 4,219.3 4,095.2 Total additional liability for certain benefit features 4,219.3 4,095.2 Reconciling items: Participating contracts 3,166.3 3,207.2 Short-duration contracts 1,294.0 1,295.6 Cost of reinsurance liability 184.5 191.1 Reinsurance recoverable liability 43.5 39.4 Other (3) 171.5 132.4 Future policy benefits and claims per consolidated statements of financial position $ 44,699.9 $ 43,025.3 (1) Amounts include the deferred profit liability. (2) Includes reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years. (3) Includes other miscellaneous reserves and the impact of unrealized gains (losses) on the additional liability for certain benefit features. Liability for Unpaid Claims The liability for unpaid claims is reported in future policy benefits and claims within our consolidated statements of financial position. Activity associated with unpaid claims was as follows: For the three months ended March 31, 2023 2022 (in millions) Balance at beginning of period $ 1,395.0 $ 1,370.9 Less: reinsurance recoverable 68.6 68.7 Net balance at beginning of period 1,326.4 1,302.2 Incurred: Current year 429.4 404.6 Prior years (40.8) (15.0) Total incurred 388.6 389.6 Payments: Current year 225.9 205.3 Prior years 162.5 174.1 Total payments 388.4 379.4 Net balance at end of period 1,326.6 1,312.4 Plus: reinsurance recoverable 69.6 68.9 Balance at end of period $ 1,396.2 $ 1,381.3 Incurred liability adjustments relating to prior years, which affected current operations during 2023 and 2022, resulted in part from developed claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims. Long-Duration Contracts Gross Premiums or Assessments and Interest Accretion The amount of gross premiums or assessments and interest accretion recognized by segment in the consolidated statements of operations was as follows: Gross premiums or assessments (1) Interest accretion (2) For the three months ended For the three months ended March 31, March 31, 2023 2022 2023 2022 (in millions) Retirement and Income Solutions: Pension risk transfer $ 577.0 $ 116.5 $ 245.2 $ 232.7 Individual fixed income annuities 8.0 6.8 55.7 58.5 Total Retirement and Income Solutions 585.0 123.3 300.9 291.2 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities (3) 6.6 10.5 106.2 139.1 Benefits and Protection: Specialty Benefits: Individual disability 150.6 144.4 23.2 22.3 Life Insurance: Universal life 174.6 142.5 46.3 42.5 Term life 160.9 157.2 11.4 10.8 Total Benefits and Protection 486.1 444.1 80.9 75.6 Corporate: Long-term care insurance 1.5 1.4 2.5 2.4 Total per consolidated statements of operations $ 1,079.2 $ 579.3 $ 490.5 $ 508.3 (1) Gross premiums are included within premiums and other considerations on the consolidated statements of operations. Assessments, which are only applicable to the Life Insurance - Universal life level of aggregation, are included within fees and other revenues on the consolidated statements of operations. (2) Interest accretion is included within benefits, claims and settlement expenses on the consolidated statements of operations. (3) Includes inflation adjustments included within the liability for future policy benefits rollforward for interest accretion. Liability for Future Policy Benefits The liability for future policy benefits for individual and group annuities is generally equal to the present value of expected future policy benefit payments. The reserves are computed using assumptions for mortality and interest. Mortality rate assumptions are based on our experience and are periodically reviewed against both industry standards and experience. The liability for future policy benefits for non-participating term life insurance, individual disability income contracts and individual and group long-term care contracts is generally equal to the present value of expected future policy benefit payments less the present value of expected net premiums. The reserves are computed using assumptions for mortality, interest, morbidity and lapse. An interest accretion rate is determined for an identified cohort and remains unchanged after the issue year. For policies issued on or prior to December 31, 2020, the interest accretion rate is based on the assumed investment yield when the business was issued. For policies issued after December 31, 2020, the interest accretion rate is based on the upper-medium grade fixed-income instrument yields, which is generally equivalent to a single-A rated bond yield matched to the duration of our insurance liabilities, when the business was issued. The liability for future policy benefits is remeasured to reflect current upper-medium grade fixed-income instrument yields as of each reporting date. The liability is calculated by discounting cash flows using rate curves reflecting the currency and duration of the insurance liabilities. For discount rate tenors, or points on the curves, where the upper-medium grade fixed-income instrument yields are not liquid or limited observable market data is available, we use various estimation techniques consistent with fair value measurement guidance. For our individual fixed income annuities in Latin America, the discount rate methodology is designed to prioritize observable inputs based on market data available in the local debt markets where the respective policies are issued in the currency in which the policies are denominated. For discount rate tenors where upper-medium grade fixed-income instrument yields based on international rating standards are not liquid or limited observable market data is available, estimation techniques are used to determine a curve in the appropriate currency. Further details regarding reference rates used are included under “Interest Accretion and Current Discount Rates.” Retirement and Income Solutions The balances and the changes in the present value for expected future policy benefits were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 Pension Individual Pension Individual risk fixed income risk fixed income transfer annuities transfer annuities ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 21,211.4 $ 5,019.4 $ 25,365.8 $ 6,535.0 Effect of changes in discount rate assumptions at beginning of period 1,799.6 439.0 (3,386.5) (812.6) Balance at beginning of period at original discount rate 23,011.0 5,458.4 21,979.3 5,722.4 Effect of changes in cash flow assumptions — — (7.9) (3.0) Effect of actual variances from expected experience (13.3) (0.8) (3.2) — Adjusted beginning of period balance at original discount rate 22,997.7 5,457.6 21,968.2 5,719.4 Interest accrual 245.2 55.7 935.7 229.7 Benefit payments (481.5) (126.9) (1,841.7) (520.4) Issuances 578.5 7.9 1,948.8 29.7 Balance at end of period at original discount rate 23,339.9 5,394.3 23,011.0 5,458.4 Effect of changes in discount rate assumptions at end of period (1,193.8) (302.0) (1,799.6) (439.0) Future policy benefits 22,146.1 5,092.3 21,211.4 5,019.4 Reinsurance impact — (4,782.5) — (4,714.0) Future policy benefits after reinsurance $ 22,146.1 $ 309.8 $ 21,211.4 $ 305.4 Weighted-average duration for future policy benefits (years) 8.6 8.0 8.5 7.9 (1) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. Upper-medium grade fixed-income instrument yields decreased during the three months ended March 31, 2023, resulting in an increase to the liability for future policy benefits of $605.8 million for Pension risk transfer and $137.0 million for Individual fixed income annuities. Upper-medium grade fixed-income instrument yields increased during the year ended December 31, 2022, resulting in a decrease to the liability for future policy benefits of $5,186.1 million for Pension risk transfer and $1,251.6 million for Individual fixed income annuities. See “Interest Accretion and Current Discount Rates” for further details. Principal Asset Management - Principal International The balances and the changes in the present value for expected future policy benefits for Latin America – Individual fixed income annuities were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 5,042.3 $ 4,336.8 Effect of changes in discount rate assumptions at beginning of period (754.6) (478.5) Balance at beginning of period at original discount rate 4,287.7 3,858.3 Effect of actual variances from expected experience 0.7 (4.7) Adjusted beginning of period balance at original discount rate 4,288.4 3,853.6 Interest accrual (1) 106.2 662.0 Benefit payments (90.5) (325.8) Issuances 7.1 86.4 Foreign currency translation adjustment 333.3 11.5 Balance at end of period at original discount rate 4,644.5 4,287.7 Effect of changes in discount rate assumptions at end of period 772.4 754.6 Future policy benefits $ 5,416.9 $ 5,042.3 Weighted-average duration for future policy benefits (years) (2) 10.7 10.9 (1) Includes inflation adjustments. (2) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. Upper-medium grade fixed-income instrument yields impacting Latin America increased during the three months ended March 31, 2023; however, foreign currency movements offset the impact of those yields, resulting in an increase to the liability for future policy benefits of $17.8 million. Upper-medium grade fixed-income instrument yields impacting Latin America decreased during the year ended December 31, 2022, resulting in an increase to the liability for future policy benefits of $276.1 million. See “Interest Accretion and Current Discount Rates” for further details. Benefits and Protection The balances and the changes in the present value for expected net premiums and expected future policy benefits were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 Specialty Life Specialty Life Benefits Insurance Benefits Insurance Individual Individual disability Term life disability Term life ($ in millions) Present value of expected net premiums Balance at beginning of period $ 2,341.8 $ 3,423.2 $ 3,149.9 $ 4,193.7 Effect of changes in discount rate assumptions at beginning of period 395.2 196.0 (198.9) (690.1) Balance at beginning of period at original discount rate 2,737.0 3,619.2 2,951.0 3,503.6 Effect of changes in cash flow assumptions — — (413.1) — Effect of actual variances from expected experience 82.9 28.4 235.9 128.6 Adjusted beginning of period balance at original discount rate 2,819.9 3,647.6 2,773.8 3,632.2 Interest accrual 23.5 41.5 95.2 162.9 Net premiums collected (66.1) (86.4) (276.5) (346.6) Issuances 23.5 49.6 144.5 170.7 Balance at end of period at original discount rate 2,800.8 3,652.3 2,737.0 3,619.2 Effect of changes in discount rate assumptions at end of period (315.0) (95.9) (395.2) (196.0) Balance at end of period $ 2,485.8 $ 3,556.4 $ 2,341.8 $ 3,423.2 Present value of expected future policy benefit payments Balance at beginning of period $ 4,040.6 $ 4,332.2 $ 5,648.3 $ 5,311.3 Effect of changes in discount rate assumptions at beginning of period 1,021.4 251.6 (501.0) (913.9) Balance at beginning of period at original discount rate 5,062.0 4,583.8 5,147.3 4,397.4 Effect of changes in cash flow assumptions — — (476.3) — Effect of actual variances from expected experience 92.4 32.2 240.0 139.0 Adjusted beginning of period balance at original discount rate 5,154.4 4,616.0 4,911.0 4,536.4 Interest accrual 46.7 52.9 185.4 206.8 Benefit payments (49.3) (87.3) (183.7) (340.6) Issuances 24.3 53.5 149.3 181.2 Balance at end of period at original discount rate 5,176.1 4,635.1 5,062.0 4,583.8 Effect of changes in discount rate assumptions at end of period (874.4) (117.5) (1,021.4) (251.6) Balance at end of period $ 4,301.7 $ 4,517.6 $ 4,040.6 $ 4,332.2 Future policy benefits (1) $ 1,815.9 $ 961.2 $ 1,698.8 $ 909.0 Reinsurance impact (412.3) 43.5 (386.8) 25.6 Future policy benefits after reinsurance $ 1,403.6 $ 1,004.7 $ 1,312.0 $ 934.6 Weighted-average duration for future policy benefits (years) (2) 18.5 9.5 18.5 9.6 (1) (2) Represents the average of the cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. Upper-medium grade fixed-income instrument yields decreased during the three months ended March 31, 2023, resulting in an increase to the liability for future policy benefits of $66.8 million for Individual disability and $34.0 million for Term life. Upper-medium grade fixed-income instrument yields increased during the year ended December 31, 2022, resulting in a decrease to the liability for future policy benefits of $928.3 million for Individual disability and $279.4 million for Term life. See “Interest Accretion and Current Discount Rates” for further details. We updated our actuarial assumptions during the third quarter of 2022, resulting in a $63.2 million decrease in the liability for future policy benefits and a $52.4 million increase to income before taxes and pre-tax operating earnings, net of reinsurance, for our individual disability business. This was primarily due to favorable updates to claim experience assumptions. Additional Liability for Certain Benefit Features The liability for future policy benefits also includes an additional reserve on certain universal life contracts where benefit features result in gains in early years followed by losses in later years. The liability for these future losses is accrued in relation to estimated contract assessments. A premium deficiency exists if the net liabilities together with future premiums are determined to be insufficient to provide for expected future policy benefits. Premium deficiency testing considers, among other factors, anticipated investment income and does not include a provision for adverse deviation. We did not have a premium deficiency reserve as of March 31, 2023 or December 31, 2022. The balances and the changes in the additional liability for certain benefits features for Life Insurance - Universal life contracts were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ 4,095.2 $ 3,814.2 Effect of changes in cash flow assumptions — (6.0) Effect of actual variances from expected experience 15.1 54.9 Interest accrual 46.3 171.2 Net assessments collected 89.2 320.3 Benefit payments (26.5) (91.9) Other (1) — (167.5) Balance at end of period 4,219.3 4,095.2 Reinsurance impact (4,215.2) (4,091.4) Balance at end of period after reinsurance $ 4.1 $ 3.8 Weighted-average duration for additional liability (years) (2) 27.0 27.6 (1) Reflects the impact of re-cohorting in 2022 as a result of our decision to manage the ULSG business separately from our other universal life business following a comprehensive review of our business mix and capital management options (the “Strategic Review”). (2) Represents the average of the cohort-level duration of the benefits less the net assessment cash flows weighted by the reserve balance for each cohort. Corporate The balances and the changes in the present value for expected net premiums and expected future policy benefits for long-term care insurance were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Present value of expected net premiums Balance at beginning of period $ 64.6 $ 62.8 Effect of changes in discount rate assumptions at beginning of period (3.6) (14.0) Balance at beginning of period at original discount rate 61.0 48.8 Effect of changes in cash flow assumptions — 10.0 Effect of actual variances from expected experience (3.6) 4.1 Adjusted beginning of period balance at original discount rate 57.4 62.9 Interest accrual 0.9 3.3 Net premiums collected (1.5) (5.2) Balance at end of period at original discount rate 56.8 61.0 Effect of changes in discount rate assumptions at end of period 4.7 3.6 Balance at end of period $ 61.5 $ 64.6 Present value of expected future policy benefit payments Balance at beginning of period $ 248.1 $ 297.5 Effect of changes in discount rate assumptions at beginning of period (18.9) (89.5) Balance at beginning of period at original discount rate 229.2 208.0 Effect of changes in cash flow assumptions — 17.2 Effect of actual variances from expected experience (5.9) 3.7 Adjusted beginning of period balance at original discount rate 223.3 228.9 Interest accrual 3.4 13.1 Benefit payments (3.3) (12.8) Balance at end of period at original discount rate 223.4 229.2 Effect of changes in discount rate assumptions at end of period 26.5 18.9 Balance at end of period $ 249.9 $ 248.1 Future policy benefits (1) $ 188.4 $ 183.5 Reinsurance impact (188.4) (183.5) Future policy benefits after reinsurance $ — $ — Weighted-average duration for future policy benefits (years) (2) 11.8 11.8 (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. (2) Represents the average of cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. Upper-medium grade fixed-income instrument yields decreased during the three months ended March 31, 2023, resulting in an increase to the liability for future policy benefits of $6.5 million. Upper-medium grade fixed-income instrument yields increased during the year ended December 31, 2022, resulting in a decrease to the liability for future policy benefits of $60.2 million. See “Interest Accretion and Current Discount Rates” for further details. Expected Future Gross Premiums and Benefit Payments The amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums, utilizing the current upper-medium fixed-income instrument yield, were as follows: March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Pension risk transfer Expected undiscounted future benefit payments $ 34,085.9 $ 33,691.4 Individual fixed income annuities Expected undiscounted future benefit payments $ 7,605.3 $ 7,716.6 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities Expected undiscounted future benefit payments $ 6,960.9 $ 6,449.9 Benefits and Protection - Specialty Benefits: Individual disability Expected discounted future gross premiums $ 5,316.8 $ 5,140.9 Expected undiscounted future gross premiums $ 8,035.8 $ 7,978.7 Expected undiscounted future benefit payments $ 8,656.7 $ 8,473.9 Benefits and Protection - Life Insurance: Term life Expected discounted future gross premiums $ 6,301.3 $ 6,104.6 Expected undiscounted future gross premiums $ 10,169.3 $ 10,146.3 Expected undiscounted future benefit payments $ 7,264.7 $ 7,202.5 Corporate: Long-term care insurance Expected discounted future gross premiums $ 61.5 $ 64.6 Expected undiscounted future gross premiums $ 89.3 $ 96.5 Expected undiscounted future benefit payments $ 468.6 $ 483.4 Interest Accretion and Current Discount Rates The interest accretion rate shown for each level of aggregation is an average of the cohort-level accretion rates weighted by the reserve balance for each cohort within that level of aggregation. The current discount rate is calculated at a cohort-level based on current upper-medium fixed-income instrument yields and weighted by the reserve balance for each cohort within each level of aggregation. The weighted-average rates were as follows: Interest accretion rate Current discount rate March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 Retirement and Income Solutions: Pension risk transfer 4.40 % 4.38 % 4.96 % 5.31 % Individual fixed income annuities 4.21 % 4.22 % 4.94 % 5.30 % Principal Asset Management - Principal International (1): Latin America: Individual fixed income annuities 4.24 % 4.24 % 2.50 % 2.43 % Benefits and Protection: Specialty Benefits: Individual disability 4.01 % 4.03 % 5.01 % 5.36 % Life Insurance: Universal life 4.73 % 4.73 % See note (2) See note (2) Term life 4.85 % 4.89 % 4.83 % 5.22 % Corporate: Long-term care insurance 6.16 % 6.16 % 5.00 % 5.34 % (1) The interest accretion rate and current discount rate are Chilean real rates, excluding inflation, in the local currency. (2) The additional liability for certain benefit features for Life Insurance – Universal life is measured using the discount rate at contract inception. Therefore, the current discount rate is not applicable for this product. |
Market Risk Benefits
Market Risk Benefits | 3 Months Ended |
Mar. 31, 2022 | |
Market Risk Benefits | |
Market Risk Benefits | 9. Market Risk Benefits Contracts or contract features that provide protection to the policyholder from capital market risk, including equity, interest rate or foreign exchange risk, and expose us to other-than-nominal capital market risk are classified as MRBs. We issue certain annuity contracts and other investment contracts that include MRBs that have been bifurcated from the host contract. The Retirement and Income Solutions segment offers variable annuity products with GMWB riders and GMDB riders. The Principal Asset Management segment offers defined contribution plans in Asia with a guarantee on the minimum account balance under certain qualifying events. MRBs are measured at fair value at the contract level and can be in either an asset or liability position, depending on certain inputs at the reporting date. MRB assets and liabilities are presented separately within the consolidated statements of financial position. Increases to an asset or decreases to a liability are described as favorable changes to fair value. Changes in fair value are reported in MRB remeasurement gain (loss) on the consolidated statements of operations. However, the change in fair value related to our own nonperformance risk is reported in OCI. For contracts that contain multiple MRB features, the MRBs are valued on a combined basis using an integrated model. MRBs are classified as Level 3 fair value measurements as the fair value is based on unobservable inputs. The key assumptions for calculating the fair value of the MRBs are market assumptions such as equity market returns, interest rate levels, market volatility and correlations and policyholder behavior assumptions such as lapse, mortality, utilization and withdrawal patterns. Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The MRBs are valued using stochastic models that incorporate a spread reflecting our nonperformance risk. The assumption for our own nonperformance risk for MRBs is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Increases (decreases) in our own nonperformance risk, which impacts the rates used to discount future cash flows, could lead to favorable (unfavorable) changes in the fair value of the MRBs. Long-term interest rates are used as the mean return when projecting the growth in the value of the associated account value and impact the discount rate used in the discounted future cash flows valuation. The amount of claims will increase if account value is not sufficient to cover guaranteed withdrawals. An increase (decrease) in risk-free rates could cause a favorable (unfavorable) change in the fair value of the MRBs. A decrease (increase) in market volatilities could cause a favorable (unfavorable) change in the fair value of the MRBs. An increase (decrease) in mortality rates or the overall lapse rate assumptions could cause a favorable (unfavorable) change in the fair value of the MRBs. The lapse rate assumption may vary dynamically based on the relationship between the guarantee and associated account value. A weaker (stronger) dynamic lapse rate assumption could lead to favorable (unfavorable) changes in the fair value of the MRBs. The utilization rate assumption includes how many contractholders will take withdrawals, when they will take them and how much of their benefit they will take. A decrease (increase) in the number of contractholders taking withdrawals, contractholders taking withdrawals earlier versus later, or contractholders taking more versus less of their benefit could lead to favorable (unfavorable) changes in the fair value of the MRBs. The following tables summarize disaggregated MRB amounts in an asset and liability position and reconcile the totals to those reported in the consolidated statements of financial position. March 31, 2023 December 31, 2022 Net asset Net asset Asset Liability (liability) Asset Liability (liability) (in millions) Retirement and Income Solutions: Individual variable annuities $ 107.3 $ 170.4 $ (63.1) $ 109.2 $ 181.4 $ (72.2) Principal Asset Management - Principal International: Asia: Guaranteed pension — 24.0 (24.0) — 26.0 (26.0) Total MRB per consolidated statements of financial position $ 107.3 $ 194.4 $ (87.1) $ 109.2 $ 207.4 $ (98.2) Retirement and Income Solutions The net asset (liability) balances and the changes in the valuation of the MRBs for Individual variable annuities were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ (72.2) $ (494.7) Effect of changes in nonperformance risk at beginning of period (31.7) 109.5 Adjusted balance at beginning of period (103.9) (385.2) Effect of: Interest accrual and expected policyholder behavior (19.8) (90.1) Benefit payments 0.2 1.3 Changes in interest rates (54.2) 539.1 Changes in equity markets 46.4 (112.4) Changes in equity index volatility 30.6 (50.2) Actual policyholder behavior different from expected behavior (2.0) 1.5 Changes in future expected policyholder behavior — (6.1) Changes in other future expected assumptions — (1.8) Adjusted balance at end of period (102.7) (103.9) Effect of changes in nonperformance risk at end of period 39.6 31.7 Balance at end of period $ (63.1) $ (72.2) Weighted-average attained age of policyholders (years) (1) 67.5 67.4 Net amount at risk (2) $ 299.8 $ 415.5 (1) The weighted-average attained age is calculated at the contract level using the total contributions since inception and the age of the contractholders. (2) The net amount at risk for our GMDB riders is defined as the current GMDB amount in excess of the current account balance. The net amount at risk for our GMWB riders is defined as the greater of the present value of the GMWB payments less the current account balance or zero. For contracts with both GMDB and GMWB riders, the net amount at risk is the greater of the GMDB or GMWB net amount at risk. Increases in the equity markets and decreases in interest rates resulted in a decrease in the net amount at risk in 2023. Decreases in the equity markets and increases in interest rates resulted in an increase in the net amount at risk in 2022. Significant changes to inputs and assumptions that impacted the change in the MRB fair value measurement shown above were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 Change in net Change in net Change in input MRB liability Change in input MRB liability Long-term interest rate Decreased Unfavorable Increased Favorable Equity markets Increased Favorable Decreased Unfavorable Equity market volatilities Decreased Favorable Increased Unfavorable Own nonperformance risk Increased Favorable Increased Favorable See “Unobservable Inputs for Fair Value Measurement” for additional details on the inputs. Principal Asset Management - Principal International The net asset (liability) balances and the changes in the valuation of the MRBs for Asia – Guaranteed pension were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ (26.0) $ (35.1) Effect of changes in nonperformance risk at beginning of period 1.2 4.3 Adjusted balance at beginning of period (24.8) (30.8) Effect of: Interest accrual and expected policyholder behavior (2.8) (7.1) Benefit payments 3.7 9.5 Changes in interest rates 0.7 3.9 Changes in equity markets 0.1 (1.0) Actual policyholder behavior different from expected behavior 0.4 0.7 Foreign currency translation adjustment 0.1 — Adjusted balance at end of period (22.6) (24.8) Effect of changes in nonperformance risk at end of period (1.4) (1.2) Balance at end of period $ (24.0) $ (26.0) Weighted-average attained age of policyholders (years) (1) 50.0 50.0 Net amount at risk (2) $ 87.4 $ 91.0 (1) The weighted-average attained age is calculated at the contract level using the guarantee amounts and the age of the underlying members of the contracts. (2) The net amount at risk for the minimum guarantee on withdrawal is defined as the current guaranteed balance in excess of the current account balance. Unobservable Inputs for Fair Value Measurement The following table provides quantitative information about the significant unobservable inputs used for fair value measurements of MRBs. The utilization rate and mortality rate inputs are omitted from the table as a range does not provide meaningful presentation. The utilization rate represents the number of contractholders taking withdrawals in addition to the amount and timing of the withdrawals. The mortality rate is an input based on an appropriate industry mortality table. March 31, 2023 December 31, 2022 Weighted- Weighted- Range of inputs Average Range of inputs Average Retirement and Income Solutions: Individual variable annuities Long-term interest rate (1) 3.67 - 3.80 % 3.73 % 3.97 - 4.12 % 4.04 % Long-term equity market volatility 18.10 - 31.76 % 21.37 % 18.10 - 34.15 % 22.07 % Nonperformance risk 0.93 - 2.00 % 1.71 % 0.90 - 1.96 % 1.65 % Lapse rate 1.25 - 24.75 % 5.76 % 1.25 - 24.75 % 5.76 % Principal Asset Management - Principal International: Asia: Guaranteed pension Long-term interest rate (1) 3.93 - 4.08 % 4.00 % 3.80 - 3.98 % 3.88 % Long-term equity market volatility 18.07 - 24.09 % 19.98 % 18.06 - 25.16 % 20.69 % Nonperformance risk 0.66 - 1.63 % 1.35 % 0.90 - 1.98 % 1.68 % Lapse rate 4.95 - 19.35 % 13.40 % 4.95 - 19.35 % 13.40 % (1) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. The rate curves are derived from an interpolation between various observable swap rates. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2023 | |
Reinsurance | |
Reinsurance | 10. Reinsurance We reinsure a portion of the insurance risks associated with our individual disability, traditional life, universal life, medical and long-term care insurance as well as retail fixed annuity contracts with significant life insurance risk through reinsurance agreements with unaffiliated reinsurance companies, primarily on a quota share, excess loss, yearly renewable term or coinsurance basis. During the second quarter of 2022, we closed a coinsurance with funds withheld reinsurance transaction with Talcott Life & Annuity Re in which we ceded our in-force U.S. retail fixed annuity and ULSG blocks of business. The economics of the transaction were effective as of January 1, 2022. We use both the reinsurance and deposit methods of accounting for this transaction. For further information about this transaction, refer to Note 1, Nature of Operations and Significant Accounting Policies. We are contingently liable with respect to reinsurance ceded to other companies in the event the reinsurer is unable to meet the obligations it has assumed. As of March 31, 2023, and December 31, 2022, we had $13,458.1 million and $13,252.8 million of reinsurance recoverable assets, respectively, included in reinsurance recoverable and deposit receivable on the consolidated statements of financial position, which does not reflect potentially offsetting impacts of collateral. As of March 31, 2023, and December 31, 2022, we had $43.5 million and $39.4 million of reinsurance recoverable liabilities, respectively, included in future policy benefits and claims on the consolidated statements of financial condition. The effects of reinsurance on premiums and other considerations and policy and contract benefits were as follows: For the three months ended March 31, 2023 2022 (in millions) Premiums and other considerations: Direct $ 1,563.3 $ 1,040.5 Ceded (114.7) (153.1) Net premiums and other considerations $ 1,448.6 $ 887.4 Benefits, claims and settlement expenses: Direct $ 2,107.8 $ 1,629.5 Ceded (333.9) (138.8) Net benefits, claims and settlement expenses $ 1,773.9 $ 1,490.7 Liability for future policy benefits remeasurement (gain) loss: Direct $ 12.7 $ 20.3 Ceded (18.3) (6.9) Net liability for future policy benefits remeasurement (gain) loss $ (5.6) $ 13.4 As of March 31, 2023 and December 31, 2022, we had a $7,423.4 million and $ 7,901.0 reinsurance deposit receivable, respectively. Refer to Note 3, Investments, for information on our financing receivables valuation allowance related to the reinsurance recoverable and deposit receivable. Cost of Reinsurance A reinsurance asset or liability is established to spread the expected net reinsurance costs or profits over the expected term of the contracts. The cost of reinsurance asset and liability are reported in premiums due and other receivables and liability for future policy benefits and claims, respectively, on the consolidated statements of financial position. The cost of reinsurance asset and liability included on the consolidated statements of financial position were as follows: March 31, 2023 December 31, 2022 (in millions) Cost of reinsurance asset $ 3,315.0 $ 3,339.1 Cost of reinsurance liability $ 184.5 $ 191.1 Cost of reinsurance amortization, including the impacts of remeasurement, of $17.8 million and $(5.5) million for the three months ended March 31, 2023 and 2022, respectively, was reported in benefits, claims and settlement expenses and liability for future policy benefits remeasurement (gain) loss on the consolidated statements of operations. Funds Withheld The following assets were held in support of our reserves associated with our coinsurance with funds withheld agreement and are reported in the line items shown on the consolidated statements of financial position. March 31, 2023 December 31, 2022 (in millions) Fixed maturities, available-for-sale $ 16,231.7 $ 15,693.5 Fixed maturities, trading 103.2 100.8 Equity securities 0.3 11.0 Mortgage loans 2,735.1 2,810.8 Other investments 203.0 179.8 Cash and cash equivalents 1,522.8 1,762.9 Accrued interest income 200.0 178.7 Net other liabilities (223.7) (33.6) Net assets $ 20,772.4 $ 20,703.9 Certain assets are reported at amortized cost while the fair value of those assets is reflected in the funds withheld payable. As of March 31, 2023 and December 31, 2022, we had a $ 20,524.4 million and $20,436.1 million funds withheld payable, which was net of a $ 3,026.2 million and $3,652.8 million embedded derivative asset, respectively. The change in fair value of the embedded derivative was a gain (loss) of $ (626.6) million and $0.0 million for the three months ended March 31, 2023 and 2022, respectively. While the economic benefits of the funds withheld assets flow to Talcott Life & Annuity Re, we retain legal ownership of the assets within the funds withheld account. Guidelines are in place to ensure the investment risk is appropriately managed. Net investment income and net realized capital gains (losses) related to the assets on the consolidated statements of operations is reported net of the amounts that flow to Talcott Life & Annuity Re. The realized gains and losses that do not flow to Talcott Life & Annuity Re are reported in net realized capital gains (losses) on funds withheld assets on the consolidated statements of operations. Following are the components of net realized capital gains (losses) on the funds withheld assets that were passed to Talcott Life & Annuity Re. For the three months ended March 31, 2023 (in millions) Fixed maturities, available-for-sale $ (57.0) Fixed maturities, trading (0.1) Equity securities (1.2) Derivatives 2.9 Net realized capital losses $ (55.4) |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt. | |
Long-Term Debt | 11. Long-Term Debt March 31, 2023 Net unamortized discount, premium and debt issuance Carrying Principal costs amount (in millions) 3.125% notes payable, due 2023 $ 300.0 $ — $ 300.0 3.4% notes payable, due 2025 400.0 (1.1) 398.9 3.1% notes payable, due 2026 350.0 (1.3) 348.7 3.7% notes payable, due 2029 500.0 (4.2) 495.8 2.125% notes payable, due 2030 600.0 (3.6) 596.4 5.375% notes payable, due 2033 400.0 (4.0) 396.0 6.05% notes payable, due 2036 505.6 (2.2) 503.4 4.625% notes payable, due 2042 300.0 (3.0) 297.0 4.35% notes payable, due 2043 300.0 (2.9) 297.1 4.3% notes payable, due 2046 300.0 (3.0) 297.0 5.5% notes payable, due 2053 300.0 (4.4) 295.6 Floating rate notes payable, due 2055 400.0 (4.5) 395.5 Non-recourse mortgages and notes payable 66.5 0.7 67.2 Total long-term debt $ 4,722.1 $ (33.5) $ 4,688.6 December 31, 2022 Net unamortized discount, premium and debt issuance Carrying Principal costs amount (in millions) 3.125% notes payable, due 2023 $ 300.0 $ (0.1) $ 299.9 3.4% notes payable, due 2025 400.0 (1.2) 398.8 3.1% notes payable, due 2026 350.0 (1.4) 348.6 3.7% notes payable, due 2029 500.0 (4.3) 495.7 2.125% notes payable, due 2030 600.0 (3.6) 596.4 6.05% notes payable, due 2036 505.6 (2.3) 503.3 4.625% notes payable, due 2042 300.0 (2.9) 297.1 4.35% notes payable, due 2043 300.0 (3.0) 297.0 4.3% notes payable, due 2046 300.0 (3.1) 296.9 Floating rate notes payable, due 2055 400.0 (4.5) 395.5 Non-recourse mortgages and notes payable 67.1 0.7 67.8 Total long-term debt $ 4,022.7 $ (25.7) $ 3,997.0 Net discount, premium and issuance costs associated with issuing these notes are amortized to expense over the respective terms using the interest method. On March 8, 2023, we issued $700.0 million of senior notes. We issued a $400.0 million series of notes that bear interest at 5.375% and will mature in 2033 and a $300.0 million series of notes that bear interest at 5.5% and will mature in 2053. Interest on the notes is payable semi-annually on March 15 and September 15 each year, beginning on September 15, 2023. The proceeds from these notes will be used to redeem our floating rate notes payable due in 2055, with the remainder available to repay at maturity our 3.125% notes payable due in the second quarter of 2023. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Taxes | |
Income Taxes | 12. Income Taxes Effective Income Tax Rate Our provision for income taxes may not have the customary relationship of taxes to income. A reconciliation between the U.S. corporate income tax rate and the effective income tax rate was as follows: For the three months ended March 31, 2023 2022 U.S. corporate income tax rate 21 % 21 % Dividends received deduction 9 (5) Tax credits 6 (4) Employee compensation 4 (2) Interest exclusion from taxable income 3 (2) Impact of equity method presentation 3 (2) Local country permanent tax adjustments 2 — Global Intangible Low-Taxed Income (6) 1 Low income housing tax credit amortization (5) 1 Foreign country statutory rate differential (2) 1 State income taxes — (2) Other 2 2 Effective income tax rate 37 % 9 % Effects of Tax Legislation The Inflation Reduction Act of 2022 (“The Act”) was enacted by the U.S. government on August 16, 2022. The Act implements a new corporate alternative minimum tax (“CAMT”) effective January 1, 2023. We are an “Applicable Corporation,” which requires computation of the U.S. federal income tax liability under two systems, the U.S. regular corporate tax (“RCT”) and the CAMT. Although the CAMT may apply in any given year when tentative minimum tax (“TMT”) then exceeds the RCT liability, as a “prepayment” the CAMT generates a corresponding alternative minimum tax credit (“AMTC”). We made an accounting policy election in 2022 to recognize the CAMT as a current period tax expense when incurred, along with recording an offsetting AMTC related deferred tax asset. No CAMT accrual was made for the first quarter of 2023, as TMT did not exceed the calculated RCT liability. |
Employee and Agent Benefits
Employee and Agent Benefits | 3 Months Ended |
Mar. 31, 2023 | |
Employee and Agent Benefits | |
Employee and Agent Benefits | 13. Employee and Agent Benefits Components of Net Periodic Benefit Cost Other postretirement Pension benefits benefits For the three months ended For the three months ended March 31, March 31, 2023 2022 2023 2022 (in millions) Service cost $ 14.0 $ 20.2 $ — $ — Interest cost 39.7 28.1 0.8 0.6 Expected return on plan assets (40.7) (44.7) (1.1) (1.2) Amortization (4.2) (4.2) (0.3) (0.3) Recognized net actuarial (gain) loss 9.8 13.8 (0.2) (0.3) Net periodic benefit cost (income) $ 18.6 $ 13.2 $ (0.8) $ (1.2) The components of net periodic benefit cost including the service cost component are included in operating expenses on the consolidated statements of operations. Contributions Our funding policy for our qualified pension plan is to fund the plan annually in an amount at least equal to the minimum annual contribution required under the Employee Retirement Income Security Act (“ERISA”) and, generally, not greater than the maximum amount that can be deducted for U.S. federal income tax purposes. It is too early to determine, but we do not anticipate that we will be required to fund a minimum required contribution under ERISA. Regardless, it is possible that we may fund the qualified and nonqualified pension plans in 2023 for a combined total of up to $70.0 million. During the three months ended March 31, 2023, we contributed $30.0 million to these plans. |
Contingencies, Guarantees and I
Contingencies, Guarantees and Indemnifications | 3 Months Ended |
Mar. 31, 2023 | |
Contingencies, Guarantees and Indemnifications | |
Contingencies, Guarantees and Indemnifications | 14. Contingencies, Guarantees and Indemnifications Litigation and Regulatory Contingencies We are regularly involved in litigation, both as a defendant and as a plaintiff, but primarily as a defendant. Litigation naming us as a defendant ordinarily arises out of our business operations as a provider of asset management and accumulation products and services, individual life insurance, specialty benefits insurance and our investment activities. Some of the lawsuits may be class actions, or purport to be, and some may include claims for unspecified or substantial punitive and treble damages. We may discuss such litigation in one of three ways. We accrue a charge to income and disclose legal matters for which the chance of loss is probable and for which the amount of loss can be reasonably estimated. We may disclose contingencies for which the chance of loss is reasonably possible and provide an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Finally, we may voluntarily disclose loss contingencies for which the chance of loss is remote in order to provide information concerning matters that potentially expose us to possible losses. In addition, regulatory bodies such as state insurance departments, the SEC, the Financial Industry Regulatory Authority (“FINRA”), the Department of Labor (“DOL”) and other regulatory agencies in the U.S. and in international locations in which we do business, regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, ERISA and laws governing the activities of broker-dealers. We receive requests from regulators and other governmental authorities relating to industry issues and may receive additional requests, including subpoenas and interrogatories, in the future. While the outcome of any pending or future litigation or regulatory matter cannot be predicted, management does not believe any such matter will have a material adverse effect on our business or financial position. To the extent such matters present a reasonably possible chance of loss, we are generally not able to estimate the possible loss or range of loss associated therewith. The outcome of such matters is always uncertain and unforeseen results can occur. It is possible that such outcomes could require us to pay damages or make other expenditures or establish accruals in amounts that we could not estimate as of March 31, 2023. Guarantees and Indemnifications In the normal course of business, we have provided guarantees to third parties primarily related to former subsidiaries and joint ventures. The terms of these agreements range in duration and often are not explicitly defined. The maximum exposure under these agreements as of March 31, 2023, was approximately $77.0 million. At inception, the fair value of such guarantees was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. Should we be required to perform under these guarantees, we generally could recover a portion of the loss from third parties through recourse provisions included in agreements with such parties, the sale of assets held as collateral that can be liquidated in the event performance is required under the guarantees or other recourse generally available to us; therefore, such guarantees would not result in a material adverse effect on our business or financial position. While the likelihood is remote, such outcomes could materially affect net income in a particular quarter or annual period. Furthermore, in connection with our contingent funding agreements, we are required to purchase any principal and interest strips of U.S. Treasury securities that are due and not paid from the associated unconsolidated trusts. The maximum exposure under these agreements as of March 31, 2023, was $750.0 million. We manage mandatory privatized social security funds in Chile. By regulation, we have a required minimum guarantee on the funds’ relative return. Because the guarantee has no limitation with respect to duration or amount, the maximum exposure of the guarantee in the future is indeterminable. We are also subject to various other indemnification obligations issued in conjunction with divestitures, acquisitions, financing and reinsurance transactions whose terms range in duration and often are not explicitly defined. Certain portions of these indemnifications may be capped, while other portions are not subject to such limitations; therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. At inception, the fair value of such indemnifications was insignificant. In addition, we believe the likelihood is remote that material payments will be required. Therefore, any liability accrued within our consolidated statements of financial position is insignificant. While we are unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications, we believe that performance under these indemnifications would not result in a material adverse effect on our business or financial position. While the likelihood is remote, performance under these indemnifications could materially affect net income in a particular quarter or annual period. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | 15 . Stockholders’ Equity Common Stock Dividends For the three months ended March 31, 2023 2022 Dividends declared per common share $ 0.64 $ 0.64 Reconciliation of Outstanding Common Shares For the three months ended March 31, 2023 2022 (in millions) Beginning balance 243.5 261.7 Shares issued 1.7 1.7 Treasury stock acquired (2.1) (11.2) Ending balance 243.1 252.2 In June 2021, our Board of Directors (“Board”) authorized a share repurchase program of up to $1.2 billion of our outstanding common stock, which was completed in August 2022. In January 2022, our Board authorized a $1.6 billion increase to the June 2021 share repurchase program authorization, which has no expiration date. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity. In March 2022, we entered into an accelerated share repurchase program with a third party financial institution to repurchase $700.0 million of common stock. We received approximately 8.5 million shares at an initial cost of $560.0 million from our counterparty as of March 31, 2022, which was recorded in treasury stock. The associated $140.0 million forward contract was recorded in additional paid-in capital. This program closed in June 2022, at which time an additional 1.4 million shares were delivered based on the $70.53 daily volume-weighted average price of our common stock, less a discount, during the term of the program. In August 2022, we entered into an accelerated share repurchase program with a third party financial institution to repurchase $400.0 million of common stock. We received approximately 4.1 million shares at an initial cost of $320.0 million from our counterparty as of August 16, 2022, which was recorded in treasury stock. This program closed in September 2022, at which time an additional 1.2 million shares were delivered based on the $76.48 daily volume-weighted average price of our common stock, less a discount, during the term of the program. Other Comprehensive Income (Loss) For the three months ended March 31, 2023 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 1,280.8 $ (264.9) $ 1,015.9 Reclassification adjustment for losses included in net income (1) 78.5 (16.4) 62.1 Adjustments for assumed changes in amortization patterns 0.2 — 0.2 Adjustments for assumed changes in policyholder liabilities (0.1) — (0.1) Net unrealized gains on available-for-sale securities 1,359.4 (281.3) 1,078.1 Net unrealized gains on derivative instruments during the period 3.7 (0.8) 2.9 Reclassification adjustment for gains included in net income (2) (3.7) 0.8 (2.9) Net unrealized gains on derivative instruments — — — Liability for future policy benefits discount rate remeasurement loss (3) (682.4) 141.5 (540.9) Market risk benefit nonperformance risk gain (4) 7.7 (1.7) 6.0 Foreign currency translation adjustment 132.2 (0.1) 132.1 Amortization of amounts included in net periodic benefit cost (5) 5.1 (1.3) 3.8 Net unrecognized postretirement benefit obligation 5.1 (1.3) 3.8 Other comprehensive income $ 822.0 $ (142.9) $ 679.1 For the three months ended March 31, 2022 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ (5,535.5) $ 1,172.0 $ (4,363.5) Reclassification adjustment for gains included in net income (1) (40.6) 5.2 (35.4) Adjustments for assumed changes in amortization patterns (0.1) — (0.1) Adjustments for assumed changes in policyholder liabilities 363.1 (76.3) 286.8 Net unrealized losses on available-for-sale securities (5,213.1) 1,100.9 (4,112.2) Net unrealized losses on derivative instruments during the period (21.0) 4.4 (16.6) Reclassification adjustment for gains included in net income (2) (6.8) 1.4 (5.4) Adjustments for assumed changes in policyholder liabilities 3.9 (0.7) 3.2 Net unrealized losses on derivative instruments (23.9) 5.1 (18.8) Liability for future policy benefits discount rate remeasurement gain (3) 3,190.9 (671.8) 2,519.1 Market risk benefit nonperformance risk gain (4) 93.2 (19.5) 73.7 Foreign currency translation adjustment 156.6 (1.5) 155.1 Amortization of amounts included in net periodic benefit cost (5) 9.0 (2.3) 6.7 Net unrecognized postretirement benefit obligation 9.0 (2.3) 6.7 Other comprehensive loss $ (1,787.3) $ 410.9 $ (1,376.4) (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations. (2) See Note 4, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details. (3) Includes the discount rate remeasurement gain (loss) associated with the liability for future policy benefits and the associated reinsurance recoverable. See Note 8, Future Policy Benefits and Claims, under the caption “Liability for Future Policy Benefits” for further details. (4) See Note 9, Market Risk Benefits, for further details. (5) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 13, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. Accumulated Other Comprehensive Loss Net unrealized Net unrealized LFPB Foreign Unrecognized Accumulated gains (losses) on gains discount rate MRB currency postretirement other available-for-sale on derivative remeasurement nonperformance translation benefit comprehensive securities (1) instruments gain (loss) risk gain (loss) adjustment obligation loss (in millions) Balances as of January 1, 2022 $ 3,880.4 $ 56.6 $ (4,037.6) $ (90.1) $ (1,548.7) $ (344.7) $ (2,084.1) Other comprehensive loss during the period, net of adjustments (4,076.8) (13.4) 2,519.1 73.7 153.7 — (1,343.7) Amounts reclassified to AOCI (35.4) (5.4) — — — 6.7 (34.1) Other comprehensive loss (4,112.2) (18.8) 2,519.1 73.7 153.7 6.7 (1,377.8) Balances as of March 31, 2022 $ (231.8) $ 37.8 $ (1,518.5) $ (16.4) $ (1,395.0) $ (338.0) $ (3,461.9) Balances as of January 1, 2023 $ (5,857.9) $ 39.7 $ 740.9 $ 24.0 $ (1,571.6) $ (254.1) $ (6,879.0) Other comprehensive income during the period, net of adjustments 1,016.0 2.9 (540.9) 6.0 130.7 — 614.7 Amounts reclassified from AOCI 62.1 (2.9) — — — 3.8 63.0 Other comprehensive income 1,078.1 — (540.9) 6.0 130.7 3.8 677.7 Balances as of March 31, 2023 $ (4,779.8) $ 39.7 $ 200.0 $ 30.0 $ (1,440.9) $ (250.3) $ (6,201.3) (1) Net unrealized gains on available-for-sale securities for which an allowance for credit loss has been recorded were $0.6 million and $6.2 million as of March 31, 2023 and 2022, respectively. Noncontrolling Interest Interests held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position. The noncontrolling interest holders in certain of our consolidated entities maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates. Since redemption of the noncontrolling interest is outside of our control, this interest is excluded from stockholders’ equity and reported separately as redeemable noncontrolling interest on the consolidated statements of financial position. Our redeemable noncontrolling interest primarily relates to consolidated sponsored investment funds for which interests are redeemed at fair value from the net assets of the funds. For our redeemable noncontrolling interest related to other consolidated subsidiaries, redemptions are required to be purchased at fair value or a value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. The carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital. Following is a reconciliation of the changes in the redeemable noncontrolling interest: For the three months ended March 31, 2023 2022 (in millions) Balance at beginning of period $ 262.0 $ 332.5 Net income (loss) attributable to redeemable noncontrolling interest 4.5 (10.3) Redeemable noncontrolling interest of deconsolidated entities (1) (2.4) — Contributions from redeemable noncontrolling interest 19.0 24.0 Distributions to redeemable noncontrolling interest (8.4) (39.6) Purchase of subsidiary shares from redeemable noncontrolling interest (1.6) — Change in redemption value of redeemable noncontrolling interest (0.6) 0.1 Other comprehensive income attributable to redeemable noncontrolling interest 0.2 0.1 Balance at end of period $ 272.7 $ 306.8 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 16. Fair Value Measurements We use fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment contracts, are excluded from these fair value disclosure requirements. Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety considering factors specific to the asset or liability. ● Level 1 – Fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 – Fair values are based on inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 – Fair values are based on at least one significant unobservable input for the asset or liability. Determination of Fair Value The following discussion describes the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis. The techniques utilized in estimating the fair value of financial instruments are reliant on the assumptions used. Care should be exercised in deriving conclusions about our business, its value or financial position based on the fair value information of financial instruments presented below. Fair value estimates are made based on available market information and judgments about the financial instrument at a specific point in time. Such estimates do not consider the tax impact of the realization of unrealized gains or losses. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument. We validate prices through an investment analyst review process, which includes validation through direct interaction with external sources, review of recent trade activity or use of internal models. In circumstances where broker quotes are used to value an instrument, we generally receive one non-binding quote. Broker quotes are validated through an investment analyst review process, which includes validation through direct interaction with external sources and use of internal models or other relevant information. We did not make any significant changes to our valuation processes during 2023. Fixed Maturities Fixed maturities include bonds, ABS, redeemable preferred stock and certain non-redeemable preferred securities. When available, the fair value of fixed maturities is based on quoted prices of identical assets in active markets. These are reflected in Level 1 and primarily include U.S. Treasury bonds and actively traded redeemable corporate preferred securities. When quoted prices of identical assets in active markets are not available, our first priority is to obtain prices from third party pricing vendors. We have regular interaction with these vendors to ensure we understand their pricing methodologies and to confirm they are utilizing observable market information. Their methodologies vary by asset class and include inputs such as estimated cash flows, benchmark yields, reported trades, broker quotes, credit quality, industry events and economic events. Fixed maturities with validated prices from pricing services, which includes the majority of our public fixed maturities in all asset classes, are generally reflected in Level 2. Also included in Level 2 are corporate bonds when quoted market prices are not available, for which an internal model using substantially all observable inputs or a matrix pricing valuation approach is used. In the matrix approach, securities are grouped into pricing categories that vary by sector, rating and average life. Each pricing category is assigned a risk spread based on studies of observable public market data from the investment professionals assigned to specific security classes. The expected cash flows of the security are then discounted back at the current Treasury curve plus the appropriate risk spread. Although the matrix valuation approach provides a fair valuation of each pricing category, the valuation of an individual security within each pricing category may also be impacted by company specific factors. If we are unable to price a fixed maturity security using prices from third party pricing vendors or other sources specific to the asset class, we may obtain a broker quote or utilize an internal pricing model specific to the asset utilizing relevant market information, to the extent available and where at least one significant unobservable input is utilized. These are reflected in Level 3 in the fair value hierarchy and can include fixed maturities across all asset classes. As of March 31, 2023, less than 4% of our total fixed maturities were Level 3 securities valued using internal pricing models. The primary inputs, by asset class, for valuations of the majority of our Level 2 investments from third party pricing vendors or our internal pricing valuation approach are described below. U.S. Government and Agencies/Non-U.S. Governments States and Political Subdivisions Corporate RMBS, CMBS, Collateralized Debt Obligations and Other Debt Obligations Equity Securities Equity securities include mutual funds, common stock, non-redeemable preferred stock and required regulatory investments. Fair values of equity securities are determined using quoted prices in active markets for identical assets when available, which are reflected in Level 1. When quoted prices are not available, we may utilize internal valuation methodologies appropriate for the specific asset that use observable inputs such as underlying share prices or the NAV, which are reflected in Level 2. Fair values might also be determined using broker quotes or through the use of internal models or analysis that incorporate significant assumptions deemed appropriate given the circumstances and consistent with what other market participants would use when pricing such securities, which are reflected in Level 3. Derivatives The fair values of exchange-traded derivatives are determined through quoted market prices, which are reflected in Level 1. Exchange-traded derivatives include futures that are settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of OTC cleared derivatives are determined through market prices published by the clearinghouses, which are reflected in Level 2. The clearinghouses utilize the secured overnight financing rate (“SOFR”) curve in their valuation. Variation margin associated with OTC cleared derivatives is settled daily, which reduces their fair value in the consolidated statements of financial position. The fair values of bilateral OTC derivative instruments are determined using either pricing valuation models that utilize market observable inputs or broker quotes. The majority of our bilateral OTC derivatives are valued with models that use market observable inputs, which are reflected in Level 2. Significant inputs include contractual terms, interest rates, currency exchange rates, credit spread curves, equity prices and volatilities. These valuation models consider projected discounted cash flows, relevant swap curves and appropriate implied volatilities. Certain bilateral OTC derivatives utilize unobservable market data, primarily independent broker quotes that are nonbinding quotes based on models that do not reflect the result of market transactions, which are reflected in Level 3. Our non-cleared derivative contracts are generally documented under ISDA Master Agreements, which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties. Collateral arrangements are bilateral and based on current ratings of each entity. We utilize the SOFR curve to value our positions. Counterparty credit risk is routinely monitored to ensure our adjustment for nonperformance risk is appropriate. Our centrally cleared derivative contracts are conducted with regulated centralized clearinghouses, which provide for daily exchange of cash collateral or variation margin equal to the difference in the daily market values of those contracts that eliminates the nonperformance risk on these trades. Interest Rate Contracts. Foreign Exchange Contracts. Equity Contracts. Credit Contracts. Other Investments Other investments reported at fair value include invested assets of consolidated sponsored investment funds, unconsolidated sponsored investment funds, other investment funds reported at fair value, equity method real estate investments for which the fair value option was elected and certain redeemable and nonredeemable preferred stock. Invested assets of consolidated sponsored investment funds include equity securities, fixed maturities and derivative assets, for which fair values are determined as previously described, and are reflected in Level 1 and Level 2. The fair value of unconsolidated sponsored investment funds and other investment funds is determined using the NAV of the fund. The NAV of the fund represents the price at which we would be able to initiate a transaction. Investments for which the NAV represents a quoted price in an active market for identical assets are reflected in Level 1. Investments that do not have a quoted price in an active market are reflected in Level 2. Cash Equivalents Certain cash equivalents are reported at fair value on a recurring basis and include money market instruments and other short-term investments with maturities of three months or less. Fair values of these cash equivalents may be determined using public quotations, when available, which are reflected in Level 1. When public quotations are not available, because of the highly liquid nature of these assets, carrying amounts may be used to approximate fair values, which are reflected in Level 2. Separate Account Assets Separate account assets include equity securities, debt securities, cash equivalents and derivative instruments, for which fair values are determined as previously described, and are reflected in Level 1, Level 2 and Level 3. Separate account assets also include commercial mortgage loans, for which the fair value is estimated by discounting the expected total cash flows using market rates that are applicable to the yield, credit quality and maturity of the loans. The market clearing spreads vary based on mortgage type, weighted average life, rating and liquidity. These are reflected in Level 3. Finally, separate account assets include real estate, for which the fair value is estimated using discounted cash flow valuation models that utilize various public real estate market data inputs. In addition, each property is appraised annually by an independent appraiser. The real estate included in separate account assets is recorded net of related mortgage encumbrances for which the fair value is estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. The real estate within the separate accounts is reflected in Level 3. Market Risk Benefits MRBs are measured at fair value at the contract level on a recurring basis and are reflected in Level 3 as either an asset or a liability, depending on certain inputs at the reporting date. The key assumptions for calculating the fair value are market assumptions and policyholder behavior. Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The MRBs are valued using stochastic models that incorporate a spread reflecting our own nonperformance risk. The assumption for our own nonperformance risk is based on current market credit spreads for debt-like instruments we have issued and are available in the market. Refer to Note 9, Market Risk Benefits, for further information on the determination of fair value measurement of MRBs. Investment and Universal Life Contracts Certain universal life, annuity and other investment contracts include embedded derivatives that have been bifurcated from the host contract and are measured at fair value on a recurring basis, which are reflected in Level 3. The key assumptions for calculating the fair value of the embedded derivative liabilities are market assumptions (such as equity market returns, interest rate levels, market volatility and correlations) and policyholder behavior assumptions (such as lapse and mortality). Risk margins are included in the policyholder behavior assumptions. The assumptions are based on a combination of historical data and actuarial judgment. The embedded derivative liabilities are valued using models that incorporate a spread reflecting our own creditworthiness. The assumption for our own nonperformance risk for investment contracts and any embedded derivatives bifurcated from certain universal life, annuity and investment contracts is based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Funds Withheld Payable The funds withheld payable includes an embedded derivative that has been bifurcated from the host contract and is measured at fair value on a recurring basis, which is reflected in Level 3. The fair value is determined based on the change in the estimated fair value of the underlying funds withheld investments. The fair value of these assets is determined as previously described. Other Liabilities Derivative liabilities of consolidated sponsored investment funds are reported at fair value within other liabilities. Fair values of these derivatives are determined as previously described and are reflected in Level 2. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2023 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,829.9 $ — $ 1,443.9 $ 386.0 $ — Non-U.S. governments 549.2 — 0.6 548.6 — States and political subdivisions 6,173.4 — — 6,101.3 72.1 Corporate 37,296.6 — 29.6 35,612.5 1,654.5 Residential mortgage-backed pass-through securities 2,794.9 — — 2,794.9 — Commercial mortgage-backed securities 4,927.8 — — 4,924.5 3.3 Collateralized debt obligations (1) 4,902.3 — — 4,740.1 162.2 Other debt obligations 6,922.8 — — 6,056.3 866.5 Total fixed maturities, available-for-sale 65,396.9 — 1,474.1 61,164.2 2,758.6 Fixed maturities, trading 787.9 — 129.2 502.6 156.1 Equity securities 1,733.3 — 506.9 1,226.4 — Derivative assets (2) 386.7 — — 381.7 5.0 Other investments 722.9 79.1 304.2 337.7 1.9 Cash equivalents 3,235.1 — 565.4 2,669.7 — Market risk benefit asset (3) 107.3 — — — 107.3 Sub-total excluding separate account assets 72,370.1 79.1 2,979.8 66,282.3 3,028.9 Separate account assets 162,000.8 8,830.1 97,181.5 55,095.4 893.8 Total assets $ 234,370.9 $ 8,909.2 $ 100,161.3 $ 121,377.7 $ 3,922.7 Liabilities Investment and universal life contracts (4) $ (55.5) $ — $ — $ — $ (55.5) Market risk benefit liability (3) (194.4) — — — (194.4) Funds withheld payable embedded derivative (4) 3,026.2 — — — 3,026.2 Derivative liabilities (2) (508.4) — — (507.4) (1.0) Other liabilities (1.0) — — (1.0) — Total liabilities $ 2,266.9 $ — $ — $ (508.4) $ 2,775.3 Net assets $ 236,637.8 $ 8,909.2 $ 100,161.3 $ 120,869.3 $ 6,698.0 December 31, 2022 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,739.8 $ — $ 1,359.1 $ 380.7 $ — Non-U.S. governments 567.3 — 1.4 565.9 — States and political subdivisions 6,232.3 — — 6,161.4 70.9 Corporate 36,183.2 — 26.6 34,588.3 1,568.3 Residential mortgage-backed pass-through securities 2,228.7 — — 2,228.7 — Commercial mortgage-backed securities 4,864.6 — — 4,861.2 3.4 Collateralized debt obligations (1) 4,566.4 — — 4,510.2 56.2 Other debt obligations 6,507.6 — — 6,039.8 467.8 Total fixed maturities, available-for-sale 62,889.9 — 1,387.1 59,336.2 2,166.6 Fixed maturities, trading 760.7 — 78.6 548.1 134.0 Equity securities 1,708.6 — 492.4 1,216.2 — Derivative assets (2) 321.6 — — 320.9 0.7 Other investments 701.1 81.4 311.7 306.1 1.9 Cash equivalents 3,604.1 — 973.5 2,630.6 — Market risk benefit asset (3) 109.2 — — — 109.2 Sub-total excluding separate account assets 70,095.2 81.4 3,243.3 64,358.1 2,412.4 Separate account assets 155,375.1 9,120.9 92,010.7 53,208.6 1,034.9 Total assets $ 225,470.3 $ 9,202.3 $ 95,254.0 $ 117,566.7 $ 3,447.3 Liabilities Investment and universal life contracts (4) $ (46.4) $ — $ — $ — $ (46.4) Market risk benefit liability (3) (207.4) — — — (207.4) Funds withheld payable embedded derivative 3,652.8 — — — 3,652.8 Derivative liabilities (2) (634.2) — — (630.1) (4.1) Other liabilities (0.4) — — (0.4) — Total liabilities $ 2,764.4 $ — $ — $ (630.5) $ 3,394.9 Net assets $ 228,234.7 $ 9,202.3 $ 95,254.0 $ 116,936.2 $ 6,842.2 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 4, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. (3) Refer to Note 9, Market Risk Benefits, for further information on the change in the Level 3 fair value measurements of MRBs. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position. (5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $ 7.8 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. Separate account assets using the NAV practical expedient consist of hedge funds and a real estate fund with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds. Changes in Level 3 Fair Value Measurements The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) was as follows: For the three months ended March 31, 2023 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of January 1, net income comprehensive settlements into out of March 31, 2023 (2) income (3) (4) Level 3 Level 3 2023 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 70.9 $ — $ 1.6 $ (0.4) $ — $ — $ 72.1 Corporate 1,568.3 — (6.6) 125.3 10.4 (42.9) 1,654.5 Commercial mortgage-backed securities 3.4 — 0.1 (0.2) — — 3.3 Collateralized debt obligations 56.2 — 1.1 120.1 — (15.2) 162.2 Other debt obligations 467.8 — (6.5) 186.9 218.3 — 866.5 Total fixed maturities, available-for-sale 2,166.6 — (10.3) 431.7 228.7 (58.1) 2,758.6 Fixed maturities, trading 134.0 (0.4) — 22.5 — — 156.1 Other investments 1.9 — — — — — 1.9 Separate account assets (1) 1,034.9 15.0 — (156.1) — — 893.8 Liabilities Investment and universal life contracts (46.4) (5.3) — (3.8) — — (55.5) Funds withheld payable embedded derivative 3,652.8 (626.6) — — — — 3,026.2 Derivatives Net derivative assets (liabilities) (3.4) 7.4 — — — — 4.0 For the three months ended March 31, 2022 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of January 1, net income comprehensive settlements into out of March 31, 2022 (2) income (3) (4) Level 3 Level 3 2022 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 94.8 $ — $ 0.1 $ (0.4) $ — $ — $ 94.5 Corporate 834.3 (3.0) (4.7) 139.0 175.2 — 1,140.8 Commercial mortgage-backed securities 19.2 — (0.9) (0.2) — — 18.1 Collateralized debt obligations 85.8 — (0.3) 55.5 — (84.0) 57.0 Other debt obligations 42.1 — (0.6) (0.3) — (20.0) 21.2 Total fixed maturities, available-for-sale 1,076.2 (3.0) (6.4) 193.6 175.2 (104.0) 1,331.6 Fixed maturities, trading 4.9 — — 28.5 29.0 — 62.4 Other investments 2.1 — (0.7) — — — 1.4 Separate account assets (1) 945.3 71.4 — (1.3) — — 1,015.4 Liabilities Investment and universal life contracts (83.2) 8.1 — 6.4 — — (68.7) Derivatives Net derivative assets (liabilities) — (1.4) — 0.7 — — (0.7) (1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities. (2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were: For the three months ended March 31, 2023 2022 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ (3.0) Total fixed maturities, available-for-sale — (3.0) Fixed maturities, trading (0.3) — Separate account assets (21.8) 68.3 Liabilities Investment and universal life contracts (7.1) 7.4 Funds withheld payable embedded derivative (626.6) — Derivatives Net derivative assets (liabilities) 7.3 (1.3) (3) Changes in unrealized gains (losses) included in OCI, including foreign currency translation adjustments related to Principal International, relating to positions still held were: For the three months ended March 31, 2023 2022 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 1.6 $ 0.1 Corporate (6.6) (4.7) Commercial mortgage-backed securities 0.1 (1.0) Collateralized debt obligations 1.1 (0.4) Other debt obligations (6.5) (0.6) Total fixed maturities, available-for-sale (10.3) (6.6) (4) Gross purchases, sales, issuances and settlements were: For the three months ended March 31, 2023 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (0.4) $ (0.4) Corporate 150.9 (3.6) — (22.0) 125.3 Commercial mortgage-backed securities — — — (0.2) (0.2) Collateralized debt obligations 121.3 — — (1.2) 120.1 Other debt obligations 190.9 — — (4.0) 186.9 Total fixed maturities, available-for-sale 463.1 (3.6) — (27.8) 431.7 Fixed maturities, trading 26.4 (3.5) — (0.4) 22.5 Separate account assets (5) — (202.0) (4.1) 50.0 (156.1) Liabilities Investment and universal life contracts — — (8.2) 4.4 (3.8) For the three months ended March 31, 2022 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (0.4) $ (0.4) Corporate 190.9 (20.4) — (31.5) 139.0 Commercial mortgage-backed securities — — — (0.2) (0.2) Collateralized debt obligations 55.5 — — — 55.5 Other debt obligations — — — (0.3) (0.3) Total fixed maturities, available-for-sale 246.4 (20.4) — (32.4) 193.6 Fixed maturities, trading 28.5 — — — 28.5 Separate account assets (5) — — (1.1) (0.2) (1.3) Liabilities Investment and universal life contracts — — (6.7) 13.1 6.4 Derivatives Net derivative assets (liabilities) — 0.7 — — 0.7 (5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. Transfers Transfers of assets and liabilities measured at fair value on a recurring basis between fair value hierarchy levels were as follows: For the three months ended March 31, 2023 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ 10.4 $ — $ 42.9 Collateralized debt obligations — — — 15.2 Other debt obligations — 218.3 — — Total fixed maturities, available-for-sale — 228.7 — 58.1 For the three months ended March 31, 2022 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ 175.2 $ — $ — Collateralized debt obligations — — — 84.0 Other debt obligations — — — 20.0 Total fixed maturities, available-for-sale — 175.2 — 104.0 Fixed maturities, trading — 29.0 — — Assets transferred into Level 3 during the three months ended March 31, 2023 and 2022, primarily included those assets for which we are now unable to obtain pricing from a recognized third party pricing vendor as well as assets that were previously priced using a matrix valuation approach that may no longer be relevant when applied to asset-specific situations. Assets transferred out of Level 3 during the three months ended March 31, 2023, primarily included those assets for which we are now able to obtain pricing from a recognized third party pricing vendor or from internal models using substantially all market observable information. Quantitative Information about Level 3 Fair Value Measurements The following table provides quantitative information about the significant unobservable inputs used for recurring fair value measurements categorized within Level 3, excluding assets and liabilities for which significant quantitative unobservable inputs are not developed internally, which primarily consists of those valued using broker quotes. The MRB asset and liability are excluded from the table. Refer to Note 9, Market Risk Benefits, for information on the unobservable inputs used for fair value measurement of MRBs. The funds withheld payable embedded derivative is excluded from the table as the determination of its fair value incorporates the fair value of the invested assets supporting the reinsurance agreement. Refer to “Assets and liabilities measured at fair value on a recurring basis” for a complete valuation hierarchy summary. March 31, 2023 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in milli |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Information | |
Segment Information | 17. Segment Information We provide financial products and services through the following segments: Retirement and Income Solutions, Principal Asset Management and Benefits and Protection. In addition, we have a Corporate segment. The segments are managed and reported separately because they provide different products and services, have different strategies or have different markets and distribution channels. Prior to 2023, we separately reported Principal Global Investors and Principal International as segments. Those are now integrated into our Principal Asset Management segment. The new segment presentation has been applied retrospectively to our segment results, which have been recast for LDTI, but did not impact our consolidated financial statements. The Retirement and Income Solutions segment provides retirement and related financial products and services primarily to businesses, their employees and other individuals. The segment includes workplace savings and retirement solutions, banking, trust and custodial services, individual variable annuities, pension risk transfer, investment only and our exited retail fixed annuities business. The Principal Asset Management segment provides global investment solutions to institutional, retirement, retail and high net worth investors in the U.S. and select emerging markets. The segment is organized into Principal Global Investors, which provides public, multi-asset and private market capabilities across all asset classes, including equity, fixed income, real estate and alternatives, to serve a breadth of client investment objectives; and Principal International, which provides long-term savings and retirement solutions through pension accumulation, mutual funds and income annuities, along with retail asset management services in Asia and Latin America. The Benefits and Protection (formerly known as U.S. Insurance Solutions) segment focuses on solutions for small-to-mid sized businesses and their employees. The segment is organized into Specialty Benefits, which provides group dental, group life insurance, group disability insurance (including short-term disability, long-term disability and paid family and medical leave), supplemental health products (including vision, critical illness, accident and hospital indemnity) and individual disability insurance; and Life Insurance, which provides life insurance, with a focus on the business market customer, including universal life and variable universal life (including indexed universal life) and traditional life insurance (including term life insurance). All remaining customers are part of the legacy life block of business, including universal and variable universal life insurance (including indexed universal life), traditional life insurance (including participating whole life, adjustable life products and term life insurance) and our exited ULSG business. Our Corporate segment manages the assets representing capital that has not been allocated to any other segment. Financial results of the Corporate segment primarily reflect our financing activities (including financing costs), income on capital not allocated to other segments, inter-segment eliminations, income tax risks and certain income, expenses and other adjustments not allocated to the segments based on the nature of such items. Results of Principal Securities, Inc. (“PSI”), our retail broker-dealer and registered investment advisor (“RIA”); and our exited group medical and long-term care insurance businesses are reported in this segment. Management uses segment pre-tax operating earnings in evaluating performance, which is consistent with the financial results provided to and discussed with securities analysts. We determine segment pre-tax operating earnings by adjusting U.S. GAAP income before income taxes for pre-tax net realized capital gains (losses), as adjusted, pre-tax income (loss) from exited business, pre-tax other adjustments that management believes are not indicative of overall operating trends and certain adjustments related to equity method investments and noncontrolling interest. While these items may be significant components in understanding and assessing the consolidated financial performance, management believes the presentation of pre-tax operating earnings enhances the understanding of our results of operations by highlighting pre-tax earnings attributable to the normal, ongoing operations of the business. The pre-tax net realized capital gains (losses), as adjusted, excluded from pre-tax operating earnings reflects consolidated U.S. GAAP pre-tax net realized capital gains (losses) excluding the following items that are included in pre-tax operating earnings: ● Periodic settlements and accruals on derivative instruments not designated as hedging instruments, ● Certain market value adjustments of derivatives and embedded derivatives and ● Certain market value adjustments of derivative instruments used to economically hedge embedded derivatives. Pre-tax income (loss) from exited business includes amounts associated with our exited U.S. retail fixed annuity and ULSG businesses, including the change in fair value of the funds withheld embedded derivative, net realized capital gains (losses) on funds withheld assets, strategic review costs and impacts, amortization of reinsurance gain (loss) and other impacts of reinsured business. The strategic review costs and impacts primarily include actuarial balance re-cohorting impacts resulting from the Strategic Review and costs to close the Reinsurance Transaction. Other impacts of reinsured business primarily include DAC amortization. Pre-tax net realized capital gains (losses), as adjusted, are further adjusted for: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) adjustments related to equity method investments, ● Pre-tax net realized capital gains (losses) adjustments related to sponsored investment funds, ● Certain variable annuity fees, ● Market value adjustments of market risk benefits, ● Related changes in the amortization pattern of actuarial balances, ● Certain hedge accounting market value expense adjustments and ● Net realized capital gains (losses) distributed. Segment operating revenues reflect consolidated U.S. GAAP total revenues excluding: ● Net realized capital gains (losses), except periodic settlements and accruals on derivatives not designated as hedging instruments and certain market value adjustments of derivative instruments used to economically hedge embedded derivatives, and their impact on: ● Amortization of hedge accounting book value adjustments for certain discontinued hedges, ● Certain hedge accounting market value revenue adjustments, ● Certain variable annuity fees, ● Certain market value adjustments to fee revenues, ● Pre-tax net realized capital gains (losses) adjustments related to equity method investments and ● Pre-tax net realized capital gains (losses) adjustments related to sponsored investment funds. ● Pre-tax revenues from exited business, ● Pre-tax other adjustments and income taxes of equity method investments and ● Pre-tax other adjustments management believes are not indicative of overall operating trends. The accounting policies of the segments are consistent with the accounting policies for the consolidated financial statements, with the exception of: (1) pension and other postretirement employee benefits (“OPEB”) cost allocations, (2) certain expenses deemed to benefit the entire organization and (3) income tax allocations. For purposes of determining pre-tax operating earnings, the segments are allocated the service component of pension and other postretirement benefit costs. The Corporate segment reflects the non-service components of pension and other postretirement benefit costs as assumptions are established and funding decisions are managed from a company-wide perspective. Additionally, the Corporate segment reflects expenses that benefit the entire organization for which the segments are not able to influence the spend. This includes expenses such as public company costs, executive management costs, acquisition and disposition costs, among others. The Corporate segment functions to absorb the risk inherent in interpreting and applying tax law. For purposes of determining non-GAAP operating earnings, the segments are allocated tax adjustments consistent with the positions we took on tax returns. The Corporate segment results reflect any differences between the tax returns and the estimated resolution of any disputes. The following tables summarize select financial information by segment, including operating revenues for our products and services, and reconcile segment totals to those reported in the consolidated financial statements: March 31, 2023 December 31, 2022 (in millions) Assets: Retirement and Income Solutions $ 207,109.0 $ 202,294.2 Principal Asset Management 48,462.3 45,950.7 Benefits and Protection 41,082.2 40,048.3 Corporate 2,754.7 2,285.1 Total consolidated assets $ 299,408.2 $ 290,578.3 For the three months ended March 31, 2023 2022 (in millions) Operating revenues by segment: Retirement and Income Solutions (1) $ 1,616.1 $ 1,263.0 Principal Asset Management: Principal Global Investors 392.7 435.3 Principal International 305.1 327.2 Eliminations (5.3) (6.6) Total Principal Asset Management (2) 692.5 755.9 Benefits and Protection: Specialty Benefits 782.2 717.7 Life Insurance 321.4 525.7 Eliminations (0.2) (0.1) Total Benefits and Protection 1,103.4 1,243.3 Corporate 27.6 6.3 Total segment operating revenues 3,439.6 3,268.5 Net realized capital losses, net of related revenue adjustments (39.2) (146.4) Revenues from exited business (3) (547.6) — Adjustments related to equity method investments (22.6) (18.5) Market risk benefit derivative settlements (11.2) (8.1) Total revenues per consolidated statements of operations $ 2,819.0 $ 3,095.5 Pre-tax operating earnings (losses) by segment: Retirement and Income Solutions $ 249.8 $ 294.2 Principal Asset Management 187.8 211.0 Benefits and Protection 99.3 92.8 Corporate (96.1) (129.0) Total segment pre-tax operating earnings 440.8 469.0 Pre-tax net realized capital losses, as adjusted (4) (24.3) (87.9) Pre-tax loss from exited business (5) (608.3) — Adjustments related to equity method investments and noncontrolling interest (20.7) (2.7) Income (loss) before income taxes per consolidated statements of operations $ (212.5) $ 378.4 (1) Reflects inter-segment revenues of $94.8 million and $97.4 million for the three months ended March 31, 2023 and 2022, respectively. (2) Reflects inter-segment revenues of $70.7 million and $76.5 million for the three months ended March 31, 2023 and 2022, respectively. (3) Revenues from exited business is derived as follows: For the three months ended March 31, 2023 2022 (in millions) Revenues from exited business: Change in fair value of funds withheld embedded derivative $ (626.6) $ — Net realized capital gains on funds withheld assets 81.0 — Amortization of reinsurance gain 1.4 — Other impacts of reinsured business (3.4) — Total revenues from exited business $ (547.6) $ — (4) Pre-tax net realized capital gains (losses), as adjusted, is derived as follows: For the three months ended March 31, 2023 2022 (in millions) Net realized capital losses: Net realized capital losses $ (66.0) $ (136.6) Derivative and hedging-related revenue adjustments 2.1 (32.0) Certain variable annuity fees 18.4 20.0 Adjustments related to equity method investments 0.2 (3.6) Adjustments related to sponsored investment funds 6.1 5.8 Net realized capital losses, net of related revenue adjustments (39.2) (146.4) Amortization of deferred acquisition costs and other actuarial balances — 6.6 Capital losses distributed 18.4 91.0 Market value adjustments of market risk benefits (6.5) (22.7) Market value adjustments of embedded derivatives 3.0 (16.4) Pre-tax net realized capital losses, as adjusted (a) $ (24.3) $ (87.9) (a) As adjusted before noncontrolling interest capital gains (losses). (5) Pre -tax income (loss) from exited business included: For the three months ended March 31, 2023 2022 (in millions) Pre-tax loss from exited business Change in fair value of funds withheld embedded derivative $ (626.6) $ — Net realized capital gains on funds withheld assets 81.0 — Amortization of reinsurance loss (22.1) — Other impacts of reinsured business (40.6) — Total pre-tax loss from exited business $ (608.3) $ — |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 3 Months Ended |
Mar. 31, 2023 | |
Revenues from Contracts with Customers | |
Revenues from Contracts with Customers | 18. Revenues from Contracts with Customers The following tables summarize disaggregation of revenues from contracts with customers, including select financial information by segment, and reconcile totals to those reported in the consolidated financial statements. Revenues from contracts with customers are included in fees and other revenues on the consolidated statements of operations. For the three months ended March 31, 2023 2022 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions $ 130.2 $ 144.4 Principal Asset Management: Principal Global Investors 381.3 429.6 Principal International 113.2 110.4 Eliminations (5.3) (6.6) Total Principal Asset Management 489.2 533.4 Benefits and Protection: Specialty Benefits 3.9 4.0 Life Insurance 16.7 15.4 Total Benefits and Protection 20.6 19.4 Corporate 45.1 53.0 Total segment revenue from contracts with customers 685.1 750.2 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 290.4 449.0 Pre-tax other adjustments (2) 19.8 20.0 Total fees and other revenues per consolidated statements of operations $ 995.3 $ 1,219.2 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business, certain variable annuity fees and market value adjustments to fee revenues. Retirement and Income Solutions Retirement and Income Solutions offers service and trust agreements for defined contribution retirement plans, including 401(k) plans, 403(b) plans, and employee stock ownership plans. The investment components of these service agreements are in the form of mutual fund offerings. In addition, plan sponsor retirement plan trust and custody services are also available through our trust company. Individual retirement accounts (“IRAs”) are offered through Principal Bank. Furthermore, services and trust agreements are offered to non-retirement customers including insurance companies, endowments and other financial institutions. Administrative service fee revenues are earned for administrative activities performed for the defined contribution retirement plans including recordkeeping and reporting as well as trust and custody, asset management and investment services. Administrative service fee revenues are earned for administrative activities performed for non-retirement plan customers including trust and custody services, defined benefit administration and investment management activities. The majority of these activities are performed daily over time. Fee-for-service transactions are also provided upon client request. These services are considered distinct or grouped into a bundle until a distinct performance obligation is identified. Some performance obligations are considered a series of distinct services, which are substantially the same and have the same pattern of transfer to the customer. Administrative service fee revenues can be based on a fixed contractual rate for these services or can be variable based upon contractual rates applied to the market value of the client’s investments or assets under administration. If the consideration for this series of performance obligations is based on market value, it is considered variable during the billing period as the services are performed over time. The consideration becomes unconstrained and thus recognized as revenue for each billing period’s series of distinct services once the market value of the client’s investments or assets under administration is determined at market close. Additionally, fixed fees and other revenues are recognized point-in-time as fee-for-service transactions upon completion. IRAs are primarily funded by retirement savings rolled over from qualified retirement plans. The IRAs are held in savings accounts, money market accounts and certificates of deposit. Deposit account fee revenues are earned as the performance of establishing and maintaining IRA accounts is completed. Fee-for-service transactions are also provided upon client request. The establishment fees and annual maintenance fees are accrued into earnings over a period of time using the average account life. Upfront and recurring bank fees are related to performance obligations that have the same pattern of transfer to the customer and are recognized in income over time with control transferred to the customers utilizing the output method. These fees are based on a fixed contractual rate. Fixed fees and other revenues are also recognized point-in-time as fee-for-service transactions upon completion. Additionally, commission income is earned on advisory services provided to customers. The revenues are earned over time as the service is performed based upon contractual rates applied to the market value of the clients’ portfolios. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2023 2022 (in millions) Administrative service fee revenue $ 126.5 $ 141.5 Deposit account fee revenue 2.9 2.5 Commission income 0.4 0.2 Other fee revenue 0.4 0.2 Total revenues from contracts with customers 130.2 144.4 Fees and other revenues not within the scope of revenue recognition guidance 278.3 299.4 Total fees and other revenues 408.5 443.8 Premiums and other considerations 582.7 123.3 Net investment income 624.9 695.9 Total operating revenues $ 1,616.1 $ 1,263.0 Principal Asset Management Fees and other revenues earned for asset management, investment advisory and distribution services provided to institutional and retail clients in addition to trustee and/or administrative services performed for retirement savings plans. Fees are based largely upon contractual rates applied to the specified amounts of the clients’ portfolios. Each service is a distinct performance obligation; however, if the services are not distinct on their own, we combine them into a distinct bundle or we have a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Fees and other revenues received for performance obligations such as asset management and other services are typically recognized over time utilizing the output method as the service is performed. Performance fees and transaction fees on certain accounts are recognized in income when the probability of significant reversal will not occur upon resolution of the uncertainty, which could be based on a variety of factors such as market performance or other internal metrics. Asset management fees are accrued each month based on the fee terms within the applicable agreement and are generally billed quarterly when values used for the calculation are available. Management fees and performance fees are variable consideration as they are subject to fluctuation based on assets under management (“AUM”) and other constraints. These fees are not recognized until unconstrained at the end of each reporting period. Incentive-based fees are recognized in income when the probability of significant reversal will not occur upon the resolution of the uncertainty, which is based on market performance. Fees for managing customers’ mandatory retirement savings accounts in Latin America are collected with each monthly deposit made by our customers. If a customer stops contributing before retirement age, we collect no fees but services are still provided. We recognize revenue from these contracts as services are performed over the life of the contract and review annually. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2023 2022 (in millions) Principal Global Investors: Management fee revenue $ 339.7 $ 379.0 Other fee revenue 41.6 50.6 Total revenues from contracts with customers 381.3 429.6 Fees and other revenues not within the scope of revenue recognition guidance 4.6 5.3 Total fees and other revenues 385.9 434.9 Net investment income 6.8 0.4 Total operating revenues $ 392.7 $ 435.3 For the three months ended March 31, 2023 2022 (in millions) Principal International: Management fee revenue $ 110.9 $ 107.7 Other fee revenue 2.3 2.7 Total revenues from contracts with customers 113.2 110.4 Fees and other revenues not within the scope of revenue recognition guidance 1.4 1.2 Total fees and other revenues 114.6 111.6 Premiums and other considerations 6.4 10.3 Net investment income 184.1 205.3 Total operating revenues $ 305.1 $ 327.2 Revenues from contracts with customers by region: Latin America $ 85.9 $ 82.1 Asia 27.5 28.5 Eliminations (0.2) (0.2) Total revenues from contracts with customers $ 113.2 $ 110.4 Benefits and Protection Fees and other revenues are earned for administrative services performed including recordkeeping and reporting services for fee-for-service products, nonqualified benefit plans, separate accounts and dental networks. Services within contracts are not distinct on their own; however, we combine the services into a distinct bundle and account for the bundle as a single performance obligation, which is satisfied over time utilizing the output method as services are rendered. The transaction price corresponds with the performance completed to date, for which the value is recognized as revenue during the period. Variability of consideration is resolved at the end of each period and payments are due when billed. Commission income is earned through sponsored brokerage services. Performance obligations are satisfied at a point in time, upon delivery of a placed case, and the transaction price calculated per the compensation schedule is recognized as revenue. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2023 2022 (in millions) Specialty Benefits: Administrative service fees $ 3.9 $ 4.0 Total revenues from contracts with customers 3.9 4.0 Fees and other revenues not within the scope of revenue recognition guidance 4.6 4.7 Total fees and other revenues 8.5 8.7 Premiums and other considerations 733.6 665.6 Net investment income 40.1 43.4 Total operating revenues $ 782.2 $ 717.7 For the three months ended March 31, 2023 2022 (in millions) Life Insurance: Administrative service fees $ 7.2 $ 6.8 Commission income 9.5 8.6 Total revenues from contracts with customers 16.7 15.4 Fees and other revenues not within the scope of revenue recognition guidance 77.3 228.3 Total fees and other revenues 94.0 243.7 Premiums and other considerations 130.8 88.8 Net investment income 96.6 193.2 Total operating revenues $ 321.4 $ 525.7 Corporate Fees and other revenues are earned on the performance of selling and servicing of securities and related products offered through PSI, an introducing broker-dealer registered with the FINRA. PSI enters into selling and distribution agreements with the obligation to sell or distribute the securities products, such as mutual funds, annuities and products sold through RIAs, to individual clients in return for front-end sales charges, 12b-1 service fees, annuity fees and asset-based fees. Front-end sales charges, 12b-1 fees and annuity fees are related to a single sale and are earned at the time of sale. PSI also enters into agreements with individual customers to provide securities trade execution and custody through a brokerage services platform in return for ticket charge and other service fee revenue. These services are bundled as one single distinct service referred to as brokerage services. This revenue is related to distinct transactions and is earned at a point in time. PSI also enters into agreements with individual customers to provide trade execution, clearing services, custody services and investment research services through our proprietary offered fee-based products. These services are bundled as one single distinct service referred to as advisory services. In addition, for outside RIA business PSI performs sales and distribution services only. The revenues are earned over time as the service is performed utilizing the output method. A majority of our revenue is based upon contractual rates applied to the market value of the clients’ portfolios and considered variable consideration. The Corporate segment also includes inter-segment eliminations of fees and other revenues. The types of revenues from contracts with customers were as follows: For the three months ended March 31, 2023 2022 (in millions) Commission income $ 87.9 $ 97.2 Other fee revenue 20.5 19.8 Eliminations (63.3) (64.0) Total revenues from contracts with customers 45.1 53.0 Fees and other revenues not within the scope of revenue recognition guidance (75.6) (89.7) Total fees and other revenues (30.5) (36.7) Premiums and other considerations (1.3) (0.5) Net investment income 59.4 43.5 Total operating revenues $ 27.6 $ 6.3 Contract Costs Sales compensation and other incremental costs of obtaining a contract are capitalized and amortized over the period of contract benefit if the costs are expected to be recovered. The contract cost asset, which is included in other assets on the consolidated statements of financial position, was $215.6 million and $204.9 million as of March 31, 2023 and December 31, 2022, respectively. We apply the practical expedient for certain costs where we recognize the incremental costs of obtaining these contracts as an expense when incurred if the amortization period of the assets is one year or less. These costs, along with costs that are not deferrable, are included in operating expenses on the consolidated statements of operations. Deferred contract costs consist primarily of commissions and variable compensation. We amortize capitalized contract costs on a straight-line basis over the expected contract life, reflecting lapses as they are incurred. Deferred contract costs are subject to impairment testing on an annual basis, or when a triggering event occurs that could warrant an impairment. To the extent future revenues less future maintenance expenses are not adequate to cover the asset balance, an impairment is recognized. For the three months ended March 31, 2023 and 2022, $8.3 million and $9.6 million, respectively, of amortization expense was recorded in operating expenses on the consolidated statements of operations and no impairment loss was recognized in relation to the costs capitalized. |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2023 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Plans | 19. Stock-Based Compensation Plans As of March 31, 2023, we had the 2021 Stock Incentive Plan, the 2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the Employee Stock Purchase Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan and the Directors Stock Plan (“Stock-Based Compensation Plans”). No new grants will be made under the 2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan or the Directors Stock Plan. Under the terms of the 2021 Stock Incentive Plan, grants may be nonqualified stock options, incentive stock options qualifying under Section 422 of the Internal Revenue Code, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units or other stock-based awards. To date, we have not granted any incentive stock options, restricted stock or performance units under any plans. As part of our fair value process, we assess the impact of material nonpublic information on our share price or expected volatility, as applicable, at the time of grant. No awards in 2023 required a fair value adjustment. As of March 31, 2023, the maximum number of new shares of common stock available for grant under the 2021 Stock Incentive Plan was 23.0 million. For awards with graded vesting, we use an accelerated expense attribution method. The compensation cost that was charged against net income for stock-based awards granted under the Stock-Based Compensation Plans was as follows: For the three months ended March 31, 2023 2022 (in millions) Compensation cost $ 28.2 $ 28.4 Related income tax benefit 7.0 6.4 Capitalized as part of an asset 0.4 0.4 Nonqualified Stock Options No nonqualified stock options were granted to employees during the three months ended March 31, 2023. As of March 31, 2023, we had $0.5 million of total unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over a weighted-average service period of approximately 0.8 years. Performance Share Awards Performance share awards were granted to certain employees under the 2021 Stock Incentive Plan. Total performance share awards granted were 0.3 million for the three months ended March 31, 2023. The performance share awards granted represent initial target awards and do not reflect potential increases or decreases resulting from the final performance results to be determined at the end of the performance period. The actual number of common shares to be awarded at the end of each performance period will range between 0% and 180% of the initial target awards. Effective in 2022, we added a relative total shareholder return modifier to the performance share awards under which the number of shares ultimately granted is also impacted by our actual shareholder return relative to our S&P 500 Financial Sector Index peer group. The fair value of performance share awards is determined using a Monte Carlo simulation model. The weighted-average grant date fair value of these performance share awards granted was $91.47 per common share. As of March 31, 2023, we had $31.5 million of total unrecognized compensation cost related to nonvested performance share awards granted. The cost is expected to be recognized over a weighted-average service period of approximately 1.9 years. Restricted Stock Units Restricted stock units were issued to certain employees and non-employee directors pursuant to the 2021 Stock Incentive Plan. Total restricted stock units granted were 0.9 million for the three months ended March 31, 2023. The fair value of restricted stock units is determined based on the closing stock price of our common shares on the grant date. The weighted-average grant date fair value of these restricted stock units granted was $88.66 per common share. As of March 31, 2023, we had $123.9 million of total unrecognized compensation cost related to nonvested restricted stock unit awards granted. The cost is expected to be recognized over a weighted-average period of approximately 2.0 years. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan, employees purchased 0.2 million shares for the three months ended March 31, 2023. The weighted average fair value of the discount on the stock purchased was $7.43 per share. As of March 31, 2023, a total of 3.3 million of new shares were available to be made issuable by us for this plan. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Common Share | |
Earnings Per Common Share | 20. Earnings Per Common Share The computations of the basic and diluted per share amounts were as follows: For the three months ended March 31, 2023 2022 (in millions, except per share data) Net income (loss) $ (134.5) $ 343.2 Subtract: Net income attributable to noncontrolling interest 5.6 4.5 Total $ (140.1) $ 338.7 Weighted-average shares outstanding: Basic 243.4 259.4 Dilutive effects: Stock options — 1.6 Restricted stock units — 2.3 Performance share awards — 0.5 Diluted 243.4 263.8 Net income (loss) per common share: Basic $ (0.58) $ 1.31 Diluted $ (0.58) $ 1.28 The calculation of diluted earnings per share for the three months ended March 31, 2023 and 2022, excludes the incremental effects related to certain outstanding stock-based compensation grants and an accelerated share repurchase program due to their anti-dilutive effect. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Event | |
Subsequent Event | 21. Subsequent Event On April 7, 2023, we extinguished our floating rate notes payable due in 2055. The notes were redeemed in whole by paying a redemption price equal to the original principal amount of $400.0 million. During the second quarter of 2023, we incurred a one-time cost to extinguish this debt before the scheduled maturity, which was recorded in operating expenses on the consolidated statements of operations. |
Nature of Operations and Sign_2
Nature of Operations and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Nature of Operations and Significant Accounting Policies | |
Basis of Presentation - Policy | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Principal Financial Group, Inc. (“PFG”) have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023, are not necessarily indicative of the results that may be expected for the year ended December 31, 2023, especially when considering risks and uncertainties that may impact our business, results of operations, financial condition and liquidity. Our use of estimates and assumptions affect amounts reported and disclosed and includes, but is not limited to, the fair value of investments in the absence of quoted market values, investment impairments and valuation allowances, the fair value of derivatives, funds withheld embedded derivative, deferred acquisition costs (“DAC”) and other actuarial balances, measurement of goodwill and intangible assets, the liability for future policy benefits and claims, the value of pension and other postretirement benefits and accounting for income taxes and the valuation of deferred tax assets. Our estimates and assumptions could change in the future. Our results of operations and financial condition may also be impacted by other uncertainties including evolving regulatory, legislative and standard-setter accounting interpretations and guidance. These interim unaudited condensed consolidated financial statements should be read in conjunction with our annual audited financial statements as of December 31, 2022, included in our Form 10-K for the year ended December 31, 2022, filed with the United States Securities and Exchange Commission (“SEC”). The accompanying condensed consolidated statement of financial position as of December 31, 2022, has been derived from the audited consolidated statement of financial position but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. On January 1, 2023, we adopted the guidance commonly referred to as long-duration targeted improvements (“LDTI”), which updates certain requirements in the accounting for long-duration insurance and annuity contracts. The guidance was applied as of the January 1, 2021, transition date. As such, results for 2022 and 2021 have been recast and are also presented under the new LDTI guidance. In the first quarter of 2023 we implemented changes to our organizational structure to better align businesses, distribution teams and product offerings for future growth. We integrated our global asset management and international pension businesses under one segment, Principal Asset Management. Results of our historically reported Principal Global Investors and Principal International segments are reported within this segment. Additionally, we are now reporting results for our Retirement and Income Solutions segment in total and not separated into Fee and Spread components. Finally, we updated the name of our U.S. Insurance Solutions segment to Benefits and Protection and will continue to report the results of Specialty Benefits and Life Insurance within this segment. Our segment results have been modified to reflect these changes, which did not have an impact on our consolidated financial statements. See Note 17, Segment Information, for financial results of our segments. During the second quarter of 2022, we closed a coinsurance with funds withheld reinsurance transaction with Talcott Life &Annuity Re, Ltd. (“Talcott Life & Annuity Re”), a limited liability company organized under the laws of the Cayman Islands and an affiliate of Talcott Resolution Life, Inc., a subsidiary of Sixth Street, pursuant to which we ceded our in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee (“ULSG”) blocks of business (the “Reinsurance Transaction”). The economics of the Reinsurance Transaction were effective as of January 1, 2022. See Note 10, Reinsurance, for further details. Certain reclassifications have been made to prior periods relating to the presentation of our loss adjustment expense (“LAE”) liability and the change in that liability to conform to the current presentation. See Note 8, Future Policy Benefits and Claims. The LAE liability was previously reported in other liabilities in the consolidated statements of financial position and the change in the liability was previously reported in operating expenses in the consolidated statements of operations. The LAE liability is now reported in future policy benefits and claims in the consolidated statements of financial position and the change in the liability is now reported in benefits, claims and settlement expenses in the consolidated statements of operations. |
Consolidation - Policy | Consolidation We have relationships with various special purpose entities and other legal entities that must be evaluated to determine if the entities meet the criteria of a variable interest entity (“VIE”) or a voting interest entity (“VOE”). This assessment is performed by reviewing contractual, ownership and other rights, including involvement of related parties, and requires use of judgment. First, we determine if we hold a variable interest in an entity by assessing if we have the right to receive expected losses and expected residual returns of the entity. If we hold a variable interest, then the entity is assessed to determine if it is a VIE. An entity is a VIE if the equity at risk is not sufficient to support its activities, if the equity holders lack a controlling financial interest or if the entity is structured with non-substantive voting rights. In addition to the previous criteria, if the entity is a limited partnership or similar entity, it is a VIE if the limited partners do not have the power to direct the entity’s most significant activities through substantive kick-out rights or participating rights. A VIE is evaluated to determine the primary beneficiary. The primary beneficiary of a VIE is the enterprise with (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When we are the primary beneficiary, we are required to consolidate the entity in our financial statements. We reassess our involvement with VIEs on a quarterly basis. For further information about VIEs, refer to Note 2, Variable Interest Entities. If an entity is not a VIE, it is considered a VOE. VOEs are generally consolidated if we own a greater than 50% voting interest. If we determine our involvement in an entity no longer meets the requirements for consolidation under either the VIE or VOE models, the entity is deconsolidated. Entities in which we have management influence over the operating and financing decisions but are not required to consolidate, other than investments accounted for at fair value under the fair value option, are reported using the equity method. |
Recent Accounting Pronouncements - Policy | Recent Accounting Pronouncements Description Date of adoption Effect on our consolidated financial statements or other significant matters Standards adopted: Targeted improvements to the accounting for long-duration insurance contracts This authoritative guidance updated certain requirements in the accounting for long-duration insurance and annuity contracts. 1. The assumptions used to calculate the liability for future policy benefits on traditional and limited-payment contracts are reviewed and updated periodically. Cash flow assumptions are reviewed at least annually and updated when necessary with the impact recognized in net income. Discount rate assumptions are prescribed as the current upper-medium grade (low credit risk) fixed income instrument yield and are updated quarterly with the impact recognized in other comprehensive income (“OCI”). 2. Market risk benefits, which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. January 1, 2023 We created a governance framework and a plan to support implementation of the standard. Our implementation and evaluation process included, but was not limited to the following: ● identifying and documenting contracts and contract features in scope of the guidance; ● identifying the actuarial models, systems and processes to be updated; ● evaluating and selecting our systems solutions for implementing the new guidance; ● building models and evaluating preliminary output as models are developed; ● evaluating and finalizing our key accounting policies; ● assessing the impact to our chart of accounts; ● developing format and content of new disclosures; Description Date of adoption Effect on our consolidated financial statements or other significant matters 3. DAC and other actuarial balances for all insurance and annuity contracts are amortized on a constant basis over the expected term of the related contracts. 4. Additional disclosures are required, including disaggregated rollforwards of significant insurance liabilities and other account balances as well as disclosures about significant inputs, judgments, assumptions and methods used in measurement. The guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC was applied on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented (January 1, 2021, also referred to as the transition date) based on their existing carrying amounts. An entity could elect to apply the changes retrospectively. The guidance for market risk benefits was applied retrospectively. ● conducting financial dry runs using model output and updated chart of accounts; ● evaluating transition requirements and impacts and ● establishing and documenting appropriate internal controls. This guidance changed how we account for many of our insurance and annuity products. The guidance did not have a material impact on our consolidated statements of operations. Further details about transition impacts of the guidance are included under the caption “Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts Guidance.” The additional disclosure requirements can be found in the following notes: ● Note 5, Deferred Acquisition Costs and Other Actuarial Balances ● Note 6, Separate Account Balances ● Note 7, Contractholder Funds ● Note 8, Future Policy Benefits and Claims ● Note 9, Market Risk Benefits Troubled debt restructurings and vintage disclosures This authoritative guidance eliminated the accounting requirements for Troubled Debt Restructurings (“TDRs”) by creditors and enhanced the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. The update required entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The amendments in this update were applied prospectively, except for the transition method related to the recognition and measurement of troubled debt restructurings, for which an entity had the option to apply a modified retrospective transition method. Early adoption was permitted. January 1, 2023 This guidance did not have a material impact on our consolidated financial statements. Description Date of adoption Effect on our consolidated financial statements or other significant matters Targeted improvements to accounting for hedging activities – portfolio layer method This authoritative guidance is intended to further align the economics of a company’s risk management activities in its financial statements with hedge accounting requirements. The guidance expanded the current single-layer method to allow multiple hedge layers of a single closed portfolio. Non-prepayable assets can also be included in the same portfolio. This guidance also clarified the current guidance on accounting for fair value basis adjustments applicable to both a single hedged layer and multiple hedged layers. Upon adoption, the application of these hedge strategies was applied prospectively. Early adoption was permitted. January 1, 2023 This guidance did not have a material impact on our consolidated financial statements. Facilitation of the effects of reference rate reform on financial reporting This authoritative guidance provided optional expedients and exceptions for contracts and hedging relationships affected by reference rate reform. An entity could elect not to apply certain modification accounting requirements to contracts affected by reference rate reform and instead account for the modified contract as a continuation of the existing contract. Also, an entity could apply optional expedients to continue hedge accounting for hedging relationships in which the critical terms changed due to reference rate reform. This guidance eased the financial reporting impacts of reference rate reform on contracts and hedging relationships and was effective until December 31, 2022. A subsequent amendment issued in December 2022 extended the relief date from December 31, 2022, to December 31, 2024, and was effective upon issuance. March 12, 2020 We adopted the guidance upon issuance prospectively and elected the applicable optional expedients and exceptions for contracts and hedging relationships impacted by reference rate reform through December 31, 2024. The guidance did not have an impact on our consolidated financial statements upon adoption. When we adopt new accounting standards, we have a process in place to perform a thorough review of the pronouncement, identify the financial statement and system impacts and create an implementation plan among our impacted business units to ensure we are compliant with the pronouncement on the date of adoption. This includes having effective processes and controls in place to support the reported amounts. |
Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts Guidance - Policy | Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts Guidance As mentioned above, we adopted LDTI on January 1, 2023. For traditional and limited-payment long-duration contracts, we review and update, if necessary, assumptions used to measure cash flows for the liability for future policy benefits during the third quarter of each year, or more frequently if evidence suggests assumptions should be revised. The change in our liability estimate as a result of updating cash flow assumptions is recognized in net income. Actual cash flows are grouped into issue-year cohorts for the liability calculation and updated quarterly. Cohorts are used as the unit of account for liability measurement. Discount rate assumptions are prescribed as the current upper-medium grade (low-credit-risk) fixed-income instrument yield. The discount rate is updated quarterly at each reporting date with the impact recognized in OCI. The provision for risk of adverse deviation is eliminated, as is premium deficiency, or loss recognition, testing. We also removed unrealized gain (loss) adjustments, previously recorded in accumulated other comprehensive income (“AOCI”), attributable to the impact of unrealized gains and losses on premium deficiency testing. Under LDTI, market risk benefits (“MRBs”), which are contracts or contract features that provide protection to the policyholder from capital market risk and expose us to other-than-nominal capital market risk, are measured at fair value. The periodic change in fair value is recognized in net income with the exception of the periodic change in fair value related to our own nonperformance risk, which is recognized in OCI. Certain contract features previously accounted for as an embedded derivative or as an additional liability for annuitization benefits or death or other insurance benefits are recorded as MRBs under LDTI. LDTI simplified the amortization of DAC and other actuarial balances such as the unearned revenue liability and sales inducement asset for long-duration contracts. These balances were previously amortized in proportion to premiums, estimated gross profits, estimated gross margins or estimated gross revenues; however, these balances are now amortized on a constant level basis over the expected life of the related contracts. Impairment testing is no longer applicable for DAC. We also removed unrealized gain (loss) adjustments, previously recorded in AOCI, as the LDTI amortization is not impacted by investment gains and losses. LDTI also requires disaggregated rollforwards for the liability for future policy benefits, additional liability for certain benefit features, MRBs, DAC and other actuarial balances required to be amortized on a basis consistent with DAC. Although the accounting for the additional liability for certain benefit features, separate account liabilities and contractholder funds does not change under LDTI, the guidance requires disaggregated rollforwards for those balances. Further, for certain actuarial balances, disclosures are required for the significant inputs, judgments, assumptions and methods used in measurement, including changes in those inputs, judgments and assumptions, and the effect of those changes on measurement. The LDTI guidance is not prescriptive as to the appropriate level of aggregation for disclosures; however, amounts from different reportable segments cannot be aggregated. Factors to consider in determining the level of aggregation for disclosures include the type of coverage, geography and market or type of customer. We have identified the following levels of aggregation for LDTI disclosures. The disclosures do not include levels of aggregation for insignificant balances. ● Retirement and Income Solutions: o Workplace savings and retirement solutions – Group annuity contracts offered to the plan sponsors of defined contribution plans or defined benefit plans o Individual variable annuities – Variable deferred annuities offered to individuals for both qualified and nonqualified retirement savings o Pension risk transfer – Single premium group annuities offered to pension plan sponsors and other institutions o Individual fixed deferred annuities – An exited business that offered single premium deferred annuity contracts and flexible premium deferred annuities (“FPDAs”) to individuals for both qualified and nonqualified retirement savings o Individual fixed income annuities – An exited business that offered single premium immediate annuities (“SPIAs”) and deferred income annuities (“DIAs”) to individuals for both qualified and nonqualified retirement savings o Investment only – Primarily guaranteed investment contracts (“GICs”) and funding agreements offered to retirement plan sponsors and other institutions ● Principal Asset Management – Principal International o Latin America: ◾ Individual fixed income annuities – SPIAs offered to individuals ◾ Pension – Certain retirement accumulation products where the segregated funds and associated obligation to the client are consolidated within our financial statements as separate account assets and liabilities and are only in the scope of LDTI disclosures for separate accounts o Asia: ◾ Guaranteed pension – Pension savings schemes offered to both employers and employees ● Benefits and Protection – Specialty Benefits: o Individual disability – Disability insurance providing protection to individuals and/or business owners ● Benefits and Protection – Life Insurance: o Universal life – Universal life, variable universal life and indexed universal life insurance products offered to individuals and/or business owners, which will be collectively referred to hereafter as “universal life” contracts; includes our exited ULSG business o Term life – Term life insurance products offered to individuals and/or business owners o Participating life – Participating life insurance contracts offered to individuals, some of which are part of a closed block of business and are only in the scope of LDTI disclosures for DAC ● Corporate: o Long-term care insurance – A closed block of long-term care insurance that is fully reinsured, which was offered on both a group and individual basis. For the separate account liability disclosures, our Retirement and Income Solutions segment will use a Group retirement contracts level of aggregation. This consists primarily of separate account liabilities for the workplace savings and retirement solutions business as well as amounts for the investment only and pension risk transfer businesses. Impact of Adoption We adopted the guidance for the liability for future policy benefits for traditional and limited-payment contracts and DAC and other actuarial balances on a modified retrospective basis; that is, to contracts in force as of the beginning of the earliest period presented based on their existing carrying amounts. We adopted the guidance for MRBs and cost of reinsurance retrospectively. Results for reporting periods beginning January 1, 2021, within our consolidated financial statements are presented under the new guidance. A cumulative effect adjustment of $159.9 million was recorded as a decrease to retained earnings and a cumulative effect adjustment of $5,128.0 million was recorded as a decrease to AOCI as of January 1, 2021, as shown below. Accumulated other Retained earnings comprehensive income Pre-Tax Tax After-Tax Pre-Tax Tax After-Tax (in millions) DAC and other actuarial balances: Adjustment for reversal of unrealized loss from AOCI (1) $ — $ — $ — $ 421.5 $ (88.5) $ 333.0 Cost of reinsurance asset (liability): Cumulative effect of amortization basis change (9.0) 1.9 (7.1) — — — Adjustment of unrealized loss in AOCI — — — 16.1 (3.4) 12.7 Reinsurance recoverable: Adjustment for reversal of unrealized gain from AOCI (2) — — — (45.5) 9.5 (36.0) Adjustment under the modified retrospective approach (3) 31.4 (6.6) 24.8 — — — Effect of remeasurement of the recoverable at the current discount rate — — — 201.8 (42.4) 159.4 Liability for future policy benefits: Adjustment for reversal of unrealized loss from AOCI (2) — — — 1,965.3 (452.2) 1,513.1 Adjustment under the modified retrospective approach (3) (119.1) 29.8 (89.3) 17.9 (4.8) 13.1 Effect of remeasurement of the liability at the current discount rate — — — (9,043.1) 2,024.8 (7,018.3) Market risk benefits: Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date — — — (4.8) 1.0 (3.8) Adjustments to the host contract for differences between previous carrying amount and measurement of the MRB 20.9 (4.4) 16.5 — — — Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes) (258.8) 54.4 (204.4) — — — Reclassification of nonperformance risk changes between retained earnings and AOCI (4) 108.4 (22.5) 85.9 (108.4) 22.5 (85.9) Investment in equity method subsidiary impacted by LDTI (5) 22.8 (9.1) 13.7 (25.5) 10.2 (15.3) Total impact on opening balance as of January 1, 2021 $ (203.4) $ 43.5 $ (159.9) $ (6,604.7) $ 1,476.7 $ (5,128.0) (1) Includes the impact for DAC, sales inducement asset and the unearned revenue liability. We have not included the disaggregated rollforwards for the sales inducement asset within the footnote disclosures due to immateriality. (2) Prior period unrealized gain (loss) adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (3) The impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI. The foreign currency translation related to the liability for future policy benefits was reflected as an adjustment to the opening balance of AOCI. (4) The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI. (5) Reflects the impact from our equity method investment in Brasilprev Seguros e Previdencia, which had transition impacts for the liability for future policy benefits and the additional liability for certain benefit features. The table below reflects the increase (decrease) to the impacted line items in the consolidated statements of financial position related to the cumulative effect adjustment as of January 1, 2021. Increase (decrease) (in millions) Assets Other investments (1) $ (1.6) Reinsurance recoverable and deposit receivable 187.7 Premiums due and other receivables (2) (24.4) Deferred acquisition costs 450.9 Market risk benefit asset (3) 18.9 Other assets (4) 19.3 Total assets $ 650.8 Liabilities Contractholder funds (5) $ (397.9) Future policy benefits and claims (6) 7,143.4 Market risk benefit liability (3) 663.5 Other policyholder funds (7) 48.8 Deferred income taxes (1,519.1) Total liabilities 5,938.7 Stockholders’ equity Retained earnings (159.9) Accumulated other comprehensive income (5,128.0) Total stockholders’ equity (5,287.9) Total liabilities and stockholders’ equity $ 650.8 (1) Reflects the impact on our investment in Brasilprev Seguros e Previdencia, which is accounted for using the equity method. (2) Includes the impact on the cost of reinsurance asset. (3) This is a new line item on the consolidated statements of financial position as a result of implementing LDTI. These contract features were previously recorded as embedded derivatives within contractholder funds or additional liabilities for certain benefit features within future policy benefits and claims on the consolidated statements of financial position. (4) Reflects the impact on the sales inducement asset. (5) Reflects the impact of contract features previously recorded as embedded derivatives that are recorded as MRBs under LDTI. (6) Includes the impact on the liability for future policy benefits and cost of reinsurance liability. Also includes the impact on contract features classified as additional liabilities for certain benefit features that are recorded as MRBs under LDTI. (7) Reflects the impact on the unearned revenue liability. The disaggregated rollforwards below reconcile the ending asset or liability balances as of December 31, 2020, to the opening balance as of January 1, 2021, which is the earliest period presented within the consolidated financial statements, for those balances impacted by LDTI with associated disaggregated disclosure requirements. The level of aggregation presented within the rollforwards is consistent with the disaggregated rollforwards required by the guidance. The balances as of December 31, 2020, shown in the rollforwards below, do not equal amounts reported on the consolidated statements of financial position as they do not include balances for short-duration contracts, insignificant balances not included in our levels of aggregation for disclosures and other amounts not within the scope of the disaggregated rollforwards. Deferred Acquisition Costs Adjustment for reversal of Balance as of unrealized loss Balance as of December 31, 2020 from AOCI (1) January 1, 2021 (2) (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 424.6 $ 52.6 $ 477.2 Individual variable annuities 281.7 0.2 281.9 Pension risk transfer (3) — — — Individual fixed deferred annuities 11.5 181.2 192.7 Investment only 12.6 — 12.6 Total Retirement and Income Solutions 730.4 234.0 964.4 Benefits and Protection: Specialty Benefits: Individual disability 529.8 — 529.8 Life Insurance: Universal life 1,443.0 165.3 1,608.3 Term life 607.9 — 607.9 Participating life 60.3 51.6 111.9 Total Benefits and Protection 2,641.0 216.9 2,857.9 Total $ 3,371.4 $ 450.9 $ 3,822.3 (1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) Does not include DAC for short-duration contracts or insignificant balances for long-duration contracts not included in our levels of aggregation for disclosures. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on DAC. (3) This product began recording DAC upon implementing LDTI. The balances and changes in DAC for 2021 for each level of aggregation were as follows: Retirement and Income Solutions For the year ended December 31, 2021 Workplace savings and Individual Pension Individual retirement variable risk fixed deferred Investment solutions annuities transfer (1) annuities only (in millions) Balance at beginning of period $ 477.2 $ 281.9 $ — $ 192.7 $ 12.6 Costs deferred 50.1 26.4 2.7 7.6 9.1 Amortized to expense (38.3) (27.1) — (38.1) (3.6) Balance at end of period $ 489.0 $ 281.2 $ 2.7 $ 162.2 $ 18.1 (1) Amortization during 2021 was nominal. Benefits and Protection For the year ended December 31, 2021 Specialty Benefits Life Insurance Individual disability Universal life Term life Participating life (in millions) Balance at beginning of period $ 529.8 $ 1,608.3 $ 607.9 $ 111.9 Costs deferred 89.8 84.3 126.5 1.9 Amortized to expense (38.9) (96.4) (55.5) (11.5) Balance at end of period $ 580.7 $ 1,596.2 $ 678.9 $ 102.3 Unearned Revenue Liability Adjustment for reversal of Balance as of unrealized gain Balance as of December 31, 2020 from AOCI (1) January 1, 2021 (2) (in millions) Benefits and Protection - Life Insurance: Universal life $ 335.6 $ 48.8 $ 384.4 Total $ 335.6 $ 48.8 $ 384.4 (1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) Reported within other policyholder funds in the consolidated statements of financial position. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on the unearned revenue liability. Benefits and Protection The balances and changes in the unearned revenue liability for 2021 for Life Insurance – Universal life were as follows: For the year ended December 31, 2021 (in millions) Balance at beginning of period $ 384.4 Deferrals 66.1 Revenue recognized (25.2) Balance at end of period $ 425.3 Liability for Future Policy Benefits Effect of Adjustment remeasurement Adjustment under the of the liability Balance as of for reversal of modified at the current Balance as of December 31, unrealized loss retrospective discount January 1, 2020 from AOCI (1) approach (2) rate (3) 2021 (4) (in millions) Retirement and Income Solutions: Pension risk transfer $ 21,982.8 $ (947.0) $ — $ 4,827.9 $ 25,863.7 Individual fixed income annuities 6,147.2 (215.0) 0.1 1,213.5 7,145.8 Total Retirement and Income Solutions 28,130.0 (1,162.0) 0.1 6,041.4 33,009.5 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities 5,038.4 (634.6) 61.7 2,096.0 6,561.5 Benefits and Protection: Specialty Benefits: Individual disability 2,173.8 (168.7) 2.4 493.4 2,500.9 Life Insurance: Term life 834.5 — 7.0 318.8 1,160.3 Total Benefits and Protection 3,008.3 (168.7) 9.4 812.2 3,661.2 Corporate: Long-term care insurance 134.1 — 30.0 93.5 257.6 Total $ 36,310.8 $ (1,965.3) $ 101.2 $ 9,043.1 $ 43,489.8 (1) Prior period adjustments in AOCI related to premium deficiency testing were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) As a result of updating cash flow assumptions and measuring the liability for future policy benefits at the issue-year cohort level, the impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI. (3) The remeasurement of the liability at the current upper-medium grade fixed-income instrument yield, which was generally lower than the locked-in interest accretion rate, was reflected as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (4) Reported within future policy benefits and claims in the consolidated statements of financial position. Refer to Note 8, Future Policy Benefits and Claims, for further information on the liability for future policy benefits. The balances and changes in the liability for future policy benefits for 2021 for each level of aggregation were as follows: Retirement and Income Solutions and Principal Asset Management – Principal International For the year ended December 31, 2021 Principal Asset Management – Retirement and Income Principal Solutions International Latin America Pension Individual Individual risk fixed income fixed income transfer annuities annuities (in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 25,863.7 $ 7,145.8 $ 6,561.5 Effect of changes in discount rate assumptions at beginning of period (4,827.9) (1,213.5) (2,096.0) Balance at beginning of period at original discount rate 21,035.8 5,932.3 4,465.5 Effect of actual variances from expected experience (2.4) (1.3) (4.9) Adjusted beginning of period balance at original discount rate 21,033.4 5,931.0 4,460.6 Interest accrual 916.7 240.5 444.3 Benefit payments (1,772.5) (532.0) (436.0) Issuances 1,801.7 82.9 141.3 Foreign currency translation adjustment — — (751.9) Balance at end of period at original discount rate 21,979.3 5,722.4 3,858.3 Effect of changes in discount rate assumptions at end of period 3,386.5 812.6 478.5 Future policy benefits $ 25,365.8 $ 6,535.0 $ 4,336.8 Benefits and Protection and Corporate For the year ended December 31, 2021 Benefits and Protection Corporate Specialty Life Benefits Insurance Individual Long-term disability Term life care insurance (in millions) Present value of expected net premiums Balance at beginning of period $ 3,148.3 $ 3,799.0 $ 66.7 Effect of changes in discount rate assumptions at beginning of period (340.7) (861.1) (17.6) Balance at beginning of period at original discount rate 2,807.6 2,937.9 49.1 Effect of changes in cash flow assumptions — — 2.8 Effect of actual variances from expected experience 122.0 211.4 (0.8) Adjusted beginning of period balance at original discount rate 2,929.6 3,149.3 51.1 Interest accrual 95.4 151.1 2.9 Net premiums collected (280.4) (315.0) (5.2) Issuances 206.4 518.2 — Balance at end of period at original discount rate 2,951.0 3,503.6 48.8 Effect of changes in discount rate assumptions at end of period 198.9 690.1 14.0 Balance at end of period $ 3,149.9 $ 4,193.7 $ 62.8 Present value of expected future policy benefit payments Balance at beginning of period $ 5,649.2 $ 4,959.3 $ 324.3 Effect of changes in discount rate assumptions at beginning of period (834.1) (1,179.9) (111.1) Balance at beginning of period at original discount rate 4,815.1 3,779.4 213.2 Effect of changes in cash flow assumptions — — 0.5 Effect of actual variances from expected experience 118.8 216.0 (4.6) Adjusted beginning of period balance at original discount rate 4,933.9 3,995.4 209.1 Interest accrual 181.0 194.3 12.4 Benefit payments (179.7) (335.7) (13.5) Issuances 212.1 543.4 — Balance at end of period at original discount rate 5,147.3 4,397.4 208.0 Effect of changes in discount rate assumptions at end of period 501.0 913.9 89.5 Balance at end of period $ 5,648.3 $ 5,311.3 $ 297.5 Future policy benefits (1) $ 2,498.4 $ 1,117.6 $ 234.7 Reinsurance impact (549.9) (0.1) (234.7) Future policy benefits after reinsurance $ 1,948.5 $ 1,117.5 $ — (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. Additional Liability for Certain Benefit Features Benefits and Protection The balances and changes in the additional liability for certain benefits features for 2021 for Life Insurance - Universal life were as follows: For the year ended, December 31, 2021 (in millions) Balance at beginning of period $ 3,463.9 Effect of changes in cash flow assumptions (11.1) Effect of actual variances from expected experience 18.1 Interest accrual 158.3 Net assessments collected 324.7 Benefit payments (83.1) Other (1) (56.6) Balance at end of period $ 3,814.2 (1) Market Risk Benefits Cumulative effect of changes in the Retained earnings nonperformance adjustment risk between the for the valuation of original contract contracts as MRBs Asset (liability) issue date and (exclusive of Asset (liability) balance as of the transition nonperformance balance as of December 31, 2020 (1) date (2) risk changes) (3) January 1, 2021 (4) (in millions) Retirement and Income Solutions: Individual variable annuities $ (348.6) $ (4.8) $ (237.9) $ (591.3) Principal Asset Management - Principal International: Asia: Guaranteed pension (5) (53.3) — — (53.3) Total $ (401.9) $ (4.8) $ (237.9) $ (644.6) (1) The balance as of December 31, 2020, for MRBs represents the contract features that meet the definition of an MRB under LDTI and the related carrying amount of those features prior to adoption. These contract features were previously accounted for as an embedded derivative, or as an additional liability for annuitization benefits or death or other insurance benefits. (2) The cumulative effect of the change in our own nonperformance risk between the original contract issuance date and the transition date of LDTI for contract features previously accounted for as an additional liability for certain benefit features was recorded as an adjustment to the opening balance of AOCI. (3) The cumulative difference, exclusive of the nonperformance risk change, between the pre-adoption carrying amount and the fair value measurement for MRBs was recorded as an adjustment to the opening balance of retained earnings. (4) Refer to Note 9, Market Risk Benefits, for further information on MRBs. The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI. (5) This product had nominal transition adjustments. The balances and changes in MRBs for 2021 for each level of aggregation were as follows: For the year ended December 31, 2021 Retirement and Income Principal Asset Management – Solutions Principal International Asia Individual variable annuities Guaranteed pension (in millions) Balance at beginning of period $ (591.3) $ (53.3) Effect of changes in nonperformance risk at beginning of period 106.7 6.5 Adjusted balance at beginning of period (484.6) (46.8) Effect of: Interest accrual and expected policyholder behavior (120.7) (5.3) Benefit payments 0.4 5.7 Changes in interest rates 154.3 7.6 Changes in equity markets 106.4 1.4 Changes in equity index volatility 15.1 — Actual policyholder behavior different from expected behavior 2.3 3.6 Changes in future expected policyholder behavior (96.6) 0.5 Changes in other future expected assumptions 38.2 2.3 Foreign currency translation adjustment — 0.2 Adjusted balance at end of period (385.2) (30.8) Effect of changes in nonperformance risk at end of period (109.5) (4.3) Balance at end of period $ (494.7) $ (35.1) |
Nature of Operations and Sign_3
Nature of Operations and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table) | Accumulated other Retained earnings comprehensive income Pre-Tax Tax After-Tax Pre-Tax Tax After-Tax (in millions) DAC and other actuarial balances: Adjustment for reversal of unrealized loss from AOCI (1) $ — $ — $ — $ 421.5 $ (88.5) $ 333.0 Cost of reinsurance asset (liability): Cumulative effect of amortization basis change (9.0) 1.9 (7.1) — — — Adjustment of unrealized loss in AOCI — — — 16.1 (3.4) 12.7 Reinsurance recoverable: Adjustment for reversal of unrealized gain from AOCI (2) — — — (45.5) 9.5 (36.0) Adjustment under the modified retrospective approach (3) 31.4 (6.6) 24.8 — — — Effect of remeasurement of the recoverable at the current discount rate — — — 201.8 (42.4) 159.4 Liability for future policy benefits: Adjustment for reversal of unrealized loss from AOCI (2) — — — 1,965.3 (452.2) 1,513.1 Adjustment under the modified retrospective approach (3) (119.1) 29.8 (89.3) 17.9 (4.8) 13.1 Effect of remeasurement of the liability at the current discount rate — — — (9,043.1) 2,024.8 (7,018.3) Market risk benefits: Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date — — — (4.8) 1.0 (3.8) Adjustments to the host contract for differences between previous carrying amount and measurement of the MRB 20.9 (4.4) 16.5 — — — Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes) (258.8) 54.4 (204.4) — — — Reclassification of nonperformance risk changes between retained earnings and AOCI (4) 108.4 (22.5) 85.9 (108.4) 22.5 (85.9) Investment in equity method subsidiary impacted by LDTI (5) 22.8 (9.1) 13.7 (25.5) 10.2 (15.3) Total impact on opening balance as of January 1, 2021 $ (203.4) $ 43.5 $ (159.9) $ (6,604.7) $ 1,476.7 $ (5,128.0) (1) Includes the impact for DAC, sales inducement asset and the unearned revenue liability. We have not included the disaggregated rollforwards for the sales inducement asset within the footnote disclosures due to immateriality. (2) Prior period unrealized gain (loss) adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (3) The impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI. The foreign currency translation related to the liability for future policy benefits was reflected as an adjustment to the opening balance of AOCI. (4) The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI. (5) Reflects the impact from our equity method investment in Brasilprev Seguros e Previdencia, which had transition impacts for the liability for future policy benefits and the additional liability for certain benefit features. Increase (decrease) (in millions) Assets Other investments (1) $ (1.6) Reinsurance recoverable and deposit receivable 187.7 Premiums due and other receivables (2) (24.4) Deferred acquisition costs 450.9 Market risk benefit asset (3) 18.9 Other assets (4) 19.3 Total assets $ 650.8 Liabilities Contractholder funds (5) $ (397.9) Future policy benefits and claims (6) 7,143.4 Market risk benefit liability (3) 663.5 Other policyholder funds (7) 48.8 Deferred income taxes (1,519.1) Total liabilities 5,938.7 Stockholders’ equity Retained earnings (159.9) Accumulated other comprehensive income (5,128.0) Total stockholders’ equity (5,287.9) Total liabilities and stockholders’ equity $ 650.8 (1) Reflects the impact on our investment in Brasilprev Seguros e Previdencia, which is accounted for using the equity method. (2) Includes the impact on the cost of reinsurance asset. (3) This is a new line item on the consolidated statements of financial position as a result of implementing LDTI. These contract features were previously recorded as embedded derivatives within contractholder funds or additional liabilities for certain benefit features within future policy benefits and claims on the consolidated statements of financial position. (4) Reflects the impact on the sales inducement asset. (5) Reflects the impact of contract features previously recorded as embedded derivatives that are recorded as MRBs under LDTI. (6) Includes the impact on the liability for future policy benefits and cost of reinsurance liability. Also includes the impact on contract features classified as additional liabilities for certain benefit features that are recorded as MRBs under LDTI. (7) Reflects the impact on the unearned revenue liability. |
Disaggregated Rollforward at Adoption - Deferred Acquisition Costs (Table) | March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 500.2 $ 498.0 Individual variable annuities 276.8 278.0 Pension risk transfer 10.2 8.1 Individual fixed deferred annuities 124.7 131.0 Investment only 13.7 14.9 Total Retirement and Income hope soSolutions 925.6 930.0 Benefits and Protection: Specialty Benefits: Individual disability 635.0 626.1 Life Insurance: Universal life 1,560.4 1,569.7 Term life 687.1 685.7 Participating life 90.8 93.0 Total Benefits and Protection 2,973.3 2,974.5 Short-duration contracts 40.2 34.7 Other balances (1) 9.2 8.8 Total DAC per consolidated statements of financial position $ 3,948.3 $ 3,948.0 (1) Includes insignificant balances for long-duration contracts. |
Disaggregated Rollforward at Adoption - Unearned Revenue Liability (Table) | Benefits and Protection The balances and changes in the unearned revenue liability for 2021 for Life Insurance – Universal life were as follows: For the year ended December 31, 2021 (in millions) Balance at beginning of period $ 384.4 Deferrals 66.1 Revenue recognized (25.2) Balance at end of period $ 425.3 |
Disaggregated Rollforward at Adoption - Liability for Future Policy Benefits (Table) | Retirement and Income Solutions and Principal Asset Management – Principal International For the year ended December 31, 2021 Principal Asset Management – Retirement and Income Principal Solutions International Latin America Pension Individual Individual risk fixed income fixed income transfer annuities annuities (in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 25,863.7 $ 7,145.8 $ 6,561.5 Effect of changes in discount rate assumptions at beginning of period (4,827.9) (1,213.5) (2,096.0) Balance at beginning of period at original discount rate 21,035.8 5,932.3 4,465.5 Effect of actual variances from expected experience (2.4) (1.3) (4.9) Adjusted beginning of period balance at original discount rate 21,033.4 5,931.0 4,460.6 Interest accrual 916.7 240.5 444.3 Benefit payments (1,772.5) (532.0) (436.0) Issuances 1,801.7 82.9 141.3 Foreign currency translation adjustment — — (751.9) Balance at end of period at original discount rate 21,979.3 5,722.4 3,858.3 Effect of changes in discount rate assumptions at end of period 3,386.5 812.6 478.5 Future policy benefits $ 25,365.8 $ 6,535.0 $ 4,336.8 Benefits and Protection and Corporate For the year ended December 31, 2021 Benefits and Protection Corporate Specialty Life Benefits Insurance Individual Long-term disability Term life care insurance (in millions) Present value of expected net premiums Balance at beginning of period $ 3,148.3 $ 3,799.0 $ 66.7 Effect of changes in discount rate assumptions at beginning of period (340.7) (861.1) (17.6) Balance at beginning of period at original discount rate 2,807.6 2,937.9 49.1 Effect of changes in cash flow assumptions — — 2.8 Effect of actual variances from expected experience 122.0 211.4 (0.8) Adjusted beginning of period balance at original discount rate 2,929.6 3,149.3 51.1 Interest accrual 95.4 151.1 2.9 Net premiums collected (280.4) (315.0) (5.2) Issuances 206.4 518.2 — Balance at end of period at original discount rate 2,951.0 3,503.6 48.8 Effect of changes in discount rate assumptions at end of period 198.9 690.1 14.0 Balance at end of period $ 3,149.9 $ 4,193.7 $ 62.8 Present value of expected future policy benefit payments Balance at beginning of period $ 5,649.2 $ 4,959.3 $ 324.3 Effect of changes in discount rate assumptions at beginning of period (834.1) (1,179.9) (111.1) Balance at beginning of period at original discount rate 4,815.1 3,779.4 213.2 Effect of changes in cash flow assumptions — — 0.5 Effect of actual variances from expected experience 118.8 216.0 (4.6) Adjusted beginning of period balance at original discount rate 4,933.9 3,995.4 209.1 Interest accrual 181.0 194.3 12.4 Benefit payments (179.7) (335.7) (13.5) Issuances 212.1 543.4 — Balance at end of period at original discount rate 5,147.3 4,397.4 208.0 Effect of changes in discount rate assumptions at end of period 501.0 913.9 89.5 Balance at end of period $ 5,648.3 $ 5,311.3 $ 297.5 Future policy benefits (1) $ 2,498.4 $ 1,117.6 $ 234.7 Reinsurance impact (549.9) (0.1) (234.7) Future policy benefits after reinsurance $ 1,948.5 $ 1,117.5 $ — (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. |
Disaggregated Rollforward at Adoption - Additional Liability for Certain Benefit Features (Table) | Additional Liability for Certain Benefit Features Benefits and Protection The balances and changes in the additional liability for certain benefits features for 2021 for Life Insurance - Universal life were as follows: For the year ended, December 31, 2021 (in millions) Balance at beginning of period $ 3,463.9 Effect of changes in cash flow assumptions (11.1) Effect of actual variances from expected experience 18.1 Interest accrual 158.3 Net assessments collected 324.7 Benefit payments (83.1) Other (1) (56.6) Balance at end of period $ 3,814.2 (1) |
Disaggregated Rollforward at Adoption - Market Risk Benefits (Table) | For the year ended December 31, 2021 Retirement and Income Principal Asset Management – Solutions Principal International Asia Individual variable annuities Guaranteed pension (in millions) Balance at beginning of period $ (591.3) $ (53.3) Effect of changes in nonperformance risk at beginning of period 106.7 6.5 Adjusted balance at beginning of period (484.6) (46.8) Effect of: Interest accrual and expected policyholder behavior (120.7) (5.3) Benefit payments 0.4 5.7 Changes in interest rates 154.3 7.6 Changes in equity markets 106.4 1.4 Changes in equity index volatility 15.1 — Actual policyholder behavior different from expected behavior 2.3 3.6 Changes in future expected policyholder behavior (96.6) 0.5 Changes in other future expected assumptions 38.2 2.3 Foreign currency translation adjustment — 0.2 Adjusted balance at end of period (385.2) (30.8) Effect of changes in nonperformance risk at end of period (109.5) (4.3) Balance at end of period $ (494.7) $ (35.1) |
Deferred acquisition costs | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table) | Adjustment for reversal of Balance as of unrealized loss Balance as of December 31, 2020 from AOCI (1) January 1, 2021 (2) (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 424.6 $ 52.6 $ 477.2 Individual variable annuities 281.7 0.2 281.9 Pension risk transfer (3) — — — Individual fixed deferred annuities 11.5 181.2 192.7 Investment only 12.6 — 12.6 Total Retirement and Income Solutions 730.4 234.0 964.4 Benefits and Protection: Specialty Benefits: Individual disability 529.8 — 529.8 Life Insurance: Universal life 1,443.0 165.3 1,608.3 Term life 607.9 — 607.9 Participating life 60.3 51.6 111.9 Total Benefits and Protection 2,641.0 216.9 2,857.9 Total $ 3,371.4 $ 450.9 $ 3,822.3 (1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) Does not include DAC for short-duration contracts or insignificant balances for long-duration contracts not included in our levels of aggregation for disclosures. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on DAC. (3) This product began recording DAC upon implementing LDTI. |
Unearned revenue liability | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table) | Unearned Revenue Liability Adjustment for reversal of Balance as of unrealized gain Balance as of December 31, 2020 from AOCI (1) January 1, 2021 (2) (in millions) Benefits and Protection - Life Insurance: Universal life $ 335.6 $ 48.8 $ 384.4 Total $ 335.6 $ 48.8 $ 384.4 (1) Prior period adjustments in AOCI were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) Reported within other policyholder funds in the consolidated statements of financial position. Refer to Note 5, Deferred Acquisition Costs and Other Actuarial Balances, for further information on the unearned revenue liability. |
Liability for future policy benefits | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table) | Liability for Future Policy Benefits Effect of Adjustment remeasurement Adjustment under the of the liability Balance as of for reversal of modified at the current Balance as of December 31, unrealized loss retrospective discount January 1, 2020 from AOCI (1) approach (2) rate (3) 2021 (4) (in millions) Retirement and Income Solutions: Pension risk transfer $ 21,982.8 $ (947.0) $ — $ 4,827.9 $ 25,863.7 Individual fixed income annuities 6,147.2 (215.0) 0.1 1,213.5 7,145.8 Total Retirement and Income Solutions 28,130.0 (1,162.0) 0.1 6,041.4 33,009.5 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities 5,038.4 (634.6) 61.7 2,096.0 6,561.5 Benefits and Protection: Specialty Benefits: Individual disability 2,173.8 (168.7) 2.4 493.4 2,500.9 Life Insurance: Term life 834.5 — 7.0 318.8 1,160.3 Total Benefits and Protection 3,008.3 (168.7) 9.4 812.2 3,661.2 Corporate: Long-term care insurance 134.1 — 30.0 93.5 257.6 Total $ 36,310.8 $ (1,965.3) $ 101.2 $ 9,043.1 $ 43,489.8 (1) Prior period adjustments in AOCI related to premium deficiency testing were reversed as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (2) As a result of updating cash flow assumptions and measuring the liability for future policy benefits at the issue-year cohort level, the impact of loss cohorts, those with net premiums in excess of gross premiums, and cohorts with negative reserves, was reflected as an adjustment to the opening balance of retained earnings upon adoption of LDTI. (3) The remeasurement of the liability at the current upper-medium grade fixed-income instrument yield, which was generally lower than the locked-in interest accretion rate, was reflected as an adjustment to the opening balance of AOCI upon the adoption of LDTI. (4) Reported within future policy benefits and claims in the consolidated statements of financial position. Refer to Note 8, Future Policy Benefits and Claims, for further information on the liability for future policy benefits. |
Market risk benefits | |
Recent Accounting Pronouncements | |
Schedule of Impact of Adoption of Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Table) | Market Risk Benefits Cumulative effect of changes in the Retained earnings nonperformance adjustment risk between the for the valuation of original contract contracts as MRBs Asset (liability) issue date and (exclusive of Asset (liability) balance as of the transition nonperformance balance as of December 31, 2020 (1) date (2) risk changes) (3) January 1, 2021 (4) (in millions) Retirement and Income Solutions: Individual variable annuities $ (348.6) $ (4.8) $ (237.9) $ (591.3) Principal Asset Management - Principal International: Asia: Guaranteed pension (5) (53.3) — — (53.3) Total $ (401.9) $ (4.8) $ (237.9) $ (644.6) (1) The balance as of December 31, 2020, for MRBs represents the contract features that meet the definition of an MRB under LDTI and the related carrying amount of those features prior to adoption. These contract features were previously accounted for as an embedded derivative, or as an additional liability for annuitization benefits or death or other insurance benefits. (2) The cumulative effect of the change in our own nonperformance risk between the original contract issuance date and the transition date of LDTI for contract features previously accounted for as an additional liability for certain benefit features was recorded as an adjustment to the opening balance of AOCI. (3) The cumulative difference, exclusive of the nonperformance risk change, between the pre-adoption carrying amount and the fair value measurement for MRBs was recorded as an adjustment to the opening balance of retained earnings. (4) Refer to Note 9, Market Risk Benefits, for further information on MRBs. The cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date for contract features previously accounted for as an embedded derivative was recorded as a reclassification from retained earnings to AOCI. (5) This product had nominal transition adjustments. |
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | |
Recent Accounting Pronouncements | |
Disaggregated Rollforward at Adoption - Deferred Acquisition Costs (Table) | Retirement and Income Solutions For the year ended December 31, 2021 Workplace savings and Individual Pension Individual retirement variable risk fixed deferred Investment solutions annuities transfer (1) annuities only (in millions) Balance at beginning of period $ 477.2 $ 281.9 $ — $ 192.7 $ 12.6 Costs deferred 50.1 26.4 2.7 7.6 9.1 Amortized to expense (38.3) (27.1) — (38.1) (3.6) Balance at end of period $ 489.0 $ 281.2 $ 2.7 $ 162.2 $ 18.1 (1) Amortization during 2021 was nominal. Benefits and Protection For the year ended December 31, 2021 Specialty Benefits Life Insurance Individual disability Universal life Term life Participating life (in millions) Balance at beginning of period $ 529.8 $ 1,608.3 $ 607.9 $ 111.9 Costs deferred 89.8 84.3 126.5 1.9 Amortized to expense (38.9) (96.4) (55.5) (11.5) Balance at end of period $ 580.7 $ 1,596.2 $ 678.9 $ 102.3 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Variable Interest Entities | |
Carrying Amounts of Assets and Liabilities of Consolidated Variable Interest Entities (Table) | March 31, 2023 December 31, 2022 Total Total Total Total assets liabilities assets liabilities (in millions) Mandatory retirement savings funds (1) $ 36,985.1 $ 36,606.1 $ 34,876.9 $ 34,528.3 Real estate (2) 753.6 52.2 689.6 42.2 Sponsored investment funds (3) 501.4 7.2 471.4 2.6 Residential mortgage loans (4) 1,169.6 41.4 1,182.6 41.8 Total $ 39,409.7 $ 36,706.9 $ 37,220.5 $ 34,614.9 (1) The assets of the mandatory retirement savings funds primarily include separate account assets and equity securities. The liabilities primarily include separate account liabilities and contractholder funds. (2) The assets of the real estate VIEs primarily include real estate, other investments and cash. Liabilities primarily include other liabilities. (3) The assets of sponsored investment funds are primarily fixed maturities and equity securities, certain of which are reported with other investments, and cash. The consolidated statements of financial position included a $250.9 million and $235.3 million redeemable noncontrolling interest for sponsored investment funds as of March 31, 2023 and December 31, 2022, respectively. (4) The assets of the residential mortgage loans VIEs primarily include residential mortgage loans. The liabilities primarily include other liabilities. |
Asset Carrying Value and Maximum Loss Exposure of Unconsolidated Variable Interest Entities (Table) | Maximum exposure to Asset carrying value loss (1) (in millions) March 31, 2023 Fixed maturities, available-for-sale: Corporate $ 162.9 $ 174.8 Residential mortgage-backed pass-through securities 2,794.9 2,951.5 Commercial mortgage-backed securities 4,927.8 5,555.1 Collateralized debt obligations (2) 4,902.3 5,136.6 Other debt obligations 6,906.7 7,934.9 Fixed maturities, trading: Residential mortgage-backed pass-through securities 11.1 11.1 Commercial mortgage-backed securities 78.7 78.7 Collateralized debt obligations (2) 4.7 4.7 Other debt obligations 30.2 30.2 Equity securities 110.2 110.2 Other investments: Other limited partnership and fund interests (3) 1,539.5 2,614.6 December 31, 2022 Fixed maturities, available-for-sale: Corporate $ 111.8 $ 127.2 Residential mortgage-backed pass-through securities 2,228.7 2,420.6 Commercial mortgage-backed securities 4,864.6 5,572.2 Collateralized debt obligations (2) 4,566.4 4,820.0 Other debt obligations 6,507.6 7,566.2 Fixed maturities, trading: Residential mortgage-backed pass-through securities 5.4 5.4 Commercial mortgage-backed securities 83.4 83.4 Collateralized debt obligations (2) 5.7 5.7 Other debt obligations 80.0 80.0 Equity securities 99.8 99.8 Other investments: Other limited partnership and fund interests (3) 1,473.5 2,434.9 (1) Our risk of loss is limited to our initial investment measured at amortized cost for fixed maturities, available-for-sale, plus any unfunded commitments and/or guarantees and similar provisions for collateralized debt obligations and other debt obligations. Our risk of loss is limited to our investment measured at fair value for our fixed maturities, trading and equity securities. Our risk of loss is limited to our carrying value plus any unfunded commitments and/or guarantees and similar provisions for our other investments. A carrying value of zero is used if distributions have been received in excess of our investment, resulting in a negative carrying value for the investment. Unfunded commitments are not liabilities on our consolidated statements of financial position because we are only required to fund additional equity when called upon to do so by the general partner or investment manager. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. (3) As of March 31, 2023 and December 31, 2022, the maximum exposure to loss for other limited partnership and fund interests includes $146.7 million and $144.3 million, respectively, of debt within certain of our managed international real estate funds that is fully secured by assets whose value exceeds the amount of the debt, but also includes recourse to the investment manager. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments | |
Available-for-Sale Securities (Table) | Gross Gross Allowance Amortized unrealized unrealized for credit cost (1) gains losses loss Fair value (in millions) March 31, 2023 Fixed maturities, available-for-sale: U.S. government and agencies $ 2,041.5 $ 1.5 $ 213.1 $ — $ 1,829.9 Non-U.S. governments 584.3 20.9 56.0 — 549.2 States and political subdivisions 7,061.5 21.5 909.6 — 6,173.4 Corporate 40,630.6 542.6 3,872.6 4.0 37,296.6 Residential mortgage-backed pass-through securities 2,951.5 16.3 172.9 — 2,794.9 Commercial mortgage-backed securities 5,555.1 1.2 628.5 — 4,927.8 Collateralized debt obligations (2) 5,024.6 8.8 131.1 — 4,902.3 Other debt obligations 7,564.7 13.7 655.5 0.1 6,922.8 Total fixed maturities, available-for-sale $ 71,413.8 $ 626.5 $ 6,639.3 $ 4.1 $ 65,396.9 Gross Gross Allowance Amortized unrealized unrealized for credit cost (1) gains losses loss Fair value (in millions) December 31, 2022 Fixed maturities, available-for-sale: U.S. government and agencies $ 1,990.9 $ 0.1 $ 251.2 $ — $ 1,739.8 Non-U.S. governments 611.2 20.9 64.8 — 567.3 States and political subdivisions 7,355.4 13.7 1,136.8 — 6,232.3 Corporate 40,370.4 461.0 4,640.5 7.7 36,183.2 Residential mortgage-backed pass-through securities 2,420.6 6.2 198.1 — 2,228.7 Commercial mortgage-backed securities 5,572.2 0.5 708.1 — 4,864.6 Collateralized debt obligations (2) 4,705.6 4.5 143.7 — 4,566.4 Other debt obligations 7,236.8 5.7 734.8 0.1 6,507.6 Total fixed maturities, available-for-sale $ 70,263.1 $ 512.6 $ 7,878.0 $ 7.8 $ 62,889.9 (1) Amortized cost excludes accrued interest receivable of $632.6 million and $578.0 million as of March 31, 2023 and December 31, 2022, respectively. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Fixed Maturities Available-for-Sale by Contractual Maturity (Table) | Amortized cost Fair value (in millions) Due in one year or less $ 1,603.7 $ 1,593.3 Due after one year through five years 9,104.5 8,819.0 Due after five years through ten years 11,055.5 10,268.5 Due after ten years 28,554.2 25,168.3 Subtotal 50,317.9 45,849.1 Mortgage-backed and other asset-backed securities 21,095.9 19,547.8 Total $ 71,413.8 $ 65,396.9 |
Net Realized Capital Gains and Losses (Table) | For the three months ended March 31, 2023 2022 (in millions) Fixed maturities, available-for-sale: Gross gains $ 17.8 $ 165.8 Gross losses (28.0) (120.7) Net credit losses (7.7) (6.1) Hedging, net (1) (1.2) (0.7) Fixed maturities, trading (2) (0.5) (6.3) Equity securities (3) (15.6) (105.2) Mortgage loans (2.7) (19.6) Derivatives (1) (42.9) 8.4 Other 14.8 (52.2) Net realized capital losses $ (66.0) $ (136.6) (1) The change in fair value of fixed maturities, available-for-sale and the change in fair value of derivative hedging instruments in fair value hedging relationships are reported in net investment income with the earnings effect of fixed maturities, available-for-sale. Gains (losses) for fixed maturities, available-for-sale related to terminated cash flow hedges continue to be reflected in net realized capital gains (losses). (2) Unrealized gains (losses) on fixed maturities, trading still held at the reporting date were $(1.8) million and $(5.2) million for the three months ended March 31, 2023 and 2022, respectively. This excludes $1.8 million and $(7.9) million in unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in market risk benefit remeasurement (gain) loss and $(2.8) million and $0.0 million of unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in net realized capital gains (losses) on funds withheld assets. (3) Unrealized gains (losses) on equity securities still held at the reporting date were $(13.7) million and $(105.5) million for the three months ended March 31, 2023 and 2022, respectively . This excludes $(0.6) million and $(19.3) million of unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in net investment income and $1.7 million and $0.0 million of unrealized gains (losses) for the three months ended March 31, 2023 and 2022, respectively, that were reported in net realized capital gains (losses) on funds withheld assets. |
Allowance for credit loss (Tables) | For the three months ended March 31, 2023 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ 7.7 $ — $ — $ — $ 0.1 $ 7.8 Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — (4.2) — — — — (4.2) Foreign currency translation adjustment — — — 0.5 — — — — 0.5 Ending balance $ — $ — $ — $ 4.0 $ — $ — $ — $ 0.1 $ 4.1 For the three months ended March 31, 2022 Residential mortgage- backed Commercial Collateralized U.S. States and pass- mortgage- debt Other government Non-U.S. political through backed obligations debt and agencies governments subdivisions Corporate securities securities (1) obligations Total (in millions) Beginning balance $ — $ — $ — $ 15.1 $ — $ 0.3 $ — $ 0.1 $ 15.5 Additions for credit losses not previously recorded — — — 1.0 — — — — 1.0 Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period — — — 3.0 — — — — 3.0 Foreign currency translation adjustment — — — 0.9 — — — — 0.9 Ending balance $ — $ — $ — $ 20.0 $ — $ 0.3 $ — $ 0.1 $ 20.4 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Available-for-Sale Securities in Unrealized Loss Positions Without an Allowance for Credit Loss (Table) | March 31, 2023 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1): U.S. government and agencies $ 879.6 $ 86.0 $ 605.2 $ 127.3 $ 1,484.8 $ 213.3 Non-U.S. governments 257.4 21.4 131.5 34.5 388.9 55.9 States and political subdivisions 3,191.6 372.3 2,251.2 537.3 5,442.8 909.6 Corporate 17,165.8 1,571.1 12,333.1 2,303.7 29,498.9 3,874.8 Residential mortgage-backed pass-through securities 616.0 16.4 1,159.9 156.5 1,775.9 172.9 Commercial mortgage-backed securities 996.4 78.4 3,749.0 548.6 4,745.4 627.0 Collateralized debt obligations (2) 1,738.4 33.5 2,484.8 97.5 4,223.2 131.0 Other debt obligations 2,413.2 116.9 3,382.9 538.5 5,796.1 655.4 Total fixed maturities, available-for-sale $ 27,258.4 $ 2,296.0 $ 26,097.6 $ 4,343.9 $ 53,356.0 $ 6,639.9 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. December 31, 2022 Less than Greater than or twelve months equal to twelve months Total Gross Gross Gross Fair unrealized Fair unrealized Fair unrealized value losses value losses value losses (in millions) Fixed maturities, available-for-sale (1): U.S. government and agencies $ 1,528.3 $ 209.4 $ 181.5 $ 41.8 $ 1,709.8 $ 251.2 Non-U.S. governments 407.5 57.7 19.9 7.1 427.4 64.8 States and political subdivisions 5,303.5 1,008.9 391.9 127.8 5,695.4 1,136.7 Corporate 27,309.5 3,944.6 2,944.1 698.0 30,253.6 4,642.6 Residential mortgage-backed pass-through securities 1,201.7 97.5 574.8 105.7 1,776.5 203.2 Commercial mortgage-backed securities 3,648.5 484.0 1,124.8 222.5 4,773.3 706.5 Collateralized debt obligations (2) 2,832.2 89.0 1,330.1 54.7 4,162.3 143.7 Other debt obligations 3,419.8 292.0 2,283.8 437.6 5,703.6 729.6 Total fixed maturities, available-for-sale $ 45,651.0 $ 6,183.1 $ 8,850.9 $ 1,695.2 $ 54,501.9 $ 7,878.3 (1) Fair value and gross unrealized losses are excluded for available-for-sale securities for which an allowance for credit loss has been recorded. (2) Primarily consists of collateralized loan obligations backed by secured corporate loans. |
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Table) | March 31, 2023 December 31, 2022 (in millions) Net unrealized losses on fixed maturities, available-for-sale (1) $ (6,072.3) $ (7,445.7) Net unrealized gains on derivative instruments 50.7 50.7 Adjustments for assumed changes in amortization patterns (1.5) (1.7) Adjustments for assumed changes in policyholder liabilities 0.4 0.5 Net unrealized gains (losses) other investments and noncontrolling interest adjustments (6.2) 7.9 Provision for deferred income tax benefits 1,288.8 1,570.1 Net unrealized losses on available-for-sale securities and derivative instruments $ (4,740.1) $ (5,818.2) (1) Excludes net unrealized gains (losses) on fixed maturities, available-for-sale included in fair value hedging relationships. |
Financing Receivable Credit Quality Indicators (Table) | March 31, 2023 2023 2022 2021 2020 2019 Prior Total (in millions) Commercial mortgage loans: A- and above $ 71.0 $ 1,039.4 $ 2,302.1 $ 1,779.6 $ 2,206.7 $ 6,595.5 $ 13,994.3 BBB+ thru BBB- 14.9 454.2 444.2 185.4 390.9 827.2 2,316.8 BB+ thru BB- 31.8 116.4 18.2 3.2 — 136.9 306.5 B+ and below — — — — — 49.5 49.5 Total $ 117.7 $ 1,610.0 $ 2,764.5 $ 1,968.2 $ 2,597.6 $ 7,609.1 $ 16,667.1 Direct financing leases: A- and above $ — $ 129.8 $ 14.7 $ 62.7 $ 1.5 $ 235.8 $ 444.5 BBB+ thru BBB- — 25.5 23.2 52.2 12.8 84.1 197.8 BB+ thru BB- 2.2 — 62.0 8.7 — 1.9 74.8 Total $ 2.2 $ 155.3 $ 99.9 $ 123.6 $ 14.3 $ 321.8 $ 717.1 Residential mortgage loans: Performing $ 81.6 $ 1,114.0 $ 1,730.4 $ 448.6 $ 132.9 $ 493.8 $ 4,001.3 Non-performing — 5.3 4.7 3.8 1.4 7.7 22.9 Total $ 81.6 $ 1,119.3 $ 1,735.1 $ 452.4 $ 134.3 $ 501.5 $ 4,024.2 Reinsurance recoverable and deposit receivable $ 20,884.0 December 31, 2022 2022 2021 2020 2019 2018 Prior Total (in millions) Commercial mortgage loans: A- and above $ 1,036.4 $ 2,277.9 $ 1,807.3 $ 2,210.2 $ 2,187.9 $ 4,624.9 $ 14,144.6 BBB+ thru BBB- 385.6 439.6 156.8 418.7 238.9 691.7 2,331.3 BB+ thru BB- 104.0 16.8 3.0 — 8.9 71.7 204.4 B+ and below — — — — 8.3 41.7 50.0 Total $ 1,526.0 $ 2,734.3 $ 1,967.1 $ 2,628.9 $ 2,444.0 $ 5,430.0 $ 16,730.3 Direct financing leases: A- and above $ 110.5 $ 13.0 $ 39.9 $ 1.4 $ 42.9 $ 167.3 $ 375.0 BBB+ thru BBB- 33.9 21.9 62.4 11.9 11.7 70.4 212.2 BB+ thru BB- 2.7 57.3 12.1 2.0 — 2.1 76.2 B+ and below — 1.6 — — — — 1.6 Total $ 147.1 $ 93.8 $ 114.4 $ 15.3 $ 54.6 $ 239.8 $ 665.0 Residential mortgage loans: Performing $ 1,144.8 $ 1,740.7 $ 447.1 $ 133.0 $ 75.4 $ 417.8 $ 3,958.8 Non-performing 8.0 4.7 2.2 1.7 0.6 7.0 24.2 Total $ 1,152.8 $ 1,745.4 $ 449.3 $ 134.7 $ 76.0 $ 424.8 $ 3,983.0 Reinsurance recoverable and deposit receivable $ 21,156.7 |
Non-Accrual Financing Receivables (Table) | March 31, 2023 Amortized cost Beginning Ending of nonaccrual amortized cost amortized cost assets without on nonaccrual on nonaccrual a valuation status status allowance (in millions) Commercial mortgage loans $ 50.0 $ 49.4 $ — Residential mortgage loans 17.8 15.3 0.6 Total $ 67.8 $ 64.7 $ 0.6 December 31, 2022 Amortized cost Beginning Ending of nonaccrual amortized cost amortized cost assets without on nonaccrual on nonaccrual a valuation status status allowance (in millions) Commercial mortgage loans $ 13.2 $ 50.0 $ — Residential mortgage loans 4.0 17.8 0.6 Total $ 17.2 $ 67.8 $ 0.6 |
Schedule of Interest Income Recognized on Non-accrual Financing Receivables (Table) | For the three months ended March 31, 2023 2022 (in millions) Commercial mortgage loans $ — $ 0.3 Total $ — $ 0.3 |
Financing Receivables Aging (Table) | March 31, 2023 Amortized cost 90 days or 90 days or 30-59 days 60-89 days more past Total past more and past due past due due due Current Total (1) accruing (in millions) Commercial mortgage loans $ 24.4 $ — $ 14.5 $ 38.9 $ 16,628.2 $ 16,667.1 $ 1.1 Direct financing leases 6.3 44.9 4.4 55.6 661.5 717.1 4.4 Residential mortgage loans 69.8 16.7 15.6 102.1 3,922.1 4,024.2 7.6 Total $ 100.5 $ 61.6 $ 34.5 $ 196.6 $ 21,211.8 $ 21,408.4 $ 13.1 December 31, 2022 Amortized cost 90 days or 90 days or 30-59 days 60-89 days more past Total past more and past due past due due due Current Total (1) accruing (in millions) Commercial mortgage loans $ 45.9 $ 7.5 $ 14.4 $ 67.8 $ 16,662.5 $ 16,730.3 $ — Direct financing leases 6.6 6.2 1.6 14.4 650.6 665.0 1.6 Residential mortgage loans 73.1 15.4 16.2 104.7 3,878.3 3,983.0 6.4 Total $ 125.6 $ 29.1 $ 32.2 $ 186.9 $ 21,191.4 $ 21,378.3 $ 8.0 (1) As of both March 31, 2023 and December 31, 2022, no reinsurance recoverables or deposit receivables were considered past due. |
Financing Receivables Valuation Allowance (Table) | For the three months ended March 31, 2023 Direct Commercial financing Residential Reinsurance mortgage loans leases mortgage loans recoverables Total (in millions) Beginning balance $ 77.9 $ 0.6 $ 5.6 $ 2.7 $ 86.8 Provision 3.8 (0.1) 0.1 (0.2) 3.6 Charge-offs — — (0.1) — (0.1) Recoveries — — 0.2 — 0.2 Foreign currency translation adjustment 0.2 0.1 0.1 — 0.4 Ending balance $ 81.9 $ 0.6 $ 5.9 $ 2.5 $ 90.9 For the three months ended March 31, 2022 Direct Commercial financing Residential Reinsurance mortgage loans leases mortgage loans recoverables Total (in millions) Beginning balance $ 43.9 $ 0.4 $ 2.0 $ 2.7 $ 49.0 Provision 22.1 — (0.5) — 21.6 Charge-offs — — (0.1) — (0.1) Recoveries — — 0.4 — 0.4 Foreign currency translation adjustment 0.1 — — — 0.1 Ending balance $ 66.1 $ 0.4 $ 1.8 $ 2.7 $ 71.0 |
Mortgage Loans Purchased and Sold (Table) | For the three months ended March 31, 2023 2022 (in millions) Commercial mortgage loans: Purchased $ 33.0 $ 32.7 Residential mortgage loans: Purchased (1) 69.1 534.3 Sold 4.2 7.1 (1) Includes mortgage loans purchased by residential mortgage loan VIEs in 2022. |
Commercial Mortgage Loans by Geographic Distribution and Property Type Distribution (Table) | March 31, 2023 December 31, 2022 Amortized Percent Amortized Percent cost of total cost of total ($ in millions) Geographic distribution New England $ 508.0 3.0 % $ 512.1 3.1 % Middle Atlantic 4,510.8 27.1 4,505.6 26.9 East North Central 666.9 4.0 652.5 3.9 West North Central 369.4 2.2 370.9 2.2 South Atlantic 2,578.0 15.5 2,558.3 15.3 East South Central 349.0 2.1 339.8 2.0 West South Central 1,187.5 7.1 1,204.9 7.2 Mountain 954.9 5.7 938.7 5.6 Pacific 4,962.8 29.8 5,115.3 30.6 International 579.8 3.5 532.2 3.2 Total $ 16,667.1 100.0 % $ 16,730.3 100.0 % Property type distribution Office $ 4,103.0 24.6 % $ 4,322.0 25.9 % Retail 1,513.8 9.1 1,499.4 9.0 Industrial 3,227.9 19.4 3,235.9 19.3 Apartments 6,931.2 41.6 6,827.1 40.8 Hotel 71.4 0.4 72.5 0.4 Mixed use/other 819.8 4.9 773.4 4.6 Total $ 16,667.1 100.0 % $ 16,730.3 100.0 % |
Financial Assets Subject to Netting Agreements (Table) | Gross amounts not offset in the consolidated statements of financial position Gross amount of recognized Financial Collateral assets (1) instruments (2) received Net amount (in millions) March 31, 2023 Derivative assets $ 386.7 $ (149.1) $ (195.6) $ 42.0 Reverse repurchase agreements 140.0 — (140.3) (0.3) Total $ 526.7 $ (149.1) $ (335.9) $ 41.7 December 31, 2022 Derivative assets $ 321.0 $ (135.7) $ (151.9) $ 33.4 Reverse repurchase agreements 124.4 — (124.4) — Total $ 445.4 $ (135.7) $ (276.3) $ 33.4 (1) The gross amount of recognized derivative and reverse repurchase agreement assets are reported with other investments and cash and cash equivalents, respectively, on the consolidated statements of financial position. The gross amounts of derivative and reverse repurchase agreement assets are not netted against offsetting liabilities for presentation on the consolidated statements of financial position. (2) Represents amount of offsetting derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets for presentation on the consolidated statements of financial position. |
Financial Liabilities Subject to Netting Agreements (Table) | Gross amounts not offset in the consolidated statements of financial position Gross amount of recognized Financial Collateral liabilities (1) instruments (2) pledged Net amount (in millions) March 31, 2023 Derivative liabilities $ 507.3 $ (149.1) $ (355.3) $ 2.9 December 31, 2022 Derivative liabilities $ 634.2 $ (135.7) $ (485.1) $ 13.4 (1) The gross amount of recognized derivative liabilities is reported with other liabilities on the consolidated statements of financial position. The above excludes derivative liabilities, which are primarily embedded derivatives that are not subject to master netting agreements or similar agreements. The gross amounts of derivative liabilities are not netted against offsetting assets for presentation on the consolidated statements of financial position. (2) Represents amount of offsetting derivative assets that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative liabilities for presentation on the consolidated statements of financial position. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Financial Instruments | |
Derivative Financial Instruments, Exposure (Table) | March 31, 2023 December 31, 2022 (in millions) Notional amounts of derivative instruments Interest rate contracts: Interest rate swaps $ 54,333.8 $ 52,249.9 Interest rate options 3,049.0 4,418.9 Interest rate forwards 2,370.7 2,527.5 Interest rate futures 960.5 877.5 Foreign exchange contracts: Currency swaps 1,617.9 1,634.7 Currency forwards 1,585.3 1,123.1 Equity contracts: Equity options 1,999.1 2,049.3 Equity futures 732.7 574.1 Credit contracts: Credit default swaps 400.0 400.0 Other contracts: Embedded derivatives 23,164.3 23,209.3 Total notional amounts at end of period $ 90,213.3 $ 89,064.3 Credit exposure of derivative instruments Interest rate contracts: Interest rate swaps $ 68.3 $ 64.2 Interest rate options 32.3 41.7 Interest rate forwards 5.4 0.1 Foreign exchange contracts: Currency swaps 190.8 171.1 Currency forwards 70.8 34.0 Equity contracts: Equity options 24.6 16.5 Credit contracts: Credit default swaps 3.7 3.6 Total gross credit exposure 395.9 331.2 Less: collateral received 219.0 191.9 Net credit exposure $ 176.9 $ 139.3 |
Derivative Financial Instruments, Fair Value Disclosures (Table) | Derivative assets (1) Derivative liabilities (2) March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 (in millions) Derivatives designated as hedging instruments Interest rate contracts $ 16.7 $ 20.0 $ 90.2 $ 105.1 Foreign exchange contracts 132.8 134.6 28.3 19.7 Total derivatives designated as hedging instruments $ 149.5 $ 154.6 $ 118.5 $ 124.8 Derivatives not designated as hedging instruments Interest rate contracts $ 82.9 $ 81.1 $ 323.7 $ 439.9 Foreign exchange contracts 126.2 65.9 9.0 21.9 Equity contracts 24.5 16.5 55.2 45.6 Credit contracts 3.6 3.5 1.9 2.0 Other contracts — — (2,970.7) (3,606.4) Total derivatives not designated as hedging instruments 237.2 167.0 (2,580.9) (3,097.0) Total derivative instruments $ 386.7 $ 321.6 $ (2,462.4) $ (2,972.2) (1) The fair value of derivative assets is reported with other investments on the consolidated statements of financial position. (2) The fair value of derivative liabilities is reported with other liabilities on the consolidated statements of financial position, with the exception of certain embedded derivative liabilities. Embedded derivatives with a net liability fair value of $55.5 million and $46.4 million as of March 31, 2023 and December 31, 2022, respectively, are reported with contractholder funds on the consolidated statements of financial position. Embedded derivatives with a net (asset) liability fair value of $(3,026.2) million and $(3,652.8) million as of March 31, 2023 and December 31, 2022, respectively, are reported with funds withheld payable on the consolidated statements of financial position. |
Credit Derivatives Sold (Table) | March 31, 2023 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.2 $ 40.0 2.2 BBB 190.0 2.5 190.0 2.9 BB 20.0 (0.1) 20.0 4.2 Sovereign A 20.0 0.3 20.0 2.2 Total credit default swap protection sold $ 270.0 $ 2.9 $ 270.0 2.8 December 31, 2022 Weighted Maximum average Notional Fair future expected life amount value payments (in years) (in millions) Single name credit default swaps Corporate debt A $ 40.0 $ 0.4 $ 40.0 2.5 BBB 190.0 2.2 190.0 3.1 BB 20.0 (0.2) 20.0 4.5 Sovereign A 20.0 0.2 20.0 2.5 Total credit default swap protection sold $ 270.0 $ 2.6 $ 270.0 3.1 |
Fair Value Hedges (Table) | Cumulative amount of fair value hedging basis adjustment Line item in the consolidated statements increase/(decrease) included in the of financial position in which the Amortized cost of hedged item amortized cost of the hedged item hedged item is included March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 (in millions) Fixed maturities, available-for-sale (1): Active hedging relationships $ 3,454.0 $ 3,498.6 $ (126.1) $ (153.4) Discontinued hedging relationships 75.5 48.8 0.3 1.3 Total fixed maturities, available-for-sale in active or discontinued hedging relationships $ 3,529.5 $ 3,547.4 $ (125.8) $ (152.1) (1) These amounts include the amortized cost basis of closed portfolios used to designate last-of-layer hedging relationships in which the hedged last layer amount is expected to remain at the end of the hedging relationship. As of March 31, 2023 and December 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $3,215.0 million and $3,256.9 million, respectively, the cumulative basis adjustments associated with these hedging relationships was $(83.5) million and $(102.4) million, respectively, and the amount of the designated hedged items were $1,110.0 million and $1,110.0 million, respectively. |
Cash Flow Hedges (Table) | Amount of gain (loss) recognized in AOCI on derivatives for the Derivatives in cash three months ended March 31, flow hedging relationships Related hedged item 2023 2022 (in millions) Interest rate contracts Fixed maturities, available-for-sale $ 15.9 $ (44.2) Interest rate contracts Investment contracts (3.3) 9.5 Foreign exchange contracts Fixed maturities, available-for-sale (10.1) 13.0 Total $ 2.5 $ (21.7) |
Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations (Table) | For the three months ended March 31, 2023 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 986.7 $ (66.0) $ 1,773.9 Gains on fair value hedging relationships: Interest rate contracts: Gain recognized on hedged item $ 26.2 $ — $ — Loss recognized on derivatives (22.6) — — Amortization of hedged item basis adjustments (0.1) — — Amounts related to periodic settlements on derivatives 12.6 — — Total gain recognized for fair value hedging relationships $ 16.1 $ — $ — Gains on cash flow hedging relationships: Interest rate contracts: Gain reclassified from AOCI on derivatives $ 1.1 $ — $ — Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 1.4 — Amounts related to periodic settlements on derivatives — — 3.1 Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 1.2 — Amounts related to periodic settlements on derivatives 5.4 — — Total gain recognized for cash flow hedging relationships $ 6.5 $ 2.6 $ 3.1 For the three months ended March 31, 2022 Benefits, Net investment Net realized claims and income related capital gains settlement to hedges (losses) related to expenses of fixed hedges of fixed related to maturities, maturities, hedges of available- available- investment for-sale for-sale contracts (in millions) Total amounts of consolidated statement of operations line items in which the effects of fair value and cash flow hedges are reported $ 1,125.5 $ (136.6) $ 1,490.7 Losses on fair value hedging relationships: Interest rate contracts: Loss recognized on hedged item $ (71.1) $ — $ — Gain recognized on derivatives 68.0 — — Amortization of hedged item basis adjustments (0.4) — — Amounts related to periodic settlements on derivatives (4.2) — — Total loss recognized for fair value hedging relationships $ (7.7) $ — $ — Gains (losses) on cash flow hedging relationships: Interest rate contracts: Gain reclassified from AOCI on derivatives $ 3.3 $ — $ — Gain reclassified from AOCI as a result that a forecasted transaction is no longer probable of occurring — 2.9 — Amounts related to periodic settlements on derivatives — — (0.2) Foreign exchange contracts: Gain reclassified from AOCI on derivatives — 0.6 — Amounts related to periodic settlements on derivatives 2.7 — — Total gain (loss) recognized for cash flow hedging relationships $ 6.0 $ 3.5 $ (0.2) |
Net Investment Hedges (Table) | Amount of loss Amount of loss recognized reclassified from AOCI into in AOCI on derivatives net realized capital gains (losses) for the three months ended for the three months ended March 31, March 31, Derivatives in net investment hedging relationships 2023 2022 2023 2022 (in millions) Foreign exchange contracts $ (0.6) $ (0.7) $ — $ — Total $ (0.6) $ (0.7) $ — $ — |
Derivatives Not Designated as Hedging Instruments (Table) | Amount of gain (loss) recognized in net income on derivatives for the three months ended March 31, Derivatives not designated as hedging instruments 2023 2022 (in millions) Interest rate contracts $ (17.8) $ (229.4) Foreign exchange contracts 29.2 67.9 Equity contracts (63.1) (5.3) Credit contracts 0.8 0.1 Other contracts (1) (639.2) 12.8 Total $ (690.1) $ (153.9) (1) Includes the change in fair value of the funds withheld embedded derivative. |
Deferred Acquisition Costs an_2
Deferred Acquisition Costs and Other Actuarial Balances (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disaggregated DAC amounts and reconciliation (Table) | March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 500.2 $ 498.0 Individual variable annuities 276.8 278.0 Pension risk transfer 10.2 8.1 Individual fixed deferred annuities 124.7 131.0 Investment only 13.7 14.9 Total Retirement and Income hope soSolutions 925.6 930.0 Benefits and Protection: Specialty Benefits: Individual disability 635.0 626.1 Life Insurance: Universal life 1,560.4 1,569.7 Term life 687.1 685.7 Participating life 90.8 93.0 Total Benefits and Protection 2,973.3 2,974.5 Short-duration contracts 40.2 34.7 Other balances (1) 9.2 8.8 Total DAC per consolidated statements of financial position $ 3,948.3 $ 3,948.0 (1) Includes insignificant balances for long-duration contracts. |
Disaggregated unearned revenue liability amounts and reconciliation (Table) | March 31, 2023 December 31, 2022 (in millions) Benefits and Protection - Life Insurance: Universal life $ 466.6 $ 459.0 Other balances (1) 8.8 8.4 Total unearned revenue liability $ 475.4 $ 467.4 (1) Includes insignificant balances for long-duration contracts. |
Disaggregated Rollforward at Adoption - Unearned Revenue Liability (Table) | Benefits and Protection The balances and changes in the unearned revenue liability for 2021 for Life Insurance – Universal life were as follows: For the year ended December 31, 2021 (in millions) Balance at beginning of period $ 384.4 Deferrals 66.1 Revenue recognized (25.2) Balance at end of period $ 425.3 |
Retirement and Income Solutions | |
Disaggregated DAC amounts and reconciliation (Table) | Retirement and Income Solutions The balances and changes in DAC were as follows: Workplace Individual savings and Individual Pension fixed retirement variable risk deferred Investment solutions annuities transfer annuities only (in millions) Balances as of January 1, 2022 $ 489.0 $ 281.2 $ 2.7 $ 162.2 $ 18.1 Costs deferred 48.3 22.5 5.6 — 1.4 Amortized to expense (39.3) (25.7) (0.2) (31.2) (4.6) Balances as of December 31, 2022 498.0 278.0 8.1 131.0 14.9 Costs deferred 12.0 5.2 2.2 — — Amortized to expense (9.8) (6.4) (0.1) (6.3) (1.2) Balances as of March 31, 2023 $ 500.2 $ 276.8 $ 10.2 $ 124.7 $ 13.7 |
Benefits and Protection | |
Disaggregated DAC amounts and reconciliation (Table) | Benefits and Protection The balances and changes in DAC were as follows: Specialty Benefits Life Insurance Individual disability Universal life Term life Participating life (in millions) Balances as of January 1, 2022 $ 580.7 $ 1,596.2 $ 678.9 $ 102.3 Costs deferred 87.6 70.6 66.7 1.4 Amortized to expense (42.2) (97.1) (59.9) (10.7) Balances as of December 31, 2022 626.1 1,569.7 685.7 93.0 Costs deferred 19.9 14.9 16.6 0.3 Amortized to expense (11.0) (24.2) (15.2) (2.5) Balances as of March 31, 2023 $ 635.0 $ 1,560.4 $ 687.1 $ 90.8 |
Disaggregated Rollforward at Adoption - Unearned Revenue Liability (Table) | Benefits and Protection The balances and changes in the unearned revenue liability for Life Insurance – Universal life contracts were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 (in millions) Balance at beginning of period $ 459.0 $ 425.3 Deferrals 15.0 61.8 Revenue recognized (7.4) (28.1) Balance at end of period 466.6 459.0 Reinsurance impact (227.4) (227.9) Balance at end of period after reinsurance $ 239.2 $ 231.1 |
Separate Account Balance (Table
Separate Account Balance (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of separate account assets by investment category (Table) | March 31, 2023 December 31, 2022 (in millions) Fixed maturities: U.S. government and agencies $ 7,916.9 $ 7,339.6 Non-U.S. governments 8,956.1 8,424.3 States and political subdivisions 225.9 211.7 Corporate 15,538.1 14,429.7 Residential mortgage-backed securities 3,994.7 3,894.5 Commercial mortgage-backed securities 199.5 206.2 Other debt obligations 360.8 299.5 Total fixed maturities 37,192.0 34,805.5 Equity securities 109,562.8 105,053.3 Real estate 604.0 610.6 Other investments 9,887.0 10,278.6 Cash and cash equivalents 3,639.9 3,583.8 Other assets 1,115.1 1,043.3 Total separate account assets per consolidated statements of financial position $ 162,000.8 $ 155,375.1 |
Summary of disaggregated separate account liability amounts and changes in separate account liabilities (Table) | March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Group retirement contracts $ 111,275.8 $ 107,240.1 Individual variable annuities 8,910.3 8,659.0 Total Retirement and Income Solutions 120,186.1 115,899.1 Principal Asset Management — Latin America: Pension 35,385.8 33,316.7 Asia: Guaranteed pension 928.8 915.0 Total Principal Asset Management — Principal International 36,314.6 34,231.7 Benefits and Protection - Life Insurance: Universal life 5,254.2 5,011.0 Other balances (1) 245.9 233.3 Total separate account liabilities per consolidated statements of financial position $ 162,000.8 $ 155,375.1 (1) Includes insignificant balances for long-duration contracts. |
Retirement and Income Solutions | |
Summary of disaggregated separate account liability amounts and changes in separate account liabilities (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 Group Individual Group Individual retirement variable retirement variable contracts annuities contracts annuities (in millions) Balance at beginning of period $ 107,240.1 $ 8,659.0 $ 131,188.6 $ 11,000.0 Premiums and deposits (1) 2,881.3 94.8 14,859.3 354.1 Policy charges (77.7) (51.2) (383.7) (211.1) Surrenders, withdrawals and benefit payments (1) (2,747.8) (217.3) (14,479.4) (790.1) Investment performance 5,016.8 417.6 (20,641.3) (1,723.3) Net transfers (to) from general account (1) (1,331.8) 7.4 (2,571.7) 29.4 Other (2) 294.9 — (731.7) — Balance at end of period $ 111,275.8 $ 8,910.3 $ 107,240.1 $ 8,659.0 Cash surrender value (3) $ 109,850.4 $ 8,789.3 $ 106,125.7 $ 8,538.7 (1) Within the policyholder account balances rollforwards in Note 7, Contractholder Funds, amounts in these lines for Individual variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in net transfers from (to) separate account. (2) Includes amounts to be settled between the separate account and general account due to the timing of trade settlements as of the reporting date. (3) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. |
Principal Asset Management | Principal International | |
Summary of disaggregated separate account liability amounts and changes in separate account liabilities (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 Latin America Asia Latin America Asia Guaranteed Guaranteed Pension pension Pension pension (in millions) Balance at beginning of period $ 33,316.7 $ 915.0 $ 33,030.6 $ 971.3 Premiums and deposits 812.7 66.1 3,620.4 276.2 Policy charges (4.7) (4.7) (18.2) (19.8) Surrenders, withdrawals and benefit payments (988.9) (66.7) (3,984.6) (247.0) Investment performance (303.8) 24.5 498.8 (64.0) Other (28.7) (0.1) (0.8) (0.4) Foreign currency translation adjustment 2,582.5 (5.3) 170.5 (1.3) Balance at end of period $ 35,385.8 $ 928.8 $ 33,316.7 $ 915.0 Cash surrender value $ 35,385.8 $ 928.8 $ 33,316.7 $ 915.0 |
Benefits and Protection | Life Insurance | Universal life | |
Summary of disaggregated separate account liability amounts and changes in separate account liabilities (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 (in millions) Balance at beginning of period $ 5,011.0 $ 5,886.1 Premiums and deposits (1) 126.5 514.7 Policy charges (31.9) (122.1) Surrenders, withdrawals and benefit payments (1) (115.7) (208.6) Investment performance 262.0 (1,054.5) Net transfers (to) from general account (1) 2.3 (4.6) Balance at end of period $ 5,254.2 $ 5,011.0 Cash surrender value (2) $ 5,308.6 $ 5,055.8 (1) Within the policyholder account balances rollforwards in Note 7, Contractholder Funds, amounts in these lines are reflected in net transfers from (to) separate account. (2) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. Certain products include surrender value enhancement riders that result in cash surrender values greater than account balances. |
Contractholder Funds (Tables)
Contractholder Funds (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Policyholder account balances | |
Schedule of disaggregated policyholder account balance amounts and reconcile the totals to contractholder funds (Table) | March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Workplace savings and retirement solutions $ 12,476.6 $ 12,154.7 Individual variable annuities 366.1 381.4 Individual fixed deferred annuities 6,785.7 7,228.3 Total Retirement and Income Solutions 19,628.4 19,764.4 Benefits and Protection - Life Insurance: Universal life 6,915.4 6,947.9 Corporate: Inter-segment eliminations (359.4) (362.7) Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue 26,184.4 26,349.6 Reconciling items: Investment contracts without significant fee revenue (1) 16,374.4 16,104.0 Embedded derivatives (2) 55.5 46.4 Other balances (3) 343.7 325.3 Total contractholder funds per consolidated statements of financial position $ 42,958.0 $ 42,825.3 (1) Includes GICs, funding agreements, individual fixed income annuities and guaranteed pension contracts. These contracts are not included within the disaggregated rollforward or guaranteed minimum interest rate (“GMIR”) disclosures below. (2) Refer to Note 16, Fair Value Measurements, for details on the changes in Level 3 fair value measurements of embedded derivatives. (3) Includes insignificant balances for long-duration contracts and amounts that are not accrued to the benefit of the contractholder and, therefore, are not included within the disaggregated rollforward or GMIR disclosures below. |
Schedule of guaranteed minimum interest rate (Table) | March 31, 2023 Excess of crediting rates over GMIR Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total (in millions) Retirement and Income Solutions Workplace savings and retirement solutions Up to 1.00% $ 0.2 $ 4.0 $ 128.5 $ 1,119.4 $ 685.5 $ 1,937.6 1.01% - 2.00% — 524.8 5,995.9 1,653.0 279.2 8,452.9 2.01% - 3.00% 7.7 0.1 0.7 0.5 — 9.0 3.01% - 4.00% 7.7 — — — — 7.7 4.01% and above 18.5 — — — — 18.5 Subtotal 34.1 528.9 6,125.1 2,772.9 964.7 10,425.7 No GMIR 2,050.9 Total $ 12,476.6 Individual variable annuities Up to 1.00% $ 28.9 $ — $ — $ — $ — $ 28.9 1.01% - 2.00% 3.6 — — — — 3.6 2.01% - 3.00% 319.3 — — — — 319.3 3.01% - 4.00% — — — — — — 4.01% and above — — — — — — Subtotal 351.8 — — — — 351.8 No GMIR 14.3 Total $ 366.1 Individual fixed deferred annuities Up to 1.00% $ 402.1 $ 156.5 $ 210.2 $ 747.5 $ 1,024.8 $ 2,541.1 1.01% - 2.00% 121.4 1.3 39.2 234.4 0.8 397.1 2.01% - 3.00% 3,386.6 — — — — 3,386.6 3.01% - 4.00% 166.2 — — — — 166.2 4.01% and above — — — — — — Subtotal 4,076.3 157.8 249.4 981.9 1,025.6 6,491.0 No GMIR 294.7 Total $ 6,785.7 Benefits and Protection - Life Insurance Universal life Up to 1.00% $ — $ 1.7 $ 16.2 $ — $ 1.2 $ 19.1 1.01% - 2.00% 312.4 — 412.4 707.8 132.8 1,565.4 2.01% - 3.00% 846.9 881.9 945.0 61.0 0.4 2,735.2 3.01% - 4.00% 1,695.1 30.2 29.7 29.2 3.2 1,787.4 4.01% and above 39.7 10.9 3.4 1.5 — 55.5 Subtotal 2,894.1 924.7 1,406.7 799.5 137.6 6,162.6 No GMIR 752.8 Total $ 6,915.4 December 31, 2022 Excess of crediting rates over GMIR Up to 0.50% 0.51% to 1.00% 1.01% to 2.00% 2.01% or more At GMIR above GMIR above GMIR above GMIR above GMIR Total (in millions) Retirement and Income Solutions Workplace savings and retirement solutions Up to 1.00% $ 3.9 $ 24.8 $ 1,188.9 $ 307.8 $ 364.9 $ 1,890.3 1.01% - 2.00% — 549.9 6,090.2 1,477.0 9.4 8,126.5 2.01% - 3.00% 15.1 0.1 — 0.1 — 15.3 3.01% - 4.00% 7.8 — — — — 7.8 4.01% and above 18.8 — — — — 18.8 Subtotal 45.6 574.8 7,279.1 1,784.9 374.3 10,058.7 No GMIR 2,096.0 Total $ 12,154.7 Individual variable annuities Up to 1.00% $ 33.0 $ — $ — $ — $ — $ 33.0 1.01% - 2.00% 3.6 — — — — 3.6 2.01% - 3.00% 331.8 — — — — 331.8 3.01% - 4.00% — — — — — — 4.01% and above — — — — — — Subtotal 368.4 — — — — 368.4 No GMIR 13.0 Total $ 381.4 Individual fixed deferred annuities Up to 1.00% $ 426.4 $ 161.7 $ 236.2 $ 879.2 $ 993.0 $ 2,696.5 1.01% - 2.00% 139.8 1.4 39.9 250.5 0.6 432.2 2.01% - 3.00% 3,617.1 — — — — 3,617.1 3.01% - 4.00% 169.7 — — — — 169.7 4.01% and above — — — — — — Subtotal 4,353.0 163.1 276.1 1,129.7 993.6 6,915.5 No GMIR 312.8 Total $ 7,228.3 Benefits and Protection - Life Insurance Universal life Up to 1.00% $ — $ 8.4 $ 10.1 $ — $ 0.7 $ 19.2 1.01% - 2.00% 315.7 — 407.0 695.5 155.0 1,573.2 2.01% - 3.00% 865.9 951.2 903.5 59.9 0.4 2,780.9 3.01% - 4.00% 1,698.9 35.8 21.9 25.3 3.2 1,785.1 4.01% and above 40.6 10.1 3.4 1.6 — 55.7 Subtotal 2,921.1 1,005.5 1,345.9 782.3 159.3 6,214.1 No GMIR 733.8 Total $ 6,947.9 |
Retirement and Income Solutions | |
Policyholder account balances | |
Schedule of changes in policyholder account balances (Table) | For the three months ended March 31, 2023 For the year ended December 31, 2022 Workplace Workplace savings and Individual Individual savings and Individual Individual retirement variable fixed deferred retirement variable fixed deferred solutions annuities annuities (1) solutions annuities annuities ($ in millions) Balance at beginning of period $ 12,154.7 $ 381.4 $ 7,228.3 $ 10,996.2 $ 380.9 $ 9,646.3 Premiums and deposits 1,337.6 110.2 7.5 3,719.5 426.5 35.9 Policy charges (7.5) — — (28.5) — — Surrenders, withdrawals and benefit payments (1,960.2) (243.1) (492.8) (2,866.7) (843.2) (2,655.6) Net transfers from (to) separate account (2) 896.8 115.1 — 164.6 406.6 — Interest credited 63.3 2.5 42.7 194.3 10.6 201.7 Other (8.1) — — (24.7) — — Balance at end of period $ 12,476.6 $ 366.1 $ 6,785.7 $ 12,154.7 $ 381.4 $ 7,228.3 Weighted-average crediting rate (3) 2.16 % 2.81 % 2.67 % 1.94 % 2.79 % 2.63 % Cash surrender value (4) $ 10,797.2 $ 363.3 $ 6,648.8 $ 10,341.7 $ 378.6 $ 7,081.4 (1) We use the deposit method of accounting for the reinsurance of this exited business. (2) Within the separate account liabilities rollforwards in Note 6, Separate Account Balances, these transfers for Individual variable annuities and Workplace savings and retirement solutions included in Group retirement contracts are reflected in premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account. (3) The weighted-average crediting rate is calculated on a year-to-date basis based on account value. (4) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. |
Universal life | Benefits and Protection | Life Insurance | |
Policyholder account balances | |
Schedule of changes in policyholder account balances (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ 6,947.9 $ 6,962.5 Premiums and deposits 312.4 1,267.2 Policy charges (213.5) (837.8) Surrenders, withdrawals and benefit payments (170.4) (390.0) Net transfers from (to) separate account (1) (13.1) (301.5) Interest credited 52.4 247.5 Other (0.3) — Balance at end of period 6,915.4 6,947.9 Reinsurance impact (3,496.8) (3,528.9) Balance at end of period after reinsurance $ 3,418.6 $ 3,419.0 Weighted-average crediting rate (2) 3.33 % 3.35 % Net amount at risk (3) $ 86,335.6 $ 86,547.9 Cash surrender value (4) $ 5,883.5 $ 5,911.5 (1) Within the separate account liabilities rollforwards in Note 6, Separate Account Balances, these transfers are reflected in premiums and deposits; surrenders, withdrawals and benefit payments; and net transfers (to) from general account. (2) The weighted-average crediting rate is calculated on a year-to-date basis based on account value, including indexed credits. (3) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the death benefit in excess of the current account balance or the fixed death benefit at the consolidated statement of financial position date. (4) Cash surrender value represents the amount of the contractholders’ account balances distributable at the end of the reporting period less surrender charges. |
Future Policy Benefits and Cl_2
Future Policy Benefits and Claims (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Future Policy Benefits and Claims | |
Disaggregated Future Policy Benefits and Claims amounts and reconciliation (Table) | March 31, 2023 December 31, 2022 (in millions) Liability for future policy benefits by segment (1): Retirement and Income Solutions: Pension risk transfer $ 22,146.1 $ 21,211.4 Individual fixed income annuities 5,092.3 5,019.4 Total Retirement and Income Solutions 27,238.4 26,230.8 Principal Asset Management — Latin America: Individual fixed income annuities 5,416.9 5,042.3 Benefits and Protection: Specialty Benefits: Individual disability 1,815.9 1,698.8 Life Insurance: Term life 961.2 909.0 Total Benefits and Protection 2,777.1 2,607.8 Corporate: Long-term care insurance 188.4 183.5 Total liability for future policy benefits 35,620.8 34,064.4 Additional liability for certain benefit features by segment (2): Benefits and Protection - Life Insurance: Universal life 4,219.3 4,095.2 Total additional liability for certain benefit features 4,219.3 4,095.2 Reconciling items: Participating contracts 3,166.3 3,207.2 Short-duration contracts 1,294.0 1,295.6 Cost of reinsurance liability 184.5 191.1 Reinsurance recoverable liability 43.5 39.4 Other (3) 171.5 132.4 Future policy benefits and claims per consolidated statements of financial position $ 44,699.9 $ 43,025.3 (1) Amounts include the deferred profit liability. (2) Includes reserves on certain long-duration contracts where benefit features result in gains in early years followed by losses in later years. (3) Includes other miscellaneous reserves and the impact of unrealized gains (losses) on the additional liability for certain benefit features. |
Summary of balances and the changes in the present value for expected net premiums and expected future policy benefits expected future policy benefits (Table) | Retirement and Income Solutions and Principal Asset Management – Principal International For the year ended December 31, 2021 Principal Asset Management – Retirement and Income Principal Solutions International Latin America Pension Individual Individual risk fixed income fixed income transfer annuities annuities (in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 25,863.7 $ 7,145.8 $ 6,561.5 Effect of changes in discount rate assumptions at beginning of period (4,827.9) (1,213.5) (2,096.0) Balance at beginning of period at original discount rate 21,035.8 5,932.3 4,465.5 Effect of actual variances from expected experience (2.4) (1.3) (4.9) Adjusted beginning of period balance at original discount rate 21,033.4 5,931.0 4,460.6 Interest accrual 916.7 240.5 444.3 Benefit payments (1,772.5) (532.0) (436.0) Issuances 1,801.7 82.9 141.3 Foreign currency translation adjustment — — (751.9) Balance at end of period at original discount rate 21,979.3 5,722.4 3,858.3 Effect of changes in discount rate assumptions at end of period 3,386.5 812.6 478.5 Future policy benefits $ 25,365.8 $ 6,535.0 $ 4,336.8 Benefits and Protection and Corporate For the year ended December 31, 2021 Benefits and Protection Corporate Specialty Life Benefits Insurance Individual Long-term disability Term life care insurance (in millions) Present value of expected net premiums Balance at beginning of period $ 3,148.3 $ 3,799.0 $ 66.7 Effect of changes in discount rate assumptions at beginning of period (340.7) (861.1) (17.6) Balance at beginning of period at original discount rate 2,807.6 2,937.9 49.1 Effect of changes in cash flow assumptions — — 2.8 Effect of actual variances from expected experience 122.0 211.4 (0.8) Adjusted beginning of period balance at original discount rate 2,929.6 3,149.3 51.1 Interest accrual 95.4 151.1 2.9 Net premiums collected (280.4) (315.0) (5.2) Issuances 206.4 518.2 — Balance at end of period at original discount rate 2,951.0 3,503.6 48.8 Effect of changes in discount rate assumptions at end of period 198.9 690.1 14.0 Balance at end of period $ 3,149.9 $ 4,193.7 $ 62.8 Present value of expected future policy benefit payments Balance at beginning of period $ 5,649.2 $ 4,959.3 $ 324.3 Effect of changes in discount rate assumptions at beginning of period (834.1) (1,179.9) (111.1) Balance at beginning of period at original discount rate 4,815.1 3,779.4 213.2 Effect of changes in cash flow assumptions — — 0.5 Effect of actual variances from expected experience 118.8 216.0 (4.6) Adjusted beginning of period balance at original discount rate 4,933.9 3,995.4 209.1 Interest accrual 181.0 194.3 12.4 Benefit payments (179.7) (335.7) (13.5) Issuances 212.1 543.4 — Balance at end of period at original discount rate 5,147.3 4,397.4 208.0 Effect of changes in discount rate assumptions at end of period 501.0 913.9 89.5 Balance at end of period $ 5,648.3 $ 5,311.3 $ 297.5 Future policy benefits (1) $ 2,498.4 $ 1,117.6 $ 234.7 Reinsurance impact (549.9) (0.1) (234.7) Future policy benefits after reinsurance $ 1,948.5 $ 1,117.5 $ — (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. |
Schedule of Liability for Unpaid Claims (Table) | For the three months ended March 31, 2023 2022 (in millions) Balance at beginning of period $ 1,395.0 $ 1,370.9 Less: reinsurance recoverable 68.6 68.7 Net balance at beginning of period 1,326.4 1,302.2 Incurred: Current year 429.4 404.6 Prior years (40.8) (15.0) Total incurred 388.6 389.6 Payments: Current year 225.9 205.3 Prior years 162.5 174.1 Total payments 388.4 379.4 Net balance at end of period 1,326.6 1,312.4 Plus: reinsurance recoverable 69.6 68.9 Balance at end of period $ 1,396.2 $ 1,381.3 |
Summary of gross premiums or assessments and interest accretion recognized by segment (Table) | Gross premiums or assessments (1) Interest accretion (2) For the three months ended For the three months ended March 31, March 31, 2023 2022 2023 2022 (in millions) Retirement and Income Solutions: Pension risk transfer $ 577.0 $ 116.5 $ 245.2 $ 232.7 Individual fixed income annuities 8.0 6.8 55.7 58.5 Total Retirement and Income Solutions 585.0 123.3 300.9 291.2 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities (3) 6.6 10.5 106.2 139.1 Benefits and Protection: Specialty Benefits: Individual disability 150.6 144.4 23.2 22.3 Life Insurance: Universal life 174.6 142.5 46.3 42.5 Term life 160.9 157.2 11.4 10.8 Total Benefits and Protection 486.1 444.1 80.9 75.6 Corporate: Long-term care insurance 1.5 1.4 2.5 2.4 Total per consolidated statements of operations $ 1,079.2 $ 579.3 $ 490.5 $ 508.3 (1) Gross premiums are included within premiums and other considerations on the consolidated statements of operations. Assessments, which are only applicable to the Life Insurance - Universal life level of aggregation, are included within fees and other revenues on the consolidated statements of operations. (2) Interest accretion is included within benefits, claims and settlement expenses on the consolidated statements of operations. (3) Includes inflation adjustments included within the liability for future policy benefits rollforward for interest accretion. |
Summary of balances and the changes in the additional liability for certain benefits features (Table) | Additional Liability for Certain Benefit Features Benefits and Protection The balances and changes in the additional liability for certain benefits features for 2021 for Life Insurance - Universal life were as follows: For the year ended, December 31, 2021 (in millions) Balance at beginning of period $ 3,463.9 Effect of changes in cash flow assumptions (11.1) Effect of actual variances from expected experience 18.1 Interest accrual 158.3 Net assessments collected 324.7 Benefit payments (83.1) Other (1) (56.6) Balance at end of period $ 3,814.2 (1) |
Summary of amounts of expected undiscounted future benefit payments, expected undiscounted future gross premiums and expected discounted future gross premiums (Table) | March 31, 2023 December 31, 2022 (in millions) Retirement and Income Solutions: Pension risk transfer Expected undiscounted future benefit payments $ 34,085.9 $ 33,691.4 Individual fixed income annuities Expected undiscounted future benefit payments $ 7,605.3 $ 7,716.6 Principal Asset Management - Principal International: Latin America: Individual fixed income annuities Expected undiscounted future benefit payments $ 6,960.9 $ 6,449.9 Benefits and Protection - Specialty Benefits: Individual disability Expected discounted future gross premiums $ 5,316.8 $ 5,140.9 Expected undiscounted future gross premiums $ 8,035.8 $ 7,978.7 Expected undiscounted future benefit payments $ 8,656.7 $ 8,473.9 Benefits and Protection - Life Insurance: Term life Expected discounted future gross premiums $ 6,301.3 $ 6,104.6 Expected undiscounted future gross premiums $ 10,169.3 $ 10,146.3 Expected undiscounted future benefit payments $ 7,264.7 $ 7,202.5 Corporate: Long-term care insurance Expected discounted future gross premiums $ 61.5 $ 64.6 Expected undiscounted future gross premiums $ 89.3 $ 96.5 Expected undiscounted future benefit payments $ 468.6 $ 483.4 |
Summary of weighted-average rates of interest accretion and current discount (Table) | Interest accretion rate Current discount rate March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022 Retirement and Income Solutions: Pension risk transfer 4.40 % 4.38 % 4.96 % 5.31 % Individual fixed income annuities 4.21 % 4.22 % 4.94 % 5.30 % Principal Asset Management - Principal International (1): Latin America: Individual fixed income annuities 4.24 % 4.24 % 2.50 % 2.43 % Benefits and Protection: Specialty Benefits: Individual disability 4.01 % 4.03 % 5.01 % 5.36 % Life Insurance: Universal life 4.73 % 4.73 % See note (2) See note (2) Term life 4.85 % 4.89 % 4.83 % 5.22 % Corporate: Long-term care insurance 6.16 % 6.16 % 5.00 % 5.34 % (1) The interest accretion rate and current discount rate are Chilean real rates, excluding inflation, in the local currency. (2) The additional liability for certain benefit features for Life Insurance – Universal life is measured using the discount rate at contract inception. Therefore, the current discount rate is not applicable for this product. |
Retirement and Income Solutions | |
Future Policy Benefits and Claims | |
Summary of balances and the changes in the present value for expected net premiums and expected future policy benefits expected future policy benefits (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 Pension Individual Pension Individual risk fixed income risk fixed income transfer annuities transfer annuities ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 21,211.4 $ 5,019.4 $ 25,365.8 $ 6,535.0 Effect of changes in discount rate assumptions at beginning of period 1,799.6 439.0 (3,386.5) (812.6) Balance at beginning of period at original discount rate 23,011.0 5,458.4 21,979.3 5,722.4 Effect of changes in cash flow assumptions — — (7.9) (3.0) Effect of actual variances from expected experience (13.3) (0.8) (3.2) — Adjusted beginning of period balance at original discount rate 22,997.7 5,457.6 21,968.2 5,719.4 Interest accrual 245.2 55.7 935.7 229.7 Benefit payments (481.5) (126.9) (1,841.7) (520.4) Issuances 578.5 7.9 1,948.8 29.7 Balance at end of period at original discount rate 23,339.9 5,394.3 23,011.0 5,458.4 Effect of changes in discount rate assumptions at end of period (1,193.8) (302.0) (1,799.6) (439.0) Future policy benefits 22,146.1 5,092.3 21,211.4 5,019.4 Reinsurance impact — (4,782.5) — (4,714.0) Future policy benefits after reinsurance $ 22,146.1 $ 309.8 $ 21,211.4 $ 305.4 Weighted-average duration for future policy benefits (years) 8.6 8.0 8.5 7.9 (1) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. |
Benefits and Protection | |
Future Policy Benefits and Claims | |
Summary of balances and the changes in the present value for expected net premiums and expected future policy benefits expected future policy benefits (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 Specialty Life Specialty Life Benefits Insurance Benefits Insurance Individual Individual disability Term life disability Term life ($ in millions) Present value of expected net premiums Balance at beginning of period $ 2,341.8 $ 3,423.2 $ 3,149.9 $ 4,193.7 Effect of changes in discount rate assumptions at beginning of period 395.2 196.0 (198.9) (690.1) Balance at beginning of period at original discount rate 2,737.0 3,619.2 2,951.0 3,503.6 Effect of changes in cash flow assumptions — — (413.1) — Effect of actual variances from expected experience 82.9 28.4 235.9 128.6 Adjusted beginning of period balance at original discount rate 2,819.9 3,647.6 2,773.8 3,632.2 Interest accrual 23.5 41.5 95.2 162.9 Net premiums collected (66.1) (86.4) (276.5) (346.6) Issuances 23.5 49.6 144.5 170.7 Balance at end of period at original discount rate 2,800.8 3,652.3 2,737.0 3,619.2 Effect of changes in discount rate assumptions at end of period (315.0) (95.9) (395.2) (196.0) Balance at end of period $ 2,485.8 $ 3,556.4 $ 2,341.8 $ 3,423.2 Present value of expected future policy benefit payments Balance at beginning of period $ 4,040.6 $ 4,332.2 $ 5,648.3 $ 5,311.3 Effect of changes in discount rate assumptions at beginning of period 1,021.4 251.6 (501.0) (913.9) Balance at beginning of period at original discount rate 5,062.0 4,583.8 5,147.3 4,397.4 Effect of changes in cash flow assumptions — — (476.3) — Effect of actual variances from expected experience 92.4 32.2 240.0 139.0 Adjusted beginning of period balance at original discount rate 5,154.4 4,616.0 4,911.0 4,536.4 Interest accrual 46.7 52.9 185.4 206.8 Benefit payments (49.3) (87.3) (183.7) (340.6) Issuances 24.3 53.5 149.3 181.2 Balance at end of period at original discount rate 5,176.1 4,635.1 5,062.0 4,583.8 Effect of changes in discount rate assumptions at end of period (874.4) (117.5) (1,021.4) (251.6) Balance at end of period $ 4,301.7 $ 4,517.6 $ 4,040.6 $ 4,332.2 Future policy benefits (1) $ 1,815.9 $ 961.2 $ 1,698.8 $ 909.0 Reinsurance impact (412.3) 43.5 (386.8) 25.6 Future policy benefits after reinsurance $ 1,403.6 $ 1,004.7 $ 1,312.0 $ 934.6 Weighted-average duration for future policy benefits (years) (2) 18.5 9.5 18.5 9.6 (1) (2) Represents the average of the cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. |
Summary of balances and the changes in the additional liability for certain benefits features (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ 4,095.2 $ 3,814.2 Effect of changes in cash flow assumptions — (6.0) Effect of actual variances from expected experience 15.1 54.9 Interest accrual 46.3 171.2 Net assessments collected 89.2 320.3 Benefit payments (26.5) (91.9) Other (1) — (167.5) Balance at end of period 4,219.3 4,095.2 Reinsurance impact (4,215.2) (4,091.4) Balance at end of period after reinsurance $ 4.1 $ 3.8 Weighted-average duration for additional liability (years) (2) 27.0 27.6 (1) Reflects the impact of re-cohorting in 2022 as a result of our decision to manage the ULSG business separately from our other universal life business following a comprehensive review of our business mix and capital management options (the “Strategic Review”). (2) Represents the average of the cohort-level duration of the benefits less the net assessment cash flows weighted by the reserve balance for each cohort. |
Principal Asset Management | Principal International | |
Future Policy Benefits and Claims | |
Summary of balances and the changes in the present value for expected net premiums and expected future policy benefits expected future policy benefits (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Present value of expected future policy benefit payments Balance at beginning of period $ 5,042.3 $ 4,336.8 Effect of changes in discount rate assumptions at beginning of period (754.6) (478.5) Balance at beginning of period at original discount rate 4,287.7 3,858.3 Effect of actual variances from expected experience 0.7 (4.7) Adjusted beginning of period balance at original discount rate 4,288.4 3,853.6 Interest accrual (1) 106.2 662.0 Benefit payments (90.5) (325.8) Issuances 7.1 86.4 Foreign currency translation adjustment 333.3 11.5 Balance at end of period at original discount rate 4,644.5 4,287.7 Effect of changes in discount rate assumptions at end of period 772.4 754.6 Future policy benefits $ 5,416.9 $ 5,042.3 Weighted-average duration for future policy benefits (years) (2) 10.7 10.9 (1) Includes inflation adjustments. (2) Represents the average of the cohort-level duration of the benefit cash flows weighted by the reserve balance for each cohort. |
Corporate | |
Future Policy Benefits and Claims | |
Summary of balances and the changes in the present value for expected net premiums and expected future policy benefits expected future policy benefits (Table) | For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Present value of expected net premiums Balance at beginning of period $ 64.6 $ 62.8 Effect of changes in discount rate assumptions at beginning of period (3.6) (14.0) Balance at beginning of period at original discount rate 61.0 48.8 Effect of changes in cash flow assumptions — 10.0 Effect of actual variances from expected experience (3.6) 4.1 Adjusted beginning of period balance at original discount rate 57.4 62.9 Interest accrual 0.9 3.3 Net premiums collected (1.5) (5.2) Balance at end of period at original discount rate 56.8 61.0 Effect of changes in discount rate assumptions at end of period 4.7 3.6 Balance at end of period $ 61.5 $ 64.6 Present value of expected future policy benefit payments Balance at beginning of period $ 248.1 $ 297.5 Effect of changes in discount rate assumptions at beginning of period (18.9) (89.5) Balance at beginning of period at original discount rate 229.2 208.0 Effect of changes in cash flow assumptions — 17.2 Effect of actual variances from expected experience (5.9) 3.7 Adjusted beginning of period balance at original discount rate 223.3 228.9 Interest accrual 3.4 13.1 Benefit payments (3.3) (12.8) Balance at end of period at original discount rate 223.4 229.2 Effect of changes in discount rate assumptions at end of period 26.5 18.9 Balance at end of period $ 249.9 $ 248.1 Future policy benefits (1) $ 188.4 $ 183.5 Reinsurance impact (188.4) (183.5) Future policy benefits after reinsurance $ — $ — Weighted-average duration for future policy benefits (years) (2) 11.8 11.8 (1) Represents the present value of expected future policy benefit payments less the present value of expected net premiums. (2) Represents the average of cohort-level duration of the benefits less the net premium cash flows weighted by the reserve balance for each cohort. |
Market Risk Benefits (Tables)
Market Risk Benefits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Market Risk Benefits | |
Summary of disaggregated MRB amounts in an asset and liability position (Table) | March 31, 2023 December 31, 2022 Net asset Net asset Asset Liability (liability) Asset Liability (liability) (in millions) Retirement and Income Solutions: Individual variable annuities $ 107.3 $ 170.4 $ (63.1) $ 109.2 $ 181.4 $ (72.2) Principal Asset Management - Principal International: Asia: Guaranteed pension — 24.0 (24.0) — 26.0 (26.0) Total MRB per consolidated statements of financial position $ 107.3 $ 194.4 $ (87.1) $ 109.2 $ 207.4 $ (98.2) |
Summary of net asset (liability) balances and the changes in the valuation of the MRBs (Table) | For the year ended December 31, 2021 Retirement and Income Principal Asset Management – Solutions Principal International Asia Individual variable annuities Guaranteed pension (in millions) Balance at beginning of period $ (591.3) $ (53.3) Effect of changes in nonperformance risk at beginning of period 106.7 6.5 Adjusted balance at beginning of period (484.6) (46.8) Effect of: Interest accrual and expected policyholder behavior (120.7) (5.3) Benefit payments 0.4 5.7 Changes in interest rates 154.3 7.6 Changes in equity markets 106.4 1.4 Changes in equity index volatility 15.1 — Actual policyholder behavior different from expected behavior 2.3 3.6 Changes in future expected policyholder behavior (96.6) 0.5 Changes in other future expected assumptions 38.2 2.3 Foreign currency translation adjustment — 0.2 Adjusted balance at end of period (385.2) (30.8) Effect of changes in nonperformance risk at end of period (109.5) (4.3) Balance at end of period $ (494.7) $ (35.1) |
Summary of quantitative information about the significant unobservable inputs used for fair value measurements of MRBs (Table) | March 31, 2023 December 31, 2022 Weighted- Weighted- Range of inputs Average Range of inputs Average Retirement and Income Solutions: Individual variable annuities Long-term interest rate (1) 3.67 - 3.80 % 3.73 % 3.97 - 4.12 % 4.04 % Long-term equity market volatility 18.10 - 31.76 % 21.37 % 18.10 - 34.15 % 22.07 % Nonperformance risk 0.93 - 2.00 % 1.71 % 0.90 - 1.96 % 1.65 % Lapse rate 1.25 - 24.75 % 5.76 % 1.25 - 24.75 % 5.76 % Principal Asset Management - Principal International: Asia: Guaranteed pension Long-term interest rate (1) 3.93 - 4.08 % 4.00 % 3.80 - 3.98 % 3.88 % Long-term equity market volatility 18.07 - 24.09 % 19.98 % 18.06 - 25.16 % 20.69 % Nonperformance risk 0.66 - 1.63 % 1.35 % 0.90 - 1.98 % 1.68 % Lapse rate 4.95 - 19.35 % 13.40 % 4.95 - 19.35 % 13.40 % (1) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. The rate curves are derived from an interpolation between various observable swap rates. |
Retirement and Income Solutions | |
Market Risk Benefits | |
Summary of significant changes to inputs and assumptions that impacted the change in the MRB fair value measurement | For the three months ended For the year ended March 31, 2023 December 31, 2022 Change in net Change in net Change in input MRB liability Change in input MRB liability Long-term interest rate Decreased Unfavorable Increased Favorable Equity markets Increased Favorable Decreased Unfavorable Equity market volatilities Decreased Favorable Increased Unfavorable Own nonperformance risk Increased Favorable Increased Favorable |
Retirement and Income Solutions | Individual variable annuities | |
Market Risk Benefits | |
Summary of net asset (liability) balances and the changes in the valuation of the MRBs (Table) | The net asset (liability) balances and the changes in the valuation of the MRBs for Individual variable annuities were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ (72.2) $ (494.7) Effect of changes in nonperformance risk at beginning of period (31.7) 109.5 Adjusted balance at beginning of period (103.9) (385.2) Effect of: Interest accrual and expected policyholder behavior (19.8) (90.1) Benefit payments 0.2 1.3 Changes in interest rates (54.2) 539.1 Changes in equity markets 46.4 (112.4) Changes in equity index volatility 30.6 (50.2) Actual policyholder behavior different from expected behavior (2.0) 1.5 Changes in future expected policyholder behavior — (6.1) Changes in other future expected assumptions — (1.8) Adjusted balance at end of period (102.7) (103.9) Effect of changes in nonperformance risk at end of period 39.6 31.7 Balance at end of period $ (63.1) $ (72.2) Weighted-average attained age of policyholders (years) (1) 67.5 67.4 Net amount at risk (2) $ 299.8 $ 415.5 (1) The weighted-average attained age is calculated at the contract level using the total contributions since inception and the age of the contractholders. (2) The net amount at risk for our GMDB riders is defined as the current GMDB amount in excess of the current account balance. The net amount at risk for our GMWB riders is defined as the greater of the present value of the GMWB payments less the current account balance or zero. For contracts with both GMDB and GMWB riders, the net amount at risk is the greater of the GMDB or GMWB net amount at risk. Increases in the equity markets and decreases in interest rates resulted in a decrease in the net amount at risk in 2023. Decreases in the equity markets and increases in interest rates resulted in an increase in the net amount at risk in 2022. |
Principal Asset Management | Principal International | Asia | Guaranteed pension | |
Market Risk Benefits | |
Summary of net asset (liability) balances and the changes in the valuation of the MRBs (Table) | The net asset (liability) balances and the changes in the valuation of the MRBs for Asia – Guaranteed pension were as follows: For the three months ended For the year ended March 31, 2023 December 31, 2022 ($ in millions) Balance at beginning of period $ (26.0) $ (35.1) Effect of changes in nonperformance risk at beginning of period 1.2 4.3 Adjusted balance at beginning of period (24.8) (30.8) Effect of: Interest accrual and expected policyholder behavior (2.8) (7.1) Benefit payments 3.7 9.5 Changes in interest rates 0.7 3.9 Changes in equity markets 0.1 (1.0) Actual policyholder behavior different from expected behavior 0.4 0.7 Foreign currency translation adjustment 0.1 — Adjusted balance at end of period (22.6) (24.8) Effect of changes in nonperformance risk at end of period (1.4) (1.2) Balance at end of period $ (24.0) $ (26.0) Weighted-average attained age of policyholders (years) (1) 50.0 50.0 Net amount at risk (2) $ 87.4 $ 91.0 (1) The weighted-average attained age is calculated at the contract level using the guarantee amounts and the age of the underlying members of the contracts. (2) The net amount at risk for the minimum guarantee on withdrawal is defined as the current guaranteed balance in excess of the current account balance. |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Reinsurance | |
Schedule of information pertaining to effects of reinsurance on premiums and other considerations and policy and contract benefits (Table) | For the three months ended March 31, 2023 2022 (in millions) Premiums and other considerations: Direct $ 1,563.3 $ 1,040.5 Ceded (114.7) (153.1) Net premiums and other considerations $ 1,448.6 $ 887.4 Benefits, claims and settlement expenses: Direct $ 2,107.8 $ 1,629.5 Ceded (333.9) (138.8) Net benefits, claims and settlement expenses $ 1,773.9 $ 1,490.7 Liability for future policy benefits remeasurement (gain) loss: Direct $ 12.7 $ 20.3 Ceded (18.3) (6.9) Net liability for future policy benefits remeasurement (gain) loss $ (5.6) $ 13.4 |
Schedule of information pertaining to cost of reinsurance asset and liability included on the consolidated statements of financial position (Table) | March 31, 2023 December 31, 2022 (in millions) Cost of reinsurance asset $ 3,315.0 $ 3,339.1 Cost of reinsurance liability $ 184.5 $ 191.1 |
Schedule of assets held in support of reserves associated with coinsurance with funds withheld agreement (Table) | March 31, 2023 December 31, 2022 (in millions) Fixed maturities, available-for-sale $ 16,231.7 $ 15,693.5 Fixed maturities, trading 103.2 100.8 Equity securities 0.3 11.0 Mortgage loans 2,735.1 2,810.8 Other investments 203.0 179.8 Cash and cash equivalents 1,522.8 1,762.9 Accrued interest income 200.0 178.7 Net other liabilities (223.7) (33.6) Net assets $ 20,772.4 $ 20,703.9 |
Schedule of components of net realized gains (losses) on the funds withheld assets that were passed to coinsurer (Table) | For the three months ended March 31, 2023 (in millions) Fixed maturities, available-for-sale $ (57.0) Fixed maturities, trading (0.1) Equity securities (1.2) Derivatives 2.9 Net realized capital losses $ (55.4) |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt. | |
Long-Term Debt (Table) | March 31, 2023 Net unamortized discount, premium and debt issuance Carrying Principal costs amount (in millions) 3.125% notes payable, due 2023 $ 300.0 $ — $ 300.0 3.4% notes payable, due 2025 400.0 (1.1) 398.9 3.1% notes payable, due 2026 350.0 (1.3) 348.7 3.7% notes payable, due 2029 500.0 (4.2) 495.8 2.125% notes payable, due 2030 600.0 (3.6) 596.4 5.375% notes payable, due 2033 400.0 (4.0) 396.0 6.05% notes payable, due 2036 505.6 (2.2) 503.4 4.625% notes payable, due 2042 300.0 (3.0) 297.0 4.35% notes payable, due 2043 300.0 (2.9) 297.1 4.3% notes payable, due 2046 300.0 (3.0) 297.0 5.5% notes payable, due 2053 300.0 (4.4) 295.6 Floating rate notes payable, due 2055 400.0 (4.5) 395.5 Non-recourse mortgages and notes payable 66.5 0.7 67.2 Total long-term debt $ 4,722.1 $ (33.5) $ 4,688.6 December 31, 2022 Net unamortized discount, premium and debt issuance Carrying Principal costs amount (in millions) 3.125% notes payable, due 2023 $ 300.0 $ (0.1) $ 299.9 3.4% notes payable, due 2025 400.0 (1.2) 398.8 3.1% notes payable, due 2026 350.0 (1.4) 348.6 3.7% notes payable, due 2029 500.0 (4.3) 495.7 2.125% notes payable, due 2030 600.0 (3.6) 596.4 6.05% notes payable, due 2036 505.6 (2.3) 503.3 4.625% notes payable, due 2042 300.0 (2.9) 297.1 4.35% notes payable, due 2043 300.0 (3.0) 297.0 4.3% notes payable, due 2046 300.0 (3.1) 296.9 Floating rate notes payable, due 2055 400.0 (4.5) 395.5 Non-recourse mortgages and notes payable 67.1 0.7 67.8 Total long-term debt $ 4,022.7 $ (25.7) $ 3,997.0 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Taxes | |
Reconciliation Between U.S. Corporate Income Tax Rate and Effective Income Tax Rate from Continuing Operations (Table) | For the three months ended March 31, 2023 2022 U.S. corporate income tax rate 21 % 21 % Dividends received deduction 9 (5) Tax credits 6 (4) Employee compensation 4 (2) Interest exclusion from taxable income 3 (2) Impact of equity method presentation 3 (2) Local country permanent tax adjustments 2 — Global Intangible Low-Taxed Income (6) 1 Low income housing tax credit amortization (5) 1 Foreign country statutory rate differential (2) 1 State income taxes — (2) Other 2 2 Effective income tax rate 37 % 9 % |
Employee and Agent Benefits (Ta
Employee and Agent Benefits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Employee and Agent Benefits | |
Components of Net Periodic Benefit Cost (Income) (Table) | Other postretirement Pension benefits benefits For the three months ended For the three months ended March 31, March 31, 2023 2022 2023 2022 (in millions) Service cost $ 14.0 $ 20.2 $ — $ — Interest cost 39.7 28.1 0.8 0.6 Expected return on plan assets (40.7) (44.7) (1.1) (1.2) Amortization (4.2) (4.2) (0.3) (0.3) Recognized net actuarial (gain) loss 9.8 13.8 (0.2) (0.3) Net periodic benefit cost (income) $ 18.6 $ 13.2 $ (0.8) $ (1.2) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stockholders' Equity | |
Common Stock Dividends (Table) | For the three months ended March 31, 2023 2022 Dividends declared per common share $ 0.64 $ 0.64 |
Reconciliation of Outstanding Common Shares (Table) | For the three months ended March 31, 2023 2022 (in millions) Beginning balance 243.5 261.7 Shares issued 1.7 1.7 Treasury stock acquired (2.1) (11.2) Ending balance 243.1 252.2 |
Other Comprehensive Income (Loss) (Table) | For the three months ended March 31, 2023 Pre-Tax Tax After-Tax (in millions) Net unrealized gains on available-for-sale securities during the period $ 1,280.8 $ (264.9) $ 1,015.9 Reclassification adjustment for losses included in net income (1) 78.5 (16.4) 62.1 Adjustments for assumed changes in amortization patterns 0.2 — 0.2 Adjustments for assumed changes in policyholder liabilities (0.1) — (0.1) Net unrealized gains on available-for-sale securities 1,359.4 (281.3) 1,078.1 Net unrealized gains on derivative instruments during the period 3.7 (0.8) 2.9 Reclassification adjustment for gains included in net income (2) (3.7) 0.8 (2.9) Net unrealized gains on derivative instruments — — — Liability for future policy benefits discount rate remeasurement loss (3) (682.4) 141.5 (540.9) Market risk benefit nonperformance risk gain (4) 7.7 (1.7) 6.0 Foreign currency translation adjustment 132.2 (0.1) 132.1 Amortization of amounts included in net periodic benefit cost (5) 5.1 (1.3) 3.8 Net unrecognized postretirement benefit obligation 5.1 (1.3) 3.8 Other comprehensive income $ 822.0 $ (142.9) $ 679.1 For the three months ended March 31, 2022 Pre-Tax Tax After-Tax (in millions) Net unrealized losses on available-for-sale securities during the period $ (5,535.5) $ 1,172.0 $ (4,363.5) Reclassification adjustment for gains included in net income (1) (40.6) 5.2 (35.4) Adjustments for assumed changes in amortization patterns (0.1) — (0.1) Adjustments for assumed changes in policyholder liabilities 363.1 (76.3) 286.8 Net unrealized losses on available-for-sale securities (5,213.1) 1,100.9 (4,112.2) Net unrealized losses on derivative instruments during the period (21.0) 4.4 (16.6) Reclassification adjustment for gains included in net income (2) (6.8) 1.4 (5.4) Adjustments for assumed changes in policyholder liabilities 3.9 (0.7) 3.2 Net unrealized losses on derivative instruments (23.9) 5.1 (18.8) Liability for future policy benefits discount rate remeasurement gain (3) 3,190.9 (671.8) 2,519.1 Market risk benefit nonperformance risk gain (4) 93.2 (19.5) 73.7 Foreign currency translation adjustment 156.6 (1.5) 155.1 Amortization of amounts included in net periodic benefit cost (5) 9.0 (2.3) 6.7 Net unrecognized postretirement benefit obligation 9.0 (2.3) 6.7 Other comprehensive loss $ (1,787.3) $ 410.9 $ (1,376.4) (1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations. (2) See Note 4, Derivative Financial Instruments, under the caption “Effect of Fair Value and Cash Flow Hedges on Consolidated Statements of Operations” for further details. (3) Includes the discount rate remeasurement gain (loss) associated with the liability for future policy benefits and the associated reinsurance recoverable. See Note 8, Future Policy Benefits and Claims, under the caption “Liability for Future Policy Benefits” for further details. (4) See Note 9, Market Risk Benefits, for further details. (5) Amount is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, which is reported in operating expenses on the consolidated statements of operations. See Note 13, Employee and Agent Benefits, under the caption “Components of Net Periodic Benefit Cost” for further details. |
Accumulated Other Comprehensive Income (Loss) (Table) | Net unrealized Net unrealized LFPB Foreign Unrecognized Accumulated gains (losses) on gains discount rate MRB currency postretirement other available-for-sale on derivative remeasurement nonperformance translation benefit comprehensive securities (1) instruments gain (loss) risk gain (loss) adjustment obligation loss (in millions) Balances as of January 1, 2022 $ 3,880.4 $ 56.6 $ (4,037.6) $ (90.1) $ (1,548.7) $ (344.7) $ (2,084.1) Other comprehensive loss during the period, net of adjustments (4,076.8) (13.4) 2,519.1 73.7 153.7 — (1,343.7) Amounts reclassified to AOCI (35.4) (5.4) — — — 6.7 (34.1) Other comprehensive loss (4,112.2) (18.8) 2,519.1 73.7 153.7 6.7 (1,377.8) Balances as of March 31, 2022 $ (231.8) $ 37.8 $ (1,518.5) $ (16.4) $ (1,395.0) $ (338.0) $ (3,461.9) Balances as of January 1, 2023 $ (5,857.9) $ 39.7 $ 740.9 $ 24.0 $ (1,571.6) $ (254.1) $ (6,879.0) Other comprehensive income during the period, net of adjustments 1,016.0 2.9 (540.9) 6.0 130.7 — 614.7 Amounts reclassified from AOCI 62.1 (2.9) — — — 3.8 63.0 Other comprehensive income 1,078.1 — (540.9) 6.0 130.7 3.8 677.7 Balances as of March 31, 2023 $ (4,779.8) $ 39.7 $ 200.0 $ 30.0 $ (1,440.9) $ (250.3) $ (6,201.3) (1) Net unrealized gains on available-for-sale securities for which an allowance for credit loss has been recorded were $0.6 million and $6.2 million as of March 31, 2023 and 2022, respectively. |
Redeemable Noncontrolling Interest (Table) | For the three months ended March 31, 2023 2022 (in millions) Balance at beginning of period $ 262.0 $ 332.5 Net income (loss) attributable to redeemable noncontrolling interest 4.5 (10.3) Redeemable noncontrolling interest of deconsolidated entities (1) (2.4) — Contributions from redeemable noncontrolling interest 19.0 24.0 Distributions to redeemable noncontrolling interest (8.4) (39.6) Purchase of subsidiary shares from redeemable noncontrolling interest (1.6) — Change in redemption value of redeemable noncontrolling interest (0.6) 0.1 Other comprehensive income attributable to redeemable noncontrolling interest 0.2 0.1 Balance at end of period $ 272.7 $ 306.8 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Measurements | |
Fair Value (Table) | March 31, 2023 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,829.9 $ — $ 1,443.9 $ 386.0 $ — Non-U.S. governments 549.2 — 0.6 548.6 — States and political subdivisions 6,173.4 — — 6,101.3 72.1 Corporate 37,296.6 — 29.6 35,612.5 1,654.5 Residential mortgage-backed pass-through securities 2,794.9 — — 2,794.9 — Commercial mortgage-backed securities 4,927.8 — — 4,924.5 3.3 Collateralized debt obligations (1) 4,902.3 — — 4,740.1 162.2 Other debt obligations 6,922.8 — — 6,056.3 866.5 Total fixed maturities, available-for-sale 65,396.9 — 1,474.1 61,164.2 2,758.6 Fixed maturities, trading 787.9 — 129.2 502.6 156.1 Equity securities 1,733.3 — 506.9 1,226.4 — Derivative assets (2) 386.7 — — 381.7 5.0 Other investments 722.9 79.1 304.2 337.7 1.9 Cash equivalents 3,235.1 — 565.4 2,669.7 — Market risk benefit asset (3) 107.3 — — — 107.3 Sub-total excluding separate account assets 72,370.1 79.1 2,979.8 66,282.3 3,028.9 Separate account assets 162,000.8 8,830.1 97,181.5 55,095.4 893.8 Total assets $ 234,370.9 $ 8,909.2 $ 100,161.3 $ 121,377.7 $ 3,922.7 Liabilities Investment and universal life contracts (4) $ (55.5) $ — $ — $ — $ (55.5) Market risk benefit liability (3) (194.4) — — — (194.4) Funds withheld payable embedded derivative (4) 3,026.2 — — — 3,026.2 Derivative liabilities (2) (508.4) — — (507.4) (1.0) Other liabilities (1.0) — — (1.0) — Total liabilities $ 2,266.9 $ — $ — $ (508.4) $ 2,775.3 Net assets $ 236,637.8 $ 8,909.2 $ 100,161.3 $ 120,869.3 $ 6,698.0 December 31, 2022 Assets/ Amount (liabilities) measured at measured at net asset Fair value hierarchy level fair value value (5) Level 1 Level 2 Level 3 (in millions) Assets Fixed maturities, available-for-sale: U.S. government and agencies $ 1,739.8 $ — $ 1,359.1 $ 380.7 $ — Non-U.S. governments 567.3 — 1.4 565.9 — States and political subdivisions 6,232.3 — — 6,161.4 70.9 Corporate 36,183.2 — 26.6 34,588.3 1,568.3 Residential mortgage-backed pass-through securities 2,228.7 — — 2,228.7 — Commercial mortgage-backed securities 4,864.6 — — 4,861.2 3.4 Collateralized debt obligations (1) 4,566.4 — — 4,510.2 56.2 Other debt obligations 6,507.6 — — 6,039.8 467.8 Total fixed maturities, available-for-sale 62,889.9 — 1,387.1 59,336.2 2,166.6 Fixed maturities, trading 760.7 — 78.6 548.1 134.0 Equity securities 1,708.6 — 492.4 1,216.2 — Derivative assets (2) 321.6 — — 320.9 0.7 Other investments 701.1 81.4 311.7 306.1 1.9 Cash equivalents 3,604.1 — 973.5 2,630.6 — Market risk benefit asset (3) 109.2 — — — 109.2 Sub-total excluding separate account assets 70,095.2 81.4 3,243.3 64,358.1 2,412.4 Separate account assets 155,375.1 9,120.9 92,010.7 53,208.6 1,034.9 Total assets $ 225,470.3 $ 9,202.3 $ 95,254.0 $ 117,566.7 $ 3,447.3 Liabilities Investment and universal life contracts (4) $ (46.4) $ — $ — $ — $ (46.4) Market risk benefit liability (3) (207.4) — — — (207.4) Funds withheld payable embedded derivative 3,652.8 — — — 3,652.8 Derivative liabilities (2) (634.2) — — (630.1) (4.1) Other liabilities (0.4) — — (0.4) — Total liabilities $ 2,764.4 $ — $ — $ (630.5) $ 3,394.9 Net assets $ 228,234.7 $ 9,202.3 $ 95,254.0 $ 116,936.2 $ 6,842.2 (1) Primarily consists of collateralized loan obligations backed by secured corporate loans. (2) Within the consolidated statements of financial position, derivative assets are reported with other investments and derivative liabilities are reported with other liabilities. The amounts are presented gross in the tables above to reflect the presentation on the consolidated statements of financial position; however, are presented net for purposes of the rollforward in the Changes in Level 3 Fair Value Measurements tables. Refer to Note 4, Derivative Financial Instruments, for further information on fair value by class of derivative instruments. (3) Refer to Note 9, Market Risk Benefits, for further information on the change in the Level 3 fair value measurements of MRBs. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. The funds withheld payable embedded derivative could be in either an asset or (liability) position. (5) Certain investments are measured at fair value using the NAV per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy. Other investments using the NAV practical expedient consist of certain fund interests that are restricted until maturity with unfunded commitments totaling $ 7.8 million and $7.8 million as of March 31, 2023 and December 31, 2022, respectively. Separate account assets using the NAV practical expedient consist of hedge funds and a real estate fund with varying investment strategies that also have a variety of redemption terms and conditions. We do not have unfunded commitments associated with these funds. |
Reconciliation for All Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Table) | For the three months ended March 31, 2023 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of January 1, net income comprehensive settlements into out of March 31, 2023 (2) income (3) (4) Level 3 Level 3 2023 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 70.9 $ — $ 1.6 $ (0.4) $ — $ — $ 72.1 Corporate 1,568.3 — (6.6) 125.3 10.4 (42.9) 1,654.5 Commercial mortgage-backed securities 3.4 — 0.1 (0.2) — — 3.3 Collateralized debt obligations 56.2 — 1.1 120.1 — (15.2) 162.2 Other debt obligations 467.8 — (6.5) 186.9 218.3 — 866.5 Total fixed maturities, available-for-sale 2,166.6 — (10.3) 431.7 228.7 (58.1) 2,758.6 Fixed maturities, trading 134.0 (0.4) — 22.5 — — 156.1 Other investments 1.9 — — — — — 1.9 Separate account assets (1) 1,034.9 15.0 — (156.1) — — 893.8 Liabilities Investment and universal life contracts (46.4) (5.3) — (3.8) — — (55.5) Funds withheld payable embedded derivative 3,652.8 (626.6) — — — — 3,026.2 Derivatives Net derivative assets (liabilities) (3.4) 7.4 — — — — 4.0 For the three months ended March 31, 2022 Beginning Net Ending asset/ Total realized/unrealized purchases, asset/ (liability) gains (losses) sales, (liability) balance Included in issuances balance as of Included in other and Transfers Transfers as of January 1, net income comprehensive settlements into out of March 31, 2022 (2) income (3) (4) Level 3 Level 3 2022 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 94.8 $ — $ 0.1 $ (0.4) $ — $ — $ 94.5 Corporate 834.3 (3.0) (4.7) 139.0 175.2 — 1,140.8 Commercial mortgage-backed securities 19.2 — (0.9) (0.2) — — 18.1 Collateralized debt obligations 85.8 — (0.3) 55.5 — (84.0) 57.0 Other debt obligations 42.1 — (0.6) (0.3) — (20.0) 21.2 Total fixed maturities, available-for-sale 1,076.2 (3.0) (6.4) 193.6 175.2 (104.0) 1,331.6 Fixed maturities, trading 4.9 — — 28.5 29.0 — 62.4 Other investments 2.1 — (0.7) — — — 1.4 Separate account assets (1) 945.3 71.4 — (1.3) — — 1,015.4 Liabilities Investment and universal life contracts (83.2) 8.1 — 6.4 — — (68.7) Derivatives Net derivative assets (liabilities) — (1.4) — 0.7 — — (0.7) (1) Gains and losses for separate account assets do not impact net income as the change in value of separate account assets is offset by a change in value of separate account liabilities. Foreign currency translation adjustments related to the Principal International separate account assets are recorded in AOCI and are offset by foreign currency translation adjustments of the corresponding separate account liabilities. (2) Both realized gains (losses) and mark-to-market unrealized gains (losses) are generally reported in net realized capital gains (losses), net realized capital gains (losses) on funds withheld assets or change in fair value of funds withheld embedded derivative within the consolidated statements of operations. Realized and unrealized gains (losses) on certain securities with an investment objective to realize economic value through mark-to-market changes are reported in net investment income within the consolidated statements of operations. Changes in unrealized gains (losses) included in net income relating to positions still held were: For the three months ended March 31, 2023 2022 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ (3.0) Total fixed maturities, available-for-sale — (3.0) Fixed maturities, trading (0.3) — Separate account assets (21.8) 68.3 Liabilities Investment and universal life contracts (7.1) 7.4 Funds withheld payable embedded derivative (626.6) — Derivatives Net derivative assets (liabilities) 7.3 (1.3) (3) Changes in unrealized gains (losses) included in OCI, including foreign currency translation adjustments related to Principal International, relating to positions still held were: For the three months ended March 31, 2023 2022 (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ 1.6 $ 0.1 Corporate (6.6) (4.7) Commercial mortgage-backed securities 0.1 (1.0) Collateralized debt obligations 1.1 (0.4) Other debt obligations (6.5) (0.6) Total fixed maturities, available-for-sale (10.3) (6.6) (4) Gross purchases, sales, issuances and settlements were: For the three months ended March 31, 2023 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (0.4) $ (0.4) Corporate 150.9 (3.6) — (22.0) 125.3 Commercial mortgage-backed securities — — — (0.2) (0.2) Collateralized debt obligations 121.3 — — (1.2) 120.1 Other debt obligations 190.9 — — (4.0) 186.9 Total fixed maturities, available-for-sale 463.1 (3.6) — (27.8) 431.7 Fixed maturities, trading 26.4 (3.5) — (0.4) 22.5 Separate account assets (5) — (202.0) (4.1) 50.0 (156.1) Liabilities Investment and universal life contracts — — (8.2) 4.4 (3.8) For the three months ended March 31, 2022 Net purchases, sales, issuances Purchases Sales Issuances Settlements and settlements (in millions) Assets Fixed maturities, available-for-sale: States and political subdivisions $ — $ — $ — $ (0.4) $ (0.4) Corporate 190.9 (20.4) — (31.5) 139.0 Commercial mortgage-backed securities — — — (0.2) (0.2) Collateralized debt obligations 55.5 — — — 55.5 Other debt obligations — — — (0.3) (0.3) Total fixed maturities, available-for-sale 246.4 (20.4) — (32.4) 193.6 Fixed maturities, trading 28.5 — — — 28.5 Separate account assets (5) — — (1.1) (0.2) (1.3) Liabilities Investment and universal life contracts — — (6.7) 13.1 6.4 Derivatives Net derivative assets (liabilities) — 0.7 — — 0.7 (5) Issuances and settlements include amounts related to mortgage encumbrances associated with real estate in our separate accounts. |
Transfers (Table) | For the three months ended March 31, 2023 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ 10.4 $ — $ 42.9 Collateralized debt obligations — — — 15.2 Other debt obligations — 218.3 — — Total fixed maturities, available-for-sale — 228.7 — 58.1 For the three months ended March 31, 2022 Transfers out Transfers out Transfers out Transfers out of Level 1 into of Level 2 into of Level 3 into of Level 3 into Level 3 Level 3 Level 1 Level 2 (in millions) Assets Fixed maturities, available-for-sale: Corporate $ — $ 175.2 $ — $ — Collateralized debt obligations — — — 84.0 Other debt obligations — — — 20.0 Total fixed maturities, available-for-sale — 175.2 — 104.0 Fixed maturities, trading — 29.0 — — |
Quantitative Information about Level 3 Fair Value Measurements (Table) | March 31, 2023 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 1,569.7 Discounted cash flow Discount rate (1) 5.0 % 24.9 % 12.0 % Illiquidity premium 0 basis points (“bps”)- 480 bps 80 bps Comparability adjustment (3) bps (3) bps Collateralized debt obligations 40.0 Discounted cash flow Discount rate (1) 5.4 % 5.4 % Comparability adjustment 52 bps 52 bps Other debt obligations 625.7 Discounted cash flow Discount rate (1) 5.7 % 9.1 % 8.2 % Illiquidity premium 0 bps- 415 bps 239 bps Comparability adjustment 32 bps- 152 bps 86 bps Fixed maturities, trading 128.6 Discounted cash flow Discount rate (1) 10.0 % 16.6 % 12.3 % Separate account assets 894.2 Discounted cash flow - real estate Discount rate (1) 6.0 % 10.0 % 7.3 % Terminal capitalization rate 5.0 % 9.5 % 6.0 % Average market rent growth rate 2.0 % 3.8 % 3.0 % Discounted cash flow - real estate debt Loan to value 43.4 % 64.9 % 52.2 % Market interest rate 5.5 % 8.6 % 7.0 % Liabilities Investment and universal life contracts (55.5) Discounted cash flow Long duration interest rate 2.3 % - 4.6 % (2) 3.3 % Long-term equity market volatility 15.1 % - 25.4 % 19.2 % Nonperformance risk 0.9 % 0.9 % Lapse rate 0.0 % 0.0 % Mortality rate See note (3) December 31, 2022 Assets / (liabilities) measured at Valuation Unobservable Input/range of Weighted fair value technique(s) input description inputs average (in millions) Assets Fixed maturities, available-for-sale: Corporate $ 1,479.9 Discounted cash flow Discount rate (1) 2.7 % 33.1 % 11.0 % Illiquidity premium 0 bps- 467 bps 50 bps Comparability adjustment (16) bps- 0 bps (11) bps Collateralized debt obligations 39.5 Discounted cash flow Discount rate (1) 4.4 % 4.4 % Comparability adjustment 55 bps 55 bps Other debt obligations 467.8 Discounted cash flow Discount rate (1) 5.6 % 8.2 % 7.6 % Illiquidity premium 0 bps- 260 bps 220 bps Comparability adjustment 1 bps- 139 bps 77 bps Fixed maturities, trading 119.7 Discounted cash flow Discount rate (1) 9.6 % - 15.2 % 11.0 % Separate account assets 1,034.1 Discounted cash flow - real estate Discount rate (1) 5.5 % 10.0 % 7.0 % Terminal capitalization rate 4.5 % 9.5 % 5.8 % Average market rent growth rate 2.0 % 3.8 % 3.0 % Discounted cash flow - real estate debt Loan to value 43.6 % 62.2 % 50.6 % Market interest rate 5.3 % 8.6 % 6.6 % Liabilities Investment and universal life contracts (4) (46.4) Discounted cash flow Long duration interest rate 2.4 % 4.7 % (2) 3.1 % Long-term equity market volatility 17.8 % 36.9 % 22.0 % Nonperformance risk 0.9 % 0.9 % Lapse rate 0.0 % 0.0 % Mortality rate See note (3) (1) Represents market comparable interest rate or an index adjusted rate used as the base rate in the discounted cash flow analysis prior to any illiquidity or other adjustments, where applicable. (2) Represents the range of rate curves used in the valuation analysis that we have determined market participants would use when pricing the instrument. Derived from interpolation between various observable swap rates. (3) This input is based on an appropriate industry mortality table and a range does not provide a meaningful presentation. (4) Includes bifurcated embedded derivatives that are reported at net asset (liability) fair value within the same line item in the consolidated statements of financial position in which the host contract is reported. |
Financial Instruments Not Reported at Fair Value (Table) | March 31, 2023 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 20,603.5 $ 18,967.6 $ — $ — $ 18,967.6 Policy loans 788.0 828.5 — — 828.5 Other investments 286.7 287.1 — 159.7 127.4 Cash and cash equivalents 1,405.8 1,405.8 1,391.7 14.1 — Reinsurance deposit receivable 7,423.4 6,539.5 — — 6,539.5 Cash collateral receivable 17.1 17.1 17.1 — — Investment contracts (35,551.8) (33,041.4) — (7,373.8) (25,667.6) Short-term debt (24.2) (24.2) — (24.2) — Long-term debt (4,688.6) (4,420.8) — (4,361.3) (59.5) Separate account liabilities (147,577.5) (146,631.4) — — (146,631.4) Bank deposits (1) (372.6) (355.6) — (355.6) — Cash collateral payable (279.0) (279.0) (279.0) — — December 31, 2022 Fair value hierarchy level Carrying amount Fair value Level 1 Level 2 Level 3 (in millions) Assets (liabilities) Mortgage loans $ 20,629.8 $ 18,754.5 $ — $ — $ 18,754.5 Policy loans 784.7 804.0 — — 804.0 Other investments 250.6 238.0 — 133.5 104.5 Cash and cash equivalents 1,243.9 1,243.9 1,232.5 11.4 — Reinsurance deposit receivable 7,901.0 6,859.9 — — 6,859.9 Cash collateral receivable 281.0 281.0 281.0 — — Investment contracts (35,380.1) (32,367.4) — (7,279.0) (25,088.4) Short-term debt (80.7) (80.7) — (80.7) — Long-term debt (3,997.0) (3,680.6) — (3,620.1) (60.5) Separate account liabilities (141,459.3) (140,533.9) — — (140,533.9) Bank deposits (1) (352.4) (336.3) — (336.3) — Cash collateral payable (291.3) (291.3) (291.3) — — (1) Excludes deposit liabilities without defined or contractual maturities. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Information | |
Reconciliation of Assets from Segment to Consolidated (Table) | March 31, 2023 December 31, 2022 (in millions) Assets: Retirement and Income Solutions $ 207,109.0 $ 202,294.2 Principal Asset Management 48,462.3 45,950.7 Benefits and Protection 41,082.2 40,048.3 Corporate 2,754.7 2,285.1 Total consolidated assets $ 299,408.2 $ 290,578.3 |
Reconciliation of Operating Revenues and Pre-tax Operating Earnings (Losses) by Segment (Table) | For the three months ended March 31, 2023 2022 (in millions) Operating revenues by segment: Retirement and Income Solutions (1) $ 1,616.1 $ 1,263.0 Principal Asset Management: Principal Global Investors 392.7 435.3 Principal International 305.1 327.2 Eliminations (5.3) (6.6) Total Principal Asset Management (2) 692.5 755.9 Benefits and Protection: Specialty Benefits 782.2 717.7 Life Insurance 321.4 525.7 Eliminations (0.2) (0.1) Total Benefits and Protection 1,103.4 1,243.3 Corporate 27.6 6.3 Total segment operating revenues 3,439.6 3,268.5 Net realized capital losses, net of related revenue adjustments (39.2) (146.4) Revenues from exited business (3) (547.6) — Adjustments related to equity method investments (22.6) (18.5) Market risk benefit derivative settlements (11.2) (8.1) Total revenues per consolidated statements of operations $ 2,819.0 $ 3,095.5 Pre-tax operating earnings (losses) by segment: Retirement and Income Solutions $ 249.8 $ 294.2 Principal Asset Management 187.8 211.0 Benefits and Protection 99.3 92.8 Corporate (96.1) (129.0) Total segment pre-tax operating earnings 440.8 469.0 Pre-tax net realized capital losses, as adjusted (4) (24.3) (87.9) Pre-tax loss from exited business (5) (608.3) — Adjustments related to equity method investments and noncontrolling interest (20.7) (2.7) Income (loss) before income taxes per consolidated statements of operations $ (212.5) $ 378.4 (1) Reflects inter-segment revenues of $94.8 million and $97.4 million for the three months ended March 31, 2023 and 2022, respectively. (2) Reflects inter-segment revenues of $70.7 million and $76.5 million for the three months ended March 31, 2023 and 2022, respectively. |
Revenues from exited business (Table) | For the three months ended March 31, 2023 2022 (in millions) Revenues from exited business: Change in fair value of funds withheld embedded derivative $ (626.6) $ — Net realized capital gains on funds withheld assets 81.0 — Amortization of reinsurance gain 1.4 — Other impacts of reinsured business (3.4) — Total revenues from exited business $ (547.6) $ — |
Pre-tax net realized capital gains (losses), as adjusted from exited business (Table) | For the three months ended March 31, 2023 2022 (in millions) Net realized capital losses: Net realized capital losses $ (66.0) $ (136.6) Derivative and hedging-related revenue adjustments 2.1 (32.0) Certain variable annuity fees 18.4 20.0 Adjustments related to equity method investments 0.2 (3.6) Adjustments related to sponsored investment funds 6.1 5.8 Net realized capital losses, net of related revenue adjustments (39.2) (146.4) Amortization of deferred acquisition costs and other actuarial balances — 6.6 Capital losses distributed 18.4 91.0 Market value adjustments of market risk benefits (6.5) (22.7) Market value adjustments of embedded derivatives 3.0 (16.4) Pre-tax net realized capital losses, as adjusted (a) $ (24.3) $ (87.9) (a) As adjusted before noncontrolling interest capital gains (losses). |
Pre-tax income (loss) from exited business (Table) | For the three months ended March 31, 2023 2022 (in millions) Pre-tax loss from exited business Change in fair value of funds withheld embedded derivative $ (626.6) $ — Net realized capital gains on funds withheld assets 81.0 — Amortization of reinsurance loss (22.1) — Other impacts of reinsured business (40.6) — Total pre-tax loss from exited business $ (608.3) $ — |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Revenue from contracts with customers by segment: Retirement and Income Solutions $ 130.2 $ 144.4 Principal Asset Management: Principal Global Investors 381.3 429.6 Principal International 113.2 110.4 Eliminations (5.3) (6.6) Total Principal Asset Management 489.2 533.4 Benefits and Protection: Specialty Benefits 3.9 4.0 Life Insurance 16.7 15.4 Total Benefits and Protection 20.6 19.4 Corporate 45.1 53.0 Total segment revenue from contracts with customers 685.1 750.2 Adjustments for fees and other revenues not within the scope of revenue recognition guidance (1) 290.4 449.0 Pre-tax other adjustments (2) 19.8 20.0 Total fees and other revenues per consolidated statements of operations $ 995.3 $ 1,219.2 (1) Fees and other revenues not within the scope of the revenue recognition guidance primarily represent revenue on contracts accounted for under the financial instruments or insurance contracts standards. (2) Pre-tax other adjustments relate to revenues from exited business, certain variable annuity fees and market value adjustments to fee revenues. |
Retirement and Income Solutions | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Administrative service fee revenue $ 126.5 $ 141.5 Deposit account fee revenue 2.9 2.5 Commission income 0.4 0.2 Other fee revenue 0.4 0.2 Total revenues from contracts with customers 130.2 144.4 Fees and other revenues not within the scope of revenue recognition guidance 278.3 299.4 Total fees and other revenues 408.5 443.8 Premiums and other considerations 582.7 123.3 Net investment income 624.9 695.9 Total operating revenues $ 1,616.1 $ 1,263.0 |
Principal Asset Management | Principal International | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Principal International: Management fee revenue $ 110.9 $ 107.7 Other fee revenue 2.3 2.7 Total revenues from contracts with customers 113.2 110.4 Fees and other revenues not within the scope of revenue recognition guidance 1.4 1.2 Total fees and other revenues 114.6 111.6 Premiums and other considerations 6.4 10.3 Net investment income 184.1 205.3 Total operating revenues $ 305.1 $ 327.2 Revenues from contracts with customers by region: Latin America $ 85.9 $ 82.1 Asia 27.5 28.5 Eliminations (0.2) (0.2) Total revenues from contracts with customers $ 113.2 $ 110.4 |
Principal Asset Management | Principal Global Investors | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Principal Global Investors: Management fee revenue $ 339.7 $ 379.0 Other fee revenue 41.6 50.6 Total revenues from contracts with customers 381.3 429.6 Fees and other revenues not within the scope of revenue recognition guidance 4.6 5.3 Total fees and other revenues 385.9 434.9 Net investment income 6.8 0.4 Total operating revenues $ 392.7 $ 435.3 |
Benefits and Protection | Specialty Benefits | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Specialty Benefits: Administrative service fees $ 3.9 $ 4.0 Total revenues from contracts with customers 3.9 4.0 Fees and other revenues not within the scope of revenue recognition guidance 4.6 4.7 Total fees and other revenues 8.5 8.7 Premiums and other considerations 733.6 665.6 Net investment income 40.1 43.4 Total operating revenues $ 782.2 $ 717.7 |
Benefits and Protection | Life Insurance | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Life Insurance: Administrative service fees $ 7.2 $ 6.8 Commission income 9.5 8.6 Total revenues from contracts with customers 16.7 15.4 Fees and other revenues not within the scope of revenue recognition guidance 77.3 228.3 Total fees and other revenues 94.0 243.7 Premiums and other considerations 130.8 88.8 Net investment income 96.6 193.2 Total operating revenues $ 321.4 $ 525.7 |
Corporate | |
Revenues from Contracts with Customers | |
Disaggregation of Revenues from Contracts with Customers (Table) | For the three months ended March 31, 2023 2022 (in millions) Commission income $ 87.9 $ 97.2 Other fee revenue 20.5 19.8 Eliminations (63.3) (64.0) Total revenues from contracts with customers 45.1 53.0 Fees and other revenues not within the scope of revenue recognition guidance (75.6) (89.7) Total fees and other revenues (30.5) (36.7) Premiums and other considerations (1.3) (0.5) Net investment income 59.4 43.5 Total operating revenues $ 27.6 $ 6.3 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Stock-Based Compensation Plans | |
Stock-Based Compensation Disclosures (Table) | For the three months ended March 31, 2023 2022 (in millions) Compensation cost $ 28.2 $ 28.4 Related income tax benefit 7.0 6.4 Capitalized as part of an asset 0.4 0.4 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Common Share | |
Earnings Per Common Share (Table) | For the three months ended March 31, 2023 2022 (in millions, except per share data) Net income (loss) $ (134.5) $ 343.2 Subtract: Net income attributable to noncontrolling interest 5.6 4.5 Total $ (140.1) $ 338.7 Weighted-average shares outstanding: Basic 243.4 259.4 Dilutive effects: Stock options — 1.6 Restricted stock units — 2.3 Performance share awards — 0.5 Diluted 243.4 263.8 Net income (loss) per common share: Basic $ (0.58) $ 1.31 Diluted $ (0.58) $ 1.28 |
Nature of Operations and Sign_4
Nature of Operations and Significant Accounting Policies - Cumulative effect adjustment to retained earnings and AOCI (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 |
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, After-Tax | $ 16,398.8 | $ 16,697.3 | |
Increase (Decrease) Accumulated other comprehensive income, After-Tax | $ (6,201.3) | $ (6,879) | |
Cumulative effect adjustment | Adjustment for reversal of unrealized gain (loss) from AOCI | DAC and other actuarial balances | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | $ 421.5 | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | (88.5) | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | 333 | ||
Cumulative effect adjustment | Adjustment for reversal of unrealized gain (loss) from AOCI | Reinsurance recoverables | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | (45.5) | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | 9.5 | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | (36) | ||
Cumulative effect adjustment | Adjustment for reversal of unrealized gain (loss) from AOCI | Liability for future policy benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | 1,965.3 | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | (452.2) | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | 1,513.1 | ||
Cumulative effect adjustment | Adjustment under the modified retrospective approach | Reinsurance recoverables | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | 31.4 | ||
Increase (Decrease) Retained earnings, Tax | (6.6) | ||
Increase (Decrease) Retained earnings, After-Tax | 24.8 | ||
Cumulative effect adjustment | Adjustment under the modified retrospective approach | Liability for future policy benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | (119.1) | ||
Increase (Decrease) Retained earnings, Tax | 29.8 | ||
Increase (Decrease) Retained earnings, After-Tax | (89.3) | ||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | 17.9 | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | (4.8) | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | 13.1 | ||
Cumulative effect adjustment | Effect of remeasurement at the current discount rate | Reinsurance recoverables | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | 201.8 | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | (42.4) | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | 159.4 | ||
Cumulative effect adjustment | Effect of remeasurement at the current discount rate | Liability for future policy benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | (9,043.1) | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | 2,024.8 | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | (7,018.3) | ||
Cumulative effect adjustment | Investment in equity method subsidiary impacted by LDTI | Other investments | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | 22.8 | ||
Increase (Decrease) Retained earnings, Tax | (9.1) | ||
Increase (Decrease) Retained earnings, After-Tax | 13.7 | ||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | (25.5) | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | 10.2 | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | (15.3) | ||
Cumulative effect adjustment | Cumulative effect of amortization basis change | Cost of reinsurance asset (liability) | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | (9) | ||
Increase (Decrease) Retained earnings, Tax | 1.9 | ||
Increase (Decrease) Retained earnings, After-Tax | (7.1) | ||
Cumulative effect adjustment | Adjustment of unrealized loss in AOCI | Cost of reinsurance asset (liability) | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | 16.1 | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | (3.4) | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | 12.7 | ||
Cumulative effect adjustment | Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date | Market risk benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | (4.8) | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | 1 | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | (3.8) | ||
Cumulative effect adjustment | Adjustments to the host contract for differences between previous carrying amount and measurement of the MRB | Market risk benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | 20.9 | ||
Increase (Decrease) Retained earnings, Tax | (4.4) | ||
Increase (Decrease) Retained earnings, After-Tax | 16.5 | ||
Cumulative effect adjustment | Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes) | Market risk benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | (258.8) | ||
Increase (Decrease) Retained earnings, Tax | 54.4 | ||
Increase (Decrease) Retained earnings, After-Tax | (204.4) | ||
Cumulative effect adjustment | Reclassification of nonperformance risk changes between retained earnings and AOCI | Market risk benefits | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | 108.4 | ||
Increase (Decrease) Retained earnings, Tax | (22.5) | ||
Increase (Decrease) Retained earnings, After-Tax | 85.9 | ||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | (108.4) | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | 22.5 | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | (85.9) | ||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Cumulative effect adjustment | |||
Recent Accounting Pronouncements | |||
Increase (Decrease) Retained earnings, Pre-Tax | (203.4) | ||
Increase (Decrease) Retained earnings, Tax | 43.5 | ||
Increase (Decrease) Retained earnings, After-Tax | (159.9) | ||
Increase (Decrease) Accumulated other comprehensive income, Pre-Tax | (6,604.7) | ||
Increase (Decrease) Accumulated other comprehensive income, Tax | 1,476.7 | ||
Increase (Decrease) Accumulated other comprehensive income, After-Tax | $ (5,128) |
Nature of Operations and Sign_5
Nature of Operations and Significant Accounting Policies - Cumulative effect adjustment on consolidated statements of financial position (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 |
Assets | |||
Other investments | $ (6,421.5) | $ (6,122) | |
Reinsurance recoverable and deposit receivable | 20,881.5 | 21,154 | |
Premiums due and other receivables | (3,837.6) | (3,933.3) | |
Deferred acquisition costs | 3,948.3 | 3,948 | $ 3,822.3 |
Market risk benefit asset | 107.3 | 109.2 | |
Other assets | 1,005.1 | 1,205.6 | |
Total assets | 299,408.2 | 290,578.3 | |
Liabilities | |||
Contractholder funds | 42,958 | 42,825.3 | |
Future policy benefits and claims | 44,699.9 | 43,025.3 | |
Market risk benefit liability | 194.4 | 207.4 | |
Other policyholder funds | 930.9 | 911.5 | |
Deferred income taxes | (1,417.1) | (1,324.2) | |
Total liabilities | 288,874.7 | 280,298.5 | |
Stockholders' equity | |||
Retained earnings | 16,398.8 | 16,697.3 | |
Accumulated other comprehensive income (loss) | (6,201.3) | (6,879) | |
Total stockholders' equity | 10,217.9 | 9,976.7 | |
Total liabilities and stockholders' equity | $ 299,408.2 | $ 290,578.3 | |
Effects of implementation of accounting change | ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | |||
Assets | |||
Other investments | (1.6) | ||
Reinsurance recoverable and deposit receivable | 187.7 | ||
Premiums due and other receivables | (24.4) | ||
Deferred acquisition costs | 450.9 | ||
Market risk benefit asset | 18.9 | ||
Other assets | 19.3 | ||
Total assets | 650.8 | ||
Liabilities | |||
Contractholder funds | (397.9) | ||
Future policy benefits and claims | 7,143.4 | ||
Market risk benefit liability | 663.5 | ||
Other policyholder funds | 48.8 | ||
Deferred income taxes | (1,519.1) | ||
Total liabilities | 5,938.7 | ||
Stockholders' equity | |||
Retained earnings | (159.9) | ||
Accumulated other comprehensive income (loss) | (5,128) | ||
Total stockholders' equity | (5,287.9) | ||
Total liabilities and stockholders' equity | $ 650.8 |
Nature of Operations and Sign_6
Nature of Operations and Significant Accounting Policies - Deferred Acquisition Costs (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | $ 3,948.3 | $ 3,948 | $ 3,822.3 | |
Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 925.6 | 930 | 964.4 | |
Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 2,973.3 | 2,974.5 | 2,857.9 | |
Previously reported | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 3,371.4 | |||
Previously reported | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 730.4 | |||
Previously reported | Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 2,641 | |||
Workplace savings and retirement solutions | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 500.2 | 498 | $ 489 | 477.2 |
Workplace savings and retirement solutions | Previously reported | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 424.6 | |||
Individual variable annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 276.8 | 278 | 281.2 | 281.9 |
Individual variable annuities | Previously reported | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 281.7 | |||
Pension risk transfer | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 10.2 | 8.1 | 2.7 | |
Individual fixed deferred annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 124.7 | 131 | 162.2 | 192.7 |
Individual fixed deferred annuities | Previously reported | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 11.5 | |||
Investment only | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 13.7 | 14.9 | 18.1 | 12.6 |
Investment only | Previously reported | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 12.6 | |||
Individual disability | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 635 | 626.1 | 580.7 | 529.8 |
Individual disability | Previously reported | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 529.8 | |||
Universal life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 1,560.4 | 1,569.7 | 1,596.2 | 1,608.3 |
Universal life | Previously reported | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 1,443 | |||
Term life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 687.1 | 685.7 | 678.9 | 607.9 |
Term life | Previously reported | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 607.9 | |||
Participating life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | $ 90.8 | $ 93 | $ 102.3 | 111.9 |
Participating life | Previously reported | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 60.3 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Adjustment for reversal of unrealized gain (loss) from AOCI | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 450.9 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Adjustment for reversal of unrealized gain (loss) from AOCI | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 234 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Adjustment for reversal of unrealized gain (loss) from AOCI | Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 216.9 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Workplace savings and retirement solutions | Adjustment for reversal of unrealized gain (loss) from AOCI | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 52.6 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Individual variable annuities | Adjustment for reversal of unrealized gain (loss) from AOCI | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 0.2 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Individual fixed deferred annuities | Adjustment for reversal of unrealized gain (loss) from AOCI | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 181.2 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Universal life | Adjustment for reversal of unrealized gain (loss) from AOCI | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | 165.3 | |||
ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Participating life | Adjustment for reversal of unrealized gain (loss) from AOCI | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Deferred acquisition costs | $ 51.6 |
Nature of Operations and Sign_7
Nature of Operations and Significant Accounting Policies - Balances and changes in DAC (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | $ 3,948 | $ 3,822.3 | |
Ending balance, Deferred acquisition costs | 3,948.3 | $ 3,948 | |
Retirement and Income Solutions | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 930 | 964.4 | |
Ending balance, Deferred acquisition costs | 925.6 | 930 | |
Benefits and Protection | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 2,974.5 | 2,857.9 | |
Ending balance, Deferred acquisition costs | 2,973.3 | 2,974.5 | |
Workplace savings and retirement solutions | Retirement and Income Solutions | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 498 | 489 | 477.2 |
Costs deferred | 12 | 48.3 | 50.1 |
Amortized to expense | (9.8) | (39.3) | (38.3) |
Ending balance, Deferred acquisition costs | 500.2 | 498 | 489 |
Individual variable annuities | Retirement and Income Solutions | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 278 | 281.2 | 281.9 |
Costs deferred | 5.2 | 22.5 | 26.4 |
Amortized to expense | (6.4) | (25.7) | (27.1) |
Ending balance, Deferred acquisition costs | 276.8 | 278 | 281.2 |
Pension risk transfer | Retirement and Income Solutions | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 8.1 | 2.7 | |
Costs deferred | 2.2 | 5.6 | 2.7 |
Amortized to expense | (0.1) | (0.2) | |
Ending balance, Deferred acquisition costs | 10.2 | 8.1 | 2.7 |
Individual fixed deferred annuities | Retirement and Income Solutions | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 131 | 162.2 | 192.7 |
Costs deferred | 7.6 | ||
Amortized to expense | (6.3) | (31.2) | (38.1) |
Ending balance, Deferred acquisition costs | 124.7 | 131 | 162.2 |
Investment only | Retirement and Income Solutions | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 14.9 | 18.1 | 12.6 |
Costs deferred | 1.4 | 9.1 | |
Amortized to expense | (1.2) | (4.6) | (3.6) |
Ending balance, Deferred acquisition costs | 13.7 | 14.9 | 18.1 |
Individual Disability [Member] | Benefits and Protection | Specialty Benefits | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 626.1 | 580.7 | 529.8 |
Costs deferred | 19.9 | 87.6 | 89.8 |
Amortized to expense | (11) | (42.2) | (38.9) |
Ending balance, Deferred acquisition costs | 635 | 626.1 | 580.7 |
Universal life | Benefits and Protection | Life Insurance | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 1,569.7 | 1,596.2 | 1,608.3 |
Costs deferred | 14.9 | 70.6 | 84.3 |
Amortized to expense | (24.2) | (97.1) | (96.4) |
Ending balance, Deferred acquisition costs | 1,560.4 | 1,569.7 | 1,596.2 |
Term life | Benefits and Protection | Life Insurance | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 685.7 | 678.9 | 607.9 |
Costs deferred | 16.6 | 66.7 | 126.5 |
Amortized to expense | (15.2) | (59.9) | (55.5) |
Ending balance, Deferred acquisition costs | 687.1 | 685.7 | 678.9 |
Participating Life Insurance Contract [Member] | Benefits and Protection | Life Insurance | |||
Change in deferred acquisition costs | |||
Beginning balance, Deferred acquisition costs | 93 | 102.3 | 111.9 |
Costs deferred | 0.3 | 1.4 | 1.9 |
Amortized to expense | (2.5) | (10.7) | (11.5) |
Ending balance, Deferred acquisition costs | $ 90.8 | $ 93 | $ 102.3 |
Nature of Operations and Sign_8
Nature of Operations and Significant Accounting Policies - Unearned Revenue Liability (Details) - Benefits and Protection - Life Insurance - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Nature of Operations and Significant Accounting Policies | ||||
Unearned Revenue Liability | $ 475.4 | $ 467.4 | $ 384.4 | |
Universal life | ||||
Nature of Operations and Significant Accounting Policies | ||||
Unearned Revenue Liability | $ 466.6 | $ 459 | $ 425.3 | 384.4 |
Previously reported | ||||
Nature of Operations and Significant Accounting Policies | ||||
Unearned Revenue Liability | 335.6 | |||
Previously reported | Universal life | ||||
Nature of Operations and Significant Accounting Policies | ||||
Unearned Revenue Liability | 335.6 | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | ||||
Nature of Operations and Significant Accounting Policies | ||||
Unearned Revenue Liability | 48.8 | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | ASU 2018-12 - Targeted improvements to the accounting for long-duration insurance contracts | Universal life | ||||
Nature of Operations and Significant Accounting Policies | ||||
Unearned Revenue Liability | $ 48.8 |
Nature of Operations and Sign_9
Nature of Operations and Significant Accounting Policies - Balances and changes in the unearned revenue liability (Details) - Benefits and Protection - Life Insurance - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in unearned revenue liability | |||
Beginning balance, Unearned Revenue Liability | $ 467.4 | $ 384.4 | |
Ending balance, Unearned Revenue Liability | 475.4 | $ 467.4 | |
Universal life | |||
Change in unearned revenue liability | |||
Beginning balance, Unearned Revenue Liability | 459 | 425.3 | 384.4 |
Deferrals | 15 | 61.8 | 66.1 |
Revenue recognized | (7.4) | (28.1) | (25.2) |
Ending balance, Unearned Revenue Liability | $ 466.6 | $ 459 | $ 425.3 |
Nature of Operations and Sig_10
Nature of Operations and Significant Accounting Policies - Liability for Future Policy Benefits (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | $ 35,620.8 | $ 34,064.4 | $ 43,489.8 | |
Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 27,238.4 | 26,230.8 | 33,009.5 | |
Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 2,777.1 | 2,607.8 | 3,661.2 | |
Pension risk transfer | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 22,146.1 | 21,211.4 | 25,863.7 | |
Individual fixed income annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 5,092.3 | 5,019.4 | 7,145.8 | |
Individual fixed income annuities | Principal Asset Management | Principal International | Latin America | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 5,416.9 | 5,042.3 | 6,561.5 | |
Individual disability | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 1,815.9 | 1,698.8 | $ 2,498.4 | 2,500.9 |
Term life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 961.2 | 909 | 1,117.6 | 1,160.3 |
Long-term care insurance | Corporate | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | $ 188.4 | $ 183.5 | $ 234.7 | 257.6 |
Previously Reported [Member] | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 36,310.8 | |||
Previously Reported [Member] | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 28,130 | |||
Previously Reported [Member] | Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 3,008.3 | |||
Previously Reported [Member] | Pension risk transfer | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 21,982.8 | |||
Previously Reported [Member] | Individual fixed income annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 6,147.2 | |||
Previously Reported [Member] | Individual fixed income annuities | Principal Asset Management | Principal International | Latin America | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 5,038.4 | |||
Previously Reported [Member] | Individual disability | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 2,173.8 | |||
Previously Reported [Member] | Term life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 834.5 | |||
Previously Reported [Member] | Long-term care insurance | Corporate | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 134.1 | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (1,965.3) | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (1,162) | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (168.7) | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | Pension risk transfer | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (947) | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | Individual fixed income annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (215) | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | Individual fixed income annuities | Principal Asset Management | Principal International | Latin America | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (634.6) | |||
Adjustment for reversal of unrealized gain (loss) from AOCI | Individual disability | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | (168.7) | |||
Adjustment under the modified retrospective approach | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 101.2 | |||
Adjustment under the modified retrospective approach | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 0.1 | |||
Adjustment under the modified retrospective approach | Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 9.4 | |||
Adjustment under the modified retrospective approach | Individual fixed income annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 0.1 | |||
Adjustment under the modified retrospective approach | Individual fixed income annuities | Principal Asset Management | Principal International | Latin America | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 61.7 | |||
Adjustment under the modified retrospective approach | Individual disability | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 2.4 | |||
Adjustment under the modified retrospective approach | Term life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 7 | |||
Adjustment under the modified retrospective approach | Long-term care insurance | Corporate | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 30 | |||
Effect of remeasurement at the current discount rate | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 9,043.1 | |||
Effect of remeasurement at the current discount rate | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 6,041.4 | |||
Effect of remeasurement at the current discount rate | Benefits and Protection | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 812.2 | |||
Effect of remeasurement at the current discount rate | Pension risk transfer | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 4,827.9 | |||
Effect of remeasurement at the current discount rate | Individual fixed income annuities | Retirement and Income Solutions | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 1,213.5 | |||
Effect of remeasurement at the current discount rate | Individual fixed income annuities | Principal Asset Management | Principal International | Latin America | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 2,096 | |||
Effect of remeasurement at the current discount rate | Individual disability | Benefits and Protection | Specialty Benefits | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 493.4 | |||
Effect of remeasurement at the current discount rate | Term life | Benefits and Protection | Life Insurance | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | 318.8 | |||
Effect of remeasurement at the current discount rate | Long-term care insurance | Corporate | ||||
Recent Accounting Pronouncements | ||||
Liability for future policy benefits | $ 93.5 |
Nature of Operations and Sig_11
Nature of Operations and Significant Accounting Policies - Retirement and Income Solutions and Principal Asset Management - Principal International (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement and Income Solutions | Pension risk transfer | |||
Present value of expected future policy benefit payments | |||
Balance at beginning of period, Present value of expected future policy benefit payments | $ 21,211.4 | $ 25,365.8 | $ 25,863.7 |
Effect of changes in discount rate assumptions at beginning of period | 1,799.6 | (3,386.5) | (4,827.9) |
Balance at beginning of period at original discount rate | 23,011 | 21,979.3 | 21,035.8 |
Effect of actual variances from expected experience | (13.3) | (3.2) | (2.4) |
Adjusted beginning of period balance at original discount rate | 22,997.7 | 21,968.2 | 21,033.4 |
Interest accrual | 245.2 | 935.7 | 916.7 |
Benefit payments | (481.5) | (1,841.7) | (1,772.5) |
Issuances | 578.5 | 1,948.8 | 1,801.7 |
Balance at end of period at original discount rate | 23,339.9 | 23,011 | 21,979.3 |
Effect of changes in discount rate assumptions at end of period | 1,193.8 | 1,799.6 | (3,386.5) |
Balance at end of period, Present value of expected future policy benefit payments | 22,146.1 | 21,211.4 | 25,365.8 |
Retirement and Income Solutions | Individual fixed income annuities | |||
Present value of expected future policy benefit payments | |||
Balance at beginning of period, Present value of expected future policy benefit payments | 5,019.4 | 6,535 | 7,145.8 |
Effect of changes in discount rate assumptions at beginning of period | 439 | (812.6) | (1,213.5) |
Balance at beginning of period at original discount rate | 5,458.4 | 5,722.4 | 5,932.3 |
Effect of actual variances from expected experience | (0.8) | (1.3) | |
Adjusted beginning of period balance at original discount rate | 5,457.6 | 5,719.4 | 5,931 |
Interest accrual | 55.7 | 229.7 | 240.5 |
Benefit payments | (126.9) | (520.4) | (532) |
Issuances | 7.9 | 29.7 | 82.9 |
Balance at end of period at original discount rate | 5,394.3 | 5,458.4 | 5,722.4 |
Effect of changes in discount rate assumptions at end of period | 302 | 439 | (812.6) |
Balance at end of period, Present value of expected future policy benefit payments | 5,092.3 | 5,019.4 | 6,535 |
Principal Asset Management | Principal International | Latin America | Individual fixed income annuities | |||
Present value of expected future policy benefit payments | |||
Balance at beginning of period, Present value of expected future policy benefit payments | 5,042.3 | 4,336.8 | 6,561.5 |
Effect of changes in discount rate assumptions at beginning of period | (754.6) | (478.5) | (2,096) |
Balance at beginning of period at original discount rate | 4,287.7 | 3,858.3 | 4,465.5 |
Effect of actual variances from expected experience | 0.7 | (4.7) | (4.9) |
Adjusted beginning of period balance at original discount rate | 4,288.4 | 3,853.6 | 4,460.6 |
Interest accrual | 106.2 | 662 | 444.3 |
Benefit payments | (90.5) | (325.8) | (436) |
Issuances | 7.1 | 86.4 | 141.3 |
Foreign currency translation adjustment | 333.3 | 11.5 | (751.9) |
Balance at end of period at original discount rate | 4,644.5 | 4,287.7 | 3,858.3 |
Effect of changes in discount rate assumptions at end of period | (772.4) | (754.6) | (478.5) |
Balance at end of period, Present value of expected future policy benefit payments | $ 5,416.9 | $ 5,042.3 | $ 4,336.8 |
Nature of Operations and Sig_12
Nature of Operations and Significant Accounting Policies - Balances and changes in LFPB for Benefits and Protection and Corporate (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Present value of expected future policy benefit payments | ||||
Future policy benefits | $ 35,620.8 | $ 34,064.4 | $ 43,489.8 | |
Benefits and Protection | ||||
Present value of expected future policy benefit payments | ||||
Future policy benefits | 2,777.1 | 2,607.8 | 3,661.2 | |
Benefits and Protection | Specialty Benefits | Individual disability | ||||
Present value of expected net premiums | ||||
Balance at beginning of period, Present value of expected net premiums | 3,149.9 | $ 3,148.3 | ||
Effect of changes in discount rate assumptions at beginning of period | 395.2 | (198.9) | (340.7) | |
Balance at beginning of period at original discount rate | 2,737 | 2,951 | 2,807.6 | |
Effect of changes in cash flow assumptions | (413.1) | |||
Effect of actual variances from expected experience | 82.9 | 235.9 | 122 | |
Adjusted beginning of period balance at original discount rate | 2,819.9 | 2,773.8 | 2,929.6 | |
Interest accrual | 23.5 | 95.2 | 95.4 | |
Net premiums collected | (66.1) | (276.5) | (280.4) | |
Issuances | 23.5 | 144.5 | 206.4 | |
Balance at end of period at original discount rate | 2,800.8 | 2,737 | 2,951 | |
Effect of changes in discount rate assumptions at end of period | (315) | (395.2) | 198.9 | |
Balance at end of period, Present value of expected net premiums | 3,149.9 | |||
Present value of expected future policy benefit payments | ||||
Balance at beginning of period, Present value of expected future policy benefit payments | 4,040.6 | 5,648.3 | 5,649.2 | |
Effect of changes in discount rate assumptions at beginning of period | 1,021.4 | (501) | (834.1) | |
Balance at beginning of period at original discount rate | 5,062 | 5,147.3 | 4,815.1 | |
Effect of changes in cash flow assumptions | (476.3) | |||
Effect of actual variances from expected experience | 92.4 | 240 | 118.8 | |
Adjusted beginning of period balance at original discount rate | 5,154.4 | 4,911 | 4,933.9 | |
Interest accrual | 46.7 | 185.4 | 181 | |
Benefit payments | (49.3) | (183.7) | (179.7) | |
Issuances | 24.3 | 149.3 | 212.1 | |
Balance at end of period at original discount rate | 5,176.1 | 5,062 | 5,147.3 | |
Effect of changes in discount rate assumptions at end of period | 874.4 | 1,021.4 | (501) | |
Balance at end of period, Present value of expected future policy benefit payments | 4,301.7 | 4,040.6 | 5,648.3 | |
Future policy benefits | 1,815.9 | 1,698.8 | 2,498.4 | 2,500.9 |
Reinsurance Impact | (412.3) | (386.8) | (549.9) | |
Future policy benefits after reinsurance | 1,403.6 | 1,312 | 1,948.5 | |
Benefits and Protection | Life Insurance | Term life | ||||
Present value of expected net premiums | ||||
Balance at beginning of period, Present value of expected net premiums | 4,193.7 | 3,799 | ||
Effect of changes in discount rate assumptions at beginning of period | 196 | (690.1) | (861.1) | |
Balance at beginning of period at original discount rate | 3,619.2 | 3,503.6 | 2,937.9 | |
Effect of actual variances from expected experience | 28.4 | 128.6 | 211.4 | |
Adjusted beginning of period balance at original discount rate | 3,647.6 | 3,632.2 | 3,149.3 | |
Interest accrual | 41.5 | 162.9 | 151.1 | |
Net premiums collected | (86.4) | (346.6) | (315) | |
Issuances | 49.6 | 170.7 | 518.2 | |
Balance at end of period at original discount rate | 3,652.3 | 3,619.2 | 3,503.6 | |
Effect of changes in discount rate assumptions at end of period | (95.9) | (196) | 690.1 | |
Balance at end of period, Present value of expected net premiums | 4,193.7 | |||
Present value of expected future policy benefit payments | ||||
Balance at beginning of period, Present value of expected future policy benefit payments | 4,332.2 | 5,311.3 | 4,959.3 | |
Effect of changes in discount rate assumptions at beginning of period | 251.6 | (913.9) | (1,179.9) | |
Balance at beginning of period at original discount rate | 4,583.8 | 4,397.4 | 3,779.4 | |
Effect of actual variances from expected experience | 32.2 | 139 | 216 | |
Adjusted beginning of period balance at original discount rate | 4,616 | 4,536.4 | 3,995.4 | |
Interest accrual | 52.9 | 206.8 | 194.3 | |
Benefit payments | (87.3) | (340.6) | (335.7) | |
Issuances | 53.5 | 181.2 | 543.4 | |
Balance at end of period at original discount rate | 4,635.1 | 4,583.8 | 4,397.4 | |
Effect of changes in discount rate assumptions at end of period | 117.5 | 251.6 | (913.9) | |
Balance at end of period, Present value of expected future policy benefit payments | 4,517.6 | 4,332.2 | 5,311.3 | |
Future policy benefits | 961.2 | 909 | 1,117.6 | 1,160.3 |
Reinsurance Impact | 43.5 | 25.6 | (0.1) | |
Future policy benefits after reinsurance | 1,004.7 | 934.6 | 1,117.5 | |
Corporate | Long-term care insurance | ||||
Present value of expected net premiums | ||||
Balance at beginning of period, Present value of expected net premiums | 62.8 | 66.7 | ||
Effect of changes in discount rate assumptions at beginning of period | (3.6) | (14) | (17.6) | |
Balance at beginning of period at original discount rate | 61 | 48.8 | 49.1 | |
Effect of changes in cash flow assumptions | 10 | 2.8 | ||
Effect of actual variances from expected experience | (3.6) | 4.1 | (0.8) | |
Adjusted beginning of period balance at original discount rate | 57.4 | 62.9 | 51.1 | |
Interest accrual | 0.9 | 3.3 | 2.9 | |
Net premiums collected | (1.5) | (5.2) | (5.2) | |
Balance at end of period at original discount rate | 56.8 | 61 | 48.8 | |
Effect of changes in discount rate assumptions at end of period | 4.7 | 3.6 | 14 | |
Balance at end of period, Present value of expected net premiums | 62.8 | |||
Present value of expected future policy benefit payments | ||||
Balance at beginning of period, Present value of expected future policy benefit payments | 248.1 | 297.5 | 324.3 | |
Effect of changes in discount rate assumptions at beginning of period | (18.9) | (89.5) | (111.1) | |
Balance at beginning of period at original discount rate | 229.2 | 208 | 213.2 | |
Effect of changes in cash flow assumptions | 17.2 | 0.5 | ||
Effect of actual variances from expected experience | (5.9) | 3.7 | (4.6) | |
Adjusted beginning of period balance at original discount rate | 223.3 | 228.9 | 209.1 | |
Interest accrual | 3.4 | 13.1 | 12.4 | |
Benefit payments | (3.3) | (12.8) | (13.5) | |
Balance at end of period at original discount rate | 223.4 | 229.2 | 208 | |
Effect of changes in discount rate assumptions at end of period | (26.5) | (18.9) | (89.5) | |
Balance at end of period, Present value of expected future policy benefit payments | 249.9 | 248.1 | 297.5 | |
Future policy benefits | 188.4 | 183.5 | 234.7 | $ 257.6 |
Reinsurance Impact | $ (188.4) | $ (183.5) | $ (234.7) |
Nature of Operations and Sig_13
Nature of Operations and Significant Accounting Policies - Balances and changes in Additional Liability for Certain Benefit Features (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the additional liability for certain benefits features | |||
Balance at end of period | $ 4,219.3 | $ 4,095.2 | |
Benefits and Protection | Life Insurance | Universal life | |||
Changes in the additional liability for certain benefits features | |||
Balance at beginning of period | 4,095.2 | 3,814.2 | $ 3,463.9 |
Effect of changes in cash flow assumptions | (6) | (11.1) | |
Effect of actual variances from expected experience | 15.1 | 54.9 | 18.1 |
Interest accrual | 46.3 | 171.2 | 158.3 |
Net assessments collected | 89.2 | 320.3 | 324.7 |
Benefit payments | (26.5) | (91.9) | (83.1) |
Other | (167.5) | (56.6) | |
Balance at end of period | $ 4,219.3 | $ 4,095.2 | $ 3,814.2 |
Nature of Operations and Sig_14
Nature of Operations and Significant Accounting Policies - Market Risk Benefits (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 |
Recent Accounting Pronouncements | |||
Market risk benefits | $ (644.6) | ||
Previously reported | |||
Recent Accounting Pronouncements | |||
Market risk benefits | (401.9) | ||
Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date | |||
Recent Accounting Pronouncements | |||
Market risk benefits | (4.8) | ||
Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes) | |||
Recent Accounting Pronouncements | |||
Market risk benefits | (237.9) | ||
Individual variable annuities | Retirement and Income Solutions | |||
Recent Accounting Pronouncements | |||
Market risk benefits | $ (299.8) | $ (415.5) | (591.3) |
Individual variable annuities | Previously reported | Retirement and Income Solutions | |||
Recent Accounting Pronouncements | |||
Market risk benefits | (348.6) | ||
Individual variable annuities | Cumulative effect of changes in the nonperformance risk between the original contract issue date and the transition date | Retirement and Income Solutions | |||
Recent Accounting Pronouncements | |||
Market risk benefits | (4.8) | ||
Individual variable annuities | Retained earnings adjustment for the valuation of contracts as MRBs (exclusive of nonperformance risk changes) | Retirement and Income Solutions | |||
Recent Accounting Pronouncements | |||
Market risk benefits | (237.9) | ||
Guaranteed pension | Principal Asset Management | Principal International | Asia | |||
Recent Accounting Pronouncements | |||
Market risk benefits | $ (87.4) | $ (91) | |
Guaranteed pension | Previously reported | Principal Asset Management | Principal International | Asia | |||
Recent Accounting Pronouncements | |||
Market risk benefits | $ (53.3) |
Nature of Operations and Sig_15
Nature of Operations and Significant Accounting Policies - Balances and changes in MRBs (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Balances and changes in MRBs | |||
Balance at beginning of period | $ (98.2) | ||
Balance at end of period | (87.1) | $ (98.2) | |
Individual variable annuities | Retirement and Income Solutions | |||
Balances and changes in MRBs | |||
Balance at beginning of period | (72.2) | (494.7) | $ (591.3) |
Effect of changes in nonperformance risk | 31.7 | (109.5) | (106.7) |
Adjusted balance at beginning of period | (103.9) | (385.2) | (484.6) |
Interest accrual and expected policyholder behavior | (19.8) | (90.1) | (120.7) |
Benefit payments | 0.2 | 1.3 | 0.4 |
Changes in interest rates | (54.2) | 539.1 | 154.3 |
Changes in equity markets | 46.4 | (112.4) | 106.4 |
Changes in equity index volatility | 30.6 | (50.2) | 15.1 |
Actual policyholder behavior different from expected behavior | (2) | 1.5 | 2.3 |
Changes in future expected policyholder behavior | 0 | (6.1) | (96.6) |
Changes in other future expected assumptions | 0 | (1.8) | 38.2 |
Adjusted balance at end of period | (102.7) | (103.9) | (385.2) |
Effect of changes in nonperformance risk at end of period | 39.6 | 31.7 | (109.5) |
Balance at end of period | (63.1) | (72.2) | (494.7) |
Guaranteed pension | Principal Asset Management | Principal International | Asia | |||
Balances and changes in MRBs | |||
Balance at beginning of period | (26) | (35.1) | (53.3) |
Effect of changes in nonperformance risk | (1.2) | (4.3) | 6.5 |
Adjusted balance at beginning of period | (24.8) | (30.8) | (46.8) |
Interest accrual and expected policyholder behavior | (2.8) | (7.1) | (5.3) |
Benefit payments | 3.7 | 9.5 | 5.7 |
Changes in interest rates | 0.7 | 3.9 | 7.6 |
Changes in equity markets | 0.1 | (1) | 1.4 |
Actual policyholder behavior different from expected behavior | 0.4 | 0.7 | 3.6 |
Changes in future expected policyholder behavior | 0.5 | ||
Changes in other future expected assumptions | 2.3 | ||
Foreign currency translation adjustment | 0.2 | ||
Adjusted balance at end of period | (22.6) | (24.8) | (30.8) |
Effect of changes in nonperformance risk at end of period | (1.4) | (1.2) | (4.3) |
Balance at end of period | $ (24) | $ (26) | $ (35.1) |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated VIEs (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Carrying amounts of consolidated VIE assets and liabilities | ||||
Total assets | $ 299,408.2 | $ 290,578.3 | ||
Total liabilities | 288,874.7 | 280,298.5 | ||
Redeemable noncontrolling interest | 272.7 | 262 | $ 306.8 | $ 332.5 |
Aggregate consolidated variable interest entities | ||||
Carrying amounts of consolidated VIE assets and liabilities | ||||
Total assets | 39,409.7 | 37,220.5 | ||
Total liabilities | 36,706.9 | 34,614.9 | ||
Redeemable noncontrolling interest | 250.9 | 235.3 | ||
Mandatory retirement savings funds | ||||
Carrying amounts of consolidated VIE assets and liabilities | ||||
Total assets | 36,985.1 | 34,876.9 | ||
Total liabilities | 36,606.1 | 34,528.3 | ||
Real estate VIE | ||||
Carrying amounts of consolidated VIE assets and liabilities | ||||
Total assets | 753.6 | 689.6 | ||
Total liabilities | 52.2 | 42.2 | ||
Sponsored investment funds | ||||
Carrying amounts of consolidated VIE assets and liabilities | ||||
Total assets | 501.4 | 471.4 | ||
Total liabilities | 7.2 | 2.6 | ||
Redeemable noncontrolling interest | 250.9 | 235.3 | ||
Residential mortgage loans VIE | ||||
Carrying amounts of consolidated VIE assets and liabilities | ||||
Total assets | 1,169.6 | 1,182.6 | ||
Total liabilities | $ 41.4 | $ 41.8 |
Variable Interest Entities - Un
Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | $ 299,408.2 | $ 290,578.3 |
Money Market Funds | ||
Total assets of unconsolidated money market mutual funds | 4,500 | 4,200 |
Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Carrying value used if distributions received are in excess of investment | 0 | 0 |
Corporate debt securities | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 162.9 | 111.8 |
Maximum exposure to loss | 174.8 | 127.2 |
Residential mortgage-backed pass-through securities | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 2,794.9 | 2,228.7 |
Maximum exposure to loss | 2,951.5 | 2,420.6 |
Residential mortgage-backed pass-through securities | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 11.1 | 5.4 |
Maximum exposure to loss | 11.1 | 5.4 |
Commercial mortgage-backed securities | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 4,927.8 | 4,864.6 |
Maximum exposure to loss | 5,555.1 | 5,572.2 |
Commercial mortgage-backed securities | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 78.7 | 83.4 |
Maximum exposure to loss | 78.7 | 83.4 |
Collateralized debt obligations | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 4,902.3 | 4,566.4 |
Maximum exposure to loss | 5,136.6 | 4,820 |
Collateralized debt obligations | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 4.7 | 5.7 |
Maximum exposure to loss | 4.7 | 5.7 |
Other debt obligations | Available-for-sale | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 6,906.7 | 6,507.6 |
Maximum exposure to loss | 7,934.9 | 7,566.2 |
Other debt obligations | Trading | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 30.2 | 80 |
Maximum exposure to loss | 30.2 | 80 |
Equity securities | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 110.2 | 99.8 |
Maximum exposure to loss | 110.2 | 99.8 |
Other investments: Other limited partnership and fund interests | Variable Interest Entity | ||
Unconsolidated Variable Interest Entity disclosures | ||
Asset carrying value | 1,539.5 | 1,473.5 |
Maximum exposure to loss | 2,614.6 | 2,434.9 |
Fully secured debt of international real estate funds with recourse to the investment manager, included in maximum loss exposure | $ 146.7 | $ 144.3 |
Investments - Fixed Maturities
Investments - Fixed Maturities and Equity Securities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Available-for-sale securities | ||||
Amortized cost, fixed maturities | $ 71,413.8 | $ 70,263.1 | ||
Gross unrealized gains, fixed maturities | 626.5 | 512.6 | ||
Gross unrealized losses, fixed maturities | 6,639.3 | 7,878 | ||
Allowance, fixed maturities | 4.1 | 7.8 | $ 20.4 | $ 15.5 |
Fair value, fixed maturities | 65,396.9 | 62,889.9 | ||
Accrued interest receivable | 632.6 | 578 | ||
U.S. government and agencies | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 2,041.5 | 1,990.9 | ||
Gross unrealized gains, fixed maturities | 1.5 | 0.1 | ||
Gross unrealized losses, fixed maturities | 213.1 | 251.2 | ||
Fair value, fixed maturities | 1,829.9 | 1,739.8 | ||
Non-U.S. governments | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 584.3 | 611.2 | ||
Gross unrealized gains, fixed maturities | 20.9 | 20.9 | ||
Gross unrealized losses, fixed maturities | 56 | 64.8 | ||
Fair value, fixed maturities | 549.2 | 567.3 | ||
States and political subdivisions | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 7,061.5 | 7,355.4 | ||
Gross unrealized gains, fixed maturities | 21.5 | 13.7 | ||
Gross unrealized losses, fixed maturities | 909.6 | 1,136.8 | ||
Fair value, fixed maturities | 6,173.4 | 6,232.3 | ||
Corporate debt securities | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 40,630.6 | 40,370.4 | ||
Gross unrealized gains, fixed maturities | 542.6 | 461 | ||
Gross unrealized losses, fixed maturities | 3,872.6 | 4,640.5 | ||
Allowance, fixed maturities | 4 | 7.7 | 20 | 15.1 |
Fair value, fixed maturities | 37,296.6 | 36,183.2 | ||
Residential mortgage-backed pass-through securities | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 2,951.5 | 2,420.6 | ||
Gross unrealized gains, fixed maturities | 16.3 | 6.2 | ||
Gross unrealized losses, fixed maturities | 172.9 | 198.1 | ||
Fair value, fixed maturities | 2,794.9 | 2,228.7 | ||
Commercial mortgage-backed securities | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 5,555.1 | 5,572.2 | ||
Gross unrealized gains, fixed maturities | 1.2 | 0.5 | ||
Gross unrealized losses, fixed maturities | 628.5 | 708.1 | ||
Allowance, fixed maturities | 0.3 | 0.3 | ||
Fair value, fixed maturities | 4,927.8 | 4,864.6 | ||
Collateralized debt obligations | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 5,024.6 | 4,705.6 | ||
Gross unrealized gains, fixed maturities | 8.8 | 4.5 | ||
Gross unrealized losses, fixed maturities | 131.1 | 143.7 | ||
Fair value, fixed maturities | 4,902.3 | 4,566.4 | ||
Other debt obligations | ||||
Available-for-sale securities | ||||
Amortized cost, fixed maturities | 7,564.7 | 7,236.8 | ||
Gross unrealized gains, fixed maturities | 13.7 | 5.7 | ||
Gross unrealized losses, fixed maturities | 655.5 | 734.8 | ||
Allowance, fixed maturities | 0.1 | 0.1 | $ 0.1 | $ 0.1 |
Fair value, fixed maturities | $ 6,922.8 | $ 6,507.6 |
Investments - Amortization by E
Investments - Amortization by Expected Maturity (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Amortized cost of fixed maturities available-for-sale | ||
Due in one year or less | $ 1,603.7 | |
Due after one year through five years | 9,104.5 | |
Due after five years through ten years | 11,055.5 | |
Due after ten years | 28,554.2 | |
Subtotal | 50,317.9 | |
Mortgage-backed and other asset-backed securities | 21,095.9 | |
Amortized cost, fixed maturities | 71,413.8 | $ 70,263.1 |
Fair value of fixed maturities available-for-sale | ||
Due in one year or less | 1,593.3 | |
Due after one year through five years | 8,819 | |
Due after five years through ten years | 10,268.5 | |
Due after ten years | 25,168.3 | |
Subtotal | 45,849.1 | |
Mortgage-backed and other asset-backed securities | 19,547.8 | |
Fair value, fixed maturities | $ 65,396.9 | $ 62,889.9 |
Investments - Net Realized Capi
Investments - Net Realized Capital Gains and Losses (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Major components of net realized capital gains (losses) on investments | |||
Fixed maturities, available-for-sale: Gross gains | $ 17.8 | $ 165.8 | |
Fixed maturities, available-for-sale: Gross losses | (28) | (120.7) | |
Fixed maturities, available-for-sale: Net credit losses | (7.7) | (6.1) | |
Fixed maturities, available-for-sale: Hedging, net | (1.2) | (0.7) | |
Fixed maturities, trading | (0.5) | (6.3) | |
Equity securities | (15.6) | (105.2) | |
Mortgage loans gains (losses) | (2.7) | (19.6) | |
Derivative net realized capital gains (losses) | (42.9) | 8.4 | |
Other gains (losses) | 14.8 | (52.2) | |
Net realized capital gains (losses) | [1] | (66) | (136.6) |
Unrealized gains (losses) on fixed maturities, trading | (1.8) | (5.2) | |
Unrealized gains (losses) on fixed maturities, trading, reported in net realized capital gains (losses) on funds withheld assets | (2.8) | 0 | |
Unrealized gains (losses) on fixed maturities, trading still head at reported in market risk benefit remeasurement (gain) loss | 1.8 | (7.9) | |
Unrealized gains (losses) on equity securities | (13.7) | (105.5) | |
Unrealized gains (losses) on equity securities reported in net investment income | (0.6) | (19.3) | |
Unrealized gains (losses) on equity securities reported in net realized capital gains (losses) on funds withheld assets | 1.7 | 0 | |
Proceeds from sales of investments | |||
Proceeds from sales of investments in fixed maturities, available-for-sale | $ 1,639 | $ 4,859.7 | |
[1] Includes realized and unrealized gains (losses). See Note 3, Investments, for further details. |
Investments - Allowance for Cre
Investments - Allowance for Credit Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Rollforward of the allowance for credit loss by major security type | ||
Beginning balance | $ 7.8 | $ 15.5 |
Additions for credit losses not previously recorded | 1 | |
Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | (4.2) | 3 |
Foreign currency translation adjustment | 0.5 | 0.9 |
Ending balance | 4.1 | 20.4 |
Corporate debt securities | ||
Rollforward of the allowance for credit loss by major security type | ||
Beginning balance | 7.7 | 15.1 |
Additions for credit losses not previously recorded | 1 | |
Additional increases (decreases) for credit losses on securities with an allowance recorded in the previous period | (4.2) | 3 |
Foreign currency translation adjustment | 0.5 | 0.9 |
Ending balance | 4 | 20 |
Commercial mortgage-backed securities | ||
Rollforward of the allowance for credit loss by major security type | ||
Beginning balance | 0.3 | |
Ending balance | 0.3 | |
Other debt obligations | ||
Rollforward of the allowance for credit loss by major security type | ||
Beginning balance | 0.1 | 0.1 |
Ending balance | $ 0.1 | $ 0.1 |
Investments - Gross Unrealized
Investments - Gross Unrealized Losses for Fixed Maturities (Details) $ in Millions | Mar. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item |
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | $ 27,258.4 | $ 45,651 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 2,296 | 6,183.1 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 26,097.6 | 8,850.9 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 4,343.9 | 1,695.2 |
Fixed maturities, Total, Fair value | 53,356 | 54,501.9 |
Fixed maturities, Total, Gross unrealized losses | 6,639.9 | 7,878.3 |
U.S. government and agencies | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 879.6 | 1,528.3 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 86 | 209.4 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 605.2 | 181.5 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 127.3 | 41.8 |
Fixed maturities, Total, Fair value | 1,484.8 | 1,709.8 |
Fixed maturities, Total, Gross unrealized losses | 213.3 | 251.2 |
Non-U.S. governments | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 257.4 | 407.5 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 21.4 | 57.7 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 131.5 | 19.9 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 34.5 | 7.1 |
Fixed maturities, Total, Fair value | 388.9 | 427.4 |
Fixed maturities, Total, Gross unrealized losses | 55.9 | 64.8 |
States and political subdivisions | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 3,191.6 | 5,303.5 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 372.3 | 1,008.9 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 2,251.2 | 391.9 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 537.3 | 127.8 |
Fixed maturities, Total, Fair value | 5,442.8 | 5,695.4 |
Fixed maturities, Total, Gross unrealized losses | 909.6 | 1,136.7 |
Corporate debt securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 17,165.8 | 27,309.5 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 1,571.1 | 3,944.6 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 12,333.1 | 2,944.1 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 2,303.7 | 698 |
Fixed maturities, Total, Fair value | 29,498.9 | 30,253.6 |
Fixed maturities, Total, Gross unrealized losses | 3,874.8 | 4,642.6 |
Residential mortgage-backed pass-through securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 616 | 1,201.7 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 16.4 | 97.5 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 1,159.9 | 574.8 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 156.5 | 105.7 |
Fixed maturities, Total, Fair value | 1,775.9 | 1,776.5 |
Fixed maturities, Total, Gross unrealized losses | 172.9 | 203.2 |
Commercial mortgage-backed securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 996.4 | 3,648.5 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 78.4 | 484 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 3,749 | 1,124.8 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 548.6 | 222.5 |
Fixed maturities, Total, Fair value | 4,745.4 | 4,773.3 |
Fixed maturities, Total, Gross unrealized losses | 627 | 706.5 |
Collateralized debt obligations | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 1,738.4 | 2,832.2 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 33.5 | 89 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 2,484.8 | 1,330.1 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 97.5 | 54.7 |
Fixed maturities, Total, Fair value | 4,223.2 | 4,162.3 |
Fixed maturities, Total, Gross unrealized losses | 131 | 143.7 |
Other debt obligations | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 2,413.2 | 3,419.8 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 116.9 | 292 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 3,382.9 | 2,283.8 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 538.5 | 437.6 |
Fixed maturities, Total, Fair value | 5,796.1 | 5,703.6 |
Fixed maturities, Total, Gross unrealized losses | 655.4 | 729.6 |
Principal Life Insurance Company | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Less than twelve months, Fair value | 26,573.1 | 44,857 |
Fixed maturities, Less than twelve months, Gross unrealized losses | 2,243.3 | 6,096.3 |
Fixed maturities, Greater than or equal to twelve months, Fair value | 25,409.5 | 8,496.1 |
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | 4,250.5 | 1,645.1 |
Fixed maturities, Total, Fair value | 51,982.6 | 53,353.1 |
Fixed maturities, Total, Gross unrealized losses | $ 6,493.8 | $ 7,741.4 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Percent Investment Grade (as a percent) | 94% | 94% |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Average Price (percent of carrying value to amortized cost) | 89% | 87% |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less Than Twelve Months | item | 4,895 | 7,589 |
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Less Than Twelve Months (percent of carrying value to amortized cost) | 92% | 88% |
Available-for-sale Securities in Unrealized Loss Positions, Percent Investment Grade, Less Than Twelve Months (as a percent) | 94% | 95% |
Available-for-sale Securities in Unrealized Loss Position, Aggregate Losses On Investment Grade Investments, Less Than Twelve Months | $ 2,170.6 | $ 5,920.4 |
Available-for-sale Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Twelve Months or Longer | item | 5,130 | 1,654 |
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 86% | 84% |
Principal Life Insurance Company | States and political subdivisions | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | $ 530.8 | $ 126.8 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 81% | 75% |
Principal Life Insurance Company | Corporate debt securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | $ 2,228.7 | $ 654.9 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 84% | 80% |
Principal Life Insurance Company | Commercial mortgage-backed securities | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | $ 544.5 | $ 220.9 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 87% | 83% |
Principal Life Insurance Company | Collateralized mortgage obligation security | ||
Gross Unrealized Losses for Fixed Maturities | ||
Fixed maturities, Greater than or equal to twelve months, Gross unrealized losses | $ 415 | $ 320.2 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Qualitative Disclosure | ||
Available-for-sale Securities in Unrealized Loss Positions, Average Price, Twelve Months or Longer (percent of carrying value to amortized cost) | 84% | 81% |
Investments - Net Unrealized Ga
Investments - Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Net Unrealized Gains and Losses on Available-for-Sale Securities and Derivative Instruments | ||
Net unrealized gains (losses) on fixed maturities, available-for-sale | $ (6,072.3) | $ (7,445.7) |
Net unrealized gains (losses) on derivative instruments | 50.7 | 50.7 |
Adjustments for assumed changes in amortization patterns | (1.5) | (1.7) |
Adjustments for assumed changes in policyholder liabilities | 0.4 | 0.5 |
Net unrealized gains (losses) other investments and noncontrolling interest adjustments | (6.2) | 7.9 |
Provision for deferred income tax benefits (taxes) | 1,288.8 | 1,570.1 |
Net unrealized gains (losses) on available-for-sale securities and derivative instruments | $ (4,740.1) | $ (5,818.2) |
Investments - Mortgage Loan Cre
Investments - Mortgage Loan Credit Monitoring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Vintage year, Direct financing leases | ||
2023 | $ 2.2 | |
2022 | 155.3 | $ 147.1 |
2021 | 99.9 | 93.8 |
2020 | 123.6 | 114.4 |
2019 | 14.3 | 15.3 |
2018 | 54.6 | |
Prior | 321.8 | 239.8 |
Direct financing leases, Total amortized cost | 717.1 | 665 |
Reinsurance recoverable and deposit receivable | 20,884 | 21,156.7 |
Accrued interest receivable | 632.6 | 578 |
Accrued interest receivable on direct financing leases | 1.7 | 0 |
A- and above | ||
Vintage year, Direct financing leases | ||
2022 | 129.8 | 110.5 |
2021 | 14.7 | 13 |
2020 | 62.7 | 39.9 |
2019 | 1.5 | 1.4 |
2018 | 42.9 | |
Prior | 235.8 | 167.3 |
Direct financing leases, Total amortized cost | 444.5 | 375 |
BBB+ thru BBB- | ||
Vintage year, Direct financing leases | ||
2022 | 25.5 | 33.9 |
2021 | 23.2 | 21.9 |
2020 | 52.2 | 62.4 |
2019 | 12.8 | 11.9 |
2018 | 11.7 | |
Prior | 84.1 | 70.4 |
Direct financing leases, Total amortized cost | 197.8 | 212.2 |
BB+ thru BB- | ||
Vintage year, Direct financing leases | ||
2023 | 2.2 | |
2022 | 2.7 | |
2021 | 62 | 57.3 |
2020 | 8.7 | 12.1 |
2019 | 2 | |
Prior | 1.9 | 2.1 |
Direct financing leases, Total amortized cost | 74.8 | 76.2 |
B+ and below | ||
Vintage year, Direct financing leases | ||
2021 | 1.6 | |
Direct financing leases, Total amortized cost | 1.6 | |
Commercial mortgage loans | ||
Vintage year, Mortgage loans | ||
2023 | 117.7 | |
2022 | 1,610 | 1,526 |
2021 | 2,764.5 | 2,734.3 |
2020 | 1,968.2 | 1,967.1 |
2019 | 2,597.6 | 2,628.9 |
2018 | 2,444 | |
Prior | 7,609.1 | 5,430 |
Mortgage loans, Total amortized cost | 16,667.1 | 16,730.3 |
Vintage year, Direct financing leases | ||
Accrued interest receivable | 54.3 | 57.7 |
Commercial mortgage loans | A- and above | ||
Vintage year, Mortgage loans | ||
2023 | 71 | |
2022 | 1,039.4 | 1,036.4 |
2021 | 2,302.1 | 2,277.9 |
2020 | 1,779.6 | 1,807.3 |
2019 | 2,206.7 | 2,210.2 |
2018 | 2,187.9 | |
Prior | 6,595.5 | 4,624.9 |
Mortgage loans, Total amortized cost | 13,994.3 | 14,144.6 |
Commercial mortgage loans | BBB+ thru BBB- | ||
Vintage year, Mortgage loans | ||
2023 | 14.9 | |
2022 | 454.2 | 385.6 |
2021 | 444.2 | 439.6 |
2020 | 185.4 | 156.8 |
2019 | 390.9 | 418.7 |
2018 | 238.9 | |
Prior | 827.2 | 691.7 |
Mortgage loans, Total amortized cost | 2,316.8 | 2,331.3 |
Commercial mortgage loans | BB+ thru BB- | ||
Vintage year, Mortgage loans | ||
2023 | 31.8 | |
2022 | 116.4 | 104 |
2021 | 18.2 | 16.8 |
2020 | 3.2 | 3 |
2018 | 8.9 | |
Prior | 136.9 | 71.7 |
Mortgage loans, Total amortized cost | 306.5 | 204.4 |
Commercial mortgage loans | B+ and below | ||
Vintage year, Mortgage loans | ||
2018 | 8.3 | |
Prior | 49.5 | 41.7 |
Mortgage loans, Total amortized cost | 49.5 | 50 |
Residential mortgage loans | ||
Vintage year, Mortgage loans | ||
2023 | 81.6 | |
2022 | 1,119.3 | 1,152.8 |
2021 | 1,735.1 | 1,745.4 |
2020 | 452.4 | 449.3 |
2019 | 134.3 | 134.7 |
2018 | 76 | |
Prior | 501.5 | 424.8 |
Mortgage loans, Total amortized cost | 4,024.2 | 3,983 |
Vintage year, Direct financing leases | ||
Accrued interest receivable | 10.9 | 19.6 |
Residential mortgage loans | Performing | ||
Vintage year, Mortgage loans | ||
2023 | 81.6 | |
2022 | 1,114 | 1,144.8 |
2021 | 1,730.4 | 1,740.7 |
2020 | 448.6 | 447.1 |
2019 | 132.9 | 133 |
2018 | 75.4 | |
Prior | 493.8 | 417.8 |
Mortgage loans, Total amortized cost | 4,001.3 | 3,958.8 |
Residential mortgage loans | Non-performing | ||
Vintage year, Mortgage loans | ||
2022 | 5.3 | 8 |
2021 | 4.7 | 4.7 |
2020 | 3.8 | 2.2 |
2019 | 1.4 | 1.7 |
2018 | 0.6 | |
Prior | 7.7 | 7 |
Mortgage loans, Total amortized cost | $ 22.9 | $ 24.2 |
Vintage year, Direct financing leases | ||
Mortgage loans, delinquent to be considered non-performing (in days) | 90 days |
Investments - Financing Receiva
Investments - Financing Receivable, Non-Accrual and Aging (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Financing receivables, non-accrual and aging disclosures | ||||
Financing receivables, Non-accrual status | $ 64.7 | $ 67.8 | $ 17.2 | |
Financing receivables, Non-accrual assets without a valuation allowance | 0.6 | 0.6 | ||
Financing receivables, Nonaccrual, Interest Income | $ 0.3 | |||
Direct financing leases, Total amortized cost | 717.1 | 665 | ||
Mortgage loans and direct financing leases, Total amortized cost | 21,408.4 | 21,378.3 | ||
Direct financing leases, Recorded investment 90 days or more past due and accruing | 4.4 | 1.6 | ||
Mortgage loans and direct financing leases, Recorded investment 90 days or more past due and accruing | 13.1 | 8 | ||
Reinsurance recoverable and deposit receivable | 20,884 | 21,156.7 | ||
30 to 59 Days Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Direct financing leases, Total amortized cost | 6.3 | 6.6 | ||
Mortgage loans and direct financing leases, Total amortized cost | 100.5 | 125.6 | ||
60 to 89 Days Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Direct financing leases, Total amortized cost | 44.9 | 6.2 | ||
Mortgage loans and direct financing leases, Total amortized cost | 61.6 | 29.1 | ||
90 Days or More Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Direct financing leases, Total amortized cost | 4.4 | 1.6 | ||
Mortgage loans and direct financing leases, Total amortized cost | 34.5 | 32.2 | ||
Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Direct financing leases, Total amortized cost | 55.6 | 14.4 | ||
Mortgage loans and direct financing leases, Total amortized cost | 196.6 | 186.9 | ||
Reinsurance recoverable and deposit receivable | 0 | 0 | ||
Current | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Direct financing leases, Total amortized cost | 661.5 | 650.6 | ||
Mortgage loans and direct financing leases, Total amortized cost | 21,211.8 | 21,191.4 | ||
Commercial mortgage loans | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Financing receivables, Non-accrual status | 49.4 | 50 | 13.2 | |
Financing receivables, Nonaccrual, Interest Income | $ 0.3 | |||
Mortgage loans, Total amortized cost | 16,667.1 | 16,730.3 | ||
Mortgage loans, Recorded investment 90 days or more past due and accruing | 1.1 | |||
Commercial mortgage loans | 30 to 59 Days Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 24.4 | 45.9 | ||
Commercial mortgage loans | 60 to 89 Days Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 7.5 | |||
Commercial mortgage loans | 90 Days or More Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 14.5 | 14.4 | ||
Commercial mortgage loans | Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 38.9 | 67.8 | ||
Commercial mortgage loans | Current | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 16,628.2 | 16,662.5 | ||
Residential mortgage loans | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Financing receivables, Non-accrual status | 15.3 | 17.8 | $ 4 | |
Financing receivables, Non-accrual assets without a valuation allowance | 0.6 | 0.6 | ||
Mortgage loans, Total amortized cost | 4,024.2 | 3,983 | ||
Mortgage loans, Recorded investment 90 days or more past due and accruing | 7.6 | 6.4 | ||
Residential mortgage loans | 30 to 59 Days Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 69.8 | 73.1 | ||
Residential mortgage loans | 60 to 89 Days Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 16.7 | 15.4 | ||
Residential mortgage loans | 90 Days or More Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 15.6 | 16.2 | ||
Residential mortgage loans | Past Due | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | 102.1 | 104.7 | ||
Residential mortgage loans | Current | ||||
Financing receivables, non-accrual and aging disclosures | ||||
Mortgage loans, Total amortized cost | $ 3,922.1 | $ 3,878.3 |
Investments - Mortgage Loan Val
Investments - Mortgage Loan Valuation Allowance (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Direct financing leases, Changes in financing receivable valuation allowance | ||
Beginning balance, Direct financing lease valuation allowance | $ 0.6 | $ 0.4 |
Provision: Direct financing lease valuation allowance | (0.1) | |
Foreign currency translation adjustment: Direct financing lease valuation allowance | 0.1 | |
Ending balance, Direct financing lease valuation allowance | 0.6 | 0.4 |
Total, Changes in financing receivable valuation allowance | ||
Beginning balance valuation allowance | 86.8 | 49 |
Provision | 3.6 | 21.6 |
Charge-offs | (0.1) | (0.1) |
Recoveries | 0.2 | 0.4 |
Foreign currency translation adjustment | 0.4 | 0.1 |
Ending balance valuation allowance | 90.9 | 71 |
Commercial mortgage loans | ||
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | ||
Beginning balance, Financing receivable valuation allowance | 77.9 | 43.9 |
Provision: Financing receivable valuation allowance | 3.8 | 22.1 |
Foreign currency translation adjustment: Financing receivable valuation allowance | 0.2 | 0.1 |
Ending balance, Financing receivable valuation allowance | $ 81.9 | 66.1 |
Total, Changes in financing receivable valuation allowance | ||
Mortgage loans, Days delinquent to be analyzed for valuation allowance | 60 days | |
Residential mortgage loans | ||
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | ||
Beginning balance, Financing receivable valuation allowance | $ 5.6 | 2 |
Provision: Financing receivable valuation allowance | 0.1 | (0.5) |
Charge-offs: Financing receivable valuation allowance | (0.1) | (0.1) |
Recoveries: Financing receivable valuation allowance | 0.2 | 0.4 |
Foreign currency translation adjustment: Financing receivable valuation allowance | 0.1 | |
Ending balance, Financing receivable valuation allowance | $ 5.9 | 1.8 |
Total, Changes in financing receivable valuation allowance | ||
Mortgage loans, Days delinquent to be analyzed for valuation allowance | 60 days | |
Reinsurance recoverables | ||
Mortgage loans and reinsurance recoverables, Changes in financing receivable valuation allowance | ||
Beginning balance, Financing receivable valuation allowance | $ 2.7 | 2.7 |
Provision: Financing receivable valuation allowance | (0.2) | |
Ending balance, Financing receivable valuation allowance | $ 2.5 | $ 2.7 |
Investments - Mortgage Loans (D
Investments - Mortgage Loans (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Commercial mortgage loans | |||
Mortgage loan disclosures | |||
Mortgage loans, purchased | $ 33 | $ 32.7 | |
Mortgage loans, Total amortized cost | $ 16,667.1 | $ 16,730.3 | |
Percent of mortgage loans (as a percent) | 100% | 100% | |
Commercial mortgage loans | Office | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 4,103 | $ 4,322 | |
Percent of mortgage loans (as a percent) | 24.60% | 25.90% | |
Commercial mortgage loans | Retail | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 1,513.8 | $ 1,499.4 | |
Percent of mortgage loans (as a percent) | 9.10% | 9% | |
Commercial mortgage loans | Industrial | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 3,227.9 | $ 3,235.9 | |
Percent of mortgage loans (as a percent) | 19.40% | 19.30% | |
Commercial mortgage loans | Apartments | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 6,931.2 | $ 6,827.1 | |
Percent of mortgage loans (as a percent) | 41.60% | 40.80% | |
Commercial mortgage loans | Hotel | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 71.4 | $ 72.5 | |
Percent of mortgage loans (as a percent) | 0.40% | 0.40% | |
Commercial mortgage loans | Mixed use/other | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 819.8 | $ 773.4 | |
Percent of mortgage loans (as a percent) | 4.90% | 4.60% | |
Commercial mortgage loans | New England | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 508 | $ 512.1 | |
Percent of mortgage loans (as a percent) | 3% | 3.10% | |
Commercial mortgage loans | Middle Atlantic | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 4,510.8 | $ 4,505.6 | |
Percent of mortgage loans (as a percent) | 27.10% | 26.90% | |
Commercial mortgage loans | East North Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 666.9 | $ 652.5 | |
Percent of mortgage loans (as a percent) | 4% | 3.90% | |
Commercial mortgage loans | West North Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 369.4 | $ 370.9 | |
Percent of mortgage loans (as a percent) | 2.20% | 2.20% | |
Commercial mortgage loans | South Atlantic | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 2,578 | $ 2,558.3 | |
Percent of mortgage loans (as a percent) | 15.50% | 15.30% | |
Commercial mortgage loans | East South Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 349 | $ 339.8 | |
Percent of mortgage loans (as a percent) | 2.10% | 2% | |
Commercial mortgage loans | West South Central | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 1,187.5 | $ 1,204.9 | |
Percent of mortgage loans (as a percent) | 7.10% | 7.20% | |
Commercial mortgage loans | Mountain | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 954.9 | $ 938.7 | |
Percent of mortgage loans (as a percent) | 5.70% | 5.60% | |
Commercial mortgage loans | Pacific | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 4,962.8 | $ 5,115.3 | |
Percent of mortgage loans (as a percent) | 29.80% | 30.60% | |
Commercial mortgage loans | International | |||
Mortgage loan disclosures | |||
Mortgage loans, Total amortized cost | $ 579.8 | $ 532.2 | |
Percent of mortgage loans (as a percent) | 3.50% | 3.20% | |
Residential mortgage loans | |||
Mortgage loan disclosures | |||
Mortgage loans, purchased | $ 69.1 | 534.3 | |
Mortgage loans, sold | 4.2 | $ 7.1 | |
Mortgage loans, Total amortized cost | $ 4,024.2 | $ 3,983 |
Investments - Securities Posted
Investments - Securities Posted as Collateral (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Securities Posted as Collateral | ||
Mortgage loans | $ 20,603.5 | $ 20,629.8 |
Pledged as collateral | ||
Securities Posted as Collateral | ||
Fixed maturities available-for-sale and trading securities posted as collateral for a reinsurance arrangement, derivative credit support annex (collateral) agreements, Futures Commission Merchant agreements, a lending arrangement and an obligation under funding agreements with Federal Home Loan Bank of Des Moines | 4,536.7 | 3,569.7 |
Pledged as collateral | Funding agreements with Federal Home Loan Bank | ||
Securities Posted as Collateral | ||
Mortgage loans | 6,707.2 | 6,411 |
Pledged as collateral with right to be sold or repledged | ||
Securities Posted as Collateral | ||
Securities posted as collateral eligible to be sold or repledged | $ 681.8 | $ 503.8 |
Investments - Balance Sheet Off
Investments - Balance Sheet Offsetting, Assets (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | $ 526.7 | $ 445.4 |
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position | (149.1) | (135.7) |
Collateral received, financial assets | (335.9) | (276.3) |
Net amount of assets subject to netting agreements | 41.7 | 33.4 |
Derivative assets | ||
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | 386.7 | 321 |
Amount of liabilities that offset the gross amount of assets subject to netting agreements not offset in statement of financial position | (149.1) | (135.7) |
Collateral received, financial assets | (195.6) | (151.9) |
Net amount of assets subject to netting agreements | 42 | 33.4 |
Reverse repurchase agreements | ||
Financial Asset Offsetting | ||
Gross amount of recognized assets subject to netting agreements | 140 | 124.4 |
Collateral received, financial assets | (140.3) | $ (124.4) |
Net amount of assets subject to netting agreements | $ (0.3) |
Investments - Balance Sheet O_2
Investments - Balance Sheet Offsetting, Liabilities (Details) - Derivative liabilities - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Financial Liability Offsetting | ||
Gross amount of recognized liabilities subject to netting agreements | $ 507.3 | $ 634.2 |
Amount of assets that offset the gross amount of liabilities subject to netting agreements not offset in statement of financial position | (149.1) | (135.7) |
Collateral pledged, financial liabilities | (355.3) | (485.1) |
Net amount of liabilities subject to netting agreements | $ 2.9 | $ 13.4 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Notional Amounts and Credit Exposure (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Derivative Financial Instruments, exposure | ||
Cash and securities posted under collateral arrangements associated with derivative credit support agreements and Futures Commission Merchant agreements | $ 674 | $ 750.9 |
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position | 504.3 | 632.6 |
Collateral and initial margin posted supporting derivatives with credit-risk-related contingent features that were in a liability position | 674 | 750.9 |
Additional collateral required to be posted if derivative credit-risk-related contingent features were triggered | 94.1 | |
Cash collateral received associated with derivative credit support annex agreements and Futures Commission Merchant agreements | 136.5 | 148.8 |
Notional amount | 90,213.3 | 89,064.3 |
Gross credit exposure | 395.9 | 331.2 |
Less: collateral received | 219 | 191.9 |
Net credit exposure | 176.9 | 139.3 |
Interest rate swaps | ||
Derivative Financial Instruments, exposure | ||
Cash exchanged under contract | 0 | |
Principal payments made under contract | 0 | |
Notional amount | 54,333.8 | 52,249.9 |
Gross credit exposure | 68.3 | 64.2 |
Interest rate options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 3,049 | 4,418.9 |
Gross credit exposure | 32.3 | 41.7 |
Interest rate forwards | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 2,370.7 | 2,527.5 |
Gross credit exposure | 5.4 | 0.1 |
Interest rate futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 960.5 | 877.5 |
Currency swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 1,617.9 | 1,634.7 |
Gross credit exposure | 190.8 | 171.1 |
Currency forwards | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 1,585.3 | 1,123.1 |
Gross credit exposure | 70.8 | 34 |
Equity options | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 1,999.1 | 2,049.3 |
Gross credit exposure | 24.6 | 16.5 |
Equity futures | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 732.7 | 574.1 |
Credit default swaps | ||
Derivative Financial Instruments, exposure | ||
Notional amount | 400 | 400 |
Gross credit exposure | 3.7 | 3.6 |
Embedded derivative financial instruments | ||
Derivative Financial Instruments, exposure | ||
Notional amount | $ 23,164.3 | $ 23,209.3 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Derivatives, fair value disclosures | ||
Derivative instruments, assets | $ 386.7 | $ 321.6 |
Derivative instruments, liabilities | (2,462.4) | (2,972.2) |
Fair value of embedded derivative liabilities reported with contractholder funds | 55.5 | 46.4 |
Fair value of net (asset) liability embedded derivative reported with funds withheld payable | (3,026.2) | (3,652.8) |
Derivatives designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 149.5 | 154.6 |
Derivative instruments, liabilities | 118.5 | 124.8 |
Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 237.2 | 167 |
Derivative instruments, liabilities | (2,580.9) | (3,097) |
Interest rate contracts | Derivatives designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 16.7 | 20 |
Derivative instruments, liabilities | 90.2 | 105.1 |
Interest rate contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 82.9 | 81.1 |
Derivative instruments, liabilities | 323.7 | 439.9 |
Foreign exchange contracts | Derivatives designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 132.8 | 134.6 |
Derivative instruments, liabilities | 28.3 | 19.7 |
Foreign exchange contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 126.2 | 65.9 |
Derivative instruments, liabilities | 9 | 21.9 |
Equity contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 24.5 | 16.5 |
Derivative instruments, liabilities | 55.2 | 45.6 |
Credit contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, assets | 3.6 | 3.5 |
Derivative instruments, liabilities | 1.9 | 2 |
Other contracts | Derivatives not designated as hedging instruments | ||
Derivatives, fair value disclosures | ||
Derivative instruments, liabilities | $ (2,970.7) | $ (3,606.4) |
Derivative Financial Instrume_5
Derivative Financial Instruments - Credit Derivatives Sold (Details) - Single name credit default swaps - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Credit derivatives sold disclosures | ||
Notional amount | $ 270 | $ 270 |
Fair value | 2.9 | 2.6 |
Maximum future payments | $ 270 | $ 270 |
Weighted average expected life | 2 years 9 months 18 days | 3 years 1 month 6 days |
Corporate debt securities | A | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 40 | $ 40 |
Fair value | 0.2 | 0.4 |
Maximum future payments | $ 40 | $ 40 |
Weighted average expected life | 2 years 2 months 12 days | 2 years 6 months |
Corporate debt securities | BBB | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 190 | $ 190 |
Fair value | 2.5 | 2.2 |
Maximum future payments | $ 190 | $ 190 |
Weighted average expected life | 2 years 10 months 24 days | 3 years 1 month 6 days |
Corporate debt securities | BB | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 20 | $ 20 |
Fair value | (0.1) | (0.2) |
Maximum future payments | $ 20 | $ 20 |
Weighted average expected life | 4 years 2 months 12 days | 4 years 6 months |
Sovereign | A | ||
Credit derivatives sold disclosures | ||
Notional amount | $ 20 | $ 20 |
Fair value | 0.3 | 0.2 |
Maximum future payments | $ 20 | $ 20 |
Weighted average expected life | 2 years 2 months 12 days | 2 years 6 months |
Derivative Financial Instrume_6
Derivative Financial Instruments - Fair Value Hedges (Details) - Fixed maturities, available-for-sale - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Hedges | ||
Amortized cost of hedged item - Active hedging relationships | $ 3,454 | $ 3,498.6 |
Amortized cost of hedged item - Discontinued hedging relationships | 75.5 | 48.8 |
Amortized cost of hedged item - Active or discontinued hedging relationships | 3,529.5 | 3,547.4 |
Cumulative amount of fair value hedging basis adjustment - Active hedging relationships | (126.1) | (153.4) |
Cumulative amount of fair value hedging basis adjustment - Discontinued hedging relationships | 0.3 | 1.3 |
Cumulative amount of fair value hedging basis adjustment - Active or discontinued hedging relationships | (125.8) | (152.1) |
Amortized cost basis of closed portfolio used in last-of-layer hedging relationship | 3,215 | 3,256.9 |
Cumulative basis adjustments associated with last-of-layer hedging relationship | (83.5) | (102.4) |
Amount of hedged item in last-of-layer hedging relationship | $ 1,110 | $ 1,110 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flow Hedges | ||
Maximum length of time hedging exposure to variability in future cash flows for forecasted transactions | 3 years 10 months 24 days | |
Net gains (losses) reported in AOCI related to active cash flow hedges of forecasted transactions | $ 15.9 | |
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | 2.5 | $ (21.7) |
Net gains (losses) expected to be reclassified from accumulated OCI into net income in the next 12 months | 20.8 | |
Interest rate contracts | Fixed maturities, available-for-sale | ||
Cash Flow Hedges | ||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | 15.9 | (44.2) |
Interest rate contracts | Investment contracts | ||
Cash Flow Hedges | ||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | (3.3) | 9.5 |
Foreign exchange contracts | Fixed maturities, available-for-sale | ||
Cash Flow Hedges | ||
Amount of gain (loss) recognized in AOCI on derivatives in cash flow hedging relationships | $ (10.1) | $ 13 |
Derivative Financial Instrume_8
Derivative Financial Instruments - Effect of Hedges on Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Gains (losses) recognized for hedging relationships | |||
Net investment income (loss) | $ 986.7 | $ 1,125.5 | |
Net realized capital gains (losses) | [1] | (66) | (136.6) |
Benefits, claims and settlement expenses | 1,773.9 | 1,490.7 | |
Fair Value Hedges | Interest rate contracts | Net investment income | |||
Gains (losses) recognized for hedging relationships | |||
Gain (loss) recognized on hedged item | 26.2 | (71.1) | |
Gain (loss) recognized on derivatives | (22.6) | 68 | |
Amortization of hedged item basis adjustments | (0.1) | (0.4) | |
Amounts related to periodic settlements on derivatives | 12.6 | (4.2) | |
Total gain (loss) recognized for hedging relationships | 16.1 | (7.7) | |
Cash Flow Hedges | Net investment income | |||
Gains (losses) recognized for hedging relationships | |||
Total gain (loss) recognized for hedging relationships | 6.5 | 6 | |
Cash Flow Hedges | Net realized capital gains (losses) | |||
Gains (losses) recognized for hedging relationships | |||
Total gain (loss) recognized for hedging relationships | 2.6 | 3.5 | |
Cash Flow Hedges | Benefits, claims and settlement expenses | |||
Gains (losses) recognized for hedging relationships | |||
Total gain (loss) recognized for hedging relationships | 3.1 | (0.2) | |
Cash Flow Hedges | Interest rate contracts | Gain (loss) reclassified from AOCI on derivatives | |||
Gains (losses) recognized for hedging relationships | |||
Net investment income (loss) | 1.1 | 3.3 | |
Cash Flow Hedges | Interest rate contracts | Net realized capital gains (losses) | |||
Gains (losses) recognized for hedging relationships | |||
Gain (loss) reclassified from AOCI into net income as a result that a forecasted transaction is no longer probable of occurring | 1.4 | 2.9 | |
Cash Flow Hedges | Interest rate contracts | Benefits, claims and settlement expenses | |||
Gains (losses) recognized for hedging relationships | |||
Amounts related to periodic settlements on derivatives | 3.1 | (0.2) | |
Cash Flow Hedges | Foreign exchange contracts | Gain (loss) reclassified from AOCI on derivatives | |||
Gains (losses) recognized for hedging relationships | |||
Net realized capital gains (losses) | 1.2 | 0.6 | |
Cash Flow Hedges | Foreign exchange contracts | Net investment income | |||
Gains (losses) recognized for hedging relationships | |||
Amounts related to periodic settlements on derivatives | 5.4 | 2.7 | |
Net investment hedging relationships | |||
Gains (losses) recognized for hedging relationships | |||
Amount of gain (loss) recognized in accumulated OCI on derivatives | (0.6) | (0.7) | |
Net investment hedging relationships | Foreign exchange contracts | |||
Gains (losses) recognized for hedging relationships | |||
Amount of gain (loss) recognized in accumulated OCI on derivatives | $ (0.6) | $ (0.7) | |
[1] Includes realized and unrealized gains (losses). See Note 3, Investments, for further details. |
Derivative Financial Instrume_9
Derivative Financial Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | $ (690.1) | $ (153.9) |
Interest rate contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | (17.8) | (229.4) |
Foreign exchange contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | 29.2 | 67.9 |
Equity contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | (63.1) | (5.3) |
Credit contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | 0.8 | 0.1 |
Other contracts | ||
Effect of derivatives not designated as hedging instruments on the consolidated statements of operations | ||
Amount of gain (loss) recognized in net income on derivatives | $ (639.2) | $ 12.8 |
Deferred Acquisition Costs an_3
Deferred Acquisition Costs and Other Actuarial Balances - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Long-duration and short-duration insurance | ||
Deferred Acquisition Costs | ||
Amortization of deferred acquisition costs | $ 97.9 | $ 95.8 |
Deferred Acquisition Costs an_4
Deferred Acquisition Costs and Other Actuarial Balances - Disaggregated DAC amounts (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Acquisition Costs | ||||
Deferred acquisition costs | $ 3,948.3 | $ 3,948 | $ 3,822.3 | |
Short-duration contracts | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 40.2 | 34.7 | ||
Other balances | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 9.2 | 8.8 | ||
Retirement and Income Solutions | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 925.6 | 930 | 964.4 | |
Retirement and Income Solutions | Workplace savings and retirement solutions | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 500.2 | 498 | $ 489 | 477.2 |
Retirement and Income Solutions | Individual variable annuities | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 276.8 | 278 | 281.2 | 281.9 |
Retirement and Income Solutions | Pension risk transfer | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 10.2 | 8.1 | 2.7 | |
Retirement and Income Solutions | Individual fixed deferred annuities | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 124.7 | 131 | 162.2 | 192.7 |
Retirement and Income Solutions | Investment only | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 13.7 | 14.9 | 18.1 | 12.6 |
Benefits and Protection | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 2,973.3 | 2,974.5 | 2,857.9 | |
Benefits and Protection | Life Insurance | Universal life | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 1,560.4 | 1,569.7 | 1,596.2 | 1,608.3 |
Benefits and Protection | Life Insurance | Term life | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 687.1 | 685.7 | 678.9 | 607.9 |
Benefits and Protection | Life Insurance | Participating life | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | 90.8 | 93 | 102.3 | 111.9 |
Benefits and Protection | Specialty Benefits | Individual disability | ||||
Deferred Acquisition Costs | ||||
Deferred acquisition costs | $ 635 | $ 626.1 | $ 580.7 | $ 529.8 |
Deferred Acquisition Costs an_5
Deferred Acquisition Costs and Other Actuarial Balances - Retirement and Income Solutions - Balances and changes in DAC (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | $ 3,948 | $ 3,822.3 | |
Ending balance, Deferred acquisition costs | 3,948.3 | $ 3,948 | |
Retirement and Income Solutions | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 930 | 964.4 | |
Ending balance, Deferred acquisition costs | 925.6 | 930 | |
Workplace savings and retirement solutions | Retirement and Income Solutions | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 498 | 489 | 477.2 |
Costs deferred | 12 | 48.3 | 50.1 |
Amortized to expense | (9.8) | (39.3) | (38.3) |
Ending balance, Deferred acquisition costs | 500.2 | 498 | 489 |
Individual variable annuities | Retirement and Income Solutions | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 278 | 281.2 | 281.9 |
Costs deferred | 5.2 | 22.5 | 26.4 |
Amortized to expense | (6.4) | (25.7) | (27.1) |
Ending balance, Deferred acquisition costs | 276.8 | 278 | 281.2 |
Pension risk transfer | Retirement and Income Solutions | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 8.1 | 2.7 | |
Costs deferred | 2.2 | 5.6 | 2.7 |
Amortized to expense | (0.1) | (0.2) | |
Ending balance, Deferred acquisition costs | 10.2 | 8.1 | 2.7 |
Individual fixed deferred annuities | Retirement and Income Solutions | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 131 | 162.2 | 192.7 |
Costs deferred | 7.6 | ||
Amortized to expense | (6.3) | (31.2) | (38.1) |
Ending balance, Deferred acquisition costs | 124.7 | 131 | 162.2 |
Investment only | Retirement and Income Solutions | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 14.9 | 18.1 | 12.6 |
Costs deferred | 1.4 | 9.1 | |
Amortized to expense | (1.2) | (4.6) | (3.6) |
Ending balance, Deferred acquisition costs | $ 13.7 | $ 14.9 | $ 18.1 |
Deferred Acquisition Costs an_6
Deferred Acquisition Costs and Other Actuarial Balances - Benefits and Protection - Balances and changes in DAC (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | $ 3,948 | $ 3,822.3 | |
Ending balance, Deferred acquisition costs | 3,948.3 | $ 3,948 | |
Benefits and Protection | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 2,974.5 | 2,857.9 | |
Ending balance, Deferred acquisition costs | 2,973.3 | 2,974.5 | |
Individual disability | Benefits and Protection | Specialty Benefits | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 626.1 | 580.7 | 529.8 |
Costs deferred | 19.9 | 87.6 | 89.8 |
Amortized to expense | (11) | (42.2) | (38.9) |
Ending balance, Deferred acquisition costs | 635 | 626.1 | 580.7 |
Universal life | Benefits and Protection | Life Insurance | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 1,569.7 | 1,596.2 | 1,608.3 |
Costs deferred | 14.9 | 70.6 | 84.3 |
Amortized to expense | (24.2) | (97.1) | (96.4) |
Ending balance, Deferred acquisition costs | 1,560.4 | 1,569.7 | 1,596.2 |
Term life | Benefits and Protection | Life Insurance | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 685.7 | 678.9 | 607.9 |
Costs deferred | 16.6 | 66.7 | 126.5 |
Amortized to expense | (15.2) | (59.9) | (55.5) |
Ending balance, Deferred acquisition costs | 687.1 | 685.7 | 678.9 |
Participating life | Benefits and Protection | Life Insurance | |||
Deferred Acquisition Costs | |||
Beginning balance, Deferred acquisition costs | 93 | 102.3 | 111.9 |
Costs deferred | 0.3 | 1.4 | 1.9 |
Amortized to expense | (2.5) | (10.7) | (11.5) |
Ending balance, Deferred acquisition costs | $ 90.8 | $ 93 | $ 102.3 |
Deferred Acquisition Costs an_7
Deferred Acquisition Costs and Other Actuarial Balances - Unearned Revenue Liability (Details) - Benefits and Protection - Life Insurance - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Other Actuarial Balances | ||||
Total unearned revenue liability | $ 475.4 | $ 467.4 | $ 384.4 | |
Universal life | ||||
Other Actuarial Balances | ||||
Total unearned revenue liability | 466.6 | 459 | $ 425.3 | $ 384.4 |
Other balances | ||||
Other Actuarial Balances | ||||
Total unearned revenue liability | $ 8.8 | $ 8.4 |
Deferred Acquisition Costs an_8
Deferred Acquisition Costs and Other Actuarial Balances - Unearned Revenue Liability Balances and Changes (Details) - Benefits and Protection - Life Insurance - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Actuarial Balances | |||
Beginning balance, Unearned Revenue Liability | $ 467.4 | $ 384.4 | |
Ending balance, Unearned Revenue Liability | 475.4 | $ 467.4 | |
Universal life | |||
Other Actuarial Balances | |||
Beginning balance, Unearned Revenue Liability | 459 | 425.3 | 384.4 |
Deferrals | 15 | 61.8 | 66.1 |
Revenue recognized | (7.4) | (28.1) | (25.2) |
Ending balance, Unearned Revenue Liability | 466.6 | 459 | $ 425.3 |
Reinsurance impact | (227.4) | (227.9) | |
Balance at end of period after reinsurance | $ 239.2 | $ 231.1 |
Separate Account Balances (Deta
Separate Account Balances (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Separate Account Balances | ||
Separate account that primarily includes shares of Principal Financial Group, Inc. stock that were allocated and issued to eligible participants of qualified employee benefit plans as part of the 2001 demutualization | $ 88.5 | $ 101.4 |
Separate Account Balances - Sep
Separate Account Balances - Separate Account Asset (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | $ 162,000.8 | $ 155,375.1 |
Fixed maturities | Fixed maturities | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 37,192 | 34,805.5 |
Fixed maturities | U.S. government and agencies | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 7,916.9 | 7,339.6 |
Fixed maturities | Non-U.S. governments | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 8,956.1 | 8,424.3 |
Fixed maturities | States and political subdivisions | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 225.9 | 211.7 |
Fixed maturities | Corporate debt securities | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 15,538.1 | 14,429.7 |
Fixed maturities | Residential mortgage-backed pass-through securities | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 3,994.7 | 3,894.5 |
Fixed maturities | Commercial mortgage-backed securities | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 199.5 | 206.2 |
Fixed maturities | Other debt obligations | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 360.8 | 299.5 |
Equity securities | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 109,562.8 | 105,053.3 |
Real estate | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 604 | 610.6 |
Other investments | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 9,887 | 10,278.6 |
Cash and cash equivalents | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | 3,639.9 | 3,583.8 |
Other assets | ||
Separate Account Assets | ||
Total separate account assets per consolidated statements of financial position | $ 1,115.1 | $ 1,043.3 |
Separate Account Balances - S_2
Separate Account Balances - Separate Account Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Separate Account Balances | |||
Separate account liabilities | $ 162,000.8 | $ 155,375.1 | |
Other balances | |||
Separate Account Balances | |||
Separate account liabilities | 245.9 | 233.3 | |
Retirement and Income Solutions | |||
Separate Account Balances | |||
Separate account liabilities | 120,186.1 | 115,899.1 | |
Retirement and Income Solutions | Group retirement contracts | |||
Separate Account Balances | |||
Separate account liabilities | 111,275.8 | 107,240.1 | $ 131,188.6 |
Retirement and Income Solutions | Individual variable annuities | |||
Separate Account Balances | |||
Separate account liabilities | 8,910.3 | 8,659 | 11,000 |
Principal Asset Management | Principal International | |||
Separate Account Balances | |||
Separate account liabilities | 36,314.6 | 34,231.7 | |
Principal Asset Management | Principal International | Pension | Latin America | |||
Separate Account Balances | |||
Separate account liabilities | 35,385.8 | 33,316.7 | 33,030.6 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | |||
Separate Account Balances | |||
Separate account liabilities | 928.8 | 915 | 971.3 |
Benefits and Protection | Life Insurance | Universal life | |||
Separate Account Balances | |||
Separate account liabilities | $ 5,254.2 | $ 5,011 | $ 5,886.1 |
Separate Account Balances - Ret
Separate Account Balances - Retirement and Income Solutions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Changes in separate account liabilities | ||
Balance at beginning of period | $ 155,375.1 | |
Balance at end of period | 162,000.8 | $ 155,375.1 |
Retirement and Income Solutions | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 115,899.1 | |
Balance at end of period | 120,186.1 | 115,899.1 |
Retirement and Income Solutions | Group retirement contracts | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 107,240.1 | 131,188.6 |
Premiums and deposits | 2,881.3 | 14,859.3 |
Policy charges | (77.7) | (383.7) |
Surrenders, withdrawals and benefit payments | (2,747.8) | (14,479.4) |
Investment performance | 5,016.8 | (20,641.3) |
Net transfers (to) from general account | (1,331.8) | (2,571.7) |
Other | 294.9 | (731.7) |
Balance at end of period | 111,275.8 | 107,240.1 |
Cash surrender value | 109,850.4 | 106,125.7 |
Retirement and Income Solutions | Individual variable annuities | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 8,659 | 11,000 |
Premiums and deposits | 94.8 | 354.1 |
Policy charges | (51.2) | (211.1) |
Surrenders, withdrawals and benefit payments | (217.3) | (790.1) |
Investment performance | 417.6 | (1,723.3) |
Net transfers (to) from general account | 7.4 | 29.4 |
Balance at end of period | 8,910.3 | 8,659 |
Cash surrender value | $ 8,789.3 | $ 8,538.7 |
Separate Account Balances - Pri
Separate Account Balances - Principal Asset Management - Principal International (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Changes in separate account liabilities | ||
Balance at beginning of period | $ 155,375.1 | |
Balance at end of period | 162,000.8 | $ 155,375.1 |
Principal Asset Management | Principal International | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 34,231.7 | |
Balance at end of period | 36,314.6 | 34,231.7 |
Principal Asset Management | Principal International | Pension | Latin America | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 33,316.7 | 33,030.6 |
Premiums and deposits | 812.7 | 3,620.4 |
Policy charges | (4.7) | (18.2) |
Surrenders, withdrawals and benefit payments | (988.9) | (3,984.6) |
Investment performance | (303.8) | 498.8 |
Other | (28.7) | (0.8) |
Foreign currency translation adjustment | 2,582.5 | 170.5 |
Balance at end of period | 35,385.8 | 33,316.7 |
Cash surrender value | 35,385.8 | 33,316.7 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 915 | 971.3 |
Premiums and deposits | 66.1 | 276.2 |
Policy charges | (4.7) | (19.8) |
Surrenders, withdrawals and benefit payments | (66.7) | (247) |
Investment performance | 24.5 | (64) |
Other | (0.1) | (0.4) |
Foreign currency translation adjustment | (5.3) | (1.3) |
Balance at end of period | 928.8 | 915 |
Cash surrender value | $ 928.8 | $ 915 |
Separate Account Balances - Ben
Separate Account Balances - Benefits and Protection (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Changes in separate account liabilities | ||
Balance at beginning of period | $ 155,375.1 | |
Balance at end of period | 162,000.8 | $ 155,375.1 |
Benefits and Protection | Life Insurance | Universal life | ||
Changes in separate account liabilities | ||
Balance at beginning of period | 5,011 | 5,886.1 |
Premiums and deposits | 126.5 | 514.7 |
Policy charges | (31.9) | (122.1) |
Surrenders, withdrawals and benefit payments | (115.7) | (208.6) |
Investment performance | 262 | (1,054.5) |
Net transfers (to) from general account | 2.3 | (4.6) |
Balance at end of period | 5,254.2 | 5,011 |
Cash surrender value | $ 5,308.6 | $ 5,055.8 |
Contractholder Funds (Details)
Contractholder Funds (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | $ 26,184.4 | $ 26,349.6 | |
Investment contracts without significant fee revenue | 16,374.4 | 16,104 | |
Embedded derivatives | 55.5 | 46.4 | |
Other balances | 343.7 | 325.3 | |
Total contract holder funds per consolidated statements of financial position | 42,958 | 42,825.3 | |
Retirement and Income Solutions | |||
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | 19,628.4 | 19,764.4 | |
Retirement and Income Solutions | Workplace savings and retirement solutions | |||
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | 12,476.6 | 12,154.7 | $ 10,996.2 |
Retirement and Income Solutions | Individual variable annuities | |||
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | 366.1 | 381.4 | 380.9 |
Retirement and Income Solutions | Individual fixed deferred annuities | |||
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | 6,785.7 | 7,228.3 | 9,646.3 |
Benefits and Protection | Life Insurance | Universal life | |||
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | 6,915.4 | 6,947.9 | $ 6,962.5 |
Corporate | Inter-segment eliminations | |||
Contract holder Funds | |||
Total policyholder account balances for contracts with significant insurance risk or investment contracts with significant fee revenue | $ (359.4) | $ (362.7) |
Contractholder Funds - Changes
Contractholder Funds - Changes in Policyholder Account Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Changes in policyholder account balances | ||
Balance at beginning of period | $ 26,349.6 | |
Balance at end of period | 26,184.4 | $ 26,349.6 |
Retirement and Income Solutions | ||
Changes in policyholder account balances | ||
Balance at beginning of period | 19,764.4 | |
Balance at end of period | 19,628.4 | 19,764.4 |
Retirement and Income Solutions | Workplace savings and retirement solutions | ||
Changes in policyholder account balances | ||
Balance at beginning of period | 12,154.7 | 10,996.2 |
Premiums and deposits | 1,337.6 | 3,719.5 |
Policy charges | (7.5) | (28.5) |
Surrenders, withdrawals and benefit payments | (1,960.2) | (2,866.7) |
Net transfers from (to) separate account | 896.8 | 164.6 |
Interest credited | 63.3 | 194.3 |
Other | (8.1) | (24.7) |
Balance at end of period | $ 12,476.6 | $ 12,154.7 |
Weighted-average crediting rate | 2.16% | 1.94% |
Cash surrender value | $ 10,797.2 | $ 10,341.7 |
Retirement and Income Solutions | Individual variable annuities | ||
Changes in policyholder account balances | ||
Balance at beginning of period | 381.4 | 380.9 |
Premiums and deposits | 110.2 | 426.5 |
Surrenders, withdrawals and benefit payments | (243.1) | (843.2) |
Net transfers from (to) separate account | 115.1 | 406.6 |
Interest credited | 2.5 | 10.6 |
Balance at end of period | $ 366.1 | $ 381.4 |
Weighted-average crediting rate | 2.81% | 2.79% |
Cash surrender value | $ 363.3 | $ 378.6 |
Retirement and Income Solutions | Individual fixed deferred annuities | ||
Changes in policyholder account balances | ||
Balance at beginning of period | 7,228.3 | 9,646.3 |
Premiums and deposits | 7.5 | 35.9 |
Surrenders, withdrawals and benefit payments | (492.8) | (2,655.6) |
Interest credited | 42.7 | 201.7 |
Balance at end of period | $ 6,785.7 | $ 7,228.3 |
Weighted-average crediting rate | 2.67% | 2.63% |
Cash surrender value | $ 6,648.8 | $ 7,081.4 |
Benefits and Protection | Life Insurance | Universal life | ||
Changes in policyholder account balances | ||
Balance at beginning of period | 6,947.9 | 6,962.5 |
Premiums and deposits | 312.4 | 1,267.2 |
Policy charges | (213.5) | (837.8) |
Surrenders, withdrawals and benefit payments | (170.4) | (390) |
Net transfers from (to) separate account | (13.1) | (301.5) |
Interest credited | 52.4 | 247.5 |
Other | (0.3) | |
Balance at end of period | 6,915.4 | 6,947.9 |
Reinsurance impact | (3,496.8) | (3,528.9) |
Balance at end of period after reinsurance | $ 3,418.6 | $ 3,419 |
Weighted-average crediting rate | 3.33% | 3.35% |
Net amount at risk | $ 86,335.6 | $ 86,547.9 |
Cash surrender value | $ 5,883.5 | $ 5,911.5 |
Contractholder Funds - Guarante
Contractholder Funds - Guaranteed Minimum Interest Rate (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Excess of crediting rates over GMIR | |||
Total policyholder account value | $ 26,184.4 | $ 26,349.6 | |
Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Total policyholder account value | 19,628.4 | 19,764.4 | |
Workplace savings and retirement solutions | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 10,425.7 | 10,058.7 | |
Policyholder account value without GMIR | 2,050.9 | 2,096 | |
Total policyholder account value | 12,476.6 | 12,154.7 | $ 10,996.2 |
Workplace savings and retirement solutions | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,937.6 | 1,890.3 | |
Workplace savings and retirement solutions | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 8,452.9 | 8,126.5 | |
Workplace savings and retirement solutions | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 9 | 15.3 | |
Workplace savings and retirement solutions | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 7.7 | 7.8 | |
Workplace savings and retirement solutions | 4.01% and above | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 18.5 | 18.8 | |
Workplace savings and retirement solutions | At GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 34.1 | 45.6 | |
Workplace savings and retirement solutions | At GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 0.2 | 3.9 | |
Workplace savings and retirement solutions | At GMIR | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 7.7 | 15.1 | |
Workplace savings and retirement solutions | At GMIR | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 7.7 | 7.8 | |
Workplace savings and retirement solutions | At GMIR | 4.01% and above | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 18.5 | 18.8 | |
Workplace savings and retirement solutions | Up to 0.50% above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 528.9 | 574.8 | |
Workplace savings and retirement solutions | Up to 0.50% above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 4 | 24.8 | |
Workplace savings and retirement solutions | Up to 0.50% above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 524.8 | 549.9 | |
Workplace savings and retirement solutions | Up to 0.50% above GMIR | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 0.1 | 0.1 | |
Workplace savings and retirement solutions | 0.51% to 1.00% above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 6,125.1 | 7,279.1 | |
Workplace savings and retirement solutions | 0.51% to 1.00% above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 128.5 | 1,188.9 | |
Workplace savings and retirement solutions | 0.51% to 1.00% above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 5,995.9 | 6,090.2 | |
Workplace savings and retirement solutions | 0.51% to 1.00% above GMIR | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 0.7 | ||
Workplace savings and retirement solutions | 1.01% to 2.00% above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 2,772.9 | 1,784.9 | |
Workplace savings and retirement solutions | 1.01% to 2.00% above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,119.4 | 307.8 | |
Workplace savings and retirement solutions | 1.01% to 2.00% above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,653 | 1,477 | |
Workplace savings and retirement solutions | 1.01% to 2.00% above GMIR | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 0.5 | 0.1 | |
Workplace savings and retirement solutions | 2.01% or more above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 964.7 | 374.3 | |
Workplace savings and retirement solutions | 2.01% or more above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 685.5 | 364.9 | |
Workplace savings and retirement solutions | 2.01% or more above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 279.2 | $ 9.4 | |
Workplace savings and retirement solutions | Minimum | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 1.01% | 1.01% | |
Workplace savings and retirement solutions | Minimum | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 2.01% | 2.01% | |
Workplace savings and retirement solutions | Minimum | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 3.01% | 3.01% | |
Workplace savings and retirement solutions | Minimum | 4.01% and above | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 4.01% | 4.01% | |
Workplace savings and retirement solutions | Maximum | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 1% | 1% | |
Workplace savings and retirement solutions | Maximum | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 2% | 2% | |
Workplace savings and retirement solutions | Maximum | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 3% | 3% | |
Workplace savings and retirement solutions | Maximum | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 4% | 4% | |
Individual variable annuities | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 351.8 | $ 368.4 | |
Policyholder account value without GMIR | 14.3 | 13 | |
Total policyholder account value | 366.1 | 381.4 | 380.9 |
Individual variable annuities | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 28.9 | 33 | |
Individual variable annuities | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 3.6 | 3.6 | |
Individual variable annuities | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 319.3 | 331.8 | |
Individual variable annuities | At GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 351.8 | 368.4 | |
Individual variable annuities | At GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 28.9 | 33 | |
Individual variable annuities | At GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 3.6 | 3.6 | |
Individual variable annuities | At GMIR | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 319.3 | $ 331.8 | |
Individual variable annuities | Minimum | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 1.01% | 1.01% | |
Individual variable annuities | Minimum | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 2.01% | 2.01% | |
Individual variable annuities | Minimum | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 3.01% | 3.01% | |
Individual variable annuities | Minimum | 4.01% and above | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 4.01% | 4.01% | |
Individual variable annuities | Maximum | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 1% | 1% | |
Individual variable annuities | Maximum | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 2% | 2% | |
Individual variable annuities | Maximum | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 3% | 3% | |
Individual variable annuities | Maximum | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 4% | 4% | |
Individual fixed deferred annuities | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 6,491 | $ 6,915.5 | |
Policyholder account value without GMIR | 294.7 | 312.8 | |
Total policyholder account value | 6,785.7 | 7,228.3 | 9,646.3 |
Individual fixed deferred annuities | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 2,541.1 | 2,696.5 | |
Individual fixed deferred annuities | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 397.1 | 432.2 | |
Individual fixed deferred annuities | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 3,386.6 | 3,617.1 | |
Individual fixed deferred annuities | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 166.2 | 169.7 | |
Individual fixed deferred annuities | At GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 4,076.3 | 4,353 | |
Individual fixed deferred annuities | At GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 402.1 | 426.4 | |
Individual fixed deferred annuities | At GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 121.4 | 139.8 | |
Individual fixed deferred annuities | At GMIR | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 3,386.6 | 3,617.1 | |
Individual fixed deferred annuities | At GMIR | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 166.2 | 169.7 | |
Individual fixed deferred annuities | Up to 0.50% above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 157.8 | 163.1 | |
Individual fixed deferred annuities | Up to 0.50% above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 156.5 | 161.7 | |
Individual fixed deferred annuities | Up to 0.50% above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1.3 | 1.4 | |
Individual fixed deferred annuities | 0.51% to 1.00% above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 249.4 | 276.1 | |
Individual fixed deferred annuities | 0.51% to 1.00% above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 210.2 | 236.2 | |
Individual fixed deferred annuities | 0.51% to 1.00% above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 39.2 | 39.9 | |
Individual fixed deferred annuities | 1.01% to 2.00% above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 981.9 | 1,129.7 | |
Individual fixed deferred annuities | 1.01% to 2.00% above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 747.5 | 879.2 | |
Individual fixed deferred annuities | 1.01% to 2.00% above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 234.4 | 250.5 | |
Individual fixed deferred annuities | 2.01% or more above GMIR | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,025.6 | 993.6 | |
Individual fixed deferred annuities | 2.01% or more above GMIR | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,024.8 | 993 | |
Individual fixed deferred annuities | 2.01% or more above GMIR | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 0.8 | $ 0.6 | |
Individual fixed deferred annuities | Minimum | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 1.01% | 1.01% | |
Individual fixed deferred annuities | Minimum | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 2.01% | 2.01% | |
Individual fixed deferred annuities | Minimum | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 3.01% | 3.01% | |
Individual fixed deferred annuities | Minimum | 4.01% and above | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 4.01% | 4.01% | |
Individual fixed deferred annuities | Maximum | Up to 1.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 1% | 1% | |
Individual fixed deferred annuities | Maximum | 1.01% - 2.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 2% | 2% | |
Individual fixed deferred annuities | Maximum | 2.01% - 3.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 3% | 3% | |
Individual fixed deferred annuities | Maximum | 3.01% - 4.00% | Retirement and Income Solutions | |||
Excess of crediting rates over GMIR | |||
GMIR | 4% | 4% | |
Universal life | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 6,162.6 | $ 6,214.1 | |
Policyholder account value without GMIR | 752.8 | 733.8 | |
Total policyholder account value | 6,915.4 | 6,947.9 | $ 6,962.5 |
Universal life | Up to 1.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 19.1 | 19.2 | |
Universal life | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,565.4 | 1,573.2 | |
Universal life | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 2,735.2 | 2,780.9 | |
Universal life | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,787.4 | 1,785.1 | |
Universal life | 4.01% and above | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 55.5 | 55.7 | |
Universal life | At GMIR | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 2,894.1 | 2,921.1 | |
Universal life | At GMIR | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 312.4 | 315.7 | |
Universal life | At GMIR | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 846.9 | 865.9 | |
Universal life | At GMIR | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,695.1 | 1,698.9 | |
Universal life | At GMIR | 4.01% and above | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 39.7 | 40.6 | |
Universal life | Up to 0.50% above GMIR | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 924.7 | 1,005.5 | |
Universal life | Up to 0.50% above GMIR | Up to 1.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1.7 | 8.4 | |
Universal life | Up to 0.50% above GMIR | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 881.9 | 951.2 | |
Universal life | Up to 0.50% above GMIR | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 30.2 | 35.8 | |
Universal life | Up to 0.50% above GMIR | 4.01% and above | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 10.9 | 10.1 | |
Universal life | 0.51% to 1.00% above GMIR | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1,406.7 | 1,345.9 | |
Universal life | 0.51% to 1.00% above GMIR | Up to 1.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 16.2 | 10.1 | |
Universal life | 0.51% to 1.00% above GMIR | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 412.4 | 407 | |
Universal life | 0.51% to 1.00% above GMIR | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 945 | 903.5 | |
Universal life | 0.51% to 1.00% above GMIR | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 29.7 | 21.9 | |
Universal life | 0.51% to 1.00% above GMIR | 4.01% and above | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 3.4 | 3.4 | |
Universal life | 1.01% to 2.00% above GMIR | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 799.5 | 782.3 | |
Universal life | 1.01% to 2.00% above GMIR | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 707.8 | 695.5 | |
Universal life | 1.01% to 2.00% above GMIR | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 61 | 59.9 | |
Universal life | 1.01% to 2.00% above GMIR | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 29.2 | 25.3 | |
Universal life | 1.01% to 2.00% above GMIR | 4.01% and above | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1.5 | 1.6 | |
Universal life | 2.01% or more above GMIR | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 137.6 | 159.3 | |
Universal life | 2.01% or more above GMIR | Up to 1.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 1.2 | 0.7 | |
Universal life | 2.01% or more above GMIR | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 132.8 | 155 | |
Universal life | 2.01% or more above GMIR | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | 0.4 | 0.4 | |
Universal life | 2.01% or more above GMIR | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
Policyholder account value with GMIR | $ 3.2 | $ 3.2 | |
Universal life | Minimum | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 1.01% | 1.01% | |
Universal life | Minimum | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 2.01% | 2.01% | |
Universal life | Minimum | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 3.01% | 3.01% | |
Universal life | Minimum | 4.01% and above | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 4.01% | 4.01% | |
Universal life | Maximum | Up to 1.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 1% | 1% | |
Universal life | Maximum | 1.01% - 2.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 2% | 2% | |
Universal life | Maximum | 2.01% - 3.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 3% | 3% | |
Universal life | Maximum | 3.01% - 4.00% | Benefits and Protection | Life Insurance | |||
Excess of crediting rates over GMIR | |||
GMIR | 0.04% | 4% |
Future Policy Benefits and Cl_3
Future Policy Benefits and Claims - Disaggregated Amounts Included in Future Policy Benefits and Claims (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | $ 35,620.8 | $ 34,064.4 | $ 43,489.8 | |
Additional liability for certain benefit features | 4,219.3 | 4,095.2 | ||
Participating contracts | 3,166.3 | 3,207.2 | ||
Short-duration contracts | 1,294 | 1,295.6 | ||
Cost of reinsurance liability | 184.5 | 191.1 | ||
Reinsurance recoverable liability | 43.5 | 39.4 | ||
Other | 171.5 | 132.4 | ||
Future policy benefits and claims per consolidated statements of financial position | 44,699.9 | 43,025.3 | ||
Retirement and Income Solutions | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 27,238.4 | 26,230.8 | 33,009.5 | |
Retirement and Income Solutions | Pension risk transfer | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 22,146.1 | 21,211.4 | 25,863.7 | |
Retirement and Income Solutions | Individual fixed income annuities | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 5,092.3 | 5,019.4 | 7,145.8 | |
Principal Asset Management | Principal International | Latin America | Individual fixed income annuities | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 5,416.9 | 5,042.3 | 6,561.5 | |
Benefits and Protection | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 2,777.1 | 2,607.8 | 3,661.2 | |
Benefits and Protection | Specialty Benefits | Individual disability | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 1,815.9 | 1,698.8 | $ 2,498.4 | 2,500.9 |
Benefits and Protection | Life Insurance | Term life | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | 961.2 | 909 | 1,117.6 | 1,160.3 |
Benefits and Protection | Life Insurance | Universal life | ||||
Future Policy Benefits and Claims | ||||
Additional liability for certain benefit features | 4,219.3 | 4,095.2 | 3,814.2 | |
Corporate | Long-term care insurance | ||||
Future Policy Benefits and Claims | ||||
Liability for future policy benefits | $ 188.4 | $ 183.5 | $ 234.7 | $ 257.6 |
Future Policy Benefits and Cl_4
Future Policy Benefits and Claims - Liability for Unpaid Claims (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Change in unpaid claims | ||
Balance at beginning of period, unpaid claims | $ 1,395 | $ 1,370.9 |
Balance at beginning of period, reinsurance recoverables for unpaid claims | 68.6 | 68.7 |
Net balance at beginning of period | 1,326.4 | 1,302.2 |
Incurred: | ||
Incurred: Current year | 429.4 | 404.6 |
Incurred: Prior years | (40.8) | (15) |
Total incurred | 388.6 | 389.6 |
Payments: | ||
Payments: Current year | 225.9 | 205.3 |
Payments: Prior years | 162.5 | 174.1 |
Total payments | 388.4 | 379.4 |
Net balance at end of period | 1,326.6 | 1,312.4 |
Balance at end of period, reinsurance recoverables for unpaid claims | 69.6 | 68.9 |
Balance at end of period, unpaid claims | $ 1,396.2 | $ 1,381.3 |
Future Policy Benefits and Cl_5
Future Policy Benefits and Claims - Gross Premiums or Assessments and Interest Accretion (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Future Policy Benefits and Claims | ||
Gross premiums or assessments | $ 1,079.2 | $ 579.3 |
Interest accretion | 490.5 | 508.3 |
Retirement and Income Solutions | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 585 | 123.3 |
Interest accretion | 300.9 | 291.2 |
Retirement and Income Solutions | Pension risk transfer | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 577 | 116.5 |
Interest accretion | 245.2 | 232.7 |
Retirement and Income Solutions | Individual fixed income annuities | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 8 | 6.8 |
Interest accretion | 55.7 | 58.5 |
Principal Asset Management | Principal International | Latin America | Individual fixed income annuities | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 6.6 | 10.5 |
Interest accretion | 106.2 | 139.1 |
Benefits and Protection | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 486.1 | 444.1 |
Interest accretion | 80.9 | 75.6 |
Benefits and Protection | Specialty Benefits | Individual disability | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 150.6 | 144.4 |
Interest accretion | 23.2 | 22.3 |
Benefits and Protection | Life Insurance | Universal life | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 174.6 | 142.5 |
Interest accretion | 46.3 | 42.5 |
Benefits and Protection | Life Insurance | Term life | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 160.9 | 157.2 |
Interest accretion | 11.4 | 10.8 |
Corporate | Long-term care insurance | ||
Future Policy Benefits and Claims | ||
Gross premiums or assessments | 1.5 | 1.4 |
Interest accretion | $ 2.5 | $ 2.4 |
Future Policy Benefits and Cl_6
Future Policy Benefits and Claims - Retirement and Income Solutions (Details) - Retirement and Income Solutions - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pension risk transfer | |||
Present value of expected future policy benefit payments | |||
Balance at beginning of period, Present value of expected future policy benefit payments | $ 21,211.4 | $ 25,365.8 | $ 25,863.7 |
Effect of changes in discount rate assumptions at beginning of period | 1,799.6 | (3,386.5) | (4,827.9) |
Balance at beginning of period at original discount rate | 23,011 | 21,979.3 | 21,035.8 |
Effect of changes in cash flow assumptions | (7.9) | ||
Effect of actual variances from expected experience | (13.3) | (3.2) | (2.4) |
Adjusted beginning of period balance at original discount rate | 22,997.7 | 21,968.2 | 21,033.4 |
Interest accrual | 245.2 | 935.7 | 916.7 |
Benefit payments | (481.5) | (1,841.7) | (1,772.5) |
Issuances | 578.5 | 1,948.8 | 1,801.7 |
Balance at end of period at original discount rate | 23,339.9 | 23,011 | 21,979.3 |
Effect of changes in discount rate assumptions at end of period | (1,193.8) | (1,799.6) | 3,386.5 |
Balance at end of period, Present value of expected future policy benefit payments | 22,146.1 | 21,211.4 | 25,365.8 |
Future policy benefits after reinsurance | $ 22,146.1 | $ 21,211.4 | |
Weighted-average duration for future policy benefits (in years) | 8 years 7 months 6 days | 8 years 6 months | |
Liability for future policy benefit increase (decrease) due to effect of changes in discount rate assumptions | $ 605.8 | $ (5,186.1) | |
Individual fixed income annuities | |||
Present value of expected future policy benefit payments | |||
Balance at beginning of period, Present value of expected future policy benefit payments | 5,019.4 | 6,535 | 7,145.8 |
Effect of changes in discount rate assumptions at beginning of period | 439 | (812.6) | (1,213.5) |
Balance at beginning of period at original discount rate | 5,458.4 | 5,722.4 | 5,932.3 |
Effect of changes in cash flow assumptions | (3) | ||
Effect of actual variances from expected experience | (0.8) | (1.3) | |
Adjusted beginning of period balance at original discount rate | 5,457.6 | 5,719.4 | 5,931 |
Interest accrual | 55.7 | 229.7 | 240.5 |
Benefit payments | (126.9) | (520.4) | (532) |
Issuances | 7.9 | 29.7 | 82.9 |
Balance at end of period at original discount rate | 5,394.3 | 5,458.4 | 5,722.4 |
Effect of changes in discount rate assumptions at end of period | (302) | (439) | 812.6 |
Balance at end of period, Present value of expected future policy benefit payments | 5,092.3 | 5,019.4 | $ 6,535 |
Reinsurance Impact | (4,782.5) | (4,714) | |
Future policy benefits after reinsurance | $ 309.8 | $ 305.4 | |
Weighted-average duration for future policy benefits (in years) | 8 years | 7 years 10 months 24 days | |
Liability for future policy benefit increase (decrease) due to effect of changes in discount rate assumptions | $ 137 | $ (1,251.6) |
Future Policy Benefits and Cl_7
Future Policy Benefits and Claims - Principal Asset Management - Principal International (Details) - Principal Asset Management - Principal International - Latin America - Individual fixed income annuities - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Present value of expected future policy benefit payments | |||
Balance at beginning of period, Present value of expected future policy benefit payments | $ 5,042.3 | $ 4,336.8 | $ 6,561.5 |
Effect of changes in discount rate assumptions at beginning of period | (754.6) | (478.5) | (2,096) |
Balance at beginning of period at original discount rate | 4,287.7 | 3,858.3 | 4,465.5 |
Effect of actual variances from expected experience | 0.7 | (4.7) | (4.9) |
Adjusted beginning of period balance at original discount rate | 4,288.4 | 3,853.6 | 4,460.6 |
Interest accrual | 106.2 | 662 | 444.3 |
Benefit payments | (90.5) | (325.8) | (436) |
Issuances | 7.1 | 86.4 | 141.3 |
Foreign currency translation adjustment | 333.3 | 11.5 | (751.9) |
Balance at end of period at original discount rate | 4,644.5 | 4,287.7 | 3,858.3 |
Effect of changes in discount rate assumptions at end of period | 772.4 | 754.6 | 478.5 |
Balance at end of period, Present value of expected future policy benefit payments | $ 5,416.9 | $ 5,042.3 | $ 4,336.8 |
Weighted-average duration for future policy benefits (in years) | 10 years 8 months 12 days | 10 years 10 months 24 days | |
Liability for future policy benefit increase (decrease) due to effect of changes in discount rate assumptions | $ 17.8 | $ 276.1 |
Future Policy Benefits and Cl_8
Future Policy Benefits and Claims - Benefits and Protection (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Present value of expected future policy benefit payments | |||||
Future policy benefits | $ 35,620.8 | $ 34,064.4 | $ 43,489.8 | ||
Benefits and Protection | |||||
Present value of expected future policy benefit payments | |||||
Future policy benefits | 2,777.1 | 2,607.8 | 3,661.2 | ||
Benefits and Protection | Life Insurance | Term life | |||||
Present value of expected net premiums | |||||
Balance at beginning of period | 3,423.2 | 4,193.7 | |||
Effect of changes in discount rate assumptions at beginning of period | 196 | (690.1) | $ (861.1) | ||
Balance at beginning of period at original discount rate | 3,619.2 | 3,503.6 | 2,937.9 | ||
Effect of actual variances from expected experience | 28.4 | 128.6 | 211.4 | ||
Adjusted beginning of period balance at original discount rate | 3,647.6 | 3,632.2 | 3,149.3 | ||
Interest accrual | 41.5 | 162.9 | 151.1 | ||
Net premiums collected | (86.4) | (346.6) | (315) | ||
Issuances | 49.6 | 170.7 | 518.2 | ||
Balance at end of period at original discount rate | 3,652.3 | 3,619.2 | 3,503.6 | ||
Effect of changes in discount rate assumptions at end of period | (95.9) | (196) | 690.1 | ||
Balance at end of period | 3,556.4 | 3,423.2 | 4,193.7 | ||
Present value of expected future policy benefit payments | |||||
Balance at beginning of period, Present value of expected future policy benefit payments | 4,332.2 | 5,311.3 | 4,959.3 | ||
Effect of changes in discount rate assumptions at beginning of period | 251.6 | (913.9) | (1,179.9) | ||
Balance at beginning of period at original discount rate | 4,583.8 | 4,397.4 | 3,779.4 | ||
Effect of actual variances from expected experience | 32.2 | 139 | 216 | ||
Adjusted beginning of period balance at original discount rate | 4,616 | 4,536.4 | 3,995.4 | ||
Interest accrual | 52.9 | 206.8 | 194.3 | ||
Benefit payments | (87.3) | (340.6) | (335.7) | ||
Issuances | 53.5 | 181.2 | 543.4 | ||
Balance at end of period at original discount rate | 4,635.1 | 4,583.8 | 4,397.4 | ||
Effect of changes in discount rate assumptions at end of period | (117.5) | (251.6) | 913.9 | ||
Balance at end of period, Present value of expected future policy benefit payments | 4,517.6 | 4,332.2 | 5,311.3 | ||
Future policy benefits | 961.2 | 909 | 1,117.6 | 1,160.3 | |
Reinsurance Impact | 43.5 | 25.6 | (0.1) | ||
Future policy benefits after reinsurance | 1,004.7 | 934.6 | 1,117.5 | ||
Liability for future policy benefit increase (decrease) due to effect of changes in discount rate assumptions | $ 34 | $ (279.4) | |||
Weighted-average duration for future policy benefits (in years) | 9 years 6 months | 9 years 7 months 6 days | |||
Benefits and Protection | Specialty Benefits | Individual disability | |||||
Present value of expected net premiums | |||||
Balance at beginning of period | $ 2,341.8 | $ 3,149.9 | |||
Effect of changes in discount rate assumptions at beginning of period | 395.2 | (198.9) | (340.7) | ||
Balance at beginning of period at original discount rate | 2,737 | 2,951 | 2,807.6 | ||
Effect of changes in cash flow assumptions | (413.1) | ||||
Effect of actual variances from expected experience | 82.9 | 235.9 | 122 | ||
Adjusted beginning of period balance at original discount rate | 2,819.9 | 2,773.8 | 2,929.6 | ||
Interest accrual | 23.5 | 95.2 | 95.4 | ||
Net premiums collected | (66.1) | (276.5) | (280.4) | ||
Issuances | 23.5 | 144.5 | 206.4 | ||
Balance at end of period at original discount rate | 2,800.8 | 2,737 | 2,951 | ||
Effect of changes in discount rate assumptions at end of period | (315) | (395.2) | 198.9 | ||
Balance at end of period | 2,485.8 | 2,341.8 | 3,149.9 | ||
Present value of expected future policy benefit payments | |||||
Balance at beginning of period, Present value of expected future policy benefit payments | 4,040.6 | 5,648.3 | 5,649.2 | ||
Effect of changes in discount rate assumptions at beginning of period | 1,021.4 | (501) | (834.1) | ||
Balance at beginning of period at original discount rate | 5,062 | 5,147.3 | 4,815.1 | ||
Effect of changes in cash flow assumptions | (476.3) | ||||
Effect of actual variances from expected experience | 92.4 | 240 | 118.8 | ||
Adjusted beginning of period balance at original discount rate | 5,154.4 | 4,911 | 4,933.9 | ||
Interest accrual | 46.7 | 185.4 | 181 | ||
Benefit payments | (49.3) | (183.7) | (179.7) | ||
Issuances | 24.3 | 149.3 | 212.1 | ||
Balance at end of period at original discount rate | 5,176.1 | 5,062 | 5,147.3 | ||
Effect of changes in discount rate assumptions at end of period | (874.4) | (1,021.4) | 501 | ||
Balance at end of period, Present value of expected future policy benefit payments | 4,301.7 | 4,040.6 | 5,648.3 | ||
Future policy benefits | 1,815.9 | 1,698.8 | 2,498.4 | $ 2,500.9 | |
Reinsurance Impact | (412.3) | (386.8) | (549.9) | ||
Future policy benefits after reinsurance | 1,403.6 | 1,312 | $ 1,948.5 | ||
Liability for future policy benefit increase (decrease) due to effect of changes in discount rate assumptions | $ 66.8 | $ (928.3) | |||
Liability for future policy benefits increase (decrease) from actuarial assumptions | $ (63.2) | ||||
Pre-tax operating earnings, net of reinsurance, increase (decrease) from actuarial assumptions | $ 52.4 | ||||
Weighted-average duration for future policy benefits (in years) | 18 years 6 months | 18 years 6 months |
Future Policy Benefits and Cl_9
Future Policy Benefits and Claims - Additional Liability for Certain Benefit Features (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the additional liability for certain benefits features | |||
Balance at end of period | $ 4,219.3 | $ 4,095.2 | |
Benefits and Protection | Life Insurance | Universal life | |||
Changes in the additional liability for certain benefits features | |||
Balance at beginning of period | 4,095.2 | 3,814.2 | $ 3,463.9 |
Effect of changes in cash flow assumptions | (6) | (11.1) | |
Effect of actual variances from expected experience | 15.1 | 54.9 | 18.1 |
Interest accrual | 46.3 | 171.2 | 158.3 |
Net assessments collected | 89.2 | 320.3 | 324.7 |
Benefit payments | (26.5) | (91.9) | (83.1) |
Other | (167.5) | (56.6) | |
Balance at end of period | 4,219.3 | 4,095.2 | $ 3,814.2 |
Reinsurance impact | (4,215.2) | (4,091.4) | |
Future policy benefits after reinsurance | $ 4.1 | $ 3.8 | |
Weighted-average duration for additional liability (in years) | 27 years | 27 years 7 months 6 days |
Future Policy Benefits and C_10
Future Policy Benefits and Claims - Corporate (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Present value of expected future policy benefit payments | ||||
Future policy benefits | $ 35,620.8 | $ 34,064.4 | $ 43,489.8 | |
Corporate | Long-term care insurance | ||||
Present value of expected net premiums | ||||
Balance at beginning of period | 64.6 | 62.8 | ||
Effect of changes in discount rate assumptions at beginning of period | (3.6) | (14) | $ (17.6) | |
Balance at beginning of period at original discount rate | 61 | 48.8 | 49.1 | |
Effect of changes in cash flow assumptions | 10 | 2.8 | ||
Effect of actual variances from expected experience | (3.6) | 4.1 | (0.8) | |
Adjusted beginning of period balance at original discount rate | 57.4 | 62.9 | 51.1 | |
Interest accrual | 0.9 | 3.3 | 2.9 | |
Net premiums collected | (1.5) | (5.2) | (5.2) | |
Balance at end of period at original discount rate | 56.8 | 61 | 48.8 | |
Effect of changes in discount rate assumptions at end of period | 4.7 | 3.6 | 14 | |
Balance at end of period | 61.5 | 64.6 | 62.8 | |
Present value of expected future policy benefit payments | ||||
Balance at beginning of period, Present value of expected future policy benefit payments | 248.1 | 297.5 | 324.3 | |
Effect of changes in discount rate assumptions at beginning of period | (18.9) | (89.5) | (111.1) | |
Balance at beginning of period at original discount rate | 229.2 | 208 | 213.2 | |
Effect of changes in cash flow assumptions | 17.2 | 0.5 | ||
Effect of actual variances from expected experience | (5.9) | 3.7 | (4.6) | |
Adjusted beginning of period balance at original discount rate | 223.3 | 228.9 | 209.1 | |
Interest accrual | 3.4 | 13.1 | 12.4 | |
Benefit payments | (3.3) | (12.8) | (13.5) | |
Balance at end of period at original discount rate | 223.4 | 229.2 | 208 | |
Effect of changes in discount rate assumptions at end of period | 26.5 | 18.9 | 89.5 | |
Balance at end of period, Present value of expected future policy benefit payments | 249.9 | 248.1 | 297.5 | |
Future policy benefits | 188.4 | 183.5 | 234.7 | $ 257.6 |
Reinsurance Impact | $ (188.4) | $ (183.5) | $ (234.7) | |
Weighted-average duration for future policy benefits (in years) | 11 years 9 months 18 days | 11 years 9 months 18 days | ||
Liability for future policy benefit increase (decrease) due to effect of changes in discount rate assumptions | $ 6.5 | $ (60.2) |
Future Policy Benefits and C_11
Future Policy Benefits and Claims - Expected Future Gross Premiums and Benefit Payments (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Retirement and Income Solutions | Pension risk transfer | ||
Future Policy Benefits and Claims | ||
Expected undiscounted future benefit payments | $ 34,085.9 | $ 33,691.4 |
Retirement and Income Solutions | Individual fixed income annuities | ||
Future Policy Benefits and Claims | ||
Expected undiscounted future benefit payments | 7,605.3 | 7,716.6 |
Principal Asset Management | Principal International | Latin America | Individual fixed income annuities | ||
Future Policy Benefits and Claims | ||
Expected undiscounted future benefit payments | 6,960.9 | 6,449.9 |
Benefits and Protection | Specialty Benefits | Individual disability | ||
Future Policy Benefits and Claims | ||
Expected discounted future gross premiums | 5,316.8 | 5,140.9 |
Expected undiscounted future gross premiums | 8,035.8 | 7,978.7 |
Expected undiscounted future benefit payments | 8,656.7 | 8,473.9 |
Benefits and Protection | Life Insurance | Term life | ||
Future Policy Benefits and Claims | ||
Expected discounted future gross premiums | 6,301.3 | 6,104.6 |
Expected undiscounted future gross premiums | 10,169.3 | 10,146.3 |
Expected undiscounted future benefit payments | 7,264.7 | 7,202.5 |
Corporate | Long-term care insurance | ||
Future Policy Benefits and Claims | ||
Expected discounted future gross premiums | 61.5 | 64.6 |
Expected undiscounted future gross premiums | 89.3 | 96.5 |
Expected undiscounted future benefit payments | $ 468.6 | $ 483.4 |
Future Policy Benefits and C_12
Future Policy Benefits and Claims - Interest Accretion and Current Discount Rates (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Retirement and Income Solutions | Pension risk transfer | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 4.40% | 4.38% |
Current discount rate | 4.96% | 5.31% |
Retirement and Income Solutions | Individual fixed income annuities | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 4.21% | 4.22% |
Current discount rate | 4.94% | 5.30% |
Principal Asset Management | Principal International | Latin America | Individual fixed income annuities | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 4.24% | 4.24% |
Current discount rate | 2.50% | 2.43% |
Benefits and Protection | Specialty Benefits | Individual disability | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 4.01% | 4.03% |
Current discount rate | 5.01% | 5.36% |
Benefits and Protection | Life Insurance | Universal life | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 4.73% | 4.73% |
Benefits and Protection | Life Insurance | Term life | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 4.85% | 4.89% |
Current discount rate | 4.83% | 5.22% |
Corporate | Long-term care insurance | ||
Future Policy Benefits and Claims | ||
Interest accretion rate | 6.16% | 6.16% |
Current discount rate | 5% | 5.34% |
Market Risk Benefits - Asset an
Market Risk Benefits - Asset and Liability Position and Reconciliation (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Market Risk Benefits | ||||
Market risk benefit asset | $ 107.3 | $ 109.2 | ||
Market risk benefit liability | 194.4 | 207.4 | ||
Net asset (liability) | (87.1) | (98.2) | ||
Retirement and Income Solutions | Individual variable annuities | ||||
Market Risk Benefits | ||||
Market risk benefit asset | 107.3 | 109.2 | ||
Market risk benefit liability | 170.4 | 181.4 | ||
Net asset (liability) | (63.1) | (72.2) | $ (494.7) | $ (591.3) |
Principal Asset Management | Principal International | Guaranteed pension | Asia | ||||
Market Risk Benefits | ||||
Market risk benefit liability | 24 | 26 | ||
Net asset (liability) | $ (24) | $ (26) | $ (35.1) | $ (53.3) |
Market Risk Benefits - Net Asse
Market Risk Benefits - Net Asset (Liability) Balances and Changes in Valuation of the MRBs for Individual Variable Annuities (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
The net asset (liability) balances and the changes in the valuation of the MRBs | ||||
Balance at beginning of period | $ (98.2) | |||
Balance at end of period | (87.1) | $ (98.2) | ||
Net amount at risk | $ 644.6 | |||
Retirement and Income Solutions | Individual variable annuities | ||||
The net asset (liability) balances and the changes in the valuation of the MRBs | ||||
Balance at beginning of period | (72.2) | (494.7) | $ (591.3) | |
Effect of changes in nonperformance risk at beginning of period | (31.7) | 109.5 | 106.7 | |
Adjusted balance at beginning of period | (103.9) | (385.2) | (484.6) | |
Interest accrual and expected policyholder behavior | (19.8) | (90.1) | (120.7) | |
Benefit payments | 0.2 | 1.3 | 0.4 | |
Changes in interest rates | (54.2) | 539.1 | 154.3 | |
Changes in equity markets | 46.4 | (112.4) | 106.4 | |
Changes in equity index volatility | 30.6 | (50.2) | 15.1 | |
Actual policyholder behavior different from expected behavior | (2) | 1.5 | 2.3 | |
Changes in future expected policyholder behavior | 0 | (6.1) | (96.6) | |
Changes in other future expected assumptions | 0 | (1.8) | 38.2 | |
Adjusted balance at end of period | (102.7) | (103.9) | (385.2) | |
Effect of changes in nonperformance risk at end of period | (39.6) | (31.7) | 109.5 | |
Balance at end of period | $ (63.1) | $ (72.2) | $ (494.7) | |
Weighted-average attained age of policyholders (years) | 67 years 6 months | 67 years 4 months 24 days | ||
Net amount at risk | $ 299.8 | $ 415.5 | $ 591.3 |
Market Risk Benefits - Net As_2
Market Risk Benefits - Net Asset (Liability) Balances and Changes in Valuation of MRBs for Asia - Guaranteed Pension (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
The net asset (liability) balances and the changes in the valuation of the MRBs | ||||
Balance at beginning of period | $ (98.2) | |||
Balance at end of period | (87.1) | $ (98.2) | ||
Market Risk Benefit, Net Amount at Risk | $ 644.6 | |||
Principal Asset Management | Principal International | Guaranteed pension | Asia | ||||
The net asset (liability) balances and the changes in the valuation of the MRBs | ||||
Balance at beginning of period | (26) | (35.1) | $ (53.3) | |
Effect of changes in nonperformance risk at beginning of period | 1.2 | 4.3 | (6.5) | |
Adjusted balance at beginning of period | (24.8) | (30.8) | (46.8) | |
Interest accrual and expected policyholder behavior | (2.8) | (7.1) | (5.3) | |
Benefit payments | 3.7 | 9.5 | 5.7 | |
Changes in interest rates | 0.7 | 3.9 | 7.6 | |
Changes in equity markets | 0.1 | (1) | 1.4 | |
Actual policyholder behavior different from expected behavior | 0.4 | 0.7 | 3.6 | |
Foreign currency translation adjustment | 0.1 | |||
Adjusted balance at end of period | (22.6) | (24.8) | (30.8) | |
Effect of changes in nonperformance risk at end of period | 1.4 | 1.2 | 4.3 | |
Balance at end of period | $ (24) | $ (26) | $ (35.1) | |
Market Risk Benefit, Weighted Average Attained Age | 50 years | 50 years | ||
Market Risk Benefit, Net Amount at Risk | $ 87.4 | $ 91 |
Market Risk Benefits - Unobserv
Market Risk Benefits - Unobservable Inputs for Fair Value Measurement (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Retirement and Income Solutions | Individual variable annuities | Minimum | Long-term interest rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 3.67 | 3.97 |
Retirement and Income Solutions | Individual variable annuities | Minimum | Long-term equity market volatility | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 18.10 | 18.10 |
Retirement and Income Solutions | Individual variable annuities | Minimum | Nonperformance risk | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 0.93 | 0.90 |
Retirement and Income Solutions | Individual variable annuities | Minimum | Lapse rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 1.25 | 1.25 |
Retirement and Income Solutions | Individual variable annuities | Maximum | Long-term interest rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 3.80 | 4.12 |
Retirement and Income Solutions | Individual variable annuities | Maximum | Long-term equity market volatility | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 31.76 | 34.15 |
Retirement and Income Solutions | Individual variable annuities | Maximum | Nonperformance risk | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 2 | 1.96 |
Retirement and Income Solutions | Individual variable annuities | Maximum | Lapse rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 24.75 | 24.75 |
Retirement and Income Solutions | Individual variable annuities | Weighted average input | Long-term interest rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 3.73 | 4.04 |
Retirement and Income Solutions | Individual variable annuities | Weighted average input | Long-term equity market volatility | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 21.37 | 22.07 |
Retirement and Income Solutions | Individual variable annuities | Weighted average input | Nonperformance risk | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 1.71 | 1.65 |
Retirement and Income Solutions | Individual variable annuities | Weighted average input | Lapse rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 5.76 | 5.76 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Minimum | Long-term interest rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 3.93 | 3.80 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Minimum | Long-term equity market volatility | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 18.07 | 18.06 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Minimum | Nonperformance risk | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 0.66 | 0.90 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Minimum | Lapse rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 4.95 | 4.95 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Maximum | Long-term interest rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 4.08 | 3.98 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Maximum | Long-term equity market volatility | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 24.09 | 25.16 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Maximum | Nonperformance risk | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 1.63 | 1.98 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Maximum | Lapse rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 19.35 | 19.35 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Weighted average input | Long-term interest rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 4 | 3.88 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Weighted average input | Long-term equity market volatility | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 19.98 | 20.69 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Weighted average input | Nonperformance risk | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 1.35 | 1.68 |
Principal Asset Management | Principal International | Guaranteed pension | Asia | Weighted average input | Lapse rate | ||
Unobservable Inputs for Fair Value Measurement | ||
Market risk benefits, measurement input | 13.40 | 13.40 |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Reinsurance | ||
Reinsurance recoverable assets | $ 13,458.1 | $ 13,252.8 |
Reinsurance recoverable liabilities | 43.5 | 39.4 |
Reinsurance deposit receivable | $ 7,423.4 | $ 7,901 |
Reinsurance - Effects Of Reinsu
Reinsurance - Effects Of Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Premiums and other considerations: | ||
Premiums and other considerations, Direct | $ 1,563.3 | $ 1,040.5 |
Premiums and other considerations, Ceded | (114.7) | (153.1) |
Net premiums and other considerations | 1,448.6 | 887.4 |
Benefits, claims and settlement expenses: | ||
Benefits, claims and settlement expenses, Direct | 2,107.8 | 1,629.5 |
Benefits, claims and settlement expenses, Ceded | (333.9) | (138.8) |
Net benefits, claims and settlement expenses | 1,773.9 | 1,490.7 |
Liability for future policy benefits remeasurement (gain) loss: | ||
Liability for future policy benefits remeasurement (gain) loss, Direct | 12.7 | 20.3 |
Liability for future policy benefits remeasurement (gain) loss, Ceded | (18.3) | (6.9) |
Net liability for future policy benefits remeasurement (gain) loss | $ (5.6) | $ 13.4 |
Reinsurance - Cost of Reinsuran
Reinsurance - Cost of Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Reinsurance | |||
Cost of reinsurance asset | $ 3,315 | $ 3,339.1 | |
Cost of reinsurance liability | 184.5 | $ 191.1 | |
Cost of reinsurance amortization | $ 17.8 | $ (5.5) |
Reinsurance - Funds Withheld (D
Reinsurance - Funds Withheld (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | $ 20,772.4 | $ 20,703.9 | |
Funds withheld payable | 20,524.4 | 20,436.1 | |
Embedded derivative asset | 3,026.2 | 3,652.8 | |
Change in fair value of funds withheld embedded derivative | (626.6) | $ 0 | |
Fixed maturities, available-for-sale | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 16,231.7 | 15,693.5 | |
Fixed maturities, trading | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 103.2 | 100.8 | |
Equity securities | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 0.3 | 11 | |
Mortgage loans | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 2,735.1 | 2,810.8 | |
Other investments | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 203 | 179.8 | |
Cash and cash equivalents | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 1,522.8 | 1,762.9 | |
Accrued interest income | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Net assets | 200 | 178.7 | |
Net other assets (liabilities) | |||
Funds Held under Reinsurance Agreements, Asset [Line Items] | |||
Total assets - Net other liabilities | $ (223.7) | $ (33.6) |
Reinsurance - Components of Net
Reinsurance - Components of Net Realized Capital Gains (Losses) on Funds Withheld Assets (Details) - Talcott Life & Annuity Re $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Reinsurance | |
Net realized capital losses | $ (55.4) |
Fixed maturities, available-for-sale | |
Reinsurance | |
Net realized capital losses | (57) |
Fixed maturities, trading | |
Reinsurance | |
Net realized capital losses | (0.1) |
Equity securities | |
Reinsurance | |
Net realized capital losses | (1.2) |
Derivatives | |
Reinsurance | |
Net realized capital losses | $ 2.9 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Mar. 08, 2023 | Dec. 31, 2022 |
Long-Term Debt | |||
Long-term debt principal | $ 4,722.1 | $ 4,022.7 | |
Net unamortized discount, premium and debt issuance costs | (33.5) | (25.7) | |
Long-term debt carrying amount | 4,688.6 | 3,997 | |
Senior notes | |||
Long-Term Debt | |||
Long-term debt issued | $ 700 | ||
3.125% notes payable, due 2023 | |||
Long-Term Debt | |||
Long-term debt principal | 300 | 300 | |
Net unamortized discount, premium and debt issuance costs | (0.1) | ||
Long-term debt carrying amount | $ 300 | $ 299.9 | |
Interest rate (as a percent) | 3.125% | 3.125% | |
3.4% notes payable, due 2025 | |||
Long-Term Debt | |||
Long-term debt principal | $ 400 | $ 400 | |
Net unamortized discount, premium and debt issuance costs | (1.1) | (1.2) | |
Long-term debt carrying amount | $ 398.9 | $ 398.8 | |
Interest rate (as a percent) | 3.40% | 3.40% | |
3.1% notes payable, due 2026 | |||
Long-Term Debt | |||
Long-term debt principal | $ 350 | $ 350 | |
Net unamortized discount, premium and debt issuance costs | (1.3) | (1.4) | |
Long-term debt carrying amount | $ 348.7 | $ 348.6 | |
Interest rate (as a percent) | 3.10% | 3.10% | |
3.7% notes payable, due 2029 | |||
Long-Term Debt | |||
Long-term debt principal | $ 500 | $ 500 | |
Net unamortized discount, premium and debt issuance costs | (4.2) | (4.3) | |
Long-term debt carrying amount | $ 495.8 | $ 495.7 | |
Interest rate (as a percent) | 3.70% | 3.70% | |
2.125% notes payable, due 2030 | |||
Long-Term Debt | |||
Long-term debt principal | $ 600 | $ 600 | |
Net unamortized discount, premium and debt issuance costs | (3.6) | (3.6) | |
Long-term debt carrying amount | $ 596.4 | $ 596.4 | |
Interest rate (as a percent) | 2.125% | 2.125% | |
5.375% notes payable, due 2033 | |||
Long-Term Debt | |||
Long-term debt principal | $ 400 | ||
Net unamortized discount, premium and debt issuance costs | (4) | ||
Long-term debt carrying amount | $ 396 | ||
Interest rate (as a percent) | 5.375% | ||
5.375% notes payable, due 2033 | Senior notes | |||
Long-Term Debt | |||
Long-term debt issued | $ 400 | ||
Interest rate (as a percent) | 5.375% | ||
6.05% notes payable, due 2036 | |||
Long-Term Debt | |||
Long-term debt principal | $ 505.6 | $ 505.6 | |
Net unamortized discount, premium and debt issuance costs | (2.2) | (2.3) | |
Long-term debt carrying amount | $ 503.4 | $ 503.3 | |
Interest rate (as a percent) | 6.05% | 6.05% | |
4.625% notes payable, due 2042 | |||
Long-Term Debt | |||
Long-term debt principal | $ 300 | $ 300 | |
Net unamortized discount, premium and debt issuance costs | (3) | (2.9) | |
Long-term debt carrying amount | $ 297 | $ 297.1 | |
Interest rate (as a percent) | 4.625% | 4.625% | |
4.35% notes payable, due 2043 | |||
Long-Term Debt | |||
Long-term debt principal | $ 300 | $ 300 | |
Net unamortized discount, premium and debt issuance costs | (2.9) | (3) | |
Long-term debt carrying amount | $ 297.1 | $ 297 | |
Interest rate (as a percent) | 4.35% | 4.35% | |
4.3% notes payable, due 2046 | |||
Long-Term Debt | |||
Long-term debt principal | $ 300 | $ 300 | |
Net unamortized discount, premium and debt issuance costs | (3) | (3.1) | |
Long-term debt carrying amount | $ 297 | $ 296.9 | |
Interest rate (as a percent) | 4.30% | 4.30% | |
5.5% notes payable, due 2053 | |||
Long-Term Debt | |||
Long-term debt principal | $ 300 | ||
Net unamortized discount, premium and debt issuance costs | (4.4) | ||
Long-term debt carrying amount | $ 295.6 | ||
Interest rate (as a percent) | 5.50% | ||
5.5% notes payable, due 2053 | Senior notes | |||
Long-Term Debt | |||
Long-term debt issued | $ 300 | ||
Interest rate (as a percent) | 5.50% | ||
Floating rate notes payable, due 2055 | |||
Long-Term Debt | |||
Long-term debt principal | $ 400 | $ 400 | |
Net unamortized discount, premium and debt issuance costs | (4.5) | (4.5) | |
Long-term debt carrying amount | 395.5 | 395.5 | |
Mortgages and notes payable | Non-recourse | |||
Long-Term Debt | |||
Long-term debt principal | 66.5 | 67.1 | |
Net unamortized discount, premium and debt issuance costs | 0.7 | 0.7 | |
Long-term debt carrying amount | $ 67.2 | $ 67.8 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Reconciliation between the U.S. corporate income tax rate and the effective income tax rate from continuing operations | ||
U.S. corporate income tax rate (as a percent) | 21% | 21% |
Dividends received deduction (as a percent) | 9% | (5.00%) |
Tax credits (as a percent) | 6% | (4.00%) |
Employee compensation (as a precent) | 4% | (2.00%) |
Interest exclusion from taxable income (as a percent) | 3% | (2.00%) |
Local country permanent tax adjustments (as a percent) | 2% | |
Impact of equity method presentation (as a percent) | 3% | (2.00%) |
Global Intangible Low-Taxed Income (as a percent) | (6.00%) | 1% |
Low income housing tax credit amortization (as a percent) | (5.00%) | 1% |
Foreign country statutory rate differential (as a percent) | (2.00%) | 1% |
State income taxes (as a percent) | (2.00%) | |
Other income tax rate impacts (as a percent) | 2% | 2% |
Effective income tax rate (as a percent) | 37% | 9% |
Employee and Agent Benefits - C
Employee and Agent Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Pension benefits | ||
Components of Net Periodic Benefit Cost (Income) | ||
Service cost | $ 14 | $ 20.2 |
Interest cost | $ 39.7 | $ 28.1 |
Interest cost, location on consolidated statements of operations | Operating expenses | Operating expenses |
Expected return on plan assets | $ (40.7) | $ (44.7) |
Expected return on plan assets, location on consolidated statements of operations | Operating expenses | Operating expenses |
Amortization of prior service (benefit) cost | $ (4.2) | $ (4.2) |
Amortization of prior service (benefit) cost, location on consolidated statements of operations | Operating expenses | Operating expenses |
Recognized net actuarial (gain) loss | $ 9.8 | $ 13.8 |
Recognized net actuarial (gain) loss, location on consolidated statements of operations | Operating expenses | Operating expenses |
Net periodic benefit cost (income) | $ 18.6 | $ 13.2 |
Contributions made by employer to fund qualified and nonqualified pension plans | 30 | |
Pension benefits | Maximum | ||
Components of Net Periodic Benefit Cost (Income) | ||
Amount of possible contributions to be made during the current fiscal year to the qualified and nonqualified pension plans combined | 70 | |
Other postretirement benefits | ||
Components of Net Periodic Benefit Cost (Income) | ||
Interest cost | $ 0.8 | $ 0.6 |
Interest cost, location on consolidated statements of operations | Operating expenses | Operating expenses |
Expected return on plan assets | $ (1.1) | $ (1.2) |
Expected return on plan assets, location on consolidated statements of operations | Operating expenses | Operating expenses |
Amortization of prior service (benefit) cost | $ (0.3) | $ (0.3) |
Amortization of prior service (benefit) cost, location on consolidated statements of operations | Operating expenses | Operating expenses |
Recognized net actuarial (gain) loss | $ (0.2) | $ (0.3) |
Recognized net actuarial (gain) loss, location on consolidated statements of operations | Operating expenses | Operating expenses |
Net periodic benefit cost (income) | $ (0.8) | $ (1.2) |
Contingencies, Guarantees and_2
Contingencies, Guarantees and Indemnifications (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Guarantees to third parties primarily related to former subsidiaries and joint ventures | |
Guarantees and Indemnifications | |
Maximum exposure under guarantees | $ 77 |
Guarantees related to P-Caps contingent funding agreements | |
Guarantees and Indemnifications | |
Maximum exposure under guarantees | $ 750 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Dividends and Reconciliation of Outstanding Common Shares (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | |||||||
Sep. 30, 2022 | Aug. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Aug. 16, 2022 | |
Common stock share repurchase disclosures | |||||||||
Amount of forward contract recorded in additional paid in capital | $ 140 | ||||||||
Common stock | |||||||||
Common Stock Dividends | |||||||||
Dividends declared per common share (in dollars per share) | $ 0.64 | $ 0.64 | |||||||
Reconciliation of Outstanding Common Shares | |||||||||
Outstanding shares at beginning of period | 261.7 | 243.5 | 261.7 | ||||||
Shares issued | 1.7 | 1.7 | |||||||
Treasury stock acquired | (2.1) | (11.2) | |||||||
Outstanding shares at end of period | 252.2 | 243.1 | 252.2 | ||||||
Common stock share repurchase disclosures | |||||||||
Share repurchase program, maximum authorized amount (in dollars) | $ 1,600 | $ 1,200 | |||||||
Common stock | March 2022 Accelerated Share Repurchase Program | |||||||||
Common stock share repurchase disclosures | |||||||||
Share repurchase program, maximum authorized amount (in dollars) | $ 700 | ||||||||
Number of shares repurchased | 1.4 | 8.5 | |||||||
Initial cost of shares repurchased | $ 560 | $ 560 | |||||||
Amount of forward contract recorded in additional paid in capital | $ 140 | ||||||||
Volume-weighted average price of our common stock | $ 70.53 | ||||||||
Common stock | August 2022 Accelerated Share Repurchase Program | |||||||||
Common stock share repurchase disclosures | |||||||||
Share repurchase program, maximum authorized amount (in dollars) | $ 400 | ||||||||
Number of shares repurchased | 1.2 | 4.1 | |||||||
Initial cost of shares repurchased | $ 320 | ||||||||
Volume-weighted average price of our common stock | $ 76.48 |
Stockholders' Equity - Other Co
Stockholders' Equity - Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | $ 822 | $ (1,787.3) |
Other comprehensive income (loss), tax | (142.9) | 410.9 |
Other comprehensive income (loss) | 679.1 | (1,376.4) |
Net unrealized gains (losses) on available-for-sale securities including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss) before reclassifications, pre-tax | 1,280.8 | (5,535.5) |
Adjustments for assumed changes in amortization patterns, pre-tax | 0.2 | (0.1) |
Adjustments for assumed changes in policyholder liabilities, pre-tax | (0.1) | 363.1 |
Other comprehensive income (loss), pre-tax | 1,359.4 | (5,213.1) |
Other comprehensive income (loss) before reclassifications, tax | (264.9) | 1,172 |
Reclassification from accumulated other comprehensive income, tax | (16.4) | 5.2 |
Adjustments for assumed changes in policyholder liabilities, tax | (76.3) | |
Other comprehensive income (loss), tax | (281.3) | 1,100.9 |
Other comprehensive income (loss) before reclassifications, after-tax | 1,015.9 | (4,363.5) |
Reclassification from accumulated other comprehensive income, after-tax | 62.1 | (35.4) |
Adjustments for assumed changes in amortization patterns, after-tax | 0.2 | (0.1) |
Adjustments for assumed changes in policyholder liabilities, after-tax | (0.1) | 286.8 |
Other comprehensive income (loss) | 1,078.1 | (4,112.2) |
Net unrealized gains (losses) on available-for-sale securities including NCI | Net realized capital gains (losses) | ||
Other Comprehensive Income (Loss) | ||
Reclassification from accumulated other comprehensive income, pre-tax | 78.5 | (40.6) |
Net unrealized gains (losses) on derivative instruments including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss) before reclassifications, pre-tax | 3.7 | (21) |
Reclassification from accumulated other comprehensive income, pre-tax | (3.7) | (6.8) |
Adjustments for assumed changes in policyholder liabilities, pre-tax | 3.9 | |
Other comprehensive income (loss), pre-tax | (23.9) | |
Other comprehensive income (loss) before reclassifications, tax | (0.8) | 4.4 |
Reclassification from accumulated other comprehensive income, tax | 0.8 | 1.4 |
Adjustments for assumed changes in policyholder liabilities, tax | (0.7) | |
Other comprehensive income (loss), tax | 5.1 | |
Other comprehensive income (loss) before reclassifications, after-tax | 2.9 | (16.6) |
Reclassification from accumulated other comprehensive income, after-tax | (2.9) | (5.4) |
Adjustments for assumed changes in policyholder liabilities, after-tax | 3.2 | |
Other comprehensive income (loss) | (18.8) | |
Liability for future policy benefits discount rate remeasurement gain (loss) | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | (682.4) | 3,190.9 |
Other comprehensive income (loss), tax | 141.5 | (671.8) |
Other comprehensive income (loss) | (540.9) | 2,519.1 |
Market risk benefit nonperformance risk gain | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | 7.7 | 93.2 |
Other comprehensive income (loss), tax | (1.7) | (19.5) |
Other comprehensive income (loss) | 6 | (73.7) |
Foreign currency translation adjustment including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | 132.2 | 156.6 |
Other comprehensive income (loss), tax | (0.1) | (1.5) |
Other comprehensive income (loss) | 132.1 | 155.1 |
Unrecognized postretirement benefit obligation including NCI | ||
Other Comprehensive Income (Loss) | ||
Other comprehensive income (loss), pre-tax | 5.1 | 9 |
Reclassification from accumulated other comprehensive income, tax | (1.3) | (2.3) |
Other comprehensive income (loss), tax | (1.3) | (2.3) |
Reclassification from accumulated other comprehensive income, after-tax | 3.8 | 6.7 |
Other comprehensive income (loss) | 3.8 | 6.7 |
Unrecognized postretirement benefit obligation including NCI | Operating expense | ||
Other Comprehensive Income (Loss) | ||
Reclassification from accumulated other comprehensive income, pre-tax | $ 5.1 | $ 9 |
Stockholders' Equity - AOCI and
Stockholders' Equity - AOCI and Noncontrolling Interest (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | $ 9,976.7 | |
Balances | 10,217.9 | |
Change in redeemable noncontrolling interest rollforward | ||
Redeemable noncontrolling interest, balance at beginning of period | 262 | $ 332.5 |
Net income (loss) attributable to redeemable noncontrolling interest | 4.5 | (10.3) |
Redeemable noncontrolling interest of deconsolidated entities | (2.4) | |
Contributions from redeemable noncontrolling interest | 19 | 24 |
Distributions to redeemable noncontrolling interest | (8.4) | (39.6) |
Purchase of subsidiary shares from redeemable noncontrolling interest | (1.6) | |
Change in redemption value of redeemable noncontrolling interest | (0.6) | 0.1 |
Other comprehensive income (loss) attributable to redeemable noncontrolling interest | 0.2 | 0.1 |
Redeemable noncontrolling interest, balance at end of period | 272.7 | 306.8 |
Accumulated other comprehensive income (loss) | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | (6,879) | (2,084.1) |
Other comprehensive income (loss) during the period, net of adjustments | 614.7 | (1,343.7) |
Amounts reclassified to accumulated other comprehensive income (loss) | 63 | (34.1) |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 677.7 | (1,377.8) |
Balances | (6,201.3) | (3,461.9) |
Net unrealized gains (losses) on available-for-sale securities | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | (5,857.9) | 3,880.4 |
Other comprehensive income (loss) during the period, net of adjustments | 1,016 | (4,076.8) |
Amounts reclassified to accumulated other comprehensive income (loss) | 62.1 | (35.4) |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 1,078.1 | (4,112.2) |
Balances | (4,779.8) | (231.8) |
Net unrealized gains (losses) on available-for-sale debt securities with allowance for credit losses | 0.6 | 6.2 |
Net unrealized gains (losses) on derivative instruments | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | 39.7 | 56.6 |
Other comprehensive income (loss) during the period, net of adjustments | 2.9 | (13.4) |
Amounts reclassified to accumulated other comprehensive income (loss) | (2.9) | (5.4) |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (18.8) | |
Balances | 39.7 | 37.8 |
Liability for future policy benefits discount rate remeasurement gain (loss) | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | 740.9 | (4,037.6) |
Other comprehensive income (loss) during the period, net of adjustments | (540.9) | 2,519.1 |
Amounts reclassified to accumulated other comprehensive income (loss) | 0 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | (540.9) | 2,519.1 |
Balances | 200 | (1,518.5) |
Market risk benefit nonperformance risk gain | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | 24 | (90.1) |
Other comprehensive income (loss) during the period, net of adjustments | 6 | 73.7 |
Amounts reclassified to accumulated other comprehensive income (loss) | 0 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 6 | 73.7 |
Balances | 30 | (16.4) |
Foreign currency translation adjustment | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | (1,571.6) | (1,548.7) |
Other comprehensive income (loss) during the period, net of adjustments | 130.7 | 153.7 |
Amounts reclassified to accumulated other comprehensive income (loss) | 0 | |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 130.7 | 153.7 |
Balances | (1,440.9) | (1,395) |
Unrecognized postretirement benefit obligations | ||
Change in accumulated other comprehensive income (loss) rollforward | ||
Balances | (254.1) | (344.7) |
Amounts reclassified to accumulated other comprehensive income (loss) | 3.8 | 6.7 |
Other comprehensive income (loss) attributable to Principal Financial Group, Inc. | 3.8 | 6.7 |
Balances | $ (250.3) | $ (338) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | $ 65,396.9 | $ 62,889.9 |
Fixed maturities, trading | 787.9 | 760.7 |
Equity securities | 1,733.3 | 1,708.6 |
Derivative instruments, assets | 386.7 | 321.6 |
Separate account assets | 162,000.8 | 155,375.1 |
Investment and universal life contracts | (55.5) | (46.4) |
Amount measured at net asset value | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Unfunded commitments of investments measured using NAV | $ 7.8 | 7.8 |
Maximum | ||
Fixed maturities valued using internal pricing models | ||
Maximum fixed maturities classified as Level 3 assets, percent valued using internal pricing models (as a percent) | 4% | |
U.S. government and agencies | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | $ 1,829.9 | 1,739.8 |
Non-U.S. governments | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 549.2 | 567.3 |
States and political subdivisions | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,173.4 | 6,232.3 |
Corporate debt securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 37,296.6 | 36,183.2 |
Residential mortgage-backed pass-through securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,794.9 | 2,228.7 |
Commercial mortgage-backed securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,927.8 | 4,864.6 |
Collateralized debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,902.3 | 4,566.4 |
Other debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,922.8 | 6,507.6 |
Recurring Fair Value Measurements | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 65,396.9 | 62,889.9 |
Fixed maturities, trading | 787.9 | 760.7 |
Equity securities | 1,733.3 | 1,708.6 |
Derivative instruments, assets | 386.7 | 321.6 |
Other investments | 722.9 | 701.1 |
Cash equivalents | 3,235.1 | 3,604.1 |
Market risk benefit asset | 107.3 | 109.2 |
Sub-total excluding separate account assets | 72,370.1 | 70,095.2 |
Separate account assets | 162,000.8 | 155,375.1 |
Total assets | 234,370.9 | 225,470.3 |
Investment and universal life contracts | (55.5) | (46.4) |
Market risk benefit liability | (194.4) | (207.4) |
Funds withheld payable embedded derivative | 3,026.2 | 3,652.8 |
Derivative liabilities | (508.4) | (634.2) |
Other liabilities | (1) | (0.4) |
Total liabilities | 2,266.9 | 2,764.4 |
Net assets (liabilities) | 236,637.8 | 228,234.7 |
Recurring Fair Value Measurements | Amount measured at net asset value | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Other investments | 79.1 | 81.4 |
Sub-total excluding separate account assets | 79.1 | 81.4 |
Separate account assets | 8,830.1 | 9,120.9 |
Total assets | 8,909.2 | 9,202.3 |
Net assets (liabilities) | 8,909.2 | 9,202.3 |
Recurring Fair Value Measurements | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,474.1 | 1,387.1 |
Fixed maturities, trading | 129.2 | 78.6 |
Equity securities | 506.9 | 492.4 |
Other investments | 304.2 | 311.7 |
Cash equivalents | 565.4 | 973.5 |
Sub-total excluding separate account assets | 2,979.8 | 3,243.3 |
Separate account assets | 97,181.5 | 92,010.7 |
Total assets | 100,161.3 | 95,254 |
Net assets (liabilities) | 100,161.3 | 95,254 |
Recurring Fair Value Measurements | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 61,164.2 | 59,336.2 |
Fixed maturities, trading | 502.6 | 548.1 |
Equity securities | 1,226.4 | 1,216.2 |
Derivative instruments, assets | 381.7 | 320.9 |
Other investments | 337.7 | 306.1 |
Cash equivalents | 2,669.7 | 2,630.6 |
Sub-total excluding separate account assets | 66,282.3 | 64,358.1 |
Separate account assets | 55,095.4 | 53,208.6 |
Total assets | 121,377.7 | 117,566.7 |
Derivative liabilities | (507.4) | (630.1) |
Other liabilities | (1) | (0.4) |
Total liabilities | (508.4) | (630.5) |
Net assets (liabilities) | 120,869.3 | 116,936.2 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,758.6 | 2,166.6 |
Fixed maturities, trading | 156.1 | 134 |
Derivative instruments, assets | 5 | 0.7 |
Other investments | 1.9 | 1.9 |
Market risk benefit asset | 107.3 | 109.2 |
Sub-total excluding separate account assets | 3,028.9 | 2,412.4 |
Separate account assets | 893.8 | 1,034.9 |
Total assets | 3,922.7 | 3,447.3 |
Investment and universal life contracts | (55.5) | (46.4) |
Market risk benefit liability | (194.4) | (207.4) |
Funds withheld payable embedded derivative | 3,026.2 | 3,652.8 |
Derivative liabilities | (1) | (4.1) |
Total liabilities | 2,775.3 | 3,394.9 |
Net assets (liabilities) | 6,698 | 6,842.2 |
Recurring Fair Value Measurements | U.S. government and agencies | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,829.9 | 1,739.8 |
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,443.9 | 1,359.1 |
Recurring Fair Value Measurements | U.S. government and agencies | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 386 | 380.7 |
Recurring Fair Value Measurements | Non-U.S. governments | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 549.2 | 567.3 |
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 0.6 | 1.4 |
Recurring Fair Value Measurements | Non-U.S. governments | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 548.6 | 565.9 |
Recurring Fair Value Measurements | States and political subdivisions | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,173.4 | 6,232.3 |
Recurring Fair Value Measurements | States and political subdivisions | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,101.3 | 6,161.4 |
Recurring Fair Value Measurements | States and political subdivisions | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 72.1 | 70.9 |
Recurring Fair Value Measurements | Corporate debt securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 37,296.6 | 36,183.2 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 1 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 29.6 | 26.6 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 35,612.5 | 34,588.3 |
Recurring Fair Value Measurements | Corporate debt securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 1,654.5 | 1,568.3 |
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,794.9 | 2,228.7 |
Recurring Fair Value Measurements | Residential mortgage-backed pass-through securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 2,794.9 | 2,228.7 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,927.8 | 4,864.6 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,924.5 | 4,861.2 |
Recurring Fair Value Measurements | Commercial mortgage-backed securities | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 3.3 | 3.4 |
Recurring Fair Value Measurements | Collateralized debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,902.3 | 4,566.4 |
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 4,740.1 | 4,510.2 |
Recurring Fair Value Measurements | Collateralized debt obligations | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 162.2 | 56.2 |
Recurring Fair Value Measurements | Other debt obligations | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,922.8 | 6,507.6 |
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 2 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | 6,056.3 | 6,039.8 |
Recurring Fair Value Measurements | Other debt obligations | Fair value hierarchy Level 3 | ||
Assets (liabilities) measured at fair value on a recurring basis | ||
Fixed maturities, available-for-sale | $ 866.5 | $ 467.8 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Fair Value Measurements (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax |
Beginning balance, net derivative assets (liabilities) | $ (3.4) | |
Total realized/unrealized gains (losses) included in net income, net derivative assets (liabilities) | $ 7.4 | $ (1.4) |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative | Gain (Loss) on Investments, Change In Fair Value Of Funds Withheld Embedded Derivative |
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax | Other Comprehensive Income Available for Sale Securities Period Increase Decrease Net of Tax, Other Comprehensive Income Derivatives Period Increase (Decrease), Net of Tax |
Net purchases, sales, issuances and settlements, net derivative assets (liabilities) | $ 0.7 | |
Ending balance, net derivative assets (liabilities) | $ 4 | (0.7) |
Changes in unrealized gains (losses) included in net income relating to positions still held, net derivative assets (liabilities) | 7.3 | (1.3) |
Gross purchases, sales, issuances and settlements | ||
Sales, net derivative assets (liabilities) | 0.7 | |
Net purchases, sales, issuances and settlements, net derivative assets (liabilities) | 0.7 | |
Investment and universal life contracts | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, liabilities | (46.4) | (83.2) |
Total realized/unrealized gains (losses) included in net income, liabilities | (5.3) | 8.1 |
Net purchases, sales, issuances and settlements, liabilities | (3.8) | 6.4 |
Ending balance, liabilities | (55.5) | (68.7) |
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | (7.1) | 7.4 |
Gross purchases, sales, issuances and settlements | ||
Issuances, liabilities | (8.2) | (6.7) |
Settlements, liabilities | 4.4 | 13.1 |
Net purchases, sales, issuances and settlements, liabilities | (3.8) | 6.4 |
Funds withheld payable embedded derivative | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 3,652.8 | |
Total realized/unrealized gains (losses) included in net income, assets | (626.6) | |
Ending balance, assets | 3,026.2 | |
Changes in unrealized gains (losses) included in net income relating to positions still held, liabilities | (626.6) | |
Fixed maturities | Available-for-sale | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 2,166.6 | 1,076.2 |
Total realized/unrealized gains (losses) included in net income, assets | (3) | |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (10.3) | (6.4) |
Net purchases, sales, issuances and settlements, assets | 431.7 | 193.6 |
Transfers into Level 3, assets | 228.7 | 175.2 |
Transfers out of Level 3, assets | (58.1) | (104) |
Ending balance, assets | 2,758.6 | 1,331.6 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (3) | |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (10.3) | (6.6) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 463.1 | 246.4 |
Sales, assets | (3.6) | (20.4) |
Settlements, assets | (27.8) | (32.4) |
Net purchases, sales, issuances and settlements, assets | 431.7 | 193.6 |
Fixed maturities | Trading | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 134 | 4.9 |
Total realized/unrealized gains (losses) included in net income, assets | (0.4) | |
Net purchases, sales, issuances and settlements, assets | 22.5 | 28.5 |
Transfers into Level 3, assets | 29 | |
Ending balance, assets | 156.1 | 62.4 |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 26.4 | 28.5 |
Sales, assets | (3.5) | |
Settlements, assets | (0.4) | |
Net purchases, sales, issuances and settlements, assets | 22.5 | 28.5 |
States and political subdivisions | Available-for-sale | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 70.9 | 94.8 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 1.6 | 0.1 |
Net purchases, sales, issuances and settlements, assets | (0.4) | (0.4) |
Ending balance, assets | 72.1 | 94.5 |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | 1.6 | 0.1 |
Gross purchases, sales, issuances and settlements | ||
Settlements, assets | (0.4) | (0.4) |
Net purchases, sales, issuances and settlements, assets | (0.4) | (0.4) |
Corporate debt securities | Available-for-sale | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 1,568.3 | 834.3 |
Total realized/unrealized gains (losses) included in net income, assets | (3) | |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (6.6) | (4.7) |
Net purchases, sales, issuances and settlements, assets | 125.3 | 139 |
Transfers into Level 3, assets | 10.4 | 175.2 |
Transfers out of Level 3, assets | (42.9) | |
Ending balance, assets | 1,654.5 | 1,140.8 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (3) | |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (6.6) | (4.7) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 150.9 | 190.9 |
Sales, assets | (3.6) | (20.4) |
Settlements, assets | (22) | (31.5) |
Net purchases, sales, issuances and settlements, assets | 125.3 | 139 |
Commercial mortgage-backed securities | Available-for-sale | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 3.4 | 19.2 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 0.1 | (0.9) |
Net purchases, sales, issuances and settlements, assets | (0.2) | (0.2) |
Ending balance, assets | 3.3 | 18.1 |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | 0.1 | (1) |
Gross purchases, sales, issuances and settlements | ||
Settlements, assets | (0.2) | (0.2) |
Net purchases, sales, issuances and settlements, assets | (0.2) | (0.2) |
Collateralized debt obligations | Available-for-sale | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 56.2 | 85.8 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | 1.1 | (0.3) |
Net purchases, sales, issuances and settlements, assets | 120.1 | 55.5 |
Transfers out of Level 3, assets | (15.2) | (84) |
Ending balance, assets | 162.2 | 57 |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | 1.1 | (0.4) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 121.3 | 55.5 |
Settlements, assets | (1.2) | |
Net purchases, sales, issuances and settlements, assets | 120.1 | 55.5 |
Other debt obligations | Available-for-sale | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 467.8 | 42.1 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (6.5) | (0.6) |
Net purchases, sales, issuances and settlements, assets | 186.9 | (0.3) |
Transfers into Level 3, assets | 218.3 | |
Transfers out of Level 3, assets | (20) | |
Ending balance, assets | 866.5 | 21.2 |
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (6.5) | (0.6) |
Gross purchases, sales, issuances and settlements | ||
Purchases, assets | 190.9 | |
Settlements, assets | (4) | (0.3) |
Net purchases, sales, issuances and settlements, assets | 186.9 | (0.3) |
Other investments | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 1.9 | 2.1 |
Total realized/unrealized gains (losses) included in other comprehensive income, assets | (0.7) | |
Ending balance, assets | 1.9 | 1.4 |
Fixed maturities, trading. | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Changes in unrealized gains (losses) included in OCI relating to positions still held, assets | (0.3) | |
Separate account assets | ||
Changes in Level 3 fair value measurements rollforward, assets and liabilities | ||
Beginning balance, assets | 1,034.9 | 945.3 |
Total realized/unrealized gains (losses) included in net income, assets | 15 | 71.4 |
Net purchases, sales, issuances and settlements, assets | (156.1) | (1.3) |
Ending balance, assets | 893.8 | 1,015.4 |
Changes in unrealized gains (losses) included in net income relating to positions still held, assets | (21.8) | 68.3 |
Gross purchases, sales, issuances and settlements | ||
Sales, assets | (202) | |
Issuances, assets | (4.1) | (1.1) |
Settlements, assets | 50 | (0.2) |
Net purchases, sales, issuances and settlements, assets | $ (156.1) | $ (1.3) |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Available-for-sale | Fixed maturities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | $ 228.7 | $ 175.2 |
Transfers out of Level 3 into Level 2 | 58.1 | 104 |
Available-for-sale | Corporate debt securities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | 10.4 | 175.2 |
Transfers out of Level 3 into Level 2 | 42.9 | |
Available-for-sale | Collateralized debt obligations | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 3 into Level 2 | 15.2 | 84 |
Available-for-sale | Other debt obligations | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | $ 218.3 | |
Transfers out of Level 3 into Level 2 | 20 | |
Trading | Fixed maturities | ||
Fair Value Hierarchy Levels Transfers | ||
Transfers out of Level 2 into Level 3 | $ 29 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information for Level 3 Measurements (Details) $ in Millions | Mar. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) item |
Investment and universal life contracts | Lapse rate | ||
Unobservable inputs | ||
Embedded derivative, Input | 0 | |
Investment and universal life contracts | Lapse rate | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0 | |
Recurring Fair Value Measurements | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 234,370.9 | $ 225,470.3 |
Liabilities measured at fair value | $ | 2,266.9 | 2,764.4 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | ||
Unobservable inputs | ||
Assets measured at fair value | $ | 3,922.7 | 3,447.3 |
Liabilities measured at fair value | $ | 2,775.3 | 3,394.9 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | ||
Unobservable inputs | ||
Liabilities measured at fair value | $ | $ (55.5) | $ (46.4) |
Embedded derivative, Valuation technique | Discounted cash flow | Discounted cash flow |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Minimum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.023 | 0.024 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Maximum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.046 | 0.047 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long duration interest rate | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.033 | 0.031 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Minimum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.151 | 0.178 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Maximum | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.254 | 0.369 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Long-term equity market volatility | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.192 | 0.220 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.009 | 0.009 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Non-performance risk | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0.009 | 0.009 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | ||
Unobservable inputs | ||
Embedded derivative, Input | 0 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Investment and universal life contracts | Discounted cash flow | Lapse rate | Weighted average input | ||
Unobservable inputs | ||
Embedded derivative, Input | 0 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Fixed maturities | Trading | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 128.6 | $ 119.7 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Fixed maturities | Trading | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, trading, Input | 0.100 | 0.096 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Fixed maturities | Trading | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.152 | |
Fixed maturities, trading, Input | 0.166 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Fixed maturities | Trading | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.110 | |
Fixed maturities, trading, Input | 0.123 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 1,569.7 | $ 1,479.9 |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | Discounted cash flow |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.050 | 0.027 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.249 | 0.331 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.120 | 0.110 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0 | 0 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0480 | 0.0467 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0080 | 0.0050 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Comparability adjustment | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | (0.0016) | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Comparability adjustment | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | (0.0003) | 0 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Corporate debt securities | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | (0.0003) | (0.0011) |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 40 | $ 39.5 |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | Discounted cash flow |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.044 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.054 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.054 | 0.044 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0055 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0052 | |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Collateralized debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0052 | 0.0055 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 625.7 | $ 467.8 |
Fixed maturities, available-for-sale, Valuation technique | Discounted cash flow | Discounted cash flow |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.057 | 0.056 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.091 | 0.082 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.082 | 0.076 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0 | 0 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0415 | 0.0260 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Illiquidity premium | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0239 | 0.0220 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Minimum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0032 | 0.0001 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Maximum | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0152 | 0.0139 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Other debt obligations | Available-for-sale | Discounted cash flow | Comparability adjustment | Weighted average input | ||
Unobservable inputs | ||
Fixed maturities, available-for-sale, Input | 0.0086 | 0.0077 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | ||
Unobservable inputs | ||
Assets measured at fair value | $ | $ 894.2 | $ 1,034.1 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.060 | 0.055 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.100 | 0.100 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Discount rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.073 | 0.070 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.050 | 0.045 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.095 | 0.095 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Terminal capitalization rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.060 | 0.058 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.020 | 0.020 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.038 | 0.038 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate | Average market rent growth rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.030 | 0.030 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.434 | 0.436 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.649 | 0.622 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Loan to value | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.522 | 0.506 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Minimum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.055 | 0.053 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Maximum | ||
Unobservable inputs | ||
Separate account assets, Input | 0.086 | 0.086 |
Recurring Fair Value Measurements | Fair value hierarchy Level 3 | Separate account assets | Discounted cash flow, real estate debt | Market interest rate | Weighted average input | ||
Unobservable inputs | ||
Separate account assets, Input | 0.070 | 0.066 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Not Reported at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Assets (liabilities) | ||
Mortgage loans | $ 20,603.5 | $ 20,629.8 |
Policy loans | 788 | 784.7 |
Reinsurance deposit receivable | 7,423.4 | 7,901 |
Short-term debt | (24.2) | (80.7) |
Long-term debt | (4,688.6) | (3,997) |
Carrying amount | ||
Assets (liabilities) | ||
Mortgage loans | 20,603.5 | 20,629.8 |
Policy loans | 788 | 784.7 |
Other investments | 286.7 | 250.6 |
Cash and cash equivalents not required to be reported at fair value | 1,405.8 | 1,243.9 |
Reinsurance deposit receivable | 7,423.4 | 7,901 |
Cash collateral receivable | 17.1 | 281 |
Investment contracts | (35,551.8) | (35,380.1) |
Short-term debt | (24.2) | (80.7) |
Long-term debt | (4,688.6) | (3,997) |
Separate account liabilities | (147,577.5) | (141,459.3) |
Bank deposits | (372.6) | (352.4) |
Cash collateral payable | (279) | (291.3) |
Assets (liabilities) measured at fair value | ||
Assets (liabilities) | ||
Mortgage loans | 18,967.6 | 18,754.5 |
Policy loans | 828.5 | 804 |
Other investments | 287.1 | 238 |
Cash and cash equivalents not required to be reported at fair value | 1,405.8 | 1,243.9 |
Reinsurance deposit receivable | 6,539.5 | 6,859.9 |
Cash collateral receivable | 17.1 | 281 |
Investment contracts | (33,041.4) | (32,367.4) |
Short-term debt | (24.2) | (80.7) |
Long-term debt | (4,420.8) | (3,680.6) |
Separate account liabilities | (146,631.4) | (140,533.9) |
Bank deposits | (355.6) | (336.3) |
Cash collateral payable | (279) | (291.3) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 1 | ||
Assets (liabilities) | ||
Cash and cash equivalents not required to be reported at fair value | 1,391.7 | 1,232.5 |
Cash collateral receivable | 17.1 | 281 |
Cash collateral payable | (279) | (291.3) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 2 | ||
Assets (liabilities) | ||
Other investments | 159.7 | 133.5 |
Cash and cash equivalents not required to be reported at fair value | 14.1 | 11.4 |
Investment contracts | (7,373.8) | (7,279) |
Short-term debt | (24.2) | (80.7) |
Long-term debt | (4,361.3) | (3,620.1) |
Bank deposits | (355.6) | (336.3) |
Assets (liabilities) measured at fair value | Fair value hierarchy Level 3 | ||
Assets (liabilities) | ||
Mortgage loans | 18,967.6 | 18,754.5 |
Policy loans | 828.5 | 804 |
Other investments | 127.4 | 104.5 |
Reinsurance deposit receivable | 6,539.5 | 6,859.9 |
Investment contracts | (25,667.6) | (25,088.4) |
Long-term debt | (59.5) | (60.5) |
Separate account liabilities | $ (146,631.4) | $ (140,533.9) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Assets to Consolidated (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Segment Information: Assets | ||
Total assets | $ 299,408.2 | $ 290,578.3 |
Retirement and Income Solutions | ||
Segment Information: Assets | ||
Total assets | 207,109 | 202,294.2 |
Principal Asset Management | ||
Segment Information: Assets | ||
Total assets | 48,462.3 | 45,950.7 |
Benefits and Protection | ||
Segment Information: Assets | ||
Total assets | 41,082.2 | 40,048.3 |
Corporate | ||
Segment Information: Assets | ||
Total assets | $ 2,754.7 | $ 2,285.1 |
Segment Information - Reconci_2
Segment Information - Reconciliation of Segment Operating Revenues and Earnings to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Revenues from exited business | $ (547.6) | |
Total revenues | 2,819 | $ 3,095.5 |
Pre-tax income (loss) from exited business | (608.3) | |
Income (loss) before income taxes | (212.5) | 378.4 |
Retirement and Income Solutions | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Inter-segment revenues | 94.8 | 97.4 |
Principal Asset Management | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Inter-segment revenues | 70.7 | 76.5 |
Operating Segments | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 3,439.6 | 3,268.5 |
Pre-tax operating earnings (losses) | 440.8 | 469 |
Operating Segments | Retirement and Income Solutions | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 1,616.1 | 1,263 |
Pre-tax operating earnings (losses) | 249.8 | 294.2 |
Operating Segments | Principal Asset Management | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 692.5 | 755.9 |
Pre-tax operating earnings (losses) | 187.8 | 211 |
Operating Segments | Principal Asset Management | Principal International | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 305.1 | 327.2 |
Operating Segments | Principal Asset Management | Principal Global Investors | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 392.7 | 435.3 |
Operating Segments | Principal Asset Management | Eliminations | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | (5.3) | (6.6) |
Operating Segments | Benefits and Protection | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 1,103.4 | 1,243.3 |
Pre-tax operating earnings (losses) | 99.3 | 92.8 |
Operating Segments | Benefits and Protection | Specialty Benefits | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 782.2 | 717.7 |
Operating Segments | Benefits and Protection | Life Insurance | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 321.4 | 525.7 |
Operating Segments | Benefits and Protection | Eliminations | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | (0.2) | (0.1) |
Operating Segments | Corporate | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Operating revenues | 27.6 | 6.3 |
Pre-tax operating earnings (losses) | (96.1) | (129) |
Reconciling Items | ||
Operating Revenue And Profit (Loss) From Segments To Consolidated | ||
Net realized capital gains (losses), net of related revenue adjustments | (39.2) | (146.4) |
Revenues from exited business | (547.6) | |
Adjustments related to equity method investments | (22.6) | (18.5) |
Market risk benefit derivative settlements | (11.2) | (8.1) |
Pre-tax net realized capital gains (losses), as adjusted | (24.3) | (87.9) |
Pre-tax income (loss) from exited business | (608.3) | |
Earnings adjustments related to equity method investments and noncontrolling interest | $ (20.7) | $ (2.7) |
Segment Information - Revenues
Segment Information - Revenues from exited business (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Revenues from exited business: | |||
Change in fair value of funds withheld embedded derivative | $ (626.6) | $ 0 | |
Net realized capital gains (losses) on funds withheld assets | [1] | 81 | |
Total revenues from exited business | (547.6) | ||
Reconciling Items | |||
Revenues from exited business: | |||
Change in fair value of funds withheld embedded derivative | (626.6) | ||
Net realized capital gains (losses) on funds withheld assets | 81 | ||
Amortization of reinsurance gain | 1.4 | ||
Other impacts of reinsured business | (3.4) | ||
Total revenues from exited business | $ (547.6) | ||
[1] Includes realized and unrealized gains (losses). See Note 3, Investments, for further details. |
Segment Information - Pre-tax n
Segment Information - Pre-tax net Realized Capital Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Segment Information: Net realized capital gains (losses), as adjusted | |||
Net realized capital losses | [1] | $ (66) | $ (136.6) |
Reconciling Items | |||
Segment Information: Net realized capital gains (losses), as adjusted | |||
Net realized capital losses | (66) | (136.6) | |
Derivative and hedging-related revenue adjustments | 2.1 | (32) | |
Certain variable annuity fees | 18.4 | 20 | |
Adjustments related to equity method investments | 0.2 | (3.6) | |
Adjustments related to sponsored investment funds | 6.1 | 5.8 | |
Net realized capital gains (losses), net of related revenue adjustments | (39.2) | (146.4) | |
Amortization of deferred acquisition costs and other actuarial balances | 6.6 | ||
Capital (gains) losses distributed | 18.4 | 91 | |
Market value adjustments of market risk benefits | (6.5) | (22.7) | |
Market value adjustments of embedded derivatives | 3 | (16.4) | |
Pre-tax net realized capital gains (losses), as adjusted | $ (24.3) | $ (87.9) | |
[1] Includes realized and unrealized gains (losses). See Note 3, Investments, for further details. |
Segment Information - Pre-tax i
Segment Information - Pre-tax income (loss) from exited business (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Pre-tax income (loss) from exited business: | |||
Change in fair value of funds withheld embedded derivative | $ (626.6) | $ 0 | |
Net realized capital gains (losses) on funds withheld assets | [1] | 81 | |
Total pre-tax income (loss) from exited business | (608.3) | ||
Reconciling Items | |||
Pre-tax income (loss) from exited business: | |||
Change in fair value of funds withheld embedded derivative | (626.6) | ||
Net realized capital gains (losses) on funds withheld assets | 81 | ||
Amortization of reinsurance gain (loss) | (22.1) | ||
Other impacts of reinsured business | (40.6) | ||
Total pre-tax income (loss) from exited business | $ (608.3) | ||
[1] Includes realized and unrealized gains (losses). See Note 3, Investments, for further details. |
Revenues from Contracts with _3
Revenues from Contracts with Customers - Disaggregation by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total fees and other revenues per consolidated statements of operations | $ 995.3 | $ 1,219.2 |
Operating Segments | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 685.1 | 750.2 |
Operating Segments | Retirement and Income Solutions | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 130.2 | 144.4 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 278.3 | 299.4 |
Total fees and other revenues per consolidated statements of operations | 408.5 | 443.8 |
Operating Segments | Principal Asset Management | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 489.2 | 533.4 |
Operating Segments | Benefits and Protection | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 20.6 | 19.4 |
Operating Segments | Corporate | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 45.1 | 53 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | (75.6) | (89.7) |
Total fees and other revenues per consolidated statements of operations | (30.5) | (36.7) |
Operating Segments | Principal Global Investors | Principal Asset Management | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 381.3 | 429.6 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 4.6 | 5.3 |
Total fees and other revenues per consolidated statements of operations | 385.9 | 434.9 |
Operating Segments | Principal International | Principal Asset Management | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 113.2 | 110.4 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 1.4 | 1.2 |
Total fees and other revenues per consolidated statements of operations | 114.6 | 111.6 |
Operating Segments | Specialty Benefits | Benefits and Protection | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 3.9 | 4 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 4.6 | 4.7 |
Total fees and other revenues per consolidated statements of operations | 8.5 | 8.7 |
Operating Segments | Life Insurance | Benefits and Protection | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | 16.7 | 15.4 |
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 77.3 | 228.3 |
Total fees and other revenues per consolidated statements of operations | 94 | 243.7 |
Operating Segments | Eliminations | Principal Asset Management | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total segment revenue from contracts with customers | (5.3) | (6.6) |
Reconciling Items | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Adjustments for fees and other revenues not within the scope of revenue recognition guidance | 290.4 | 449 |
Pre-tax other adjustments | $ 19.8 | $ 20 |
Revenues from Contracts with _4
Revenues from Contracts with Customers - Disaggregation within Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total fees and other revenues | $ 995.3 | $ 1,219.2 |
Premiums and other considerations | 1,448.6 | 887.4 |
Net investment income (loss) | 986.7 | 1,125.5 |
Operating Segments | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 685.1 | 750.2 |
Total operating revenues | 3,439.6 | 3,268.5 |
Operating Segments | Benefits and Protection | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 20.6 | 19.4 |
Total operating revenues | 1,103.4 | 1,243.3 |
Operating Segments | Benefits and Protection | Specialty Benefits | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 3.9 | 4 |
Fees and other revenues not within the scope of revenue recognition guidance | 4.6 | 4.7 |
Total fees and other revenues | 8.5 | 8.7 |
Premiums and other considerations | 733.6 | 665.6 |
Net investment income (loss) | 40.1 | 43.4 |
Total operating revenues | 782.2 | 717.7 |
Operating Segments | Benefits and Protection | Specialty Benefits | Administrative service fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 3.9 | 4 |
Operating Segments | Benefits and Protection | Life Insurance | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 16.7 | 15.4 |
Fees and other revenues not within the scope of revenue recognition guidance | 77.3 | 228.3 |
Total fees and other revenues | 94 | 243.7 |
Premiums and other considerations | 130.8 | 88.8 |
Net investment income (loss) | 96.6 | 193.2 |
Total operating revenues | 321.4 | 525.7 |
Operating Segments | Benefits and Protection | Life Insurance | Administrative service fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 7.2 | 6.8 |
Operating Segments | Benefits and Protection | Life Insurance | Commission income | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 9.5 | 8.6 |
Operating Segments | Principal Asset Management | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 489.2 | 533.4 |
Total operating revenues | 692.5 | 755.9 |
Operating Segments | Principal Asset Management | Principal Global Investors | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 381.3 | 429.6 |
Fees and other revenues not within the scope of revenue recognition guidance | 4.6 | 5.3 |
Total fees and other revenues | 385.9 | 434.9 |
Net investment income (loss) | 6.8 | 0.4 |
Total operating revenues | 392.7 | 435.3 |
Operating Segments | Principal Asset Management | Principal Global Investors | Management fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 339.7 | 379 |
Operating Segments | Principal Asset Management | Principal Global Investors | Other fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 41.6 | 50.6 |
Operating Segments | Principal Asset Management | Principal International | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 113.2 | 110.4 |
Fees and other revenues not within the scope of revenue recognition guidance | 1.4 | 1.2 |
Total fees and other revenues | 114.6 | 111.6 |
Premiums and other considerations | 6.4 | 10.3 |
Net investment income (loss) | 184.1 | 205.3 |
Total operating revenues | 305.1 | 327.2 |
Operating Segments | Principal Asset Management | Principal International | Latin America | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 85.9 | 82.1 |
Operating Segments | Principal Asset Management | Principal International | Asia | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 27.5 | 28.5 |
Operating Segments | Principal Asset Management | Principal International | Geographical Eliminations | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | (0.2) | (0.2) |
Operating Segments | Principal Asset Management | Principal International | Management fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 110.9 | 107.7 |
Operating Segments | Principal Asset Management | Principal International | Other fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 2.3 | 2.7 |
Operating Segments | Retirement and Income Solutions | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 130.2 | 144.4 |
Fees and other revenues not within the scope of revenue recognition guidance | 278.3 | 299.4 |
Total fees and other revenues | 408.5 | 443.8 |
Premiums and other considerations | 582.7 | 123.3 |
Net investment income (loss) | 624.9 | 695.9 |
Total operating revenues | 1,616.1 | 1,263 |
Operating Segments | Retirement and Income Solutions | Administrative service fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 126.5 | 141.5 |
Operating Segments | Retirement and Income Solutions | Deposit account fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 2.9 | 2.5 |
Operating Segments | Retirement and Income Solutions | Other fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 0.4 | 0.2 |
Operating Segments | Retirement and Income Solutions | Commission income | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 0.4 | 0.2 |
Operating Segments | Corporate | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 45.1 | 53 |
Fees and other revenues not within the scope of revenue recognition guidance | (75.6) | (89.7) |
Total fees and other revenues | (30.5) | (36.7) |
Premiums and other considerations | (1.3) | (0.5) |
Net investment income (loss) | 59.4 | 43.5 |
Total operating revenues | 27.6 | 6.3 |
Operating Segments | Corporate | Other fee revenue | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 20.5 | 19.8 |
Operating Segments | Corporate | Commission income | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | 87.9 | 97.2 |
Operating Segments | Corporate | Revenue by type - Eliminations | ||
Revenues from Contracts with Customers - Disaggregation of Revenues | ||
Total revenues from contracts with customers | $ (63.3) | $ (64) |
Revenues from Contracts with _5
Revenues from Contracts with Customers - Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Contract costs | |||
Contract cost asset | $ 215.6 | $ 204.9 | |
Practical expedient, incremental costs of obtaining a contract | true | ||
Amortization expense of contract cost asset | $ 8.3 | $ 9.6 | |
Impairment loss for contract cost asset | $ 0 | $ 0 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plans - Stock-Based Awards (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock-Based Compensation Plans | ||
Stock-Based Compensation Plans - Disclosures | ||
Compensation cost | $ 28.2 | $ 28.4 |
Related income tax benefit | 7 | 6.4 |
Capitalized as part of an asset | $ 0.4 | $ 0.4 |
2020 Directors Stock Plan, the 2014 Stock Incentive Plan, the 2014 Directors Stock Plan, the Amended and Restated 2010 Stock Incentive Plan, the 2005 Directors Stock Plan, the Stock Incentive Plan or the Directors Stock Plan | ||
Stock-Based Compensation Plans - Disclosures | ||
Number of shares that will be granted | 0 | |
2021 Stock Incentive Plan | ||
Stock-Based Compensation Plans - Disclosures | ||
Maximum number of new shares of common stock available for grant (in shares) | 23 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plans - Nonqualified Stock Options, Assumptions and Other Disclosures (Details) - Nonqualified Stock Options shares in Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) shares | |
Stock-Based Compensation Plans - Disclosures | |
Options granted (in shares) | shares | 0 |
Other nonqualified stock option disclosures | |
Unrecognized compensation costs | $ | $ 0.5 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 9 months 18 days |
Stock-Based Compensation Plan_4
Stock-Based Compensation Plans - Performance Share Awards and Restricted Stock Units (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Performance Share Awards | |
Change in nonvested units outstanding | |
Awards or units granted (in shares) | shares | 0.3 |
Awards or units granted, Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 91.47 |
Other award and unit disclosures | |
Lower limit multiple of initial target awards (as a percent) | 0% |
Upper limit multiple of initial target awards (as a percent) | 180% |
Unrecognized compensation costs | $ | $ 31.5 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 1 year 10 months 24 days |
Restricted Stock Units | |
Change in nonvested units outstanding | |
Awards or units granted (in shares) | shares | 0.9 |
Awards or units granted, Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 88.66 |
Other award and unit disclosures | |
Unrecognized compensation costs | $ | $ 123.9 |
Weighted-average service period over which unrecognized compensation costs will be recognized | 2 years |
Stock-Based Compensation Plan_5
Stock-Based Compensation Plans - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan shares in Millions | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Stock-Based Compensation Plans - Disclosures | |
Share purchases under employee stock purchase plan (in shares) | 0.2 |
Weighted-average fair value of discount on employee stock purchase plan (in dollars per share) | $ / shares | $ 7.43 |
Shares available to be issued under employee stock purchase plan (in shares) | 3.3 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Net income (loss) | $ (134.5) | $ 343.2 |
Subtract: | ||
Net income (loss) attributable to noncontrolling interest | 5.6 | 4.5 |
Total net income (loss), basic | (140.1) | 338.7 |
Total net income (loss), diluted | $ (140.1) | $ 338.7 |
Weighted-average shares outstanding: | ||
Basic | 243.4 | 259.4 |
Dilutive effects: | ||
Diluted | 243.4 | 263.8 |
Net income (loss) per common share: | ||
Basic | $ (0.58) | $ 1.31 |
Diluted | $ (0.58) | $ 1.28 |
Nonqualified Stock Options | ||
Dilutive effects: | ||
Stock-based compensation awards | 1.6 | |
Restricted Stock Units | ||
Dilutive effects: | ||
Stock-based compensation awards | 2.3 | |
Performance Share Awards | ||
Dilutive effects: | ||
Stock-based compensation awards | 0.5 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | Apr. 07, 2023 USD ($) |
Subsequent Event | Floating rate notes payable, due 2055 | |
Subsequent Event | |
Redemption amount of debt | $ 400 |