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Principal Financial margins rise on improved specialty benefits and mortality
In the second quarter, Principal’s specialty benefits incurred loss ratio fell to 57.4% from 60.2% year over year, lifting the segment’s operating margin to 18.2%.
Principal Financial Group posted $547 million in non-GAAP operating earnings for the second quarter of 2026, as improvements in its specialty benefits loss ratio and favorable life insurance mortality supported margin expansion across its insurance operations, according to Insurance Business.
The company said its specialty benefits incurred loss ratio improved to 57.4% from 60.2% a year earlier, coming in below its targeted range, with gains across product lines. Pre-tax operating earnings for specialty benefits rose 25% to $158.9 million, while the segment’s operating margin widened 300 basis points to 18.2%.
Principal attributed the continued loss ratio improvements in recent quarters to the same drivers, including strong experience in group life and group disability, plus improved group dental claims results. It also reported that life insurance pre-tax operating earnings climbed 26% to $25.2 million on more favorable mortality, and the life insurance segment’s operating margin expanded to 11.2% from 8.4%.
In related results, Principal’s combined benefits and protection segment posted pre-tax operating earnings of $184.1 million, up from $147.6 million a year earlier, and non-GAAP operating earnings totaled $2.50 per diluted share. Retirement and income solutions delivered pre-tax operating earnings of $323.3 million, with transfer deposits reaching $9 billion and a 60 basis point operating margin increase to 41.5%, while Principal Asset Management reported gross sales of $30 billion, up 2%.