Press release
Principal Financial Group® Announces Reinsurance Transaction, Increases Share Repurchase Authorization by $1.6 Billion
Announces agreement to reinsure its in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee blocks with an affiliate of
About this update from Principal Financial Group Inc
[{"type":"text","content":"\n\nAnnounces agreement to reinsure its in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee blocks with an affiliate of Sixth Street\n\n\nExpects approximately $800 million of deployable proceeds upon close when combined with other capital management transactions\n\n\nPlans to return up to $4.6 billion of capital to shareholders between 2021 and 2022, including $2.5 billion to $3.0 billion in 2022\n\n\nAdvances long-term strategy to focus on higher growth markets, improve capital efficiency, and return excess capital to shareholders\n\n\n DES MOINES, Iowa--(BUSINESS WIRE)--\nPrincipal Financial Group® (Nasdaq: PFG) today announced it has entered into an agreement with an affiliate of Sixth Street and its insurance platform, Talcott Resolution (“Talcott”), to reinsure the company’s in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee (“ULSG”) blocks of business.\n\nPrincipal® expects deployable proceeds of approximately $800 million upon closing of this reinsurance transaction and through additional transactions designed to improve the capital efficiency of its in-force individual life insurance business. The company plans to return the proceeds to shareholders through share repurchases.\n\nAt its Investor Day in June 2021, Principal announced it would pursue strategic alternatives for its U.S. retail fixed annuity and individual life insurance businesses as part of a comprehensive review of its business mix and capital management options. Today’s announcement is an important step as the company continues to deliver on its commitment to be more capital efficient with a focus on higher growth businesses within retirement in the U.S. and select emerging markets, global asset management, and U.S. benefits and protection. Reinsurance of these blocks also reduces the company’s risk exposure to interest rates, credit markets, and policyholder behavior.\n\nToday’s announcement will meaningfully enhance the company’s future financial profile:\n\n\nAccretive to non-GAAP operating earnings per diluted share (EPS) starting in 2023;\n\n\nImproving non-GAAP operating return on average equity (ROE) and affirming the company’s 15% target in 2023; and\n\n\nEnhancing free capital flow conversion by approximately 10 percentage points annually; increasing the company’s target ...