Principal Financial Group's Q4 2024: Unpacking Contradictions in Retirement Services and Specialty Benefits Pricing

These are the key contradictions discussed in Principal Financial Group's latest 2024Q4 earnings call, specifically including: Retirement Services flow dynamics, Specialty Benefits pricing strategy, RIS fee compression expectations, and SBD underwriting discipline:



Strong Financial Performance and Growth:
- Principal Financial Group reported adjusted non-GAAP earnings per share growth of 11% for 2024, with a strong 16% increase in the fourth quarter.
- This growth was driven by favorable market conditions, particularly strong equity market performance, which more than offset impacts from foreign currency.

Capital Deployment and Shareholder Returns:
- The company returned $1.7 billion of capital to shareholders in 2024, exceeding the midpoint of their targeted range, and achieved a 10% increase in the annual common stock dividend.
- This outcome was attributed to a strong capital position and free capital flow, aligning with their strategic focus on shareholder value creation.

Business Segment Performance and Growth:
- In the Retirement business, total block recurring deposits increased 7% in 2024, and the number of individuals deferring and receiving employer matches increased by 3% in the fourth quarter.
- This growth was supported by strong equity markets, favorable market conditions, and continued growth in the SMB segment.

Strategic Asset Management and Real Estate Growth:
- Asset management saw strong market performance, with $683 billion of AUM at year-end, despite $28 billion of FX impacts.
- The company's largest real estate fund raised over $3.6 billion, with a focus on private and multi-asset solutions, contributing to overall growth in this segment.