PFG Q2 Earnings Beat on Solid Underwriting, Revenues Rise Y/Y

PFG's Costs Rise With Benefit Outlays

Total expenses increased 7.6% year over year to $3.41 billion. Benefits, claims and settlement expenses rose 8.3% to $1.99 billion, while operating expenses increased 8.1% to $1.40 billion.

Non-GAAP operating earnings climbed 12% to $547 million. Excluding significant variances, operating earnings advanced 13% to $528.7 million, reflecting growth across the operating segments. Net income attributable to PFG declined 1% to $403.4 million.

Principal's Retirement Business Gains Ground

Retirement and Income Solutions’ net revenues increased 9% year over year to $779 million. Favorable market performance and business growth supported the increase.

Pre-tax operating earnings rose 11% to $323.3 million, while the operating margin expanded 60 basis points to 41.5%. Transfer deposits increased 30% to $9 billion, and recurring deposits advanced 6% to $13 billion. Participant roll-ins totaled $1.7 billion in the quarter.

PFG's Asset Management Results Stay Mixed

Investment Management’s operating revenues less pass-through expenses increased 1% to $431.6 million. Pre-tax operating earnings edged up 1% to $159.4 million, while the operating margin remained stable at 37.5%.

International Pension delivered stronger growth. Net revenues increased 16% to $184.8 million, and pre-tax operating earnings rose 24% to $97 million. Assets under management reached a record $168.5 billion, up 18%, aided by more favorable encaje returns and foreign-currency tailwinds.

PFG's Benefits Unit Drives Profit Growth

Specialty Benefits’ premiums and fees increased 4% to $873.3 million. Pre-tax operating earnings rose 25% to $158.9 million, driven by premium growth and more favorable underwriting. Specialty Benefits’ loss ratio improved 280 bps to 57.4%. This was driven by improvements across all products.

The unit’s operating margin improved 300 basis points to 18.2%, while the incurred loss ratio declined 280 basis points. Life Insurance revenues fell 6% to $224.1 million, but pre-tax operating earnings increased 26% to $25.2 million on improved mortality experience. Its operating margin expanded 280 basis points to 11.2%.

PFG's AUM Rises Despite Net Outflows

Principal Financial’s assets under management increased 7% year over year to $808 billion. The total was included within assets under administration of $1.89 trillion.

AUM net cash outflows were $11.1 billion compared with $2.6 billion a year earlier. Investment Management recorded $12 billion of net outflows, concentrated in a small number of U.S. active equity strategies. Market performance added $47.5 billion to AUM during the quarter.

Principal Financial's Capital Returns Remain Strong

The company returned $426.7 million to shareholders during the quarter. This included $250.2 million of share repurchases and $176.5 million of dividends.

Principal Financial ended the quarter with $1.6 billion of excess and available capital, an estimated 400% risk-based capital ratio and a 23.6% debt-to-capital ratio. Book value per share, excluding certain fair-value and accumulated other comprehensive income effects, was $58.40.

PFG's SMB Strategy Adds Scale

Principal Financial agreed to acquire Beam Benefits, a provider of dental, vision, life, disability and supplemental health products for small and midsized businesses. Beam serves more than 25,000 employer customers and generated $175 million in premiums during 2025.

The transaction is expected to close in the second half of 2026. Principal Financial maintained its 2026 earnings-per-share and capital targets and expects Specialty Benefits growth to be at or above the high end of its 5-9% target range in 2027. The board also raised the third-quarter dividend by 2 cents to 84 cents per share.

Zacks Rank

Principal Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Selective Insurance Group, Inc. SIGI reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%. 

Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines, and a 2% decline in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. Renewal pure price increases averaged 6.5%, down from 9.9% in the prior-year quarter.

Chubb Limited CB reported second-quarter 2026 core operating earnings of $7.26 per share, which beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. Stronger P&C underwriting, record investment income, and higher life insurance income supported results.

Net premiums earned increased 5.8% to $13.89 billion. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%, reflecting a lower share of premiums consumed by claims and expenses. Our estimate was $1.15 billion.

The Travelers Companies, Inc. TRV reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%.

Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio.

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