Principal Financial Group, Inc.
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Principal Financial Group, Inc.
Company History
Founded 1879 in Des Moines, Iowa
Last reviewed: 2026-06-10 · By Swet Parvadiya
Edward H. Rollins was a former agricultural equipment salesman when he signed the charter for the Principal Mutual Life Insurance Company in Des Moines, Iowa, in 1879. He was backed by a group of local businessmen who recognized that Iowa's growing farm economy needed financial protection products that eastern insurance companies were not bothering to provide. The company wrote 2,200 policies in its first year of operation.
The expansion into industrial life insurance in 1910 covered factory workers and laborers with policies paid through weekly premiums, extending Principal's reach into the urban working class during a period of significant industrial accident risk. The 1918 influenza pandemic was a direct actuarial test; the company survived it and emerged with refined underwriting models that informed the next two decades of growth. That capacity for institutional learning through crisis has been a recurring theme in Principal's history.
Variable life insurance products in 1975 added an investment component to traditional life coverage, connecting Principal to the American interest in equity market participation. The 1998 IPO converted the company from mutual ownership — where policyholders owned the firm — to public shareholder ownership, releasing capital for strategic acquisitions and creating a public currency for deal-making. The StanCorp acquisition in 2010 added significant group benefits capabilities.
The small business 401(k) focus emerged through the 1990s as Principal recognized that the large plan market was dominated by Fidelity and Vanguard, while the market for plans covering fifty to five hundred employees was served less efficiently. Building the administration infrastructure, the investment lineups, and the local advisor relationships required to serve that market at scale took a decade. The resulting dominant position across 1.2 million small business clients has been Principal's primary competitive distinction for more than twenty years.
Edward H. Rollins (1845–1912) was an American entrepreneur, insurance executive, and the primary architect of the grassroots distribution model that defined the early years of Principal Mutual Life Insurance Company. Born in rural New Hampshire, Rollins spent his early twenties traveling the backroads of the Midwest selling agricultural machinery, where he observed the profound financial devastation that befell families when the primary breadwinner died prematurely. Recognizing the massive, unpriced risk of occupational mortality in the rapidly industrializing American Midwest, Rollins pooled his savings and local subscriptions to found the Principal Mutual Life Insurance Company in Des Moines, Iowa, in 1879. Rollins's genius lay in distribution and risk selection; he pioneered the practice of requiring his agents to spend time on the factory floors and in the railyards to truly understand the specific occupational hazards of the industries they were insuring. This deep, forensic understanding of the industrial workforce allowed Principal to price its policies with a level of accuracy that its competitors simply could not match, establishing the template for its rapid expansion across the Rust Belt. After amassing significant wealth from the insurance business, Rollins shifted his focus to philanthropy and civic development in Des Moines, playing a key role in the establishment of local hospitals and educational institutions. His legacy endures both in the massive, highly loyal customer base he built and the culture of extreme capital conservatism and rigorous risk selection that remains the foundational DNA of Principal today.
The company is founded in Des Moines, Iowa, by Edward H. Rollins and a syndicate of local investors to provide life insurance to the rapidly industrializing workforce of the American Midwest, securing the initial capital and charter that would eventually become Principal Financial Group.
Principal expands its product offerings to include industrial life insurance, a high-frequency, low-premium product collected by door-to-door agents, a strategic move that allowed the company to penetrate the deepest pockets of the urban working class and build a massive, highly loyal customer base.
The company survives the catastrophic 1918 influenza pandemic, which killed millions of Americans and bankrupted dozens of life insurers, by relying on its conservative reserve structure and its deep understanding of the specific geographic and occupational concentrations of the virus.
Principal becomes one of the first major carriers to launch variable life insurance and variable annuity products, a strategic pivot that allowed the company to protect its policyholders against the hyperinflation of the 1970s and established its dominance in the equity-linked insurance market.
Principal Financial Group completes its initial public offering, raising over $1.2 billion in capital and transitioning from a mutual insurance company to a publicly traded stock company, a strategic pivot that provided the capital necessary to execute massive acquisitions in the retirement and asset management space.
Principal successfully navigates the catastrophic market collapse of 2008, utilizing its highly sophisticated derivative hedging programs to neutralize the equity exposures embedded in its variable annuity guarantees, a feat that saved the company from the massive reserve shortfalls that bankrupted several of its competitors.
Principal completes the transformative $1.2 billion acquisition of AHM Capital Management's mortgage servicing rights, instantly scaling its alternative asset management capabilities and establishing its dominance in the private credit space.
Principal achieves a robust Risk-Based Capital (RBC) ratio of 390% for the fiscal year 2024, generating $13.1 billion in total revenues and $1.4 billion in net income, demonstrating the immense profitability and capital discipline of its diversified business model in a volatile interest rate environment.
Principal acquired AHM Capital Management's mortgage servicing rights to instantly scale its alternative asset management capabilities and establish its dominance in the private credit space, a highly specialized, relationship-driven niche that requires deep underwriting expertise.
Principal acquired RBC Insurance's U.S. life and annuity business to aggressively expand its retirement and income solutions distribution network, acquiring a massive book of high-quality, capital-efficient products and a highly productive independent agent force.
Principal acquired StanCorp Financial Group to expand its presence in the group protection and employee benefits market, acquiring a massive book of group disability and dental assets and a highly productive team of workplace benefits consultants.
Principal Financial Group traces its origin to July 1, 1879, when Edward H. Rollins chartered the Bankers Life Association in Des Moines, Iowa, the operating predecessor of what would later be renamed Principal Mutual Life Insurance Company and eventually Principal Financial Group. Rollins, a former banker, designed the original company as a cooperative life insurance organization that pooled premiums from working professionals and paid death claims out of member assessments. The mutual structure meant policyholders, not outside shareholders, owned the company, which kept retained earnings dedicated to claim reserves and price competitiveness rather than dividend distributions. Iowa was an unusual choice for a financial-services headquarters at the time, since the major US insurance centers were already concentrated in Hartford, New York, and Newark. Rollins built the company around agriculture and small-town professional clients in the Midwest, a customer base underserved by the East Coast carriers. Within a generation the company had expanded across the central United States, and by the early 1900s it was among the largest mutual life insurers in the country. The original Des Moines headquarters remains in place today, more than 145 years after the founding, and Iowa is still central to the Principal employee base and corporate identity.
The corporate name evolved twice across more than a century. In 1911 the original Bankers Life Association reorganized into Bankers Life Company under Iowa mutual insurance law, retaining the mutual structure but enlarging product scope beyond the cooperative assessment model. In 1985 the company rebranded as Principal Mutual Life Insurance Company, a name change that reflected a strategic push to broaden beyond traditional life insurance into pensions, asset management, and group benefits. The Principal name positioned the firm as a financial services brand rather than a pure life insurer. Then in 1998 the parent holding structure was renamed Principal Financial Group, recognizing that the underlying business had become a diversified retirement and investment management platform, not a single insurance company. The 1985 and 1998 changes telegraphed the same strategic direction: move toward fee-based retirement, recordkeeping, and asset management revenue and de-emphasize old-style mortality risk products. By the time of the 2001 demutualization and initial public offering, the Principal Financial Group brand was already established with employers, advisors, and retirement plan sponsors across the United States, making the public-market transition a continuation of identity rather than a rebrand.
Principal Financial Group completed its demutualization and initial public offering on October 23, 2001, listing on the New York Stock Exchange under ticker PFG at $18.50 per share and raising approximately $1.85 billion in primary and secondary proceeds. The transaction converted what had been a policyholder-owned mutual company into a stock company with publicly traded equity. Three rationales drove the decision. First, public capital markets provided a currency for acquisitions and growth, particularly in asset management and international expansion, that the mutual structure could not easily fund. Second, the demutualization gave eligible policyholders cash or shares in exchange for their membership interests, monetizing decades of retained equity that had been locked inside the mutual. Third, a public stock and clear capital ratios made it easier for Principal to compete with other publicly traded retirement and asset management firms for institutional mandates and large 401(k) plan sponsorships, where prospects increasingly demanded financial transparency. Principal followed a wave of insurance demutualizations including MetLife in 2000, Prudential in 2001, and John Hancock in 2000, each moving from mutual to stock form to access public capital markets during the same window.
Following the 2008 to 2009 financial crisis, Principal Financial executed a clear strategic pivot toward capital-light fee businesses and away from balance-sheet-heavy spread products. The company avoided needing a federal Troubled Asset Relief Program injection, unlike several peer life insurers, because its retirement services and asset management segments generated stable fee revenue that cushioned investment-spread losses. Through the 2010s Principal expanded Principal Global Investors, the asset management arm, through both organic growth and acquisitions in international markets, building positions in real estate, fixed income, and equity strategies. The company built a sizeable Latin America footprint through earlier transactions in Brazil, Chile, and Mexico, and grew Principal International across Asia including a long-standing CITIC Principal joint venture in China. The 2019 acquisition of Wells Fargo Institutional Retirement and Trust for $1.2 billion marked the largest deal in Principal history and roughly doubled the US defined contribution recordkeeping platform. In 2022 the company exited US individual life retail and consumer fixed annuity markets to free capital for fee-based businesses. The cumulative effect transformed Principal from a traditional life and annuity carrier into a retirement and asset management franchise with a much higher fee-revenue share.
Principal Financial built its international business through a combination of joint ventures, acquisitions, and organic platform growth, anchored primarily in Latin America and Asia where pension privatization created sustained demand for private retirement providers. In Latin America, Principal entered Chile in the early 1990s following the country's pioneering pension reform and gradually expanded into Brazil, Mexico, and other markets through acquired pension administrators and asset management businesses. Principal International Brazil operates as Brasilprev, a joint venture with Banco do Brasil that is one of the largest private pension providers in the country. In Mexico, Principal has built one of the largest Afore pension fund managers. In Asia, the China business operates as CCB Principal Asset Management, a joint venture with China Construction Bank, while Principal also runs businesses in Hong Kong, Malaysia, Singapore, India, and several other markets. International revenue contributes roughly 10 percent of group operating earnings and represents the highest-growth geographic segment. The international strategy targets emerging middle-class retirement savings demand in markets where regulators have shifted from state-run to private pension models, giving Principal long-duration distribution access through bank partners and direct platforms.